Ugly. Head.
http://www.flickr.com/photos/tambako/3457063894/
Once in awhile, I receive an email or two from a loyal reader of this blog suggesting that I’m being rather negative, when it comes to my writing.
I think that I’m a realist. I think I report the facts. I think my posts and comments are reality-based.
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Would you rather that I spin things?
Maybe I should start every post I write with, “Franchising is the greatest business model ever invented. You just can’t lose! Banks love the model, and it’s easy to get a loan! Almost anybody can succeed as a franchise owner!”
Yaddadedo, Yaddadedee, Blahbity Blahbity Blah.
From The New York Times;
“The big national companies that dominated franchise lending before the 2008 collapse have stopped or reduced financing. The remaining lenders — often local banks — have been more restrictive in their credit underwriting, and they have been demanding more collateral (like home equity), more cash liquidity, more experience in the industry and outside sources of income, like rental income or a working spouse.” Read
- So, was I being negative in March of this year, when I was suggesting that banks just are not loaning money, and I was asking for their help? Look
- How about when I reported (in 2008) about the problems that McDonald’s franchisees were having getting their new latte machines financed? Read this
- Here’s a post from 2009. It’s titled, “OPEN FORUM BY American Express website.?”
- I was also interviewed about “The State of Franchising In The Credit-Crunched US,” last year. Read what I said.
Here’s my question;
Do you think that there’s a problem with banks not lending money for franchise business start-ups?
Or, am I being negative?
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Joel. Thanks for the post. I think your being realistic with a slight sense of negativity and a touch of subtle sarcastic humor. That’s why I like your blog. In today’s market you can get financing provided you can demonstrate and ability to pay the money back. Seems to be an overreaction to the loose credit standards in place prior to 2008. This is a simple adjustment our industry will have to get used to. In my opinion this will weed out the weaker players and strengthen this industry in the long run.
Todd,
Thanks for meandering over all the way from New York to visit my blog.
Thanks for the comment, too.
Sarcastic? Me? No way.
The Franchise King®
Right on, Joel. Lending is nowhere near where it was or where it needs to be to jump-start franchising efforts. Some money is out there. But, franchise candidates will definitely need to be prepared to “earn” it as it will take very good creditworthiness, ample collateral, a proven concept and much more. This week on Franchise Today, my guest was Ron Feldman, CEO at Siegel Capital. He provided some really great insight into franchise finance. The show may be listened to on-demand at http://tinyurl.com/32f9m5c.
Mr. Segreto,
Thanks for stopping by..
I don’t understand why the major banks just won’t step up to the plate, and loan money to folks who want to take their shot.
Crazy.
Now, about that radio show…
The Franchise King®
Joel,
I’d actually prefer if you “spin” things. That way I can remain in my personal little fantasyland…
J. Bailey
This article helped me a lot. Thanks!
Now,to get that franchise loan!