Franchise Funding and the Importance of Pre-Qualification
FranchiseFunding and the Importance of Pre-Qualification
Are you still wondering if you can affordto buy a franchise? While most franchises cost between $50,000 and $200,000 toget started; there are some like mobile concepts that can run much less andothers like hotels that can exceed $5 million. Given the fact that franchisebrands can vary so greatly in terms of costs, some individuals may be able toafford a luxury brand or more expensive franchise concept, while others mayonly be able to afford a franchise that costs much less. Knowing how much youhave to work with in advance can better help you identify which brands youshould consider.
This is where pre-qualification comes into play.
Just as you probably wouldn’t go looking to buy ahouse without pre-qualifying for a mortgage, you shouldn’t look to purchase abusiness without pre-qualifying for funding.
- You will know beforehand if youhave the ‘fundability’ necessary to purchase a particular franchise or if youneed to re-evaluate your options
- It speeds up the purchase processso you don’t have to worry about funding delays when you’re ready to moveforward
- Getting pre-qualified for fundingwill allow you to focus on the “what’s” of the business, rather than the “how’s”
Knowyour pre-qualification options
There are a variety of pre-qualification tools andprograms available for you to utilize. For instance, there are simpler, moreautomated ones that can provide a quick calculation of some of the differentfunding options that may be available to you based on input you provide. Thenthere are more advanced pre-qualification programs that require more in-depth paperwork,and may provide some sort of pre-qualification certificate for you to show thefranchise you’re interested in purchasing. Some tools and programs are FREE,others are not. Some provide a funding amount you may be eligible for, othersdo not. Some let you speak with a live funding expert, some do not.
Whatever it is you prefer, a good place to initially startis an automated funding tool that provides yourfunding potential. Here’s an example of one we put together: https://www.benetrends.com/funding-calculator.
While it is NOT an actual loan commitment, it is anearly determination of what amount and options you could qualify for based onyour unique situation. Many individuals have found it to be helpful in identifyingwhich franchise concepts they can best afford. Plus, it’s free and requires noobligation on your part–so you really have nothing to lose!
Visit FranchiseExpo where you can search for opportunities by industry, investment level and area while researching the franchise industry as a whole using its free resources.
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