Pełna transkrypcja odcinka Funding Secrets Every Franchisor & Broker Should Know

write franchise. 00:05:44.511 --> 00:05:47.100 I'm not a franchise guy, I'm a. 00:05:47.100 --> 00:05:54.064 I volume them, but I don't know which brand is better than the other brand you know for clients. 00:05:54.064 --> 00:05:57.505 So I rely a lot on you to do it. 00:05:57.505 --> 00:06:02.588 But you are right, it's a topsy-turvy thing that we deal with every day. 00:06:04.199 --> 00:06:05.161 What would you suggest? 00:06:05.161 --> 00:06:09.891 How can potential borrowers become more fundable? 00:06:09.891 --> 00:06:20.324 Like so talking to a borrower, but also, you know, maybe you have a broker or a franchise or that needs to give them some advice too, Like, what can they do? 00:06:21.319 --> 00:06:24.730 Well, that's a good question. 00:06:24.730 --> 00:06:30.065 I think you're the first person that's ever asked me that I'm a little taken back by it. 00:06:30.065 --> 00:06:35.870 I'm just it's to be more fundable. 00:06:35.870 --> 00:06:56.577 That question to me means is what does this client look like on paper for a lender, a bank, whatever it may be SBA, conventional, and I think it has to be a person that, at least for me, I'll speak for me. 00:06:56.658 --> 00:07:01.163 At my lending institutions we look for stability. 00:07:01.163 --> 00:07:05.569 I want to see a stable person. 00:07:05.569 --> 00:07:09.509 I'm not saying so much about their net worth, their liquidity. 00:07:09.509 --> 00:07:11.524 Is that person stable? 00:07:11.524 --> 00:07:16.149 Have they lived in the same area for a few years? 00:07:16.149 --> 00:07:24.105 Has it been a person that's moving from one apartment to another apartment, to another, one state to another state? 00:07:25.279 --> 00:07:29.670 You know, stability is one of my biggest things. 00:07:29.670 --> 00:07:35.550 When I'm looking at that and when I look at somebody's credit report, obviously you can see the stability. 00:07:35.550 --> 00:07:39.810 Now, do I want them to pay their bills on time? 00:07:39.810 --> 00:07:40.882 Certainly I do. 00:07:40.882 --> 00:07:52.389 But credit worthiness and long worthiness depends on multiple factors and it's not always based off of the individual client. 00:07:52.389 --> 00:08:07.904 You could bring me a client that is stellar and let's say he wants to buy a resale or it's a startup business, and I look at our portfolio and it's not performing, I'm not going to do it. 00:08:07.904 --> 00:08:16.964 If I look in there and I see, jeez, I got 20 out of 100 loans that we have, we got 20 of them that have defaulted. 00:08:16.964 --> 00:08:24.689 I don't care if he's got the best credit and net worth in the world, we're not going to buy it just because of default. 00:08:24.689 --> 00:08:27.507 So it's a multitask question. 00:08:29.101 --> 00:08:43.225 When you bring that to the table, the ideal candidate is someone with stability, someone that has a little liquidity to invest of their own let's call it skin in the game. 00:08:43.225 --> 00:08:58.368 Somebody who

has been around the work environment, not necessarily owning their own business, but knowing how to operate a business. 00:08:58.368 --> 00:09:03.711 Someone who's married or not married, but has outside income. 00:09:03.711 --> 00:09:12.342 There's all of these different factors that we put in to every potential client that we look at. 00:09:12.342 --> 00:09:20.241 That's the reason for the pre-qualification process that I've talked to you about in the past. 00:09:20.241 --> 00:09:35.312 Why would you have a client look at a business that's a million dollars or a half a million dollars all in, not knowing that they would qualify for that, for a loan, if they need it? 00:09:36.139 --> 00:09:39.870 That pre-qual is how I adjust for that. 00:09:39.870 --> 00:09:56.506 I can qualify somebody within four to five hours of getting the information that they give us so I can come back to Lance and say, okay, lance, and talk to the client and say this is what I'm comfortable to do, this is how much I'm willing to give you. 00:09:56.506 --> 00:09:58.206 This is how much doubt I want. 00:09:58.206 --> 00:09:59.524 This is your interest, right? 00:09:59.524 --> 00:10:06.190 This is your term, and then take a step back and let you guys do what you're supposed to do. 00:10:06.190 --> 00:10:18.784 That's why I was taken back about the question, because it's hard to to tell somebody what they have to look like. 00:10:18.784 --> 00:10:24.644 I have to see what you look like and from that point I can tell you this. 00:10:24.855 --> 00:10:27.663 I can say you're not gonna get along by yourself. 00:10:27.663 --> 00:10:30.602 You might need to bring in a partner. 00:10:30.602 --> 00:10:34.303 Or I could say you're having this issue. 00:10:34.303 --> 00:10:36.321 You know there's a credit issue. 00:10:36.321 --> 00:10:42.043 Maybe you should talk to our credit advocate guys and get that cleared up, and then you would be fine. 00:10:42.043 --> 00:10:44.142 So there's multiple things. 00:10:44.142 --> 00:10:48.482 You got a lack of collateral, you don't have enough net worth. 00:10:48.482 --> 00:10:50.240 It could be multiple reasons. 00:10:50.240 --> 00:10:56.559 Or I could look at it and say you're perfect, this is what we wanna do. 00:10:57.215 --> 00:10:58.861 This is how we move forward. 00:10:58.861 --> 00:11:06.980 Every person deserves their own look through, whatever lender they're at. 00:11:06.980 --> 00:11:14.543 Okay, everybody's story is different and you have to take the time and look at their story. 00:11:14.543 --> 00:11:21.179 Okay, I could give you hundreds of examples of things that I run through. 00:11:21.179 --> 00:11:25.895 One of my biggest is always when somebody lives talking to. 00:11:25.895 --> 00:11:29.600 A client now lives in the state of Washington and he's moving to Ohio. 00:11:29.600 --> 00:11:36.543 He's moving and packing his family up cross country and I gotta figure out before he does that. 00:11:36.543 --> 00:11:40.201 Or we're gonna be willing to give him a loan, but he leaves point A to get the point B. 00:11:40.201 --> 00:11:51.421 So everybody's story is different and my staff, I, we all know that you have to look at everybody individually. 00:11:51.421 --> 00:11:56.524 That's how you can tell if they're ready to move forward. 00:11:57.366 --> 00:11:57.807 It isn't. 00:11:57.807 --> 00:12:05.860 I suggest to anybody they should speak to multiple people about financing. 00:12:05.860 --> 00:12:10.600 You're gonna bring up a question in a little bit and we'll talk about that. 00:12:10.600 --> 00:12:15.539 But it doesn't hurt to talk to your local bank and see what they say. 00:12:15.539 --> 00:12:25.043 It doesn't hurt to go out and talk to multiple banks as long as they're not pulling your credit and shopping your loan around, as bankers call it. 00:12:25.043 --> 00:12:33.062 But if you've got the right lending partner, they're gonna know the answers once you start talking to them. 00:12:33.062 --> 00:12:41.216 I can tell from a client within five minutes on the phone are they really serious about doing this, do they? 00:12:41.216 --> 00:12:42.682 You know what do you. 00:12:42.682 --> 00:12:46.801 You know what do I think they're gonna want and what are they gonna expect. 