What Your Credit Score Means for Your Franchise

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Calc

The last two years have been challenging ones for people looking to get small business loans. It would be great if future entrepreneurs could have a bit more leverage when it comes to asking the banks for some of their money.

For example, the SBA allows banks to leverage their money…..but it doesn’t seem to be enough. Yet.

My friend Thursday Bram, in her first guest post (for Credit Score) on The Franchise King Blog, brings up something you may be able to actually use for leverage as you try to get your franchise business financed.

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In an ideal world, you’d choose the perfect franchise, write a check and be in business tomorrow. But the process of becoming a franchise owner is rarely that simple…..

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Filed Under: Entrepreneurship, Franchise Financing, Small Business

Small Business Administration to Launch 2 New Business Loan Programs

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Sba.gov

Two brand new small business loan programs in one week? This is good, right?

Here they are;

  • The Small Loan Advantage is structured to encourage larger, existing SBA lenders to make lower-dollar loans, which often benefit businesses in underserved markets.
  • The Community Advantage is a pilot initiative aimed at increasing the number of SBA 7(a) lenders who reach underserved communities, targeting community-based, mission-focused financial institutions which were previously not able to offer SBA loans.

SBA and the U.S. Department of Commerce studies have shown the importance of lower dollar loans to small business formation and growth in underserved communities

The Small Loan Advantage and Community Advantage programs will offer a streamlined application process for SBA-guaranteed 7(a) loans up to $250,000. These loans will come with the regular 7(a) government guarantee, 85 percent for loans up to $150,000 and 75 percent for those greater than $150,000.

My friend, Rieva Lesonsky and her team over at Small Biz Daily reported on this news recently, and wrote up the details of these two much-need programs. Read Small Biz Daily.

Discover Card MoreApplication

Filed Under: Small Business

Will Small Business Loans And Franchise Start-Up Loans Suddenly Become Available in 2011?

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Are you ready for some progress on the small business lending front? Could good things actually start to happen for future small business owners? Are we going to turn a corner?

Aggressive Corner

Dude's turning a corner. Are we?

I'm so ready. I'm sick of hearing the same old tired stories. There actually was a small business lending bill signed last September, you know. There's money available.

[Read more...]

Filed Under: 2011 Franchise Trends, Franchise News

The Lack Of Franchise Lending Is Still Rearing It’s Ugly Head

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Ugly
Ugly. Head.

http://www.flickr.com/photos/tambako/3457063894/

Once in awhile, I receive an email or two from a loyal reader of this blog suggesting that I’m being rather negative, when it comes to my writing.

I think that I’m a realist. I think I report the facts. I think my posts and comments are reality-based.

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Would you rather that I spin things?

Maybe I should start every post I write with, “Franchising is the greatest business model ever invented. You just can’t lose! Banks love the model, and it’s easy to get a loan! Almost anybody can succeed as a franchise owner!”

Yaddadedo, Yaddadedee, Blahbity Blahbity Blah.

From The New York Times;

“The big national companies that dominated franchise lending before the 2008 collapse have stopped or reduced financing. The remaining lenders — often local banks — have been more restrictive in their credit underwriting, and they have been demanding more collateral (like home equity), more cash liquidity, more experience in the industry and outside sources of income, like rental income or a working spouse.” Read

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Filed Under: Franchise Financing, Franchise News

How Do You Feel About Franchise Dating? (Part 2)

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Date 2

(This is the second part of a two-part series exploring a new type of what I call, "creative franchise financing.")

In Part 1, I shared that;

"Franchisors are having a bit of a challenge in the "getting new
franchisees financed" area. FranEquity is certainly timing their
new approach quite well. If anything, they've shown us a fine example of
finding a specific need in a specific market, and then trying to fill
that need. It's totally entrepreneurial. I love that."

And I do love the entrepreneurial part of this. What I don't love is…

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Filed Under: Economy, Food and Drink Franchises, Franchise Financing

How Do You Feel About Franchise Dating? (Part 1)

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Dating

(From LIVING IISc 's Public Gallery)

Franchise what? Franchise Dating. That's what a new entry into the world of "creative financing" is calling their idea……their program.

Those of you who sometimes accuse me of being overly skeptical, and a tad negative, will love my feelings on this newest idea…

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Filed Under: 2010 Franchise Trends, Franchise Financing

US Government Frees Up $21 Million For Small Business Loans; No Mention Of "Start-Up" Assistance

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Flag 2

It's great that the US Government is trying to address the lack of lending by the banks for small business loans. It's been a major problem, and has hindered our economic growth.

The banks have gone from lending money to anyone that had a pulse, to what's happening now;

They're looking for ways to turn loans down. That is what's happening, folks.

In this Washington Post story, David Cho writes that "administration officials say helping small businesses get credit remains
a top priority. It is a critical component of the strategy to address
the nation's high unemployment. More than half of all U.S. workers are
at companies with fewer than 50 employees. Without access to loans, many
of these firms are laying off workers or shutting their doors
altogether." Read

One thing is still missing;

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Filed Under: 2010 Franchise Trends, Franchise Financing

Can President Obama Help Small Business?

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President Obama has a lot on his plate. Unless you have actually been the President, it’s hard to imagine the pressure he’s under. It’s a 24/7 job, vacations are never really vacations, and in addition, there are crazies out there that would like to kill him.

The most important thing on the minds of Americans is our economy, and the loss of jobs. Do you think he can fix things?

Care to share your feelings?

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Filed Under: Economy, Small Business

Today's Credit Landscape; What Should You Do?

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800px-WinonaSavingsBankVault

(From Wikemedia Commons, taken by Jonathunder, January 2009. Winona Savings Bank, Winona, Minnesota)

I have been writing and talking about the credit crisis, and how it's affecting the franchise industry for almost a month now. I thought it would really add value for you-my readers, to hear how things look from the "Capital" side of the table.

(This is a guest post by David Criswell of Direct Capital)

During this recession, the financial structure that small businesses use to access capital has been significantly altered and created the most difficult environment to access capital in decades. Between the CIT Bankruptcy, bank closings and reduced/closed credit lines, business owners are experiencing first hand the effects of theembattled credit markets.

Taking a big picture view of today’s credit landscape I see three components creating the conditions businesses are experiencing trying to access capital.

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Filed Under: Economy

CIT Bankruptcy Could Affect Franchise And Small Business Lending

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Cit

Small business loans have been fairly difficult to come by, to say the least. CIT, a huge small business lender, although not the only game in town, is in trouble, but has done a nice volume of loans for the franchise and small business start-up community in years past. So now what?

Now, it's time to start seriously thinking of creative financing arrangements. Although controversial, maybe tapping into your 401K's for some of your start-up funds, isn't a bad idea.

I have noticed that most of the negative comments concerning the 401K rollover plan ideas come from CPA's. it's very predictable;

A prospective franchise owner goes to his or her CPA's office armed with information on a 401K Rollover plan, and the CPA says…

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Filed Under: Franchise Advisor
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