Franchise Financing

Over the past few months financial service companies have really been under fire. I have also been getting a lot of questions from my clients in reference to how hard it is to get financing for a franchise now that the market is all skewed around.

The main thing to keep in mind when securing financing for your Franchise is that the banks don't just look at you, your credit score is important of course and the higher the better, but they also look at the success rate of the Franchise company. The Franchise Company's success rate is one of the most important things the banks look at, they always have, this isn't something new, but it is still important.

It will be much easier to get a loan for a franchise that has a success rate of 97% and has been in business for 45 years and has 900 locations than it would be to get a loan for a franchise that has a 65% success rate and has been in business for 7 years and has 100 locations. See what I mean? Your credit doesn't play into that at all.

Where your credit will affect you the most is in the interest % numbers and in your required cash injection, this is the amount of actual cash you need to invest in your business to qualify for the loan itself.

So the bottom line is, there are still banks financing franchises, because the success rate isn't as affected as you may think, it is of course to a smaller extent than let's say the real estate industry.

For more information on Franchises visit this site: http://OpenAFranchise.com

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