BoeFly is to find an online platform for banks and financial institutions to lend money for the company. While the platform to find many types of financing that can be used, it has the reputation of being a great place designed to get a loan to start, buy or grow a franchise. I had a chance to interview the founder and CEO of BoeFly, Michael Rozman. The following Q & A is constructed from my notes and not represent his exact words.
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Definitions (common sense definition, while not technically accurate, will help you get the interview to understand)
- franchisees -. the small business owner of one or more franchise locations
- Franchisor - the owner of the franchise brand (think Jamba Juice), which go to the right licenses franchises under their name
- Accepted franchisees -. A person who has been approved to become a franchisee of a franchisor to open a franchise in a given area, until certain conditions are met, such as to obtain financing.
to find the funding to launch a new franchise How difficult?
We find most accepted franchisees with good credit history, which to obtain financing able to work with a quality franchisor. While reduction below Score credit quality at a FICO over simplification, would a person with a score of 680 to fit the description of a person with a good credit history. We see a lot of loans to entrepreneurs with much lower credit scores.
Unfortunately, this is not the experience of many loan applicants. Many people go to their local bank financing to find. Each bank has different criteria on which to impart them. Often know the lending officer that the bank does not give to a candidate before they ever make a request, for example, because the franchise brand has too few vacancies. However, the loan officer is unable to pass on this information to the applicant for regulatory and compliance reasons allowed. This results in many wasted time and effort. The BoeFly platform solves this problem in a few different ways. An entity shall present his information to BoeFly and we adjust the borrower with the right lender from pool of thousands.
What are some of the reasons why a bank might not want to start a loan to finance a franchise?
want all banks to have a high degree of confidence that the borrower will repay the loan. For existing business or franchise, is there to help a financial history, to make this decision. With a new franchisee, tends lenders very carefully the history of franchising consider when introducing new franchisees. Lenders consider factors such as the number of franchised units, the time in the business of the franchisor and the success rate / sales of their franchisees. Consider, for example, some banks will not start franchising financing, which has no more than 500 existing units. When looking at the start of a franchise, you can find these numbers in the Franchise Disclosure Document which, the franchisor can be obtained with the question.
I should mention that a very large proportion of the loans are to launch new franchise SBA loans. These loans are of a credit institution but are partially insured against loss by the Small Business Administration.
There are some franchises that are bankable not?
Yes. It is very difficult to obtain financing for home based businesses or franchises that have $ startup cost under 15,000. An example might be home-based travel service This does not mean that it is a bad deal, only that it does not want to finance a bank. In these cases, you might find the franchisor willing to finance the franchise fee costs. not directly provide general franchisor financing.
franchising How strong in supporting accepted franchisees get loans?
It varies enormously. There are some franchisors who take the philosophical position that the financing of the responsibility of the franchisee is accepted. There are others, such as Jamba Juice, the franchise candidates actively educate who are considering joining the brand and accept franchisees alike about their financing options. In the case of Jamba Juice, they go several steps on education. You pay for their franchisees accepted "bqual" credit report to obtain and subsidize the cost of using the BoeFly platform to find financing. When researching to restart the franchise, I would strongly recommend researching what provides help franchisors in finding financing.
What are the typical loan sizes, the interest rates and conditions to start a franchise?
on BoeFly platform we will see the majority of the loans in the $ 100,000 to $ 500,000 range. Since these loans often SBA sets the maximum interest rate of the SBA. Lenders tend to the maximum or very close to the maximum charge, rate, allowing the SBA. Depending on the size and length of the loan, the interest rate will often reach 5-6% for loans with a floating rate. The duration of these loans ranges from 7 to 10 years range.
Michael Rozman, CEO and cofounder
Mike Rozman is CEO and co-founder of BoeFly .com, the online marketplace connecting business borrowers with 5,000+ lenders. Mike has a passion for helping small business owners the most efficient competitive financing secure a business or grow an existing business to start. He was to bring innovation committed to the franchise industry, as brands successfully the unique capital can address access needs of new and existing franchisees.
Previously Mike the president and cofounder of Edgware Analytics was the company that was used. As a founding platform for BoeFly Before Edgware from 03 Mike was a vice president at JPMorgan Chase in its global banking.
Mike acquired a dual MBA from Columbia Business School and the London Business School and a BS from Boston College.
Mike serves at the International Suppliers Franchise Association Board and a Certified Franchise Executive in 2013 was
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