I am contemplating buying a franchise but dont want it to restrict my possibilites of purcahsing investement properties. If anyone has experience in this or there is a broker online the help would be appreciated.
– Will this majorly halt my likliness to borrow for investement properties?
– Do finance companies look at a small business and a franchise different when applying for finance? Is it easier for a franchise?
– if I am earning a lot more in my franchise than as an employee would I be able to borrow more or is it still going to be hard as I am essentially a business owner
– How long will I have to run the business until I can get finance for investmentsOoo, so many questions.
First, buying a franchise is easier than starting a new business from scratch. Very few Banks will lend to a new business, while buying a franchise is easier as there are solid cashflow estimates etc available.
Second, even buying a business most Banks are going to want bricks and mortar security (either commercial or residential). So, it will impact on your ability to purchase IPs because of the reduced equity.
Third, most Bank’s will rely on business income after 12 months of trading. In terms of buying the business then an IP, you will almost definitely have to wait the 12 months. There are of course expections, but not many.
Fourth, any Bank will use whatever income is available to them, because Bank’s are in the business of lending money. So if you have the new franchise and your current employment running concurrently, the Bank will use both income streams to prove serviceability. If you leave your current employment because the franchise is paying off, then obviously answer 3 applies. You’ll need 12 months trading.
I hope that helps.
also…with the better known and tested franchises you can finance up to 70% of the franchise cost – without bricks and mortar security.
cheers
brahms
CALL NOW…adults only (boys and girls ask mummy or dad first) ~~ 1900 hot broker ~~
You must be logged in to reply to this topic. If you don't have an account, you can register here.
