I want to franchise a business that will cost around $100,000 to $150,000. My problem is that I have bad credit. If the business/company that I want to franchise form can show their statistics or something, of their other stores, would a bank allow me to get a business loan for that amount of money? P.S. It will be a cafe. Thanks to any answers!

Getting a business loan will depend on your credit. The company that you want to franchise from can probably show what the average franchisee takes in, but that includes some that make much more and some that go broke, so a bank can't assume that YOU will make that much. And by the way, you can't assume it either.

You definitely should present the store's statistics in your business plan -- but the bank will definitely check if you have collateral, etc. as well. Banks look at several factors before they give a business loan especially for that amount

- A business plan explaining what the business is

- Your background and experience in the business -- in my experience, this is KEY in the eyes of the bank because they want to make sure that you know what you are doing and that you can make the business work. If you don't have any experience with the business, have someone on board that knows the business to give banks assurance that someone will guide you

- Your credit factors because it shows your dependability and how well you handle credit. They will do a credit check on you and poor credit history may be frowned upon, or even reason for the disapproval of your loan application

- Your collateral. Banks, even SBA guaranteed loans, want the borrower to show collateral. They want to be guaranteed that somewhere somehow they can get payment from you

- Condition or terms of loans. Banks would want to know three important things: "How much money are you requesting? What will it be used for? and For how long will it be needed?" Banks oftentimes prefer to approve loans for items that can be identified, has lasting value, and can be repossessed and sold if things fail.

- Equity investment as they will not give you 100% of the amount you need and they want to see that you believe in your business enough to put your own money or you are invested in your business as well

Try talking to the bank where you currently have an account. Ask them how important is personal credit rating -- assuming you can have the rest of the other factors that they need.

Talk also to your local Small Business Development Center as they are the best resource you can have who will help you locate possible financing for your business

Lastly, check if the franchisor offers financing that you can avail of.