You know you would want to buy a franchise but then you ask yourself, “Can I afford to buy a franchise?”
Franchise opportunities range in price from as low as $50,000 – to into the millions of dollars. In order to assess “affordability,” you need to look at the amount of liquidity or cash, you have available. So that you can cover your personal needs until your business begins to show a profit– and the total cost of the franchise.
As a guideline, the minimum requirement to qualify for most lower- priced franchise opportunities tends to be $40,000 liquid and $200,000 net worth – plus “cash to live on.” As most franchises are financed beyond a cash down-payment, you will likely need to understand how financing works. Your consultant can help you understand what you can most likely afford, and what your financial options might be.
How do I obtain financing?
Even in today’s market, financing IS obtainable. SBA ( government guaranteed loans) or 401k rollover plans finances most franchises.
However, if your credit is poor, you probably should wait until you improve upon your rating before you consider purchasing a franchise — or credit might be hard to find. The majority of franchises require a credit score of 685 or higher. You can check your credit at creditkarma.com. (It will not hurt your credit rating by checking)
Each financing option comes with its own set of requirements – so in order to understand which might be most appropriate for you, we recommend you discuss your financing options with your consultant – who will then introduce you to experts who can guide you as needed.