Betta Home Living Franchise Loan
If you’re looking at starting your own business in the world of retail, have you considered getting a Betta Home Living franchise loan?
The company formerly known as Betta Electrical is one of the most recognised electrical, homewares and furniture retailers in Australia and it has been operating its franchise system for well over 50 years.
How can you qualify for a Betta Home Living franchise loan and take advantage of a strong brand name?
Betta Home Living franchise loan approval criteria
How much can I borrow?
- New store (Greenfield): Borrow up to 50% of the franchise costs.
- Existing store: Borrow up to 60% of the franchise costs.
- Loan term: Typically 3-5 years or as per the length of the lease term.
- Loan term with property as security: 25 to 30 years (standard loan term).
- 3 years experience in the retail industry, specifically in a management or supervisory role.
- Detailed business plan approved by your accountant.
- Low doc options not available.
- Yes! Interest rate discounts available by negotiation.
By using an equity in an existing residential you can borrow up to 100% of the franchise costs!
Please call us on 1300 889 743 or complete our free assessment form to speak with one of our Betta Home Living franchise loan specialists today.
How do I get approved?
Like any business loan, the key to getting approved is creating a strong profile of yourself as a reliable borrower who is going to be able to run a viable venture and pay off the franchise loan.
To prove this, the bank will generally want to see that you have past experience in managing a similar-sized venture: the more evidence you can provide, the better!
This could be anything from:
- Written references from past managers, particularly state and national managers.
- Sales reports for the past 2-3 years showing revenue increasing.
Apart from your experience, the bank will also want to see that you’re financially responsible so they’ll generally ask for:
- Your most recent group certificate.
- Your last two payslips.
- The bank will run a check on your credit file to further support your character.
You’ll need to show that you’ve done your due diligence on your ability to run a profitable store so you need to draft up a business plan as well.
With the help of a qualified accountant, the business plan should include:
- Revenue projections.
- Cash flow forecasts.
- A market analysis of the location you want to open the store.
Note: In order to get approved to purchase an existing store, the lender requires that the debt-to-EBITDA ratio (earnings before interest, tax, depreciation and amortisation) be no higher than 1.2x.
Does this sound all too complicated?
Don’t worry! We can help you build a strong case with the bank and we endeavour to ask for all of these supporting documents the first time around to speed up the application process.
Should I use my property as security?
Yes and, in fact, unless you have cash to put towards the purchase, you’ll need to use equity to complete the purchase as banks won’t lend more than 50% of the business value for a Betta Home Living franchise.
If you have enough equity, you won’t even need to put anything towards the purchase other than your own working capital requirements (usually between $15,000 to $20,000 to support a business for the first 6 months).
Speak to us about refinancing your mortgage to access equity for a Betta Home Living franchise loan by completing our free assessment form.
Get legal and financial advice
Before signing on to a Betta Home Living franchise or putting any money down as a deposit, it’s important that you conduct a rigorous due diligence on the existing store you’re looking to buy as well as your own situation.
For example, you should ask yourself whether you have enough working capital as a buffer should you hit a rough patch.
You also need to decide what the ownership structure the business is going to be and whether you run the business as a sole trader, in a partnership, as a company or in a trust.
There are tax advantages and disadvantages to each arrangement that you need to discuss with your accountant and a financial advisor.
Similarly, you should consider seeking out the services of a solicitor to read over the franchise agreement so you know exactly what you’re getting when buying the franchise.
About Betta Home Living franchises
There are around 200 Betta stores located nationwide with the majority in regional areas.
This is great news if you live in these locations but it hasn’t stopped Betta Home Living from growing into a national retail giant since it was founded in 1961.
With a large range of retail products, it’s a name synonymous with high-quality brands at great prices.
What happened to Betta Electrical?
Better Home Living began life in the 1960s as the Brisbane Electrical Television Traders Association (BETTA) but was operating under the Better Store Limited (BSL) throughout the 1990s.
BSL went into administration in 2006, at which point 48 Betta stores acquired their own brand, forming the BSR Franchising Group.
Now the parent company, BSR has been rebranding Betta Electrical to Betta Home Living since 2013/14 to reflect the retailer’s expansion into homewares and furniture.
It’s essentially the same store but it doesn’t rely solely on the sale of electrical products anymore.
This diversification strategy makes a lot of sense in a highly competitive market that is also at the mercy of online shopping.
What does Betta sell?
With brands ranging from Samsung and Bosch to Westinghouse and Panasonic, Betta’s range of products include:
- TV and audio.
- IT, phones and cameras.
- Fridges and freezers.
- Furniture and bedding.
- Small appliances.
- Cooling and heating.
- Kitchen and cooking.
How much does a Betta Home Living franchise cost?
Unlike other franchise system models, there is actually no joining or application fee when signing on to become a Betta franchisee.
There will be costs involved in signage, branding, construction and fit-out of the a new store but it will vary depending on location and particularly by store size.
In addition, BSR doesn’t have a central accounting model so you will have an individual account with your suppliers and go through the application process.
You can get a complete overview of the costs included in opening a Betta Home Living store by requesting a franchise kit and speaking Betta’s chief operations officer
Can I get revenue estimates?
Your expected turnover is difficult to determine without knowing the size and location of the store you want to buy or construct.
A market analysis undertaken by Betta may be able to give you some indication of revenue estimates, particularly if you’re setting up in a new suburb with no competition.
How will I be supported?
- Marketing and advertising: Betta is widely known for its sponsorship of a majority sporting events and teams including the V8 Supercars, Sydney Swans and the Brisbane Heat. In addition, they will support your monthly catalogues, radio and some television advertising and social media marketing. In saying that, BSR will expect you to do your own marketing at the local level.
- Promotions: Betta has an annual promotional programme which means surprise promotions won’t be sprung on you at the last minute. This can happen a lot in poorly-managed franchise systems.
- Negotiated pricing with suppliers: You’re able to leverage the buying power of BSR Franchise Group and access discount group pricing from suppliers.
- Retail management system: Betta has developed its own retail management system which provides up-to-date pricing and quality point of sale software.
- Training: You’ll receive point-of-sale system training, sales training and you’ll be taught how to order and buy products from suppliers that best match your store requirements.
- Complete store analysis: This includes site selection and deciding on your stock profile basis on the demographics of the local market.
In addition to the above, you’ll be assigned a business development manager who will act as your point of contact on your day-to-day operations.
Apply for a loan.
Get a free assessment
Call 1300 889 743 or complete our free assessment form today to speak with one of our specialist mortgage brokers and discover if you qualify for a Betta Home Living franchise loan.