With bank and franchise finance drying up in this economy, a smart entrepreneur came up with a solution. A platform to link investors with potential franchisees. FranEquity provides a platform where a potential franchisee in need of money can present an opportunity and accumulate investors into a group so the franchisee can qualify for bank or traditional finance. This platform also matches franchisors with investors.

This type of arrangement really opens the doors for many entrepreneurs seeking capital to start or grow a franchise. Here are some applications of this concept which may be helpful in your capital raising efforts:

• If you want to fund a franchise start up but lack capital and expertise, then consider putting together a local private investor group to fund 40-50% of the finances necessary and then finance the rest with the bank. Use a good law firm to set up the investment group and define the rules.
• Already a business owner and want to franchise your concept? Don’t have the funds? Consider forming a private investment group so you can develop the system and do some test franchises. Leverage your investment group into bigger bank finance when ready to sell your franchise concept.
• Already own a franchise but can’t get financed for more units? Consider forming a private investment group to help you qualify under the franchisor terms.

If you brainstorm this idea, you will see there are a ton of ways to apply this, along with some great advantages. If you as a franchisee have the expertise to run a successful franchise, you shouldn’t be disqualified by the lack of finance. It is a win-win for both the franchisee and the franchisor during a period of tough business finance attainment. Apply it to your context and see what creative ways you can come up with to venture the franchise market.

Three considerations before you approach private funders:

• Have you considered using  Marketing Consultant to help develop your Business Plan? A solid business plan is crucial in securing private and other types of business finance.
• Has another successful entrepreneur critiqued your  Strategic Plans? The feedback is incredibly useful.
• Is your  Loan Package
• short and derive interest in 30 seconds? You don’t have much time to interest a busy investor.

Disclaimer: The blog author is not offering investment or finance, nor endorsing a particular company in this blog post. Please conduct your due diligence and utilize legal help when considering such a strategy.

This article is written by Frank Goley, Business Planner for ABC Business Consulting.