At The Wealthy Franchise we have seen many franchise buyers who use home equity loans to finance their business purchase and build the location out. We know how important it is to have an excellent credit rating in order to look at a franchise opportunity.
Franchise operations can range quite a bit in price. We have franchises available that operate out of a home and the costs are lower. We also have franchises that can be located in food courts of malls and have lots of immediate traffic. We also work with larger franchisors who require a fairly substantial build out to house restaurants, coffee shops and printing operations. Every franchise can be a little different.
Here are some tips for how to improve your credit score so you can improve your chances of qualifying for a loan:
Credit scores measure your creditworthiness and are used by lenders to judge whether you’ll pay back debts. A low score warns lenders that you might be an unreliable borrower, which either means that you won’t get the loan, or you will have to pay a higher interest rate.
Use a secured card. If you have a poor credit score consider using a secured card — an account that requires cash as collateral for the line of credit — with a small limit, and make sure to pay it off in full every month.
Check Your Credit Report. Credit score repair begins with your credit report. If you haven’t already, request a free copy of your credit report and check it for errors. Your credit report contains the data used to calculate your score and often it contains errors.
Don’t take out too many cards. To keep your credit score high, limit the number of credit cards you apply for within a short period of time. Every time you apply for new credit, that application shows up on your credit report, so it makes lenders uneasy if you are “shopping around” for credit.
Leave paid off debt on your credit report. Some people believe that old debt on their credit report is bad. The minute they pay off their mortgage or car, they call credit agencies to try and get it off their credit report. Paying off large loans in full shows lenders that you are good with credit.
These are just a few ideas to help your credit status. Your bank can also give you some additional details.
The Wealthy Franchise is in the business of consulting to buyers who are looking for a business to acquire. You are welcome to contact us for additional information with no obligation. We represent accounting, printing, legal, food, nutrition and several others. We are always glad to be able to discuss your interests. Please call us anytime.