Nurseries present a sensible investment opportunity, providing a steady income stream and continuous adoption of new customers (so long as people keep having children…).
From acquiring new sites, to large-scale development projects, we help childcare and specialist education businesses access the funding they need to grow.
If you are looking to fund the purchase of your first nursery franchise, you will likely need to demonstrate experience of working in the nursery industry or a similar field.
There are a variety of financial products which are designed to suit the purchase of a nursery franchise, depending on your business finances, your personal career, and a number of other contributing factors.
Here’s a breakdown of the financial products available for you to assist the purchase of a nursery franchise:
Business loan
Traditional business loans from lenders provide you with a lump sum to cover the above costs. Business loans provide flexibility, meaning you can utilise this loan across a number of different areas to fund your franchise purchase and associated operational costs. Business loans have structured repayment terms allowing you to spread the cost of funding the franchise purchase over time, with affordable monthly repayments. With this foresight, it is fairly simple to budget your repayments and plan accordingly around them.
Asset finance
Asset finance allows you to purchase essential equipment, such as new educational technology, for your nursery operations. Asset finance options including hire purchase or a business lease allows your business to spread the costs of acquiring this equipment over time while preserving cash flow in the crucial early stages of your operation. If the nursery franchise you’re looking to finance needs updating, asset finance can help to fund the updates to your equipment.
Commercial mortgages
If you plan to own the property for your nursery, a commercial mortgage can assist in funding the acquisition. Lenders typically require a deposit, however, commercial mortgages provide long-term cash flow stability and potential capital appreciation while allowing you to become the owner of the property.
Franchise finance packages
Some nursery franchisors work with lenders to provide tailored franchise finance packages, bespoke to your specific requirements and financial position. Franchise finance can provide flexible terms based on the franchise’s established business model and projected profitability. Franchise finance packages are bespoke and unique to each application.
Understanding the costs of nursery franchise finance
Before seeking finance, it’s vital you understand the costs associated with purchasing a franchise:
Franchise fees: Initial costs required for you to acquire the franchise rights
Property purchase or lease: Securing a suitable location for your nursery
Refurbishment and branding: Upgrading the premises to meet your franchise standards
Equipment or supplies: Investing in educational equipment or refitting your nursery
Staff training: Staff must be trained to meet regulatory standards, which can sometimes be costly depending on the level of training required
Working capital: Ensuring sufficient cash flow for your nursery’s day-to-day expenses
Given the significant investment required, commercial finance presents an effective and affordable route to fund these costs.
Choosing the correct finance option for your specific requirements
The most suitable funding option depends on your unique financial and commercial position, as well as your desires for future growth of your nursery franchise. Commercial finance provides a variety of solutions tailored to support your investment. By exploring these options and working with a commercial finance broker to understand your unique requirements, you can successfully secure the capital needed to establish and grow your franchise, tailored to suit your position.
If you want to speak with a broker who understands franchise financing, get in touch with Mill Wood.
