No one could have predicted the impact of the coronavirus and how it would ripple through, well, everything. If you want to start a business or invest in an existing one, you might be thinking that those plans are out the window.
But that’s not necessarily true.
COVID has created unique opportunities for Investors looking to start new businesses -- especially in the franchise arena.
Looking to start a business? It's a buyer's market. Especially, if you're looking for cash, commercial real estate or labor. Interest rates are at all time lows. Landlords are more willing to negotiate shorter lease terms -- even making rent concessions. And, many banks are willing to write loans with better interest rates. Securing favorable terms now, when conditions are more flexible, can accelerate growth—especially when things start to pick up again.
If you are considering investment in a franchise opportunity, there may be additional incentives and flexibility. Terms such as territory size... franchise fees... and even language in the franchise agreement (normally non-negotiable and sacrosanct) are all open for discussion. Even if it’s just temporary, many of these concessions can help you get through your initial ramp up and through the pandemic.
Further, the U.S. Small Business Administration (SBA), which is generally pre-disposed to franchise opportunities has guaranteed loan programs for up to $5 million. Earlier this year, the SBA offered many incentive programs for new business start ups and there's discussion about new loan packages for 2021. In addition to loans, the SBA is also a resource for small business guidance and other assistance.
