THE MONEY FEATURE
business. We have a dedicated franchise team with extensive knowledge, understanding and expertise within the franchise industry. 2014 was a record lending year and we are looking to further build on this performance in 2015. HSBC have made available an £8billion fund for SMEs this year and are also waiving arrangement and security fees on qualifying business loans between £1,000 and £300,000 until the end of July.
There are a number of areas where franchisors can help prepare their franchisees for that fi rst meeting with their bank:
• Ensure they produce a concise plan that sets out a clear strategy for their business.
• Their business plan should include well thought-out fi nancial projections, including a cashfl ow forecast, profi t and loss account and balance sheet, ideally for between one and three years. This is a key area where the franchisee may have an advantage over conventional start-ups, and franchisors should assist them with the fi gures based on the performance of existing franchisees, but the franchisee must own and understand these fi gures in order to present a credible case to the bank manager. Sometimes our business managers tell us that they have been presented with fi gures that a potential franchisee does not understand or cannot explain.
• CVs of key personnel are very important. You should be keen to view a CV to confi rm the suitability of the applicant to run the business; whilst previous experience in the particular business sector may not be essential, there are certain skills and capabilities that are vital to run a successful franchise.
• Include a marketing plan detailing how the franchisee will target their potential customers and the unique selling point of the product / service offering.
• The plan should address any risks facing the business and what action needs to be taken to either prevent them or minimise their impact.
• Franchisees should try to practise their presentation before meeting with the bank to ensure they deliver a professional pitch. It’s said that you only get one chance to make a fi rst impression.
There is always funding available for strong business propositions subject to terms and
Franchisor News | 27
conditions and credit evaluation. Franchisees are in a stronger position than a stand-alone business due to franchisor help and support, plus other franchisees in the network being advocates of the model. Requests for funding are more likely to be agreed if the bank is presented with a professional and credible business plan.
At HSBC, we consider every proposal on an individual basis. Economic returns or security are a secondary consideration to a viable business proposition – we are looking to build long-term, successful relationships with our customers.
want to grow.
Our funding solutions are an alternative to a bank overdraft or business loan and put businesses in charge of their day-to-day fi nance requirements. Businesses can borrow between £10,000 and £500,000, with maximum fl exibility repayment times.
“Our facility also helps franchisees manage their cash flow”
lternative means of funding have always been available, but increasing numbers of people are choosing to use these avenues to obtain funding for their businesses. Just Cash Flow PLC is a responsible specialist lender to UK businesses, offering fl exible funding solutions to businesses that
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Just Cash Flow is well positioned to be your franchise-funding partner. When your selection processes have identifi ed an acceptable franchisee we can rapidly put our revolving credit facility in place. This will enable your new franchisee to get up and running and not waiting for the many weeks or months it can take to put a longer-term fi nance solution in place. The process of applying for funding is straightforward and a funding decision is made quickly by real people with many years of commercial experience. We also partner with other lenders to fi nd the optimum solution for your franchise. We understand that every business is different so we offer tailored fi nancial solutions to meet requirements. Once the franchise is successfully up and running, this facility will also help franchisees manage their all-important cash fl ow – particularly in the fi rst year. n
John Davies, marketing director, Just Cash Flow
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