When you buy a franchise, you might need a small business loan to finance your new business. Getting the loan might prove difficult if you don’t have a good credit.
If you know you have bad credit, you might have to go through a few extra steps to buy your franchise. By creating a strong business plan and showcasing that plan to the important parties in your franchise ownership, you can set up your franchise. With the business plan, you might also have to convince the franchisors that you can get the financing you need up front.
It’s also possible that a bank might give you the loan you need to finance your franchise, but you might have to pay a higher interest rate. In this case, you will be required to pay higher monthly payments.
As you evaluate the franchise offer, find out what your estimated monthly costs and revenue will be. Although the interest rate and monthly payments might be higher, the investment could still prove profitable in the long run.