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    6 Replies Latest reply on Jun 12, 2008 6:36 PM by dtominus

    is this true

    colormemine Newbie
      Hello, I have a question. I already own a franchise and it's doing well for almost two years. I'm thinking about purchasing another store (same franchise) in a different location.
      The franchise I'm considering purchasing MAKES MONEY. I was told that even though it may make money. I was not the owner of that franchise making that money. So the bank will look at me as a NEW owner, starting a new franchise, and will possibly ask for collateral or a huge down payment.

      Is this true ?....
        • Re: is this true
          LUCKIEST Guide
          is this true, Welcome to this web site Edward

          Everybody in business should have a team of Professionals like A Lawyer, An Accountant
          and maybe an Insurance Broker.

          Good question to ask them. LUCKIEST
          • Re: is this true
            Lighthouse24 Ranger

            I don't think it's that black and white. If you have a good relationship with your current banker and he/she knows you're running a profitable store -- and is aware that you are looking to buy and run another of the same brand that is currently profitable -- I'd expect that banker to make the road a little smoother for me (or I'd find another bank). That's not to say you wouldn't need collateral or a down payment, but your terms certainly should be better than a person off the street looking for business capital to buy that same store.

            For the franchises I worked with, a high percentage of established stores that are sold to first-timers ultimately fail. A very high percentage of established stores that are sold to buyers who already have other stores in the same line are successful. If your particular franchise brand has that same history, I can't imagine that a good commercial lender wouldn't know and consider that.

            Good luck!
            1 of 1 people found this helpful
            • Re: is this true
              dtominus Wayfarer
              I may be able to help you with your franchise needs , If your looking for capital contact me at 727-545-9530

               


              David Tominus
              • Re: is this true
                Bridge Navigator
                You are a perfect candidate for an SBA guaranteed loan. Work with an SBA approved lender.

                1) You are purchasing a business with a history of profits
                2) You have experience in the business

                Normally, SBA loans require 10-20% down. Expect 20% down in this environment.

                Any lender is going to look for collateral. If someone lends money without collateral, expect to pay a huge premium.

                If the business makes enough money, why are you worried about putting up collateral?

                You can not ask a lender to lend you money "risk" free. They want to see that you have confidence in the business.

                Get a professional business broker who can work with you to properly analyze the business and to assist you in identifying a good loan broker.

                 

                Best of Luck!

                Greg Dupuis
                Bridge Ventures, LLC
                Merger & Acquisition Advisors
                www.bridgeventuresllc.com
                1 of 1 people found this helpful
                • Re: is this true
                  dtominus Wayfarer
                  I would offer unsecured no money down please call me

                   


                  David Tominus
                  727-545-9530
                  dtominus@yahoo.com