00:12:46.801 --> 00:13:10.003 So that easiest way is it's a challenging question for people because everybody's different, lance, and I answered exactly the way you wanted me to, but it's not an easy question to be able to say it's A and B, it's A to B or B to C, it's A to God knows what. 00:13:10.003 --> 00:13:12.307 To figure it out. 00:13:13.075 --> 00:13:26.123 So after you first speak with them and you kind of get a good look at it, that's where your pre-qualification comes in and gives them a good idea of here's where you're at, here's what you could possibly do and here's some suggestions on how to bring that up. 00:13:26.674 --> 00:13:28.823 Yes, I get. 00:13:28.823 --> 00:13:33.361 I mean most of the consultants and coaches and zores that we work with. 00:13:33.361 --> 00:13:38.279 They all send us clients via email or however. 00:13:38.279 --> 00:13:47.201 They do it through their portals and the main thing you see at the bottom is can you please pre-qualify this client before we start our process? 00:13:47.201 --> 00:13:50.745 So think about it realistically. 00:13:50.745 --> 00:14:01.224 A franchisor doesn't wanna spend a month talking to a client about purchasing their franchise and not know if they're gonna qualify to purchase it. 00:14:01.224 --> 00:14:16.304 A consultant or coach shouldn't spend months and months talking to a client, shouldn't even spend weeks talking to a client unless they know they're gonna qualify for some type of some type of financing if they need financing. 00:14:16.304 --> 00:14:22.778 If someone says to you you know, I'm good, I don't need financing, I'm gonna sell fun, then that's wonderful. 00:14:22.778 --> 00:14:25.442 There's no need for me to talk to

them. 00:14:25.442 --> 00:14:29.751 But that's all case by case. 00:14:29.751 --> 00:14:39.434 After you speak to them and if they need the financing, you reform and then I handle it and then I pre-qualify them and then you know the franchisors know. 00:14:39.434 --> 00:14:45.028 So it's really just a step by step process. 00:14:46.947 --> 00:14:47.294 That makes sense. 00:14:47.294 --> 00:14:48.385 And so what is the difference? 00:14:48.385 --> 00:14:51.634 I mean, you talked about working with someone like yourself. 00:14:51.634 --> 00:14:54.855 That's really, I think you kind of see. 00:14:54.855 --> 00:14:56.903 I think you kind of specialize in franchises. 00:14:56.903 --> 00:15:00.197 You do a lot of things, but you know what you're talking about when it comes to that. 00:15:00.197 --> 00:15:07.941 Or you know your traditional retail bank, because when I first got started, I thought you know a bank's a bank and the bank they're always super friendly. 00:15:07.941 --> 00:15:10.764 They're like, yeah, absolutely, we can do that for you. 00:15:10.764 --> 00:15:13.624 You know, we can get you the loan. 00:15:13.624 --> 00:15:16.881 We're gonna introduce you to Mike and Mike's like, yeah, sit down and talk. 00:15:16.881 --> 00:15:22.097 And then it's usually the person above them that they talk to and they're like, oh, yeah, we can't do that. 00:15:22.097 --> 00:15:25.562 Or we've done a franchise, like we've done one, you know. 00:15:25.562 --> 00:15:37.881 And so what for you know, for people who are listening, and then we're gonna focus mostly on things that I think that the brokers and the franchise owners would wanna know. 00:15:37.881 --> 00:15:43.942 But if somebody's new to this and they don't understand that it's important to connect people with a franchise, specific lender. 00:15:44.562 --> 00:15:44.764 Yes. 00:15:44.764 --> 00:15:52.043 Well, you have to understand lending institutions are all set up differently. 00:15:52.043 --> 00:16:02.965 I don't care if it's the big boys, the Chase, the Wells, the cities or the smaller citizens, or US banks or whoever it may be. 00:16:02.965 --> 00:16:11.981 Whatever the lending it companies like ours, you know everybody has a different appetite for the type of business that they want. 00:16:11.981 --> 00:16:17.634 But where the issue comes in is most banks are retail banks. 00:16:17.634 --> 00:16:23.706 They care about the FDIC, they care about your checking account business. 00:16:23.706 --> 00:16:27.493 They want you to get credit cards with them, do car loans, get your mortgage. 00:16:27.493 --> 00:16:30.315 That's retail banking. 00:16:30.315 --> 00:16:37.034 I have to admit that's something that I did not spend a lot of time in in my career because I wasn't interested. 00:16:37.034 --> 00:16:44.673 I wasn't interested in sitting in a brick and mortar building all day long waiting for clients to come in and ask for a loan. 00:16:44.673 --> 00:16:59.352 But when you go to these local institutions or even your own bank, 99.9% of the time they don't even have a rep inside the bank. 00:16:59.352 --> 00:17:11.599 For the company that knows anything about business loans I don't care if it's conventional or SBA, it's all outside of the office and I don't know if it's the big boys. 00:17:11.599 --> 00:17:14.788 The person you're talking to is just a yeser. 00:17:14.788 --> 00:17:17.188 Yes, I will find out for you. 00:17:17.188 --> 00:17:37.567 Yes, I will do this, but by no means should somebody take going to their own bank, where they have their deposits and been banking for years and pay off their mortgages and think that if they decline me I can't get along somewhere else, because that can't be farther from the truth. 00:17:37.567 --> 00:17:44.407 I have done multiple, multiple, multiple clients who have went to their own bank and then came. 00:17:44.407 --> 00:17:57.667 Thus the difference between a lender like ourselves that really is more of a wholesale In the banking world it's called wholesale. 00:17:57.667 --> 00:18:23.826 We only deal and there are quite a few banks out there that only, or lending institutions that only deal with loans, loan origination, it's called, and we, specifically, we do mom and pops, don't get me wrong, but most of our business is from coaches and from franchise owners. 00:18:23.826 --> 00:18:42.086 So obviously we understand the franchise world, so I can find things out relatively quickly and if it fits and you're financially strong enough, there's no reason not to do a startup business for somebody, especially under SBA. 00:18:42.086 --> 00:18:47.148 Let's be honest, the SBA was designed for startup businesses. 00:18:47.148 --> 00:18:52.730 That's what put it in place when Dwight D Eisenhower was president in 1953. 00:18:52.730 --> 00:18:58.211 They did that to stir the economy for entrepreneurial people. 00:18:58.211 --> 00:19:04.145 This is small business week and we're having this meeting, so that's a wonderful thing. 00:19:04.145 --> 00:19:11.189 But there's no reason to think that you can't get along if you talk to the right people. 00:19:11.189 --> 00:19:13.185 There's multiple companies. 00:19:13.339 --> 00:19:16.128 I'm not here to just plug first financial. 00:19:16.128 --> 00:19:21.766 I'm here to say if you're an entrepreneur, you have to do your research. 00:19:21.766 --> 00:19:36.268 You got to find out what you're interested in and then you reach out and then you talk to Lance, like you, you know us, so you refer people to Karen Perkins in my office, who you work with. 00:19:36.268 --> 00:19:36.750 That type. 00:19:36.750 --> 00:19:41.086 That's how you move forward. 00:19:41.086 --> 00:19:49.589 It doesn't cost you anything to talk right and we teach you what it has to be. 00:19:50.480 --> 00:19:59.170 And so I don't want people to think that going to their local bank is a bad thing. 00:19:59.170 --> 00:19:59.671 It isn't. 00:19:59.671 --> 00:20:06.310 Maybe they won't do you

