Opening a new business is a big step for anyone, and it can be hard to get approved for a loan to even get off the ground. One way many people streamline the process is to open a franchise for an existing company, but this still requires a sizable investment to begin, which usually means loans, and loans mean an approval process. However, you can take a few simple, easy to understand measures to show to your financial institution of choice that you have everything together and are ready to open your new business and hit the ground running as soon as the doors open.
Have a Plan
Your business plan goes a long way to demonstrating that you know what you need and how to get there, and your ability to present it convincingly will undoubtedly show that you have the skills you need to be a sound investment.
Know Your Business
Having all the important facts about your new investment, such as location and the expected costs and revenues, simplify and streamline your ability to convince the lender that you’re a sound investment for the loan and can readily pay it back. After all, this is all research that you need anyway, so having it beforehand just shows you did your homework.
Read the FDD
The FDD, or Franchise Disclosure Document, provides the majority of the information relevant to owning and operating your new business, including things like contact information for the current owners and expected costs associated with daily operations. As with many such documents, you may want to consult an expert when you review the FDD, such as your accountant or lawyer, to answer any questions that you may have.
Have Money Ready
Loans almost always require some form of down payment, likely a substantial one. Having ten to twenty percent on hand when you try to apply for the loan shows the lender that you are serious about the endeavor and that you are already savvy enough to be able to get together necessary resources. Similarly, being able to make a larger down payment also means that you will be paying less in monthly bills or even paying the loan off sooner.
Your Credit Score
Just like when applying for any other loan, your credit score plays an important role when determining if you get vital financing. Anything you can do to improve your credit will help, like making sure all of your accounts are current or even paying down old debt entirely.