According to franchise banking experts, getting finance for your new business venture requires a serious commitment on the part of the applicant. Here are some of the tips that they give to prospective business owners:

  • Never under estimate the required funding and always take into account that you will need at least six months working capital.
  • The granting of funding largely depends on a sound business plan. The ideal business plan must show your understanding of the business and the skills to run and manage it. It should also contain a cash flow projection, with reference to how the business will generate enough cash to cover costs and service debt.
  • Applicants who offer collateral stand a better chance of securing finance as it is a form of security for the bank and also shows commitment and willingness by the business owner to share the risk.
  • The margins of the business should sustain it and finance further growth if required. The bank recommends that a business entity as a going concern should be earning 10% or more profits a year.
  • You should be able to predict sales volumes, monthly expenses and the inputs required to meet the daily demand of customers.
  • The ability to repay debt and other commitments must be taken into account for the financial planning.
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FASA

"The Franchise Association of Southern Africa (FASA) is a trade association for franchisors, franchisees and the professional organizations that service the franchise industry. Its aim is to develop and safeguard the business environment for ethical franchising in South Africa. FASA is the only recognized representative body of the rapidly growing franchise industry. FASA's criteria for membership conform to international best practices and are acknowledged by government and the public at large. FASA is a full member of the World Franchise Council."
CategoryFranchising
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