The Importance of Getting Pre-Qualified Before You Choose a Business to Buy

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Why would your search for the perfect business be any different?

Sure, you probably know what type of industry you want to enter: Maybe you’re a wonderful cook, so you’d like to start a restaurant; or you were once a teacher so you know you’d be a good fit for a tutoring business. That’s all well and good—but you really don’t know exactly what business you could purchase until you have your financial ducks in a row.

Instead of getting your heart set on one specific business or franchise only to learn later in the game that you’re not eligible to purchase it, prepare yourself from the start.

Think of these things to consider: You may be able to afford more than you expect based on the funding options available to you such as SBA Loans, Unsecured Credit or Rollovers as Business Startups (these let you utilize your retirement funds to buy a business debt-free). Or, you may realize that you can purchase a franchise, which comes complete with a proven business model, training and a designated territory for real estate. The sky is most likely the limit.

Before you start applying via multiple lender sites, though, remember that every inquiry such as that can impact your credit score, so either choose one or two lenders through a bank or firm you trust, or use a free, online tool that doesn’t access your credit score.

Just be sure to come to the table armed with basic financial facts about yourself such as salary, savings, property values (if applicable) and an estimated credit score.

Once you have a firm grasp on the amount and types of financing you may be able to use, you can begin to properly narrow your search for the business or franchise of your dreams.

This article was contributed by Guidant Financial.    Let Guidant help you finance the purchase of a business or franchise – click here to learn how Guidant can help you!

  • Author: Matt Maxwell
  • Date: May 11, 2014
  • Category: Financing
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