It’s always been your dream to own your own franchise, but money is a constant sticking point. It’s no surprise you need start-up funds to achieve this goal, but where will the cash come from? Besides the obvious places like your own savings and bank or credit union loans, it’s not unheard of for loved ones to chip in, too.
People want to help
Asking friends and family for money to start a business is actually more common than you may think. And there are several ways to do it: You can ask for an outright gift or loan, or consider bringing one or more loved ones into the business as silent partners. When it comes to loans, the people you know are likely to charge much more reasonable interest rates than a bank.
A few caveats
As with any way of procuring start-up funds, you do have to be careful with the “friends and family” method. At times, money changing hands can lead to confusion, disagreements, fights and sometimes the loss of the relationship. In order to avoid this, have a contract drawn up that you both sign. It should include repayment terms, dates and witnesses to the transaction.