alone for you, but most banks are not in the startup business. 00:20:06.310 --> 00:20:09.067 For startup franchises. 00:20:09.067 --> 00:20:28.230 They're just not Maybe resale some of them we'll look at but a majority of them will come in and they'll say, well, if you have equity in your home, we'll loan you against your home and you can go open the business Type of philosophy, because that's what they're geared to do. 00:20:28.230 --> 00:20:30.929 That's retail type of banking. 00:20:30.929 --> 00:20:33.027 Or we'll give you a personal loan. 00:20:33.027 --> 00:20:34.967 There are that type of stuff. 00:20:34.967 --> 00:20:36.846 Once again is retail. 00:20:36.846 --> 00:20:39.709 So I think that's the big stepping point for people. 00:20:39.709 --> 00:20:44.007 Just because you might get the client once doesn't mean you cannot get a loan. 00:20:44.007 --> 00:20:47.067 You have to talk to the right folks. 00:20:48.310 --> 00:20:52.329 Right, and so for a franchise sore. 00:20:52.329 --> 00:20:58.509 So I own a franchise and I want people to be able to be funded to buy my franchise. 00:20:58.509 --> 00:21:08.508 In the eyes of the lenders and in the eyes of the SBA, what are some things that make me attractive to be funded for these loans? 00:21:08.508 --> 00:21:10.567 So what should franchise ores understand? 00:21:11.220 --> 00:21:12.967 Okay, that's a very good question. 00:21:12.967 --> 00:21:16.028 I try to explain it a lot to franchise ores. 00:21:16.028 --> 00:21:19.969 There's been some changes, especially in the SBA side. 00:21:19.969 --> 00:21:42.008 We used to have a thing called the registry and then they changed it to the directory and what that means is every year if you want the franchise or wants to be approved for the SBA for us to write loans under SBA, you had to be on that directory. 00:21:42.008 --> 00:21:58.028 Okay, that means that every year you had to send your FDN to the SBA out of California is the legal department that runs that and then you prove your franchise and they enter you on the directory list. 00:21:58.028 --> 00:22:00.865 That list is going away. 00:22:00.865 --> 00:22:06.951 To be perfectly honest, some bankers don't care, some do. 00:22:06.951 --> 00:22:08.443 I'm a carer. 00:22:08.443 --> 00:22:30.926 I think the directory was a wonderful tool because what it did was it allowed the SBA to vet the franchise or and make sure that their FDNs were focused on the client, what it was gonna be, and if there was something in there they didn't like, they could talk to them and change it. 00:22:30.926 --> 00:22:35.471 Well, as of May 12th, that will not be in place. 00:22:35.471 --> 00:22:40.990 Everybody's kind of protesting it a little bit. 00:22:40.990 --> 00:22:43.868 From what I understand, it's gonna be null. 00:22:44.279 --> 00:22:49.487 Now there's quite a few franchises that are on the directory there's over 4,000 franchises. 00:22:49.487 --> 00:23:05.865 A lot of guys have re-opped because it makes it easier for lenders to say, okay, they're on the directory, we can look at the reports, we can get their FDN, we can check the Coleman report, we can see all these things. 00:23:05.865 --> 00:23:22.790 It's going to change things a lot, in my opinion, because now lenders are gonna have to have their own department to review FDNs and it's gonna be a little sticky in the beginning. 00:23:22.790 --> 00:23:31.126 I don't see any problem with the existing guys that have been out there, that have been on the directory for a year, two years, 10 years. 00:23:31.126 --> 00:23:35.691 Where I do see an issue is the emerging brands. 00:23:35.691 --> 00:23:39.868 We're definitely gonna have to spend more time. 00:23:40.140 --> 00:23:50.026 I have sent every emerging brand I know that I've spoken to, to the SBA just to get on this directory, even though it's gonna disappear because now we know it's there. 00:23:50.026 --> 00:23:56.326 But I see that process might be a little more difficult for the franchise award. 00:23:56.326 --> 00:24:05.388 So they're going to have to spend time with the lending companies that they choose to work with and be vetted by the lender. 00:24:05.388 --> 00:24:12.869 So in other words, I'm doing a couple of emerging brands or guys I've known for years started their own franchise. 00:24:12.869 --> 00:24:14.586 Is kind of what you just said to me. 00:24:14.586 --> 00:24:17.906 I've already vetted the FDNs. 00:24:17.906 --> 00:24:22.222 I've already had our head of credit review the FDNs, so we're good to go. 00:24:22.624 --> 00:24:24.630 But that's a process that takes time. 00:24:24.630 --> 00:24:27.407 Lance, I'm sure you've looked at FDNs. 00:24:27.407 --> 00:24:29.086 They're not two or three pages. 00:24:29.086 --> 00:24:36.528 There are some cases 250 to 500 pages of documents that you have to go through. 00:24:36.528 --> 00:24:40.307 But it's a process. 00:24:40.307 --> 00:24:41.611 It's gonna take a little bit. 00:24:41.611 --> 00:24:45.029 Franchisors are gonna have to relax a little bit. 00:24:45.029 --> 00:24:55.309 For people, the emerging brands, all the other guys we shouldn't see any issues because we still can get reports on how they're performing. 00:24:55.309 --> 00:25:00.287 My bank, we put a lot of effort into the financial disclosure documents. 00:25:00.407 --> 00:25:15.147 Anyhow, I don't necessarily go by the directory, but the reason the directory was there was so we knew that they were approved with the SBA so we would be able to file our guarantee. 00:25:15.147 --> 00:25:27.429 Sba loans get a guarantee back from the federal government and if they weren't on the directory you didn't get the guarantee, you couldn't write the loan under SBA. 00:25:27.429 --> 00:25:31.611 Now all that's gonna disappear because there's no directory. 00:25:31.611 --> 00:25:40.506 So it's gonna open up the marketplace with a lot of franchisors that didn't qualify to get on the directory. 00:25:40.506 --> 00:25:49.806 I kind of

