In the current economic climate, financing your new franchise may be more challenging than it once was. With less easily available credit, it is more important than ever to take stock of what is available to you from the onset. Work together with your franchisor to find what options will work best for you to ensure that your business is established on a firm financial foundation.

Personal Resources

If you happen to be fortunate enough to be sitting on enough capital to start your business and float it through the rocky terrain of start-up then so much the better. However, that ideal situation is not a reality for most, nor should you be constrained by it. Nevertheless, the more capital you can generate on your own, the better off you will be.

Take a look at what you can realistically bring to the table. Home equity is always a good start and can be leveraged as collateral for a loan to start your business. Creating a C corporation from your 401k or (other type of retirement fund) can also provide you with a source of funding. Rallying the support of personal private investors is also an excellent way of generating capital for your business.

Lenders for Business

Traditional lenders are still an option for starting up your business. In the wake of the subprime collapse, many major lenders shut their doors, but those gaps in available credit have begun to be filled by alternative lenders. Gaining the backing of the Small Business Association can dramatically improve your chances of finding a loan for your business. If you haven't committed to a franchisor yet, the SBA's Franchise Registry also offers a great starting point and can help you find a franchise with strong credibility.

Site Specific Sources

If you have already committed to a franchisor, you might wish to explore sources specific to your state, area and even specific site. Many states and cities offer financial incentives to encourage new business in the interest of economic development and job creation. If you already have a site in mind, you would be wise to explore what financial incentives might be available through your landlord during the lease negotiation stage.

Other Sources

There are other available sources of capital targeting specific groups of business owners. There is a wealth of support to be had by veterans, minorities and women (much of which is offered by the International Franchise Association). These programs exist to increase the presence of these under-represented groups in the business community and to promote diversity.

Regardless of your financial background or situation, if you are determined and realistic in your approach to new business ownership, then you stand a reasonable chance of being able to fund your business venture. Bring the same enthusiasm to your quest for capital that you intend to bring to the operation of your business. Commit yourself to the same level of diligence and research in your investigation of available financial sources as you did in your search for the perfect franchise.