People that are ambitious and entrepreneurial frequently consider starting their own business even though it is not too easy. Approximately 20% of new enterprises fail in their first year, with 50% dying by the fifth year. The franchising business concept comes into play here. 

Individuals can become business owners through franchisors at a greatly reduced risk. Franchises have a pre-made company model that has already been profitable. On the other hand, purchasing a franchise usually necessitates a large sum of money. Continue reading to learn how starting window business is possible even if you don’t have any money.

How Much Does a Window Repair Franchise Cost?

The cost of a starting window business franchise varies greatly depending on the brand and type of business. Most franchisees must pay an initial fee that can earn anywhere from $10,000 to $100,000. After that, franchisees must pay royalties. The royalty fee structure varies from brand to brand, but it is typically based on a proportion of revenue. The percentage might range anywhere from 5% to 50%.

Finally, most franchisees must spend a specific amount on “promotion costs” each year. This ensures that the franchise site is well-marketed and has a good chance of succeeding in its local market. Typically, marketing fees range from 1-4 percent of income. Insurance, inventory, equipment, recruiting, and business permits are just a few other costs associated with a franchise. Although starting window business franchise and running the same is less expensive than starting and running a small independent firm.

What Is the Best Way to Fund a Franchise?

If you’re interested in a brand but lack the financial resources to pursue it, you do have several possibilities.

Financing for Franchisors

If you’ve made up your mind about a particular brand, see if they provide franchise financing. Many businesses recognize that their franchisees will not bring all necessary funds to the table. 

Inquire with the brand about finance alternatives for their business partners who are just getting started. It’s worth noting that this choice may necessitate excellent credit. To prove how dedicated you are to the enterprise, the franchisor will usually want you to invest in the business.

A loan from a traditional bank

Individuals who meet certain criteria are eligible for small business loans from banks and credit unions. If you meet the following criteria, you may be eligible:

•  Long credit history with banks
•  Favorable credit utilization rate (under 30 percent )
•  Decent to excellent personal credit rating (from 670-850)

Furthermore, traditional lenders prefer to lend to franchisees because they are supported by a business strategy that has worked in the past. Although lesser-known franchise businesses may not be as tempting, traditional lenders are particularly pleased to see well-known franchise brands.

Loans from the Small Business Administration (SBA)

SBA loans are also a popular option for potential franchisees starting window businesses. The Small Business Administration (SBA) is a government agency that provides long-term loans at competitive rates.

The SBA does not make loans; instead, it guarantees a loan made by a bank or credit union. This is a great choice for someone who has a bad credit score and can’t receive a small business loan from a bank on their own.

The SBA 7(a) loan and the SBA CDA/504 loan are the two most common types of SBA loans. Individuals can borrow up to $5 million through the SBA 7(a) program, with repayment terms ranging from 7 to 25 years. The loan can be utilized for various things, from real estate to franchise fees. The loan amount and duration will determine the interest rates on these loans.

•  A bank or credit union may contribute up to 50% of the total.
•  The franchisee can get up to 40% of the money they require from a nonprofit Certified Development Company (CDA).
•  The franchisee may invest as low as 10% of the total cost.
•  The SBA CDA/504 loan is a team endeavor that is often split down as follows:

There are certain restrictions on how an SBA CDA/504 loan can be used. For example, you can’t utilize the loan to pay for franchise costs. While an SBA loan is easier to obtain than typical company loans, it is still a lengthy process requiring the lender to have a good credit score.

Loans against your home’s equity

If you own a home, you can get a home equity loan or a home-based line of credit. To approve the loan or credit, both of these alternatives use the worth of your home’s equity. 

Home equity is the gap between the value of your home and the amount you owe on it. For instance, if your home is worth $600,000, but you only owe $200,000, you have $400,000 in equity. However, most banks will not allow you to borrow the entire amount of equity.

A home equity line of credit allows you to borrow money against the value of your property. One disadvantage of home equity loans is that they jeopardize your home if you default on your loan. In addition, eligibility for home equity loans necessitates a high credit score and a low debt-to-income ratio.

Rollovers for New Businesses (ROBS)

Taking money out of your retirement account usually comes with a slew of expenses. If you use ROBS, you can avoid these costs and get your money in a few weeks. It allows you to start your business with money from your retirement account without the need to go to a lender.

You must have a 401(k), 403(b), or IRA account to be eligible for a ROBS plan. To gain access to the funds, you’ll need to deal with a ROBS provider, who may charge you a small one-time cost.

Partnerships

If you don’t have the money to establish the franchise on your own, consider partnering with someone who can. An investor could be a close friend, family member, or even a former coworker. If you go this route, keep in mind that you’ll be giving up some company control. You’ll want to collaborate with someone you can completely trust. It’s also a good idea to draft a solid partnership agreement that spells out everyone’s roles, rights, and profit distribution.

Conclusion

If your ultimate goal is starting window business in the United States, Window Medics are where your search for the best opportunities will end. Moreover, the company offers one of the cheapest franchise opportunities starting at $35,000 only. Therefore, it is highly reasonable compared to several other franchise options in the country.  Moreover, Window Medics is known to assist capable entrepreneurs regarding all aspects of starting window business. Whether it is incredible training sessions, marketing assistance, or financial guidance, Window Medics is known to help its dealers grow exponentially. For more information regarding the Window Medics franchise, you can call 888-329-7116 or info@windowmedics.com .