Financing your own business may not be as difficult as you think. We have nearly 1,100 locations nationwide, and our franchisees have tapped a variety of financing sources over the years — conventional loans, SBA loans, retirement loans and home-equity loans, as well as unconventional funding sources. Fantastic Sams has dedicated partnerships with large lending institutions that help streamline the loan process.
Here’s a look at some of the ways you can finance your Fantastic Sams franchise:
The Fantastic Sams Strategic Partnership Financing. Through our strategic partnerships with The Bancorp Bank and Radius Bank, potential Fantastic Sams franchisees can obtain financing approval during the application process without the hassle normally associated with obtaining a business loan.
Since The Bancorp Bank and Radius Bank have already partnered with Fantastic Sams, franchisees will benefit from a streamlined approval process, dedicated bank loan officers and the convenience of avoiding considerable financial filings with the banks.
Local and community banks. The biggest single source of financing is local banks, which are supported by guarantees through Small Business Administration loan options. Local banks are often less restrictive with candidates who are building locations in their communities.
Traditional Small Business Administration (SBA) loans. Fantastic Sams is an approved franchise on the SBA National Registry, which is accessible to all SBA commercial lenders. The SBA registry offers a list of franchises that have had their Financial Disclosure Documents and operations vetted by the SBA, giving lenders access to information that minimizes their risk. Fantastic Sams’ presence on the registry saves several steps in the SBA lending process for franchisees.
401(k) or IRA. A franchisee or a franchisee’s family member can tap into 401(k) or IRA retirement savings to fund a business without facing financial penalties for early withdrawal — as long as they do it the right way. Using retirement funds requires a series of legal steps, including the creation of a C corporation and corporate retirement account, and movement of corporate stocks. It has become a popular financing option because it allows you to, in effect, lend money to yourself.
Cash. While Fantastic Sams requires a minimum liquidity of only $100,000, you may have more capital you could use to get started. If you have the liquidity, cash is always a great way to invest. Your savings could be the key to unlocking a rewarding investment without the hassle of third parties, tax penalties or interest rates.
Home equity line of credit. Depending on the housing market in your area, you may be able to leverage the equity in your home and pull out enough capital to purchase your franchise. You also might be able to secure a line of credit based on a portion of your home equity, which can help with ramp-up costs.
Startup costs for Fantastic Sams range from $144,862 to $316,006, according to our Franchise Disclosure Document. Franchise candidates need a minimum net worth of $500,000 and at least $100,000 in liquid capital. The numbers will vary depending on how many units are purchased, since we offer deals on three-, five- and ten-salon packages. The investment is also dependent on whether you will renovate an existing salon or build a new one, as well as a number of other factors.