Even before you apply for a loan, devise a plan for repaying it. Getting the money may be your primary goal, but getting it back is the most important thing to the lender. So as you prepare that business plan, research your market, and study each page of the UFOC, keep in mind that your primary objective is to convince the lender you'll repay the loan.
What convinces lenders?
"Information," says Michael Duckham, account manager of Sacramento-based The Money Store's franchise division. "The more information the borrower provides us, the more likely we are to approve the loan."
Duckham wants to see a well-prepared business plan, tax returns for the last three years, a resume, site information, build-out estimates from local contractors, a demographic analysis, actual and projected income of franchisees, and a variety of other information from the borrower, the franchisor and the local chamber of commerce. Whew.
If you're unfamiliar with writing a business plan, seek professional guidance or check out business plan preparation software such as Business Plan Pro ($165 from Palo Alto Software, 800-229-7526), or BizPlanBuilder Interactive ($149 from Jian, 800-896-5426).