wanna say in a kind way, the first few months I would say June, july and August are gonna be like the old West. 00:25:51.320 --> 00:25:59.230 You're gonna see a lot of franchises want to get financing that didn't qualify for one reason or another. 00:25:59.230 --> 00:26:01.046 There's a lot of different reasons. 00:26:01.046 --> 00:26:04.328 It doesn't mean that the franchisor is a bad franchisor. 00:26:04.328 --> 00:26:11.268 It just means one of their policies didn't fit under the SBA guideline program. 00:26:11.268 --> 00:26:15.207 Like they take the money upfront and then get paid to franchisee. 00:26:15.207 --> 00:26:20.288 There's all different rules that these people had to stay under for SBA. 00:26:20.288 --> 00:26:27.228 That's disappearing, so lenders are gonna have to take their time. 00:26:27.460 --> 00:26:29.126 We're already prepared for it. 00:26:29.126 --> 00:26:32.911 I mean, I've gotten so many FDDs in to look at. 00:26:32.911 --> 00:26:47.532 We started a whole new filing system in our share files for FDDs, but the Mr Franchisor has to be aware of that and, other than that, it's them following their game plan. 00:26:47.532 --> 00:26:50.747 This is how you guys have it set up. 00:26:50.747 --> 00:26:52.625 We're still relying. 00:26:52.625 --> 00:27:00.028 The reason most lenders like franchises if you're really into lending is because we put a lot of faith in the franchisors. 00:27:00.028 --> 00:27:03.041 You're buying a franchise why? 00:27:03.041 --> 00:27:08.861 Because the franchiseeer or is there to assist you, right, lance? 00:27:08.861 --> 00:27:11.430 I mean that's what you're paying that money for. 00:27:11.430 --> 00:27:13.287 They have a marketing department. 00:27:13.287 --> 00:27:24.666 They have all different kinds of departments to help you grow your brand, and that's just the way it is right now and we enjoy that and other places. 00:27:24.666 --> 00:27:26.029 Just don't understand it. 00:27:27.901 --> 00:27:28.644 That makes sense. 00:27:28.644 --> 00:27:31.444 I just want to check in with you really quick. 00:27:31.444 --> 00:27:34.423 How much time do we have? 00:27:35.779 --> 00:27:37.026 I have as much time as you need. 00:27:37.026 --> 00:27:53.682 Ok, because, yeah, these are great answers and I just had a few more questions, that's fine, I can't go on a little bit, but the questions you're asking have a lot of explanations to them yeah, this is great, this is great, my pleasure. 00:27:57.224 --> 00:28:13.340 So what are some big mistakes that you see that maybe franchiseeers do that hold their business back, like if they would make some changes, their business could take off OK. 00:28:14.759 --> 00:28:22.282 I hate to speak for the franchiseeers, but I can tell you on the lender side of things that we don't like. 00:28:22.282 --> 00:28:33.528 One of my pet peeves is that you're selling multi-territories to people that really don't qualify for a multi-territory deal. 00:28:33.528 --> 00:28:47.068 Second on that multi-territory is they're not giving them enough time to open up location 2 from location 1 or location 2 from location 3 or whatever it may be. 00:28:47.068 --> 00:28:50.666 I see that happening a lot. 00:28:50.666 --> 00:28:53.789 Now I'm not telling franchiseeers not to sell. 00:28:53.789 --> 00:28:56.608 They call them two packs, three packs, five packs. 00:28:56.608 --> 00:28:58.865 I don't have any issues with that. 00:28:58.865 --> 00:29:01.267 Everybody's in business to make money. 00:29:01.267 --> 00:29:09.403 Where I have the issue is if the client physically is not going to qualify to be able to open two or three of these locations. 00:29:09.403 --> 00:29:18.811 And then it really comes back to that other example of how long does my franchisee have to open up the next. 00:29:20.946 --> 00:29:23.045 Banks are banks, lenders are lenders. 00:29:23.045 --> 00:29:39.122 If I loan you $400, I'm just picking a number $400,000 to open up location 1, or $500 or a million, whatever it may be, and you get it up and running, takes you six, seven months to get it built out, done and you're ready to go. 00:29:39.122 --> 00:29:49.308 And You're just barely making money now because you just opened and four months down the road you're still having. 00:29:49.308 --> 00:29:51.233 You're not cash flow positive yet. 00:29:51.233 --> 00:29:54.932 Now you have to go out and open up a second location. 00:29:54.932 --> 00:29:57.849 We're not going to want to loan you the money. 00:29:57.849 --> 00:29:59.890 Why would we loan you money? 00:29:59.890 --> 00:30:05.214 Why would you open up a second location when the first one isn't cash flow positive? 00:30:05.214 --> 00:30:12.513 Yet If the first one is cash flow positive, by all means I don't care if it's three months or six months or 12 months. 00:30:12.513 --> 00:30:14.972 We'll look at doing the second one. 00:30:14.972 --> 00:30:29.616 I want to do every one of them, but the franchisor has to understand that it comes down to the people being able to qualify and what lending practices are like out there. 00:30:29.616 --> 00:30:39.494 No one's going to loan somebody on a second location if the first location isn't at least breaking even. 00:30:39.494 --> 00:30:42.570 That's a big thing. 00:30:42.570 --> 00:30:43.473 That I see. 00:30:46.509 --> 00:30:54.973 The other thing that and I don't have a lot of problems with franchisors because we work with so many of them I can really tell them how I feel. 00:30:54.973 --> 00:30:57.953 Hey, I don't think this, you should be doing this. 00:30:57.953 --> 00:31:01.674 It doesn't mean they listen, but I say it. 00:31:01.674 --> 00:31:10.952 I think the biggest problem too is that they accept people that probably aren't the right candidate for that individual franchise. 00:31:10.952 --> 00:31:18.557 They don't qualify, they're not going to get a loan and you still took them in as a franchise. 00:31:18.557 --> 00:31:31.713 I don't see that as much, because most

of the groups that we work with are pretty, very, very good, stable companies with good people working for them. 00:31:31.713 --> 00:31:42.990 There's always one guy that slips in and you give him a loan and he wants a loan and he's paid his franchise fee. 00:31:42.990 --> 00:31:46.712 He comes to us and we can't help him. 00:31:48.205 --> 00:31:59.874 That's something that franchisors have to be careful for and they need to spend more time, in my opinion, vetting their clients. 00:31:59.874 --> 00:32:06.655 Let's say you get a client, you refer them over to whatever franchise he's interested in. 00:32:06.655 --> 00:32:10.252 They have their own franchise director. 00:32:10.252 --> 00:32:28.476 They need to take the time to vet the client and have them get qualified with them before they award them a territory and make sure that they have the financial needs, if they don't get a loan, that they'd still be able to open and not be undercapitalized. 00:32:28.476 --> 00:32:30.208 That's the effort. 00:32:30.208 --> 00:32:34.934 A lot of the franchisors are really good at that. 00:32:35.015 --> 00:32:59.613 Now I've seen this industry change immensely over the years, where guys would just sell franchises to anybody many, many years ago to where the good franchise groups are the ones that are out there that are really vetting their clients, their potential franchises, and they're out there to make sure that they're going to be successful. 00:32:59.613 --> 00:33:01.369 That's what a franchise is. 00:33:01.369 --> 00:33:04.614 Remember that FDD has to state everything. 00:33:04.614 --> 00:33:09.955 Just because the director is gone, the FDDs are still have to be filed every year. 00:33:09.955 --> 00:33:17.115 The worst case for a franchise or is to have to put that he's got territories that closed. 