AIB Financing

Company Description

AIB recognises the importance and potential of the franchising sector to the Irish economy and is committed to backing its growth. Whether starting-up your first business or expanding an existing franchise network AIB has a range of financial products and services to provide the required support. We are available to our business customers through our branch, phone and online channels and look forward to talking to you.

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Raising finance is one of the most critical considerations for any entrepreneur looking to start their own business. Before starting the process it is vitally important that a promoter has a detailed breakdown of what funding is and will be required to get the business off the ground and operating. When buying a franchise this can include a combination of the upfront franchise fee, initial capital expenditure on equipment and the working capital requirement on an ongoing basis.

The next issue will be identifying the sources of funding. The type of funding required will depend on the business model of your franchise and in the majority of cases the sources of funding will be varied. From a banks perspective (and franchisor too) it is strongly desired that the promoter provides their own funding to the venture demonstrating their commitment to the business and a willingness to have some “skin in the game”. Ideally this money will come from savings or an equity partner rather than personal borrowing as this will put undue pressure on your business to service both company and personal debt.

Often franchising a start-up can be challenging due to the lack of a demonstrable track record. However working with an established franchise system that has a proven concept and a history of achieving results with other franchisees has a great benefit. Not only does it give an entrepreneur confidence, it enables any potential lender to get greater insight into what should be expected from a new outlet in terms of the key performance indicators, financial and operational. Combine this with the support that a new franchisee can expect from an established franchisor and their system and this creates a lower risk proposition than as a standalone start-up thereby improving the likelihood of accessing finance. 

The level of bank finance that can be provided to a new franchisee will vary and depend on a number of factors, the strength and track record of the franchise system you are joining being one of the most important. The quality of your business plan is also vital. A prospective franchisee should work with the franchisor to produce a detailed financial plan that is supported by all the relevant information on how you will achieve your goals. It also needs to contain contingency plans in the event that things don’t go exactly as designed and allow for reinvestment. A detailed profile on the promoters should also be included to illustrate their applicable experiences and how you have the competence and capability to be successful with the franchise you have chosen.  

If you are thinking about purchasing a franchise and will require bank finance it is important that you talk to your bank as early as possible and outline your plans. Your local relationship manager will be in a position to advise you more specifically on what type of finance is most suitable for your business needs. Alternatively visit Here to find out more.

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