Tips on How to Improve Your Credit Score

Hey folks, it's time to get real about your credit score. If you're anything like me, you probably don't pay much attention to it until it's time to apply for a loan or credit card. But did you know that your credit score can make or break your ability to obtain a mortgage loan?

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When you apply for a mortgage loan, lenders take a close look at your credit score and credit history. They want to know if you're a responsible borrower who will pay back the loan on time and in full. A good credit score can help you qualify for a mortgage loan with a lower interest rate and better terms, while a poor credit score can make it more difficult to get approved and result in higher interest rates and less favorable terms.

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In short, your credit score is one of the most important factors that lenders consider when deciding whether to approve you for a mortgage loan. By taking steps to improve your credit score, you can increase your chances of getting approved for a loan with better terms and save yourself thousands of dollars in the process.

1. Check your credit report regularly

This is a no-brainer, but it's worth repeating. Make sure to check your credit report for any errors or fraudulent activity. You can get a free credit report from each of the three major credit bureaus every year, so take advantage of it.

2. Pay your bills on time

This one seems obvious, but it's worth emphasizing. Late payments can have a big impact on your credit score, so set up automatic payments or reminders to make sure you're always on time.

3. Lower your credit utilization ratio

Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Aim to keep your utilization ratio under 30% to improve your score.

1. Check your credit report regularly

This is a no-brainer, but it's worth repeating. Make sure to check your credit report for any errors or fraudulent activity. You can get a free credit report from each of the three major credit bureaus every year, so take advantage of it.

2. Pay your bills

on time

This one seems obvious, but it's worth emphasizing. Late payments can have a big impact on your credit score, so set up automatic payments or reminders to make sure you're always on time.

3. Lower your credit utilization ratio

Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Aim to keep your utilization ratio under 30% to improve your score.

4. Increase your credit limit

If you're struggling to keep your credit utilization ratio low, consider asking for a credit limit increase. Just make sure not to use the extra credit as an excuse to spend more.

5. Diversify your credit

Having a mix of credit types (like a credit card, auto loan, and mortgage) can improve your credit score. But don't open new accounts just to add diversity - only take on credit that you actually need and can handle responsibly.

4. Increase your

credit limit

If you're struggling to keep your credit utilization ratio low, consider asking for a credit limit increase. Just make sure not to use the extra credit as an excuse to spend more.

5. Diversify your credit

Having a mix of credit types (like a credit card, auto loan, and mortgage) can improve your credit score. But don't open new accounts just to add diversity - only take on credit that you actually need and can handle responsibly.

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šŸš€ Using an SBA 7(a) Loan to Launch a Franchise: Down Payments, Spouse Income & Startup Rules šŸ”‘

šŸŖ SBA 7(a) Loans Explained: How to Buy a Franchise, Fund a Buildout, and Lock in 25-Year Financing šŸ“ˆ

Bill Rapp, Commercial Mortgage Broker
December 19, 2025ā€¢3 min read

šŸŖ SBA 7(a) Loans Explained: How to Buy a Franchise, Fund a Buildout, and Lock in 25-Year Financing šŸ“ˆ

šŸš€ Using an SBA 7(a) Loan to Launch a Franchise: Down Payments, Spouse Income & Startup Rules šŸ”‘

How to Use an SBA 7(a) Loan to Buy a Franchise and Build Out a New Location

For entrepreneurs looking to buy a franchise and build out a new location, SBA 7(a) financing remains one of the most powerful tools available. It offers long amortizations, competitive rates, and the ability to finance acquisition, construction, equipment, and working capitalā€”all in one loan.

That said, startup SBA loans are more restrictive than loans for existing businesses. Approval is possibleā€”but only if the deal is structured correctly.

Below is a practical breakdown of how SBA 7(a) loans work for franchise startups, what lenders really look for, and how borrowers can position themselves for approval.

What Is an SBA 7(a) Loan?

The SBA 7(a) loan program is the Small Business Administrationā€™s flagship lending product. While loans are issued by banks and non-bank lenders, the SBA provides a partial guaranteeā€”reducing lender risk and allowing for longer terms.

