Where to Start?

In your techno-economic feasibility study, you will need to prepare a business plan with cash flow forecasts for a period of 2-10 years of the business. MDACI, a.s. will help you, but you need to be sure that you understand the figures, what they are based on and how much you need to turnover in order to break even.

Some banks use the following approach to assess your request for finance.

 

The lending banks

The bank, thought its risk management team, will carry out a full review of your background and reliability, your training, qualifications, and track record, financial resources, suitability to run the business.

MDACI, a.s. will also look at these factors to ensure that you are a suitable franchisee.

 

How much money do you need to borrow?

As known worldwide, banks and financial institutions will normally expect the franchisee to contribute at least 30% of the total cost of the franchise (from franchise purchase cost to operations management cost); this contribution should come from your own resources (own capital).

 

Apart from the actual amount the bank will also look at the followings:

• the purpose for which the money is going to be used and
• it's effect on your business
• is there sufficient demand for your product or service (the fact that you are going to be investing in a tried and tested franchise format helps here)
• how will the money borrowed benefit the business?
• What type of finance are you looking for overdraft, loan or a package of financial services?
• how much are you investing in the business? Normally you are expected to contribute towards the total start up costs from your own resources
• have you asked for the right amount, is it too much or too little?

Your franchisor will normally help with setting out details of start up funds required and help with the preparation of cash flow forecasts.

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