How to Finance Your Hike Doggie Franchise

Unless you were born with a proverbial silver spoon in your mouth, it’s highly likely you’ll need to investigate financing the purchase of your Hike Doggie business. But not to worry, you’re definitely not alone.

While statistics on franchise funding aren’t exactly precise nor predictable, the majority of first-time candidates rely on numerous funding strategies to see their purchase through. In this edition of the Hike Doggie Blog, we’re going to look at the most common ways to finance your way to franchise ownership. And it’s quite possible that you may discover an avenue you hadn’t previously considered.

Franchise ownership does represent a significant investment – not just monetarily of course, but also in terms of time, effort, and resources. Thankfully, the avenues and options for securing the funding you need to purchase a franchise have never been more diverse. What follows is a (fairly) comprehensive list of financing and funding options for you to review, along with a blurb description for each. Before you begin the loan application process, you should already be familiar with the necessary financial requirements and a snapshot of your own financial health – including a calculation of your net worth, your available liquid assets, and your personal credit score/history. In some cases, it’s also highly advisable to come prepared with at least a rudimentary business plan.

 

Conventional Bank Loans

It’s no surprise that many individuals begin their funding search by seeking a conventional loan from their own bank, which is typically a safe bet due to their ongoing patronage over the years. Always pay close attention to the latest information on interest rates, especially as of late. The Fed has made it fairly clear that a series of rate cuts are planned for the near and long-term future, which could drastically affect the amount you’ll have to repay over time.

 

SBA Loans

According to a recent survey conducted by FranchiseInsights.com, almost half (48.9%) of all prospective franchisees plan to apply for a loan secured through the U.S. Small Business Administration (SBA), which offers two specific funding vehicles for franchise owners. These proprietary SBA programs include the popular Type 7(a) loans for new franchise owners and Type 504 loans that offer more flexibility, albeit with some certain limitations.

 

Franchise-Specific Lenders

Because some franchisors don’t offer candidates financing of their own, many work closely with franchise-specific lenders who are very familiar with the business models and processes that come with franchise ownership. Through our sales and development partners at Franchise Evolution Partners, Hike Doggie has established relationships with some of the top names in franchise funding such as Benetrends, FranFund, and Guidant Financial. We’re always available to make mutual introductions and guide you through the lending process, ensuring you get the best borrower terms available.

 

Alternative Lenders

While not exactly known as a first choice for most prospective franchise owners, there are those who may be unable to secure funding through more conventional means. If that’s the case, there are still what are known as alternative lenders. But there is a downside in that you can expect higher interest rates and shorter repayment terms. 

 

Self-Funding

Self-funding a franchise purchase can be secured through personal savings, home equity, retirement savings, and other personal assets which can be leveraged as collateral. In some cases, friends and family members may also contribute to your self-funding effort if you have few alternative options. As with any form of personal financing, be sure you understand the full risks involved.

 

Crowdfunding/Angel Investors

Many of the younger generation, such as Millennials and Gen Z, have increasingly turned to a funding method that relies on crowdsourcing capital. In this same category are so-called “Angel” investors and venture capitalists (VCs) but be forewarned. Most of these options typically require a substantial percentage stake in return for funding your franchise purchase.

 

Rollovers as a Business Startup (ROBS)

It may be a funny acronym to describe an alternative financing option, but many franchise owners have had success in using the “rollover” method, borrowing against their own 401K or retirement accounts to finance a franchise purchase. The benefit? It can be done without incurring significant tax penalties. In fact, the rollover option offers additional tax advantages, but they don’t come without substantial risk. Essentially, you’re putting a lifetime of retirement savings on the line, so before determining this option is a workable solution, be sure to consult with your CPA or certified financial planner before proceeding.

 

For homeowners, one other funding avenue worth looking into at the moment is a home equity line of credit (HELOC), which allows you to borrow against your home’s value to access cash. It may make sense these days, thanks to home mortgage interest rates that are almost half that of the current SBA loan rates. Regardless of which funding avenue you decide to pursue, it’s highly advisable for you to seek professional advice and assistance to help you navigate the best possible option.

 

And if we can help out in any way, shape, or form, simply reach out to us and we’ll be in touch!

 

About Hike Doggie

Hike Doggie was founded in 2016 with a mission to “make dogs as happy as they make us”. The business model is predicated on providing a professional and turnkey dog hiking service. Our vision is to create unforgettable outdoor experiences for dogs, ensuring their physical and emotional well-being while fostering a deep bond between them and their human families. Hike Doggie offers a low barrier to entry, quick conversion, and strong retention rates – not to mention extremely happy clients. To date, Hike Doggie has participated in over 50,000 dog hikes and we’d like to have you help us add to that total. Hit the trail to success and explore franchise ownership with Hike Doggie by reaching out to our franchise development specialists at Franchise Evolution Partners to begin your personal journey. Watch this informative video on YouTube to discover how your life can change as a Hike Doggie owner. And be sure to read our blog, follow us on Instagram, connect with us on LinkedIn, and watch our collection of videos on TikTok.