Can You Buy a Franchise No Money Down? – The Honest Answer
Can I buy a franchise business no money down? Don’t be misled by other videos on this topic. Here’s the truth!
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I’m going to introduce you to a couple of America’s top franchise lending resources to explain how banks loan money to franchise businesses.
I also share financial qualifications that franchisors typically have. It’s common to see “liquid capital” and “net worth” requirements. This is the capital that the bank may require you to have in cash, and that’s why the franchisor is requiring it from you in cash. Cash doesn’t have to be cash sitting in your bank account because of the 401(k) Rollover Plan (ROBS) or the Rollover for Business Startup, which my expert friends explain. The ROBS program allows you to use your 401(k) without creating taxable events. It’s how people gain the cash they need to qualify for a franchise, even with a loan.
Additionally, with liquid capital requirement, there’s often a “net worth” requirement. What is a net worth requirement? Sometimes you can see a business that’s a $200,000 investment, but the net worth requirement will be $500,000. Why so much? Well, if the franchise requires real estate. Oftentimes, the net worth requirement will reflect what the franchisor believes the landlord is going to require to get a good lease. When the franchisor sets that $500,000 or $1,000,000 net worth requirement, it’s to protect you. It’s so that they know they offer a good lease.
Another reason that a franchise owner might have a net worth requirement is to ensure that you are not putting everything you have into the business startup. Businesses fail because people run out of money before they figure out how to make money. These are entrepreneurial businesses.
Today’s conversation involves two experts who help people figure out what they would qualify for in franchise lending. Eric Schechterman and Shirley Kefgen answer questions like:
• Can you buy a franchise with no money down?
• What is the ROBS program?
• Is there a payback time or an interest on money taken from my 401(k)?
• And more!
To learn more about how Eric and Shirley could help you determine if you qualify for lending (no money down, or with money down!), please contact:
FranFund site: https://www.franfund.com/shirley-kefgen
Benetrends site: https://www.benetrends.com/25-employees/371-eschechterman
And please reach out to me directly with your franchising questions today!
#businessfunding #franchisesecrets #franchiseconsultant