HOW DO I FINANCE A ROBEKS?
Robeks can offer you guidance as you explore
financing options, and we have also developed
several partnerships to make it easier for
franchise candidates connect with lenders.
Here is a look at some of your options for
starting your new business:
FINANCING PARTNERS
DIRECT CONNECT
Robeks has
partnered with
Direct Connect
Ventures (DCV), a
full service franchise
financing firm, to
help franchise candidates as well as existing
franchisees understand their financing options
and explore financing solutions, whether
starting a new business, adding equipment,
upgrading an existing store, or building a
credit line for their business. DCV has placed
financing for thousands of startups, refresh
projects and expansion across the nation.
BOEFLY.COM
Robeks provides
financing assistance
for franchisees
through its
partnership with
BoeFly.com, the #1 marketplace for franchise
lending. BoeFly is a powerful service that
offers borrowers access to thousands of
lenders through a single loan request.
BoeFly is secure and puts you in the drivers
seat – improving your odds of accessing a
small business loan and ultimately getting
better terms. In addition, BoeFly automatically
includes the Robeks material in your loan
package that lenders need to see. The process
streamlines your process of applying for loans
and also gives you access to experts who
can help you prepare your application. Have
questions? Through our relationship with
BoeFly, you can receive a free consult. Just call
1-800-277-3158 and reference Robeks.
RETIREMENT
ROLLOVERS
Many people don’t
realize it, but you
might not need a loan at all to start your
business! Many people have retirement assets
that they can tap, tax-free and penalty-free,
to start their own business. IRAs and 401(k)
accounts can be accessed to fund a business.
The process is tricky — there are specific steps
that need to be done in the proper order so
that you don’t trigger pre-withdrawal penalties
— so it’s best handled by a skilled financial
advisor. Robeks has partnered with Guidant
Financial, an expert in these types of rollovers
as well as other types of financing. You can
take a prequalification assessment here.
Some things to consider when evaluating your
options.
Different forms of financing comes with
different pros and cons. If you have questions,
please give us a call at 866-476-2357 or fill
out our Free Franchise Report form to get in
touch. Here are some big picture guidelines:
WHEN ATTAINING FINANCING YOU WILL
NEED TO CONSIDER THE FOLLOWING:
1. What is the least expensive expansion
capital available to me?
2. What available financing is the easiest to
attain?
3. What financing strategy will tie up the least
of my liquid assets?
Considerations
• You will need to demonstrate an ability
to repay the loan through your existing
sources of income prior to approval.
Business income generated from your new
Robeks store will not be considered.
• You can borrow up to 80% loan-to-value.
Multiply they value of your home by 80%
and then deduct the outstanding balance
of your first and second mortgages.
Certain volatile real estate markets (such
as Florida) may be 70% loan-to-value.
Certain states like Texas do not allow
second mortgages.
• Real estate appraisals required.
Ultimately, we are trying to answer the
golden question, “What is my best strategy for
achieving my financial goals?”
401K Rollover/Self-Directed IRA
The following are the most common methods
franchisees use to finance their Robeks store:
• Allows you to start your business using
qualified 401K and IRA funds with no
• declared income, no taxes, and no penalty
for early withdrawal (penalty is 10%).
• Pay yourself the interest, not the bank.
• Low documentation. You don’t have to
write a robust business plan or participate
in
• elaborate loan closing.
• Conserve your cash and liquid assets.
1. Home Equity Line of Credit (HELOC)
2. 401K/Retirement Plan Rollover/SelfDirected IRA
3. SBA Loan
4. Friends and Family
5. Partnerships
Let’s look at the advantages of each.
HELOC (Home Equity Line of Credit)
Advantages
•
•
•
•
Very low interest rate.
Highly flexible. Interest only if necessary.
No set repayment schedule.
Low documentation. You don’t need to
write a robust business plan or disclose
where the funds will be utilized.
Conserve your cash and liquid assets.
Helps your business be more resilient.
Advantages
Considerations
• Many people consider their retirement
plans a “nest egg.” You will
need to start looking at your
Robeks store as your nest egg.
• Need to think outside the box.
• Determine if the combination
of the interest you save and
income you make as a Robeks
franchisee will beat what you
will predict the stock market
will give you.
SBA Loan – Robeks is an SBA-approved
franchise
(http://www.franchiseregistry.com/)
Partnerships
Advantages
• Synergy. Partners should have
complementary skill sets and add value to
each other.
• Greater leadership and management
capacity, and ability to grow faster
together than separately.
• More eyes on the business.
• Individual partners may have more time
flexibility.
•
•
•
•
•
Government-backed loan. Eliminates
bank’s risk.
30% Cash injection. Conserve your cash.
Reasonable cost of money. Typically 2.75
points over prime.
No pre-payment penalty 7-10 year term.
Scalable. More money available with less
collateral once you have a track record of
success.
Considerations
•
Longer process than others. Often 90 days
or more.
• High documentation. Requires more time
to gather and complete paperwork.
• Balance of the loan requires 100%
collateral. You will need to show the bank
at least $280K in collateral.
• If most of your collateral is in home equity,
you should consider HELOC before SBA. Work
experience is important consideration for
attaining a loan. Learn more at www.SBA.gov
Friends and Family
Advantages
•
•
•
•
They know you.
Typically flexible on repayment terms
because of your previous relationship.
May bring certain areas of expertise into
your business.
Loans may not require collateral.
Considerations
•
•
If business performance is not what
is predicted, it may impact important
relationships moving forward.
If friends and family are seeking equity in
the business, see “Partnerships.”
Advantages
Considerations
• Partners divide the rewards and equity.
May be most expensive source of
financing.
• Business relationships are different than
family and friendship relationships.
• Partners need to have discussions about
who is responsible for what, who is
investing what, how do partners divide
income, shares, and benefits.
• Hard to dissolve without impacting the
business