Wednesday, April 24, 2024
Creating a business, financing your project: Convincing your banker in 3 steps
Become a franchisee
In the journey of starting a business, the financial aspect plays a crucial role. To materialize an entrepreneurial project, it is often necessary to seek external sources of financing, among which banks play a central role. Convincing your banker of the viability and profitability of your project is therefore an essential step to obtain the necessary financial support. Thus, with the help of our experts, we will explore the 3 key steps to convince your banker.
According to the 20th annual franchise survey by Banque Populaire, 3/4 of franchisees say they obtain bank loans more easily when operating under a brand. This is because franchising offers 3 key advantages that banks take into account: security, support, and environment. Becoming a franchisee can thus be a magical recipe for obtaining the necessary financing.
Before meeting with your banker, it is essential to have a clear idea of the brand, to have reached an agreement with the franchisor, and to have located the location of your business. It is also crucial to choose the right bank for your franchise project. Instead of dealing with a simple customer advisor, it is recommended to make an appointment with a banker who understands the workings of franchising well and who offers specific solutions tailored to this model.
Regarding the amount needed to open a franchise, it is important to have financial resources covering equipment, inventory, and working capital. Depending on the sector of activity, financing needs may vary, but as a general rule, a contribution of around 30% of the overall project is recommended. Fortunately, even with a modest contribution, it is possible to embark on entrepreneurship thanks to accessible financing and credit amounts often below 50,000 euros.
During the meeting with the banker, it is essential to show motivation, prepare a good pitch, and highlight the human aspect of your project to evoke emotion. It is also recommended to be accompanied by an accountant to establish a realistic cash flow plan and to prepare all necessary documents, including the Pre-contractual Information Document (DIP), which contains essential information about the franchise network.
In conclusion, convincing your banker to finance your entrepreneurial project may seem intimidating, but by following these 3 key steps and preparing meticulously, you can maximize your chances of success. With a clear idea, a solid financial plan, and a convincing approach, you can realize your entrepreneurial dream and obtain the necessary financial support to thrive in your business.