00:33:17.115 --> 00:33:26.847 It's a reflection on them and a reflection for banks when they look at them to be able to finance them. 00:33:26.847 --> 00:33:29.048 They can walk away. 00:33:30.172 --> 00:33:46.055 Yeah, I know that the franchisors say we don't want to tie up the territories and this and that, but I've always felt that some of those progressive opening plans were just a little aggressive because of the startup is when you're the weakest and you're learning. 00:33:46.055 --> 00:33:51.915 Just putting a little bit more slack in there would help everybody. 00:33:51.915 --> 00:33:59.335 It would help the franchise or in the franchise, people do what they feel is right, but I think they would have greater success. 00:34:00.265 --> 00:34:05.867 They know their model, Lance, and they feel, because they probably accomplished it themselves, that everybody can. 00:34:05.867 --> 00:34:09.416 But it really depends on the demographic area you are. 00:34:09.416 --> 00:34:10.467 Let's be honest. 00:34:10.467 --> 00:34:14.606 You can open up one and it's a cash flow cow from the day one you open it. 00:34:14.606 --> 00:34:20.030 Then you go to another one, but

the area is not as good as the other one was and this one doesn't support it. 00:34:20.030 --> 00:34:31.672 It's a tough decision for franchisors, but it all gets back to exactly what I said Make sure they're financially strong enough to be able to open up three days. 00:34:31.672 --> 00:34:38.516 If they can't get a loan, Maybe they have money in their retirement account or maybe they got a lot of stocks and bonds. 00:34:38.516 --> 00:34:44.538 If it's $250,000 to open up each project, make sure they qualify for it. 00:34:44.538 --> 00:34:53.887 Make sure they got $750,000 so you know they can open them up, Instead of saying down the road oh, maybe we can get you this loan or maybe you can get a lease. 00:34:53.887 --> 00:34:55.688 That's not how it should be done. 00:34:55.688 --> 00:34:58.971 You shouldn't buy a business on maybe. 00:35:00.581 --> 00:35:00.804 Right. 00:35:00.804 --> 00:35:04.373 Well, what have you noticed about franchise companies? 00:35:04.373 --> 00:35:11.097 This can be the company itself as an opportunity or the company as the product to the consumer. 00:35:11.097 --> 00:35:16.036 What have you noticed about these companies, on the ones that really took off and succeed? 00:35:16.036 --> 00:35:17.088 What is it about them? 00:35:19.625 --> 00:35:20.489 Another good question. 00:35:20.489 --> 00:35:34.338 If you want my absolute truth, I think they have better marketing departments and they're out there and they're pushing the products out in front of the coaches, the consultants. 00:35:34.338 --> 00:35:49.414 They're advertising and publications, social media, and they're just getting more exposure and you're seeing a lot of I guess I would say the word repeat brands. 00:35:49.414 --> 00:35:55.994 Give me an example when I first started in this, there was one mosquito company out there. 00:35:55.994 --> 00:36:01.635 There's probably 27 different franchises now that are pest control companies. 00:36:01.635 --> 00:36:10.494 So you're seeing somebody that had a good product and a good concept on the franchise world and it's copycat it, which is fine. 00:36:10.494 --> 00:36:12.231 I mean, it's business is business. 00:36:12.231 --> 00:36:24.114 I'm still doing them all, but I see that being that factor and once again, it's a challenging scenario for people. 00:36:24.114 --> 00:36:29.592 It all comes down to finding that brand that's going to work for you. 00:36:29.592 --> 00:36:32.858 I think that makes sense. 00:36:33.259 --> 00:36:33.539 Yeah. 00:36:33.820 --> 00:36:34.039 Yeah. 00:36:35.264 --> 00:36:36.177 Does Kynan mean retail وتانصIGHT? 00:36:36.177 --> 00:36:36.744 Is Kynan a fashion brand? 00:36:36.744 --> 00:36:43.838 I was going to say are there any things that you have noticed about? 00:36:43.838 --> 00:36:47.092 And we talk about item 19, and we talk about that stuff. 00:36:47.092 --> 00:36:56.211 I know that that's important and I know that some companies still don't put a good item 19 in there or not at all. 00:36:56.211 --> 00:36:58.570 What's your recommendations with that? 00:36:58.570 --> 00:37:07.992 Because I think that as somebody looks to buy it, that is really important to them to have an understanding of what it could do. 00:37:07.992 --> 00:37:11.411 What's your suggestions from looking at all these FDDs over the years? 00:37:14.425 --> 00:37:15.608 This is a little bit now. 00:37:15.608 --> 00:37:21.974 Remember this is me, this is my bank, this is a lot of lenders. 00:37:21.974 --> 00:37:29.436 We don't really put as much effort into the item 19 as the potential franchisee does. 00:37:29.436 --> 00:37:33.432 We're looking at the product as a whole. 00:37:33.432 --> 00:37:36.070 We're looking at the franchise as a whole. 00:37:36.070 --> 00:37:40.389 Cash revenues are great. 00:37:40.389 --> 00:37:41.815 Don't get me wrong. 00:37:41.815 --> 00:37:50.813 It's nice to see that these franchises I was on a presentation today where that's what they put up Remember what I got back to a little bit ago. 00:37:50.813 --> 00:37:52.768 It's not always about the money. 00:37:52.768 --> 00:37:59.335 It's about the structure of the franchise and the growth of the franchise. 00:37:59.335 --> 00:38:03.054 The item 19 is based off how much money you can make. 00:38:03.864 --> 00:38:13.675 I think the reason some of the franchisors there's quite a few that don't have an item 19 is because they don't have that information to really publicize yet. 00:38:13.675 --> 00:38:18.873 They don't know exactly what all their franchisees did. 00:38:18.873 --> 00:38:28.496 Because just because you're a franchisee doesn't mean that you have to submit your financials to your franchise or to be published. 00:38:28.496 --> 00:38:37.965 Now, yes, you have to give them a report because they're taking a percentage of your business, whatever it may be 5%, 6%. 00:38:37.965 --> 00:38:41.090 The guys I talked to today were 8.5%. 00:38:41.090 --> 00:38:51.396 That they take of the revenue, of the gross revenues A lot of the smaller franchises, especially your new ones, they're not going to have an item 19. 00:38:51.396 --> 00:38:59.269 The only thing they could really post is if they have their own operating business, which is something I like to see. 00:38:59.369 --> 00:39:08.536 On the franchise side, I'm a firm believer that every franchise had at least one location open of their own. 00:39:08.536 --> 00:39:13.054 They can justify the numbers from that, but a lot don't. 00:39:13.054 --> 00:39:22.932 If they don't, then we go back and I go back and I look at who's running this, who is the founder of it, who's the president? 00:39:22.932 --> 00:39:24.199 Where did they come from? 00:39:24.199 --> 00:39:25.605 Is this their background? 00:39:25.605 --> 00:39:27.831 If it is, then it's understandable. 00:39:27.831 --> 00:39:32.829 You got to look through all those things. 00:39:32.829 --> 00:39:45.514 But the item 19 is not going to deter most lenders who do franchise business.

