Colbert's Business Funding Program!

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This program is a program that approval can be from $50,000 To $10 Million!

Credit Score

• A minimum credit score of around 680-700 across all 3 bureaus is often required. Some lenders may accept lower scores, but higher scores increase the chances of approval and better terms. 

Down Payment

• Typically, lenders require a down payment of 10% to 30% of the total franchise cost. Some SBA (Small Business Administration) loans may require a lower down payment.

Net Worth

• Lenders often require a minimum net worth, which can vary widely depending on the franchise. A general range might be $100,000 to $300,000.

Liquid Assets

• Lenders may require a certain amount of liquid assets, often ranging from $50,000 to $150,000. This ensures you have the cash flow to support the business during the initial stages.

Experience

• Some lenders prefer or require that you have prior experience in the industry or in running a business. If not, a strong management team may be necessary.

Business Plan

• A detailed business plan showing the potential for success, including financial projections, is usually required. This plan should outline how you intend to run the franchise and repay the loan. (Colbert's Business Development Team Can Assist You With A Investor Ready or A Lenders Ready Business Plan.)

Franchise Agreement

• A copy of the franchise agreement or a letter of intent from the franchisor may be required to show that you've been approved or are in the process of being approved to purchase the franchise.

Collateral

• Depending on the loan type, you may need to provide collateral, such as personal or business assets, to secure the loan.

Debt Service Coverage Ratio (DSCR)

• A DSCR (Debt Coverage Service Ratio) of 1.25 or higher. This ratio shows that your business can generate enough income to cover its debts.

Franchise Viability

• The franchise itself should be well-established with a strong track record of success. Some lenders may prefer franchises that are on the SBA's Franchise Registry. 

Personal Guarantee

• Most lenders will require a personal guarantee, meaning you are personally liable for repaying the loan if the business cannot.

This program is a program that approval can be from $50,000 To $10 Million!

Strong Financial Statements 

• Historical Financials: At least three years of audited financial statements for both the acquiring and target companies.
• Current Financials: Up-to-date financial statements, including balance sheets, income statements, and cash flow statements.

Business Plan or Acquisition Strategy

• A detailed plan outlining the strategic rationale for the acquisition, projected synergies, integration plans, and financial projections post-acquisition.  (Colbert's Business Development Team Can Assist You With A Investor Ready or A Lenders Ready Business Plan.)

 Valuation Report 

• A thorough valuation of the target company, often prepared by an independent third party, to determine the purchase price and assess the financial feasibility of the acquisition.

Credit Score and History

• The acquiring company’s credit score and history play a significant role in determining eligibility for funding. A strong credit profile is essential, with a typical minimum score of 700 or higher across all 3 bureaus

Collateral

• Lenders may require collateral to secure the loan. This can include assets from the acquiring or target company, such as real estate, equipment, or inventory.

Debt-to-Income Ratio (DTI)

• A healthy debt-to-income ratio is crucial. Lenders often look for a DTI ratio below 40-50%. This ratio helps assess the acquiring company’s ability to take on additional debt.

Debt Service Coverage Ratio (DSCR)

• A DSCR of at least 1.25 or higher is typically required. This indicates that the company generates sufficient cash flow to cover its debt obligations. 

Equity Contribution

A down payment or equity contribution is often required, usually ranging from 10% to 30% of the acquisition cost. This shows the lender that the buyer has a stake in the deal and is sharing the risk.

Legal and Compliance Documents

• Legal documents such as the purchase agreement, shareholder agreements, and any necessary regulatory approvals must be provided.
• Due diligence reports covering the legal, financial, and operational aspects of the target company.

Management Experience

• Lenders may assess the experience and track record of the acquiring company’s management team, particularly their experience with mergers and acquisitions or managing larger companies.

Environmental, Social, and Governance (ESG) Compliance

• For larger deals, lenders may require compliance with ESG criteria, assessing the impact of the acquisition on environmental, social, and governance factors.

Third-Party Reports

• Lenders may require third-party reports, including market analysis, risk assessments, and independent appraisals, to better understand the potential risks and returns.

Regulatory Approvals

• Depending on the industry and location, regulatory approvals or antitrust clearance may be necessary before the acquisition can proceed.

Letter of Intent (LOI)

• A signed LOI outlining the terms of the acquisition, including purchase price, payment terms, and contingencies.  (Colbert's Business Development Team Can Assist You With A LOI.)

Insurance

• Lenders may require the acquiring company to have key person insurance or other forms of business insurance to protect against potential losses.

Personal Guarantee

In some cases, personal guarantees from the principals of the acquiring company may be required, particularly if the transaction involves significant risk.