UPS is one of America’s Best Known Brands, delivering millions of packages to homes and businesses every day.
The UPS Store network is the world’s largest franchise of retail shipping, postal, printing, and business service centers. Today, over 5,300 independently owned UPS Store locations exist in the U.S..
For many UPS Store owners, the establishment costs of setting up the business are challenging. A higher than usual amount of capital is needed, from signage, uniforms, and large quantities of inventory required to offer customers various shipping and packaging choices. Also, UPS Store locations need delivery vehicles to be leased. The number of delivery vans required varies depending on the geographic area and population density.
United Capital Source has provided small business loans for UPS Stores across the USA. We understand the business of UPS stores, so franchise owners looking to expand their ownership of more UPS Stores or apply for a working capital loan will find our small business funding team experienced in how their business operates.
What is a UPS Store Franchise?
A UPS Store is an attractive option with a wide array of services and benefits. It provides a pathway to potentially lucrative opportunities for aspiring entrepreneurs. The UPS Store franchise offers a unique combination of stability and growth potential. It is a globally recognized brand with a proven business model.
Owning a franchise under the UPS brand means instant brand recognition. UPS Store franchisees benefit from extensive training programs and ongoing support, which can help them develop their franchise into a successful business. UPS Stores provide shipping services for the community and local businesses.
The ideal UPS Store franchisee is driven and customer-focused. Upon approval, franchisees undergo comprehensive training on operational procedures and customer service.
How to Start a UPS Store Franchise: Step-by-Step
Here are the steps potential franchisees should follow to start a UPS Store:
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Research the Opportunity: Visit The UPS Store’s official franchise site to learn about the business model, investment requirements, and available markets.
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Submit an Application: Complete the initial application to express your interest and provide basic financial and personal information.
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Review the Franchise Disclosure Document (FDD): Once your application is accepted, you’ll receive the franchise disclosure document, which outlines key details like costs, obligations, and performance data. Carefully review this document before proceeding.
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Attend a Discovery Day: Meet with UPS Store representatives, ask questions, and gain deeper insight into daily operations and company culture.
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Secure Financing: Prepare funding for the initial investment through personal savings, traditional bank loans, SBA loans, or other small business financing options.
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Sign the Franchise Agreement: If approved, you’ll sign the agreement and officially become a franchisee.
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Complete Training: Attend a multi-week training program covering operations, marketing, technology systems, and customer service.
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Open Your Store: Work with the UPS Store team to select a site, build your space, and prepare for your grand opening.
How much does a UPS Store Franchise cost?
While UPS Store franchises offer unique benefits for individuals with a strong entrepreneurial spirit, prospective franchisees should be aware of the costs involved. Investing in the UPS Store franchise involves initial franchise fees, ongoing royalties, and marketing fees.
The total investment required to open a UPS Store ranges from $212,695 to $496,745. New franchisees should be aware of these costs.
What small business loans can provide UPS Store Franchise Financing?
UPS franchise owners can access various small business loans to support or expand operations. Common uses for small business loans include purchasing inventory, leasehold improvements, acquiring equipment, smoothing out cash flow gaps, hiring staff, and expanding locations.
Here are some of the top business loans to consider:
Business Line of Credit
A Business line of credit offers UPS Store franchisees flexible access to funds that can be drawn as needed. This financing option is ideal for managing ongoing expenses such as payroll, inventory, or marketing. Borrowers only pay interest on the amount drawn, making it a cost-effective solution for cash flow management. It’s a revolving form of credit, so funds replenish as you repay.
Business Term Loan
A business term loan provides a lump sum of capital repaid over a fixed term with regular payments. UPS Store owners can use this funding for major investments like renovations, expanding locations, or purchasing large amounts of inventory. These loans often come with predictable repayment schedules and competitive rates, making them a solid choice for long-term financial planning.
Merchant Cash Advance
A merchant cash advance gives UPS Store franchisees access to fast capital in exchange for a percentage of future sales. This type of funding is best for businesses with strong daily credit card receipts. Repayment is automatic and adjusts with your sales volume. It’s a quick solution for covering short-term needs without requiring collateral.
Equipment Financing
Equipment financing helps UPS Store owners purchase or lease necessary machinery, technology, or vehicles without a large upfront cost. The equipment itself serves as collateral, making it easier to qualify. Repayment terms are typically aligned with the expected life of the equipment. This loan is ideal for upgrading operational efficiency.