00:39:45.514 --> 00:39:58.155 If it's not in there, it might deter a franchisee or it might deter a coach from representing and showing the business, because you guys like that. 00:39:58.155 --> 00:40:03.721 There's not a convention or a franchise meeting that I don't go to. 00:40:03.721 --> 00:40:10.518 When we're doing speaking engagements and so is the Zores that the first thing they bring up is their item 19. 00:40:10.518 --> 00:40:12.028 I'm used to that. 00:40:12.028 --> 00:40:18.635 I do think it's a good thing for the franchisee to see it. 00:40:18.635 --> 00:40:28.807 For me I can look at it and say yes, but I'm really more concerned about the client, to be honest with you. 00:40:30.724 --> 00:40:38.710 What advice would you then have for brokers and consultants who are working with clients and they're bringing them in for funding? 00:40:38.710 --> 00:40:45.568 What are some things you see that maybe you suggest they do more of, or some things you've seen that works really well? 00:40:45.568 --> 00:40:49.170 What could we share that would really help the brokers out? 00:40:50.844 --> 00:40:51.869 There's a few things there. 00:40:51.869 --> 00:40:58.077 On the broker side, I look at everything as urgency. 00:40:58.077 --> 00:41:01.494 I always have and I use a scenario. 00:41:01.494 --> 00:41:10.954 You're probably too young to understand this, but way back when I had my franchises, we used to use a product called a lead box. 00:41:10.954 --> 00:41:17.054 We didn't have social media that, we didn't have all this stuff where you can click and have advice. 00:41:17.054 --> 00:41:24.369 We used to have these things called lead boxes and you went a free two-week membership to my fitness center. 00:41:24.369 --> 00:41:28.554 You strategically placed these all over stores. 00:41:28.554 --> 00:41:32.405 Even to this day, karate studios still use these. 00:41:34.485 --> 00:41:37.034 Someone fills out the lead, puts their name, phone number. 00:41:37.034 --> 00:41:39.311 There was no email addresses back. 00:41:39.311 --> 00:41:43.251 I'm really telling all of my I don't like it. 00:41:43.251 --> 00:41:51.248 We would go out, my sales staff pick up the leads, go back and we would call the people and make appointments. 00:41:51.248 --> 00:42:02.172 Day one, if you got the leads, everybody was excited, would show up, come in and you would try to sell them a gym membership. 00:42:02.172 --> 00:42:05.355 If not, they got two weeks free to work out. 00:42:05.355 --> 00:42:07.891 Day two, they remembered it. 00:42:07.891 --> 00:42:12.052 Day three, they didn't even remember filling it out. 00:42:12.052 --> 00:42:17.396 Getting over day three, you might as well just throw the lead out because they're not going to remember. 00:42:17.396 --> 00:42:19.833 They just did it while they were standing in line. 00:42:20.465 --> 00:42:25.436 I use that same scenario and synopsis when I talk to a coach. 00:42:25.436 --> 00:42:38.898 I said if they mentioned financing to you, when they're interested, you should automatically send them over to me and let me talk to them, or to my staff, the care and Cindy, you name it. 00:42:38.898 --> 00:42:40.449 There's multiple people here. 00:42:40.449 --> 00:42:50.693 Let us talk to them and keep the excitement going, because the longer you let that person set around, they're gone. 00:42:50.693 --> 00:43:03.929 They're going to call another coach and another coach, or they're going to call their own franchise, or they're going to go online to all these sites and I'm not plugging any of those Look for businesses. 00:43:03.929 --> 00:43:08.916 It's keeping them engulfed in what we're trying to do. 00:43:08.916 --> 00:43:12.954 When I talk to them about financing, now they're really in. 00:43:13.885 --> 00:43:17.472 That's when that pre-claw comes in, because I explain it to people. 00:43:17.472 --> 00:43:19.617 Let's get you pre-approved. 00:43:19.617 --> 00:43:20.949 It costs you no money. 00:43:20.949 --> 00:43:23.130 We're not pulling your credit. 00:43:23.130 --> 00:43:24.851 We're not doing any of that. 00:43:24.851 --> 00:43:31.786 We show them how to do everything themselves and find out how much we're willing to give you. 00:43:31.786 --> 00:43:38.597 And then you go back and engage with your consultant and go find something. 00:43:38.597 --> 00:43:40.916 That's the fastest way. 00:43:40.916 --> 00:43:43.789 That's the people that do it that way. 00:43:43.789 --> 00:43:58.153 The consultants that refer me to people in my office, those are the ones that are closing 10, 15 loans a year, believe it or not, because they're staying on top of these people and we're staying on top of them. 00:44:00.704 --> 00:44:09.952 That's the biggest thing I can say to coaches and, realistically, even people that may not be interested in financing might be. 00:44:09.952 --> 00:44:17.936 Once you get to the right thing, once they find a franchise, we don't need them to know what franchise they want yet. 00:44:17.936 --> 00:44:24.777 We just want to pre-qualify them and let you go do what you do best. 00:44:24.777 --> 00:44:30.936 I've already done what I do best by saying, okay, here's what we're going to give you, here's the terms. 00:44:30.936 --> 00:44:33.248 This is the money down, this is the interest rate. 00:44:33.248 --> 00:44:44.106 Go find what you need, get back the lands or whoever the person referred it to them to, and go find a business Once you find it. 00:44:44.106 --> 00:44:45.893 Now we re-engage again. 00:44:45.893 --> 00:44:53.867 Let's start really getting all the stuff together, be it a startup, be it a resale, whatever it may be. 00:44:53.867 --> 00:44:55.710 That's the key. 00:44:55.710 --> 00:44:59.228 Urgency brother is the key, best way to say it. 00:45:00.130 --> 00:45:21.815 Right, what would you recommend when somebody is working with a client could be a broker, could be a franchise, could be a consultant and the client wants to look at brands,

wants to look at their brand, but they're just like, hey, I'm not going to talk to a bank until I know I'm going to do this for sure, or I know I have the brand I want. 00:45:21.815 --> 00:45:31.552 There's that fear or that hesitation where they're doing a pushback, but you know they need to qualify so that you know that you can actually find something they can afford. 00:45:31.552 --> 00:45:39.489 What do you recommend saying to people in that situation where they're getting some pushback from a client? 00:45:41.166 --> 00:45:42.347 I think the best thing. 00:45:42.347 --> 00:45:46.516 A lot of you guys have forms that you use. 00:45:46.516 --> 00:45:49.469 That form is fine. 00:45:49.469 --> 00:46:05.679 If someone doesn't want to disclose anything to you, that's a tough scenario because you're talking to somebody who you don't even know is going to qualify for the things that you're going to spend a month at showing them. 00:46:05.679 --> 00:46:11.047 It's like the real estate philosophy. 00:46:11.047 --> 00:46:18.516 How many real estate agents do you know that will go out and show people homes unless they were pre-qualified already? 