フランチャイズ経営を始めるための資金調達法 | フランチャイズニュース

The most popular fundraising method for FC startups: "Getting a loan"

Now that you've determined the necessary costs for running a franchise, the next step is fundraising. Here, let's look at the most popular fundraising method: "getting a loan."

・Borrowing from relatives or acquaintances

While this is the easiest way to raise funds, there is a possibility that you may not be able to agree on the amount or conditions. Also, while you can retain management rights, you will be sharing the risk with family members. If you do not properly decide on the repayment method in advance, it may lead to trouble later on.

・Borrowing from financial institutions, etc.

If the funds needed to start a business are relatively small, borrowing from financial institutions, etc. can be advantageous in terms of procedures and collateral. Compared to investment, there is no intervention in management, and the relationship is mainly about the financial aspect of whether or not you can repay the loan.

Financial institutions that come to mind include the government-affiliated Japan Finance Corporation, and private financial institutions such as banks, credit unions, and credit cooperatives. Furthermore, while local governments do not provide direct loans at their offices, they do offer loan products (institutional loans). We have summarized them below, so it would be a good idea to review the interest rates and eligibility requirements and consult with a specialist.

(1) Japan Finance Corporation

This is a representative government-affiliated financial institution. Its appeal lies in its low interest rates of 1-2% per annum. The repayment period can also be set relatively long, making it a great asset in the early stages of a business when profit forecasting is difficult. They provide loans ranging from hundreds of thousands to tens of millions of yen to those wishing to become independent, start a business, or open a new venture. For new businesses and startups, unsecured loans and loans without guarantors are available under certain conditions.

(2) Private Financial Institutions

This refers to banks such as megabanks and regional banks, as well as credit unions and credit cooperatives. They also offer loan products specifically for independence and startups. If you're starting a small business and launching a franchise, building relationships with smaller financial institutions such as regional banks, credit unions, and credit associations is more important for fundraising than with megabanks.They have a characteristic of valuing local entrepreneurs because they do business in their respective regions.

(3) Non-bank and consumer finance

These typically do not lend to companies, but rather to the company's representative personally. The loan amounts are small, making it difficult to meet necessary funding needs, and it is not recommended to use them during the startup phase.While the procedures are simple, they are characterized by high interest rates and an extremely large interest burden.

(4) Local governments

Prefectures and municipalities also have loan programs depending on the location of residents and companies. Banks and other financial institutions are ultimately involved in these programs.

However, the government can subsidize a portion of the interest payments and guarantee fees, making it a favorable condition.

■Fundraising by soliciting support from investors: "Receiving investment"

Next, let's look at the fundraising method of "receiving investment."

・Venture Capital (VC)

A common way to start a venture company is to receive a large investment from venture capital (VC). While this may be different for startups in sectors where an IPO is expected in a few years, the situation is different for typical independent entrepreneurship.
VCs, in particular, usually have a minimum investment amount of 50 million to 100 million yen, and are not suitable for small-scale fundraising below that. Also, VCs invest by subscribing to capital increases. Be aware that this will decrease the percentage of shares held by the management.

・Angel Investors

There are tax benefits such as the angel investor tax system. Similar to VCs, since they invest in stocks, investors hope for a large return through an IPO or sale. If performance is poor, they may intervene in management in some cases.

・Crowdfunding

You publish your business plan on fundraising sites and solicit investments. You can set your own target amount and decide on the return to investors. However, this can be considered an unstable fundraising method that does not necessarily guarantee reaching the target amount. If your business plan is not attractive, it will be difficult to raise funds.

Generally no repayment required! Fundraising through grants and subsidies

Finally, we will introduce methods of fundraising through grants and subsidies.

One method that does not involve repayment is to utilize grants and subsidies from the national or prefectural government. While grants and subsidies have defined purposes and conditions, and require review, they generally do not require repayment, so obtaining information and utilizing them effectively can be a great advantage.

Grant and subsidy programs for small and medium-sized enterprises (SMEs) include those aimed at "promoting SME development," "technological development," and "employment stability." There are a variety of grant and subsidy programs, and many have limited application periods. It's a good idea to regularly check the websites of each organization.

■Choose a fundraising method based on a medium- to long-term plan

When choosing from the many fundraising methods, you should decide based on a medium- to long-term plan, including the current state of your business and future funding needs.

Envision the best future for your company and determine which method is best for you before pursuing fundraising.