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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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The woman I am seeing and I are contemplating a franchise agreement.

Resolved Question:

The woman I am seeing and I are contemplating a franchise agreement. She owns her home with no mortgage and it is valued at $380,000. She does not however have a job but does have $$120,000/yr in marriage settlement and child support payments. Our question is: is it possible to use her house as collateral for a business loan or line of credit to borrow the $100K in franchise fees and first year setup operational costs.

I have a full time position that pays $240K/year and will be her partner, I have $100K in 401K savings but little cash on hand.....
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

She may not be able to use her home as a collateral on a direct business loan, but she could be able to take out a home equity line of credit that you could use to get the funds for the franchise fee

Megan C :

Her income is still $120,000 per year, even though she's not working and since she has equity in her home I don't see it as being a problem.

Megan C :

She will likely have to do this on a personal level - it won't be a business loan, but rather a mortgage product.

Megan C :

But, I don't see this being a problem given her income and equity

Megan C :

Do you have any further questions?

Megan C :

If not, please rate as "excellent" so that I may receive credit for assisting you today

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