Choosing the right banking partner can make all the difference

In the dynamic world of franchising, choosing the right banking partner can make all the difference in achieving business growth and success. Capitec Business, who will be presenting at the FASA Breakfast event on the 11th October at the Premier Hotel in Pretoria, have positioned themselves as leaders in providing the best-tailored banking solutions specifically designed to meet the unique needs of franchisees.

Lending solutions

Capitec provide flexible financing options to support franchise growth and expansion, whether you’re:

Purchasing an existing outlet
Setting up a new store
Revamping an existing outlet
Purchasing additional equipment
Entering a management buy-out transaction
Purchasing commercial property
Improving working capital and cash flow

Transactional banking solutions

Capitec also offer a range of transactional banking services designed to simplify financial management for franchise owners:

Tailored business accounts with competitive interest rates, low monthly account fees, and access to online banking and our app for convenient account management.
Efficient payment solutions, including bulk payments, salary transfers, supplier payments, and cross-border transfers, to facilitate seamless financial transactions.
From card machines to card processing solutions and merchant services, we support retail operations and enhance customer payment experiences. The card machines are affordable, have fast settlements, have no monthly rentals and the battery lasts all day.
Cash deposit and withdrawal services, cash handling solutions, and cash flow management tools to optimise cash operations and liquidity.
Access to a user-friendly digital banking platform with features such as account monitoring; transaction history; balance inquiries; statement downloads; and secure messaging for communication.

Benefits and unique offerings

Capitec Business has several benefits and unique offerings that cater specifically to the needs of franchise businesses:

A team that specialises in franchise finance, providing expert guidance and support throughout the lending process
An understanding of the intricacies of the franchising model and tailor solutions to meet franchisees’ unique requirements
Affordable and transparent banking solutions, simplifying financial management for franchise owners and ensuring cost-effective banking services
A national network of Business Centres provides accessibility and convenience, allowing franchisees to access banking services and support wherever they are located.

How to apply for franchise finance

Once a franchisee has been approved by the franchisor and is ready to proceed with the funding process, the following steps must be applied. The team at Capitec Franchising suggest prospective franchisees follow these steps once they’re ready to apply for franchise finance, and make sure they have the standard requirements ready.

Most franchises will require you to invest at least 50% of the entire investment needed for the franchise by using your own unencumbered funds. You can then apply for finance for the remainder of the investment.

What are unencumbered funds?

Unencumbered funds refer to free cash that is not bonded or borrowed from anyone. This could include the proceeds of a pension payment, money in the bank, an investment available for drawing or cash from selling another asset. Once you have decided on a franchise and applied successfully with the franchisor, the next step is to contact Capitec Business to apply for franchise finance. Follow these steps to make sure you submit a complete application:

Get in contact with the Capitec Franchise team by emailing Franchising@capitecbank.co.za
Submit your application pack with the required supporting documents for review to the Capitec Business Franchise Team.
Upon approval of the franchise funding, finalise your legal agreements by signing the lease and franchise agreements, provided that you had 14 days to review the franchise agreement and Disclosure Document (read more about the legalities of franchising).
Hire staff and prepare to run your franchise.

Standard requirements for franchise applications

The following are required as part of your application pack, for the Capitec Business team to proceed with the assessment of your funding application Standard requirements for franchise applications.

The following information must accompany all applications, whether for a new or existing franchise purchase:

Set up of a new franchise store
- - Confirmation from the franchisor of their conditional approval of the applicant as a new franchisee
  - A summary of the owner’s background, experience and planned involvement in the business
  - Details on the location of the business, including competition in the area, parking accessibility and visibility
  - CIPC documents and confirmation of group structure (to include shareholding and directors)
  - A comprehensive breakdown of the setup cost
  - Details on the funding requirement and the whole investment required for the franchise (including working capital required, rental and stock guarantees)
  - Proof, source and amount of own contribution, which is money put into the business from own funds
  - A personal balance sheet of all shareholders and directors/owners – this must include all assets and liabilities or money that you owe
  - Copies of identity documents of all shareholders/owners and directors
  - Documented proof of residential address of all shareholders/owners
  - A projected monthly cash flow forecast for at least three years
Your franchisor should be able to assist you with the information needed to supply the funding requirement and the cash flow forecast to the bank.
Purchase or Financing an existing franchise store
- If you are purchasing an existing and operational franchise, you need to provide additional information with your application:
- Copy of the sale agreement
- Latest annual financial statements and management accounts for the business
- Fixed asset register
- Reason for sale
- How long has the business been trading
- When the last revamp was done, when the next revamp is due and what the estimated cost would be

Submitting a complete application with all the required information will shorten the application process considerably, bringing you another step closer to owning your franchise.