Working Capital Loans
Working capital loans provide fast, flexible funds to cover everyday business expenses. UPS franchisees can use these loans to bridge cash flow gaps, manage seasonal slowdowns, or invest in marketing. These loans are typically short-term and don’t require long approval times. They’re a versatile tool for maintaining day-to-day operations.
SBA Loans
SBA loans are a top option for UPS Store franchisees seeking low-interest, long-term financing. The U.S. Small Business Administration (SBA) helps small businesses get funding by setting guidelines for loans and reducing lender risk. SBA-backed loans make it easier for small businesses to get the funding they need. Loans guaranteed by the SBA range from $500 to $5.5 million.
Microloans provided by intermediary lenders can be for $50,000 or less. SBA’s primary program for long-term financing is the 7(a) loan program. Eligibility requirements for SBA loans vary by lender and loan program. Businesses must meet SBA size standards and have a sound business purpose to qualify for loans. Most SBA loan applications require a detailed business plan, strong credit history, and realistic financial projections.
What Are the Advantages of UPS Store Franchise Business Loans?
Securing a business loan for your UPS Store franchise offers several valuable benefits. One of the primary advantages is access to capital that can be used for essential needs like leasing space, purchasing equipment, stocking inventory, and covering working capital. UPS Store franchisees can also choose from various loan types with competitive interest rates tailored to different stages of business growth and operational requirements.
Financing allows franchisees to tap into the strength of the UPS brand—an established name with nationwide recognition and a proven track record. Business loans can fund initiatives such as marketing campaigns, staff expansion, or opening additional locations, while also helping to manage day-to-day cash flow and unforeseen expenses more effectively.
What Are the Disadvantages of UPS Store Franchise Business Loans?
While business loans provide critical financial support, there are potential downsides that UPS Store franchisees should consider. Taking on a loan means committing to fixed payments with interest, which can strain your cash flow and long-term profitability if revenue falls short. Additionally, many loan types require collateral, potentially putting your business or personal assets at risk in the event of default.
Franchisees are also responsible for ongoing fees, such as royalty payments and brand marketing contributions, which can reduce net earnings. Qualifying for financing may be challenging due to credit score requirements, business history, or documentation demands. External economic factors or shifts in consumer behavior could further impact your ability to meet repayment obligations during slow periods.
UPS Store Franchise Business Loan Pros & Cons
Pros:
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Access to small business loans tailored for UPS Store franchisees.
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Opportunity to join a nationally recognized brand with a trusted reputation.
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Franchisor-provided training, tools, and ongoing operational support.
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Flexible financing options to meet specific startup or growth needs.
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Potential to grow within a proven business model with high demand for shipping and business services.
Cons:
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High initial investment, including franchise fees, real estate, and equipment costs.
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Ongoing financial obligations like royalties and advertising fees.
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Limited operational flexibility due to franchisor policies and guidelines.
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Potential challenges securing financing due to credit or income requirements.
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Risk to business or personal assets if loans require collateral.
How To Apply For UPS Store Franchise Business Loans:
The amount of paperwork required depends on the product you choose. Funds can be approved and distributed for most products within 1-3 business days. Here’s how to apply:
Step 1: Choose the Right Product
The first step is choosing the most sensible solution to the problem at hand. This should require some research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term expense? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Step 2: Gather Your Documents
Here are the documents and information required for Franchise Financing Loans:
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Driver’s license
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Voided business check
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Bank statements from the past three months
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Invoice for equipment (for Equipment Financing)
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Credit card processing statements from the past three months (for Merchant Cash Advance)
SBA loans require additional documents and information, such as financial statements. To learn what’s needed for the SBA-backed loans, visit our SBA loan page.
Step 3: Fill Out Application
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Step 4: Speak to a Representative
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
Step 5: Receive Approval
If you’re approved, we’ll contact you within 24 hours. After closing, funds for most business financing products should appear in your bank account within 24 hours to one week.
Your Franchise Financing Business Loan Gets Set Up – Now What?
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
What If I’m Declined For a Franchise Business Loan?
If your application is declined, it’s possible that you applied for the wrong product to meet your cash flow needs. In this case, we would likely recommend a different product with a less hazardous repayment structure.
Your application might also be declined if it is determined that you cannot afford to take on more debt at this time.
If your credit score is holding you back from accessing financing, consider working with a reputable credit repair service to raise your scores.