Key SBA 7(a) benefits for franchise buyers:

  • Up to $5,000,000 loan amount

  • 25-year amortization for real estate and buildout

  • Ability to finance:

    • Franchise acquisition fees

    • Leasehold improvements / buildout

    • Equipment & FF&E

    • Working capital

  • Fully amortizing (no balloon)

Can You Use an SBA 7(a) Loan for a Franchise Startup?

Yesā€”but with more scrutiny.

Startup franchise loans are evaluated differently than existing cash-flowing businesses. Lenders rely heavily on:

  • Borrower strength

  • Liquidity and equity injection

  • Franchise brand performance

  • Realistic financial projections

The SBA allows startup financing, but the margin for error is smaller.

Down Payment Requirements: Expect ~20% of Total Project Cost

For franchise startups, lenders typically require 20% equity injection.

This applies to the total project cost, which may include:

  • Franchise fee

  • Buildout / tenant improvements

  • Equipment

  • Soft costs

  • Initial working capital

Equity can come from:

  • Cash

  • Retirement funds (ROBS, if structured properly)

  • Seller carry (limited, must be subordinated)

The SBA wants borrowers fully invested in the success of the business.

The Role of Spouse Income & Global Cash Flow

One of the most misunderstood aspects of SBA underwriting is global cash flow analysis.

For startups:

  • The lender evaluates household income and expenses

  • Spouse income can be critical to approval

  • Projections must show the business can support itself over time

If your spouse has stable W-2 income, it can:

  • Offset early-stage business losses

  • Support personal living expenses

  • Strengthen overall debt coverage

This is especially important when the business will take time to ramp up.

Franchise Brand Matters More Than You Think

Not all franchises are treated equally.

Lenders prefer:

  • SBA-approved franchises

  • Brands with multiple operating locations

  • Proven unit-level economics

  • Transparent financial disclosures (FDDs)

A strong franchise brand can compensate for:

  • Limited operating history

  • First-time ownership

  • Conservative startup projections

What Lenders Will Require

Expect to provide:

  • Personal financial statement

  • Resume showing relevant management experience

  • Franchise Disclosure Document (FDD)

  • Business plan with 2ā€“3 year projections

  • Lease terms or LOI

  • Construction/buildout budget

Preparation is everything in SBA lending.

Why Structure Matters More Than Rates

Most SBA deals fail before submissionā€”not because of credit, but because of structure.

Common mistakes include:

  • Under-capitalized borrowers

  • Unrealistic projections

  • Incomplete budgets

  • Poor lease terms

At Medallion Funds, we focus on front-end structuring so the loan makes sense to the lender before it ever hits underwriting.

Final Thoughts

SBA 7(a) loans remain one of the best ways to:

  • Buy a franchise

  • Build out a new location

  • Lock in long-term, fully amortizing financing

Yes, startup loans are more restrictiveā€”but with the right equity, income support, and structure, approval is absolutely achievable.

If youā€™re considering a franchise acquisition or startup buildout, the key is working with an advisor who understands how SBA lenders actually think.

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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: ā€¢ Fixed-rate mortgages: Offering stability with predictable monthly payments. ā€¢ Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. ā€¢ FHA loans: Making homeownership accessible with lower down payments. ā€¢ VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: ā€¢ Purchase loans: Financing the acquisition of new buildings or land. ā€¢ Construction loans: Facilitating the development of your project. ā€¢ Refinance loans: Restructuring your existing mortgage for better terms. ā€¢ SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: ā€¢ Expertise: Our brokers have a deep understanding of both residential and commercial lending. ā€¢ Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. ā€¢ Streamlined Process: We handle the paperwork, keeping you informed every step of the way. ā€¢ Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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Copyright Ā©2021 | Mortgage Viking Team

Licensed to Do Business | NMLS # 228246


This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright Ā© 2021 | Medallion Funds


Corporate | NMLS ID NMLS # 1825831

Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014

Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/

Copyright Ā©2021 | Mortgage Viking Team Licensed to Do Business | NMLS # 228246

This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply

Corporate | NMLS ID NMLS # 1825831

Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/