Bad Credit Financing is Available to Those Who Need to Borrow Money

Bed credit financing is available to those that need it. However, you may feel that you are out of luck. Perhaps you have heard others say that because you have bad credit you can’t get a loan. Or, maybe you have tried to apply for a loan at a couple banks but you were turned down. This can be a very depressing experience. However, there is an option for you.

There is even bad credit financing available for people who want to buy a car. Do you have a bad FICO score? No worries! You can get approved for a car loan. There is one catch, however. The lower your credit score, the higher the interest will be on the loan. This is the string attached. If you insist on getting a loan, I would suggest you use this opportunity to restore your credit as well. That means instead of getting your dream car, you need to look for something really inexpensive. Then borrow the money necessary to buy it and then pay off the loan on time each month. This is a great way to restore your credit.

So, how do you go about doing this? The first step is not to think about the car you want. Rather, you should first consider your current income and then ask yourself how much of a car payment you can afford each month. Don’t stretch yourself to the limit. Give yourself some cushion in case something happens.

Next, seek out a car that isn’t a lemon, but yet doesn’t cost a fortune either. A car over five years old should do the trick. Ideally, you want to be able to pay it off in three years max, not more. It would be even better if you could pay it off in one or two years.

Now, as you go through this process, there is the possibility of becoming depressed because your finances won’t allow you to get something that you want and is really nice. Do not get discouraged. You need to think long term. Keep reminding your self that this is only for a little while until you can get yourself back on your feet.

Finally, it is time to get the loan. Luckily, even though you have bad credit, there are bad credit financing loan companies out there tripping over themselves for your business. There are whole directories of loaners that you can look through. You should pick three or four loaners to apply to. Don’t be afraid to play them off each other a little. Remember, you don’t have much room to bargain because of your credit. However, telling one loaner that another loaner is giving you a better offer may be enough to get them to come down a bit.

Bad credit financing is available to you. However, before you take out a loan, first make sure you have a plan to pay it back. Don’t just accept the first loan you get. Make them compete so you can get the best rate and use the experience to restore your credit.

Questions on Franchise Financing Loans

You are quite taken with the idea of starting a franchise. You’ve done extensive research, hired a franchise lawyer and already have a business plan in place. The next thing on your list is funding the franchise. Many Canadian franchisees often discover that franchise financing can be as testing as the steps that precede it.

You should, of course, understand how the Canadian franchise sector is regulated and the kinds of protection and disclosure clauses that exist for both franchisee and franchisor. In Ontario, these rights are listed under the ‘Arthur Wishart Act’ and there are similar laws in place in other Canadian provinces. It would be a wise move to look at the appropriate legislation in detail with the assistance of your franchise lawyer.

You may have several queries regarding Canadian franchise finance loans, some of which are addressed below:

Q: Is it possible to buy a franchise venture without formulating a business plan?

A: It is not advisable to enter into any business venture without a business plan. Even if you are not involved personally in preparing it, it would be sensible to participate in its input and processing. This can have the effect of raising your awareness on practical and financial issues connected to your proposed franchise.

Q: Are appraisals necessary?

A: Yes, but the cost of the appraisal is certainly worth it as it boosts the lender’s confidence in the project and also reduces your calculated financial commitment to the franchise.

Q: What would be the typical interest on a Canadian franchise finance loan?

A: Currently interest rates are in the range of 5% to 6%, which is considered excellent for start-ups. Of course, your franchisor’s brand reputation and depth of market penetration will also count.

Q: Where can you avail these loans and interest rates?

A: These are available through the CSBF or BIL loan, also sometimes referred to as the Canadian Government Small Business Loan. Most franchise businesses are financed through this avenue. Of course, you may want to consult a reliable and trustworthy advisor experienced in franchise finance who will arrange this financing for your franchise venture.

Q: Is the CSBF loan the sole method available for franchise finance?

A: No, you have other options such as equipment finance to acquire fixed assets for the franchise, cash term loans and of course, your own money that you can invest in the franchise. All business ventures are typically financed by a component of debt or loan, along with the owner’s contribution of equity.

Q: Is it possible to obtain a franchise loan without providing a personal guarantee?

A: No. However, the CSBF loan needs a personal guarantee of just 25%.

Q: Can a franchise business be financed without a down payment?

A: No, definitely not. Whether you a starting a small restaurant franchise or a large manufacturing unit, all Canadian lenders will check out the owner’s financial contribution in the venture. As a franchisee, you have to strike a balance on how much to invest in the franchise.

Remember to cover all legal aspects of the financing process with a franchise lawyer as these areas can be particularly complex for first timers in the franchise field. Ensure that you research all available finance alternatives exhaustively and work towards minimizing your financial risks.