How to Finance a Franchise Purchase
You have finally decided to invest in a franchise after doing all your research. The next hurdle is finding the financing you need to purchase a franchise. There are many options available to you and this article will guide you through them.
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Instructions
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Take a self assessment of your finances before seeking financing. See how much cash you have to invest and how much financing you will need. Pay off credit card debts before applying for new credit.
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Make a business plan. You will need to present your business plan to your lenders. The business plan will also help you budget your start up expenses so you will know how much financing you will need to request.
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Consider franchiser financing. Most franchisers will offer their franchisees financing. However, it is not always the best rates you can get.
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Ask your family and friends for financing. They know you and want to support you. Make sure you are businesslike in approaching them, and sign a business contract with them.
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Use your home equity to finance your franchise purchase. Often people have a lot of equity in their homes that they can use to buy a franchise. Getting a home equity line is often the cheapest form of financing available. If you choose this option, make sure you are able to handle the payments on your home equity loan. Use this option wisely and carefully only.
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Tips & Warnings
You may want to try a local bank for less conservative lending practices.
Don't use a home equity line of credit without another source of security.
