Promise of Low Interest Rates = Opportunity for Franchisees

Posted on August 28th, 2011 by Oscar Kirkhope | Tags: Interest Rates, Rates

The silver lining in the stock market’s dismal performance over the last few days is interest rates that will stay at historic, near-zero lows for the foreseeable future, as the Federal Reserve promised Monday.

Investors’ stock portfolios may have taken a hit. But the news on interest rates the Fed, in a rare vow, said it would hold short-term rates near zero through at least mid-2013 means anyone starting a new business will be able to obtain financing at historically low costs.

Entrepreneurs with sufficient collateral and good credit can borrow money more easily than ever, using it to invest in franchise businesses, practically the only sector of the North American economy that’s grown in the last few years.

“Many of our customers are surprised to learn how little they need to start their own franchise businesses in some cases $50,000 or less,” says FranNet President Jania Bailey, who spent 18 years in banking before joining the company. “It’s not as easy to get a loan these days as it once was, but if you’re in good financial shape and have solid holdings, you can secure financing at incredibly low rates.”

Franchises offer unique opportunities for driven professionals to start their own businesses and secure their own financial futures. Because franchisees follow established business models and best practices, they can “hit the ground running” immediately and avoid the painful trial-and-error periods that kill most small business start-ups.

In recent years, people of all ages and backgrounds have reinvigorated their careers through franchise ownership from recent college graduates who struggled to break into the corporate world to former executives in their 50s who suffered unexpected layoffs and needed to find new income sources to guide them toward retirement.

“One reason why franchising has performed so well compared to the overall economy is that it sets up people to succeed,” Bailey says. “Franchisors already know how to make a business work, and because they’re invested in their franchisees, they have a natural incentive to make sure franchisees succeed, too. Franchise businesses survive and thrive at much higher rates than other small businesses, and when you consider the low start-up costs and cost of borrowing, it’s no wonder.”

For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities.

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