There are many factors to take into account when getting ready to open a franchise, but the most important is the capital you need to secure in order to finance your business. It is critical to ensure you can qualify for a franchise loan. Keep reading for helpful tips on how to determine your eligibility and give yourself the best chance possible.
Analyze Your Financial Situation
Financial lenders will review your financial profile before they look at anything else. It is the single most important factor they will consider when your application is in front of them.
Your profile includes more than just your net worth, although that is part of it. Net worth refers to the amount of wealth you possess when your financial liabilities are figured into the big picture. This provides lenders with an all-encompassing view of your fiscal health.
When it comes to getting approved for a franchise loan, your credit score can make or break your chances. Getting a loan if it is 600 or below is going to be challenging, while a score of 750 or higher will give you a major advantage. Make sure you always pay credit card bills and loans in a timely manner. If your credit score is in the lower range, you can improve it through measures such as opening a credit card with a low limit that is specifically geared toward building credit.
Financial lenders will also analyze your liquidity – that is, how easily your assets can be converted into cash.
Take Inventory Of Your Assets And Liabilities
Once you fully understand the strengths and weaknesses of your financial profile, you can better gauge your chances to qualify for a franchise loan. Take a step back and look at your credit score, net worth and liquidity as a financial lender would.
The worst move you can make is hiding any circumstances that could affect your financial stability. Be open and honest with lenders about occurrences like legal issues and income changes.
Make It Clear That You Are Committed
The best financial profile in the world will not help you if lenders do not feel you are taking the idea of opening a franchise seriously. They are not going to invest in your venture unless they can tell you are fully committed.
First, research the nitty-gritty of franchising to determine whether or not it is right for you. Starting and running your own business is a major commitment and involves a great deal of blood, sweat and tears.
Secondly, educate yourself on the financing requirements the brand in which you are interested has set forth. Get their requirements nailed down before you apply to qualify for a franchise loan.
Making Franchise Loans More Accessible
Securing franchise financing does not have to become a trial by fire. ICA awards loans to qualified borrowers without requiring them to put up personal collateral. Our loans range between $100,000 to $10,000,000, offering you the flexibility you need for your individual business situation.
Other benefits of obtaining a franchise loan through ICA include:
- Full funding granted within 30 to 45 days
- Fixed rates that start at 6.75%
- Less red tape to deal with than SBA loans
- No SBA approval is required
- Six-month interest-only grace period for new locations is available
- No current experience is required
- No pre-payment penalties are imposed
- Out of state borrowers are accepted
- Financing is available in all 50 states
You could be on your way to securing a franchise loan in as little as 30 days. Get in touch with us today to start the process.