Guaranteed Installment Loans For Bad Credit The Right Way To Get A Franchise Loan
This is at the core of evaluating your franchise options. This is the work that needs to be done first before looking at the 3000+franchise options. I suggest you begin with a resource to check your current credit score, CreditKarma.com. They do not require a cancellation after seven days so you will not be charged, it's actually free and reliable (see their FAQ).
Basically, credit scores are determined by five categories, length of credit history, new credit, other factors, how much you owe and payment history. Keep in mind higher scores generally mean lower payments, most lenders will base approval on the credit score and credit scores can range from 300-845, the higher the better.
Next, let's discuss who actually lends money for startups and business's. First, the SBA 7a program, does not loan money but rather they guarantee part of the loaned amount. Loans can range from $5K up to 5 million with a prime+2.75% on 5-10 years terms. Collateral will be determined by credit worthiness and how to get installment loans for bad credit amount requested, it's highly unlikely that anyone will receive 100% financing. The SBA will also be reviewing and scrutinizing the franchisor to insure they meet all the SBA lending guidelines. The SBA has looked unfavorable at franchise concepts that exhort strict controls on the franchisees. The next option to finance your business could be a home equity loan where the home used as collateral. The benefits are low cost, quick turn around, and low interest rates. Here, the lender is calculating the loan to value ratio, which is the amount you owe less the equity, by approximately 85% loan to value to arrive at how much they will lend.
Next, unsecured loans where equipment is used as collateral and interest rates are higher. Security backed lending is where CD's, Stocks, Bonds and other Securities (outside of retirement plans) are used as collateral. Here, up to 70% of the Security value can be payday loans guaranteed approval direct lendersed with usually low interest rate and a fairly quick turnaround.
A very viable funding alternative is a 401K-IRA Rollover plan, where more franchises are started with retirement funds than SBA installment loans easy approval. Generally, there is a 10-20 business day turnaround regardless of credit rating. These instruments are tax, penalty and debt free funding resource and best of all the government assumes as much as 40% of the risk! This option is structured as an investment, not a loan without any loan payments (profit sooner). We have seen higher success rates utilizing this funding approach which will not affect the debt ratio or credit rating. There are exit strategies and tax benefits build in and you can also receive a salary from the funds. This product was built to help bridge the financial funding gap between SBA funding and the other funding options mentioned above. Each client will need a specific analysis to determine their funding factors.
This is a complex matter that deserves the attention of experienced professionals who work directly with franchise lending. My best advice is to begin the process early so you can perform your due diligence to make an informed and educated financial decision.
At Franchise Futures we have franchise funding professionals with more than 20 years of experience to determine the best franchise funding options. This is a complex issue as you consider franchise ownership, call me to discuss your options, 866-826-0103.