00:46:18.516 --> 00:46:21.244 That's the first thing they say. 00:46:21.244 --> 00:46:27.554 Why would you want to go look at a million dollar home if you can only afford to have a million dollar home? 00:46:27.554 --> 00:46:30.304 The people that are leery of that. 00:46:30.304 --> 00:46:37.594 I would at least have a series of questions together as the consultant that you can ask them. 00:46:37.594 --> 00:46:41.023 That's fine. 00:46:41.043 --> 00:46:47.351 You don't have to speak to my finance group now, but can you give me a little information? 00:46:47.351 --> 00:46:49.974 Is your credit okay? 00:46:49.974 --> 00:46:53.719 Do you have that amount of liquidity available? 00:46:53.719 --> 00:46:55.302 What's your net worth? 00:46:55.302 --> 00:46:57.648 People know the answers to that. 00:46:57.648 --> 00:46:58.009 Come on. 00:46:58.009 --> 00:47:00.193 Everybody knows how much money they have in the bank. 00:47:00.193 --> 00:47:04.827 Everybody has an estimate of what their net worth is. 00:47:04.827 --> 00:47:08.253 They know if they pay their bills on time. 00:47:08.253 --> 00:47:12.445 Those are basic questions that you could ask. 00:47:12.445 --> 00:47:20.922 It would get you through until they really want to talk to somebody about financing One of my favorite. 00:47:20.963 --> 00:47:32.635 When I talk to people, one of the things I ask I go if you ever claim bankruptcy or default it on a government loan, because if I hear that I know I'm going to have issues. 00:47:32.635 --> 00:47:41.327 I eliminate some of that off the top, but you don't want to ask them too many questions. 00:47:41.327 --> 00:48:00.248 This is, in my opinion, in dealing with franchise orders and coaches for 25 years, anybody who really doesn't want to disclose what they have probably is not going to move forward anyhow. 00:48:00.248

--> 00:48:13.322 Every couple of months they're going to call you or they're already working with three or four other consultants and don't even tell you, because I see that when they do come to me. 00:48:13.322 --> 00:48:22.614 Well, this guy showed me this and this guy showed me that it's not a comfortable position for me to be in. 00:48:23.135 --> 00:48:33.967 But I think it's getting that general sense of information and if you don't have a form, you should create a form and if you need help, I have forms. 00:48:33.967 --> 00:48:36.771 You could even use my forms. 00:48:36.771 --> 00:48:38.172 We call it a questionnaire. 00:48:38.172 --> 00:48:40.456 It gives you everything on the questionnaire. 00:48:40.456 --> 00:48:46.324 You know are you married, what was your income for 2022? 00:48:46.324 --> 00:49:13.731 Just basic information that people I would think would know that you want to know about and I'm not saying this is done on your first call with them, because I know consultants have multiple calls, but I would say by call two you might want to talk about the financing arena and say is this project something that you might need to acquire financing for? 00:49:13.731 --> 00:49:27.465 And if they say yes, that's when you would say OK, could I introduce you to one of my funding partners and there's no charge, and you could talk to them and they can explain how all that process works. 00:49:27.465 --> 00:49:37.195 If they say no, say well, would you mind answering a couple financial questions for me so I would have a better idea of what to find you. 00:49:37.195 --> 00:49:39.684 How do you find somebody? 00:49:39.744 --> 00:49:55.630 of French, I said, if you don't know what they can afford, right, yeah it's crazy, although people, I think, just have this fear of if I do whatever this thing is, I'm going to feel obligated and sucked into doing something I don't want to do. 00:49:55.630 --> 00:49:57.090 So they put these walls up. 00:49:57.090 --> 00:50:04.197 But it doesn't totally make sense, because you're trying to help them and you can't totally help them when they do that. 00:50:04.760 --> 00:50:10.646 Now you have to put them at ease, you have to explain, listen, it's just general questions. 00:50:10.646 --> 00:50:14.751 They don't even have to put their name on it for you, you know. 00:50:14.751 --> 00:50:19.135 I mean, it's just what we're asking or verbally commit to it. 00:50:19.135 --> 00:50:29.632 I do find, even when you guys do that, what you get from a client and what I finally get from a client, are usually definitely different. 00:50:31.920 --> 00:50:37.291 They're going to tell you some things, but they have to tell me everything, or my staff obviously. 00:50:37.291 --> 00:50:41.364 When I say it, it's not even close to what they told you. 00:50:41.364 --> 00:50:43.347 Very few of them are. 00:50:43.347 --> 00:50:47.534 In most cases it's a lot more than what they've told you. 00:50:47.534 --> 00:50:52.644 Network wise, liquidity wise, it's very few, is it less? 00:50:52.644 --> 00:51:00.514 Every once in a while you get a guy who likes to make stuff up, but once again that's all part of that prequel. 00:51:00.534 --> 00:51:03.802 But I understand your misery People. 00:51:03.802 --> 00:51:09.719 To me I tell them listen, if you don't want it, we have a prequalification that costs you no money. 00:51:09.719 --> 00:51:17.494 If you're ready to move forward, we'd be more than glad to share it, send it to you when you can upload your information. 00:51:17.494 --> 00:51:21.545 I do not disclose anybody's financial information to you. 00:51:21.545 --> 00:51:31.990 If you refer the client or to the franchise or, the only thing I go to you guys is basically and say, ok, he's preapproved, he's got his letter of interest. 00:51:31.990 --> 00:51:36.103 You might want to reach out to him and that's it. 00:51:36.103 --> 00:51:40.110 And that's all you guys really need to know at that point. 00:51:40.110 --> 00:51:44.282 That's the way to approach it, but it's it. 00:51:44.282 --> 00:51:47.447 There's no easy answer for you guys. 00:51:47.447 --> 00:51:48.889 For me there is. 00:51:48.889 --> 00:51:52.295 If you're not ready, then when you're ready, call me back and we'll email it to you. 00:51:53.402 --> 00:51:54.184 That makes sense. 00:51:54.184 --> 00:52:16.748 Last question Sure, any other red flags that you think that you know broke consultants, brokers, franchise or should be aware of when working with a client like this is a client that I don't know something's telling me that they might have a challenge, they might have low credit, they might not be the kind of person that's going to follow through on a loan. 00:52:16.748 --> 00:52:20.655 You're like, when this happens rarely do I see a loan actually complete. 00:52:20.655 --> 00:52:25.469 These are just not maybe action items, but just things to be aware of and conscious of. 00:52:25.992 --> 00:52:26.413 Gotcha. 00:52:26.413 --> 00:52:30.630 I think credit is probably one of the biggest ones, lance. 00:52:30.630 --> 00:52:33.789 A lot of people really don't know their credit. 00:52:33.789 --> 00:52:36.103 I know that sounds strange. 00:52:36.103 --> 00:52:40.271 I know mine because it dames me if something's happening with my credit. 00:52:40.271 --> 00:52:49.369 But not everybody out there knows what their credit is and not everybody understands what good credit and bad credit is. 00:52:49.369 --> 00:52:56.132 Okay, just because they see a score doesn't mean that it's good credit, doesn't mean it's bad credit. 00:52:56.132 --> 00:52:57.534 They don't know what it means. 00:52:57.534 --> 00:53:00.909 There's a ratio out there between good and bad credit. 00:53:01.940 --> 00:53:09.456 One of the things the credit thing I bring up the most is because we started a credit restoration company called Genie. 00:53:09.456 --> 00:53:10.719 One of my best buddies runs it. 00:53:10.719 --> 00:53:29.568 He's excellent at it

