Tight lending at the major banks is not a concern for ten new franchisees who have taken advantage of private funding through the Snap-on Tools Australia Credit Program.
Nick Hudson, national franchise manager for Snap-on Tools, said “We are witnessing a changing economic paradigm in retail, and particularly in franchising internationally. Throughout the world there is pressure on the retail model — from a softening in demand for product, right through to a restriction on lending for people interested in investing in a franchise. We decided to circumvent this, and inject much needed funding into the system ourselves.
“We have accreditation with the major banks,” explained Hudson. “We are a reputable and solid business turning over $67 million last year in Australia alone. It is fortunate we are in the position to provide finance sourced purely from the Snap-on network. In the majority of cases here is no need for a bank to become involved in a franchiseeÕs decision.”
The program provides fixed interest rates, no ongoing fees or additional charges to franchisees, with credit unsecured except for a lien against the franchise assets.
The ten franchisees who have participated since the program was introduced last year represent one third of the annual intake of new franchisees for the mobile tool retailer.
The credit program
Snap-onÕs Credit Program is a series of steps dependent upon a franchiseeÕs needs:
- A business loan that helps new franchisee cover their fees and initial inventory to be carried in their mobile store with no repayments for the first three months.
- Credit towards their new mobile store, specifically meant for franchisees starting in business. These are fully optioned, custom built vehicles.
- Assistance with GST. Snap-on help new franchisees get over the hump of the GST, funding shorter term loans.
- A line of credit to finance and establish weekly credit accounts. The line of credit is free of all charges, interest or repayments for the first six months of the franchisee being in business.
More about Snap-on
- In Franchising magazine’s supplement The Profiler, Snap-on Tools showcased its Gateway program
- Snap-on Tools was cited for its levels of franchisee satisfaction last year