because we get a lot of people and once they send us their credit report, we see that they're not good credit and we bring them over and try to get that corrected so we can move forward with their loan and it's been a very successful program. 00:53:29.568 --> 00:53:35.697 That's the biggest thing that the client doesn't know and you guys don't know. 00:53:35.697 --> 00:53:36.639 It's a hit or miss. 00:53:36.639 --> 00:53:40.005 Somebody could have a lot of money and have terrible credit. 00:53:40.005 --> 00:53:48.719 You know, or they got divorced and something happened in the divorce, or they were laid on their mortgage payments. 00:53:48.719 --> 00:53:52.028 There's all kinds of things, but credit. 00:53:52.028 --> 00:54:00.708 That's one of the facets of getting a loan that we have no control over Virtually none. 00:54:00.708 --> 00:54:06.958 It states what they have to have and if it isn't that, there's nothing we can do. 00:54:06.958 --> 00:54:07.719 You cannot. 00:54:07.719 --> 00:54:12.797 What I have done I'm most of my bigger ticket loans. 00:54:12.797 --> 00:54:13.699 I do a merger. 00:54:13.699 --> 00:54:30.673 So if I have a husband and wife and the husband is 725 and the wife is 610, which is not good compared to good we merge them together and divide it by two and as long as we come up with 680 or above, we're pretty much good to go. 00:54:31.425 --> 00:54:33.699 Not all lending institutions do that. 00:54:33.699 --> 00:54:37.445 I spoke to a group of guys today, three partners. 00:54:37.445 --> 00:54:52.634 One partner co-signed for his son on a car and the son never made the payments on time, so his credit went from an 800 down to a 510, which is not good at all. 00:54:52.634 --> 00:54:59.634 We took the other partners that were in the 800 range, blended them together and said, okay, we're good to go. 00:54:59.634 --> 00:55:07.253 In the meantime he's working with our credit restoration department trying to get some of that stuff taken care of. 00:55:07.880 --> 00:55:09.586 But credit is a killer. 00:55:09.586 --> 00:55:12.489 We cannot change it. 00:55:12.489 --> 00:55:18.211 I can figure out a way to somebody to get a gift letter if they're a little short on the cash injection. 00:55:18.211 --> 00:55:21.719 I can figure out how to work around collateral if I need it. 00:55:21.719 --> 00:55:34.235 I can figure out how to work around a franchise that might not be where it should be, but when it comes down to that credit, there's not a lending institution in the country that can do anything. 00:55:34.235 --> 00:55:38.976 You just have to dust that, send in amount to credit. 00:55:38.976 --> 00:55:42.387 It's called credit genie because he is a genie, I have to admit. 00:55:42.387 --> 00:55:56.956 Shane does a fantastic job and that's why we also brought in my franchise CPA, lance, to be honest with you, because people can't even figure out how to do set up their corporation or how to get their licenses. 00:55:56.956 --> 00:56:04.788 So we have that group with inside us which is all one umbrella where they help people do that. 00:56:05.385 --> 00:56:11.918 So but to get back to your question credit is it, credit is everything. 00:56:11.918 --> 00:56:15.431 That's one thing I always ask Well, how was your personal credit? 00:56:15.431 --> 00:56:17.204 Have you ever claimed bankruptcy? 00:56:17.204 --> 00:56:20.273 Have you ever defaulted on child support? 00:56:20.273 --> 00:56:20.996 You miss your mom? 00:56:20.996 --> 00:56:22.530 Oh, no, no, no, no, no. 00:56:22.530 --> 00:56:23.373 Okay, we're good. 00:56:23.373 --> 00:56:26.052 Oh yeah, I had a short sale right there. 00:56:26.052 --> 00:56:26.766 It's a flag. 00:56:26.766 --> 00:56:31.474 I know that doesn't mean we still can't do the loan, but we know they have it. 00:56:31.474 --> 00:56:34.954 That's when we start working that process. 00:56:34.954 --> 00:56:37.452 Okay, we need to put you with our credit people. 00:56:37.452 --> 00:56:37.954 Let's talk. 00:56:37.954 --> 00:56:40.644 Why don't you talk to them and see what can be done? 00:56:40.644 --> 00:56:51.849 And you keep moving along and moving along and then eventually, two months, three months at max, we get an email from our credit department that says they're good to go Start moving forward with their loan. 00:56:51.849 --> 00:56:57.416 I get back to you and say their credit's good, now let's go ahead and move forward. 00:56:57.416 --> 00:56:59.355 Boom, it's systematic. 00:56:59.579 --> 00:57:02.387 Right, that makes sense as you were talking. 00:57:02.387 --> 00:57:09.820 I just got this panic in the back of my wife Cosine for one of my daughters. 00:57:09.820 --> 00:57:14.134 I see she's made all her payments on time. 00:57:15.764 --> 00:57:17.550 Because you're just a guarantor. 00:57:17.550 --> 00:57:20.731 I see it happen quite frequently. 00:57:20.731 --> 00:57:22.750 That woman just recently. 00:57:22.750 --> 00:57:27.588 She cosigned for her son's home and he didn't make his mortgage payments. 00:57:27.588 --> 00:57:34.710 So their credit gets destroyed and you're a guarantor On that type of stuff. 00:57:34.710 --> 00:57:41.137 It's different when you're a guarantor on an SBA loan that's off the balance sheet accounting. 00:57:41.137 --> 00:57:52.056 What that means is, even though you're guaranteeing it, it never appears on your personal credit because it's not a personal loan to you, like a mortgage is, or credit card or your car. 00:57:52.056 --> 00:57:55.793 It's a loan to your business entity that you set up. 00:57:55.793 --> 00:57:59.311 That's the big, big difference. 00:57:59.311 --> 00:58:01.349 So, yeah, you should check it. 00:58:01.349 --> 00:58:06.371 I see it happen a lot it does. 00:58:07.704 --> 00:58:16.655 Or people default on their student loans and the parents cosigned for their student loans and they fell behind on student loan payments. 00:58:16.655 --> 00:58:27.210 That's a big effect when it comes to SBA, because their student loans are government back loans, just like Fannie Mae, freddie Mac mortgages. 00:58:27.210 --> 00:58:28.954 Those are all government back loans. 00:58:28.954 --> 00:58:36.989 If you were laid on a government loan, no bank's ever going to give you another government loan because the SBA won't. 00:58:36.989 --> 00:58:38.271 Let us do it, obviously. 00:58:38.271 --> 00:58:44.253 So I'm sure you're okay, though Don't panic. 00:58:46.547 --> 00:58:51.056 Well, I appreciate you joining me on this call today, dan. 00:58:51.056 --> 00:58:54.389 You're insightful and wonderful as always. 00:58:54.389 --> 00:59:06.277 Go to the a link next this video, and you can go to that and check out First Financial and all the amazing resources they have to help you. 00:59:06.277 --> 00:59:12.592 I've worked with them, they're great and just thanks again for joining us. 00:59:13.244 --> 00:59:14.449 It's always a pleasure, lance. 00:59:14.449 --> 00:59:16.414 Thank you, and I look forward to our next one.