Are you wondering how to finance a franchise purchase? Finding funding for franchises can be difficult, but franchise ownership is attractive to entrepreneurs because it provides limited risk and often yields successful results.
Most franchise businesses will require you to obtain some initial funding. So, whether you want to add more franchises, buy out a partner or are just getting started in a franchise business, our staff of financial loan experts can help you through the franchise loan process from beginning to end to help secure a loan that is right for you.

What are the Franchise Loan Options?

Many lenders are hesitant to finance franchises, especially newer franchises with no tangible assets or proven ability to generate positive cash flow. However, in most cases, you can qualify for a franchise loan even with credit or income challenges.
While qualification issues may make the process more difficult, it is not impossible. About ninety percent of new franchisees seek bank or alternative financing to get their businesses off the ground and there are many funding options to consider outside of the traditional banks such as credit unions, government programs, state programs and other niche programs.

Here are some common options for franchise loans:

  • Bank loan or other traditional lender. Good credit is needed for these.
  • SBA Loan: Good credit is still a factor, but less so than with the traditional lenders.
  • SBA Micro Loan Program: This loan is best designed for people with poor credit. They tend to have higher rates than more traditional business loans.
  • Financing through the Franchiser: Similar to a traditional lender. Typical finance amounts range from 10 to 75 percent.

What Documents Will Franchise Loan Lenders Want to See to Secure a Franchise Loan?

Traditional lenders will want to know how much cash you have to invest in the business; how much collateral you have to secure the loan; credit history; and managerial and work experience as it relates to the prospective franchise business.
The SBA will examine the size of the business; request a business plan; perform a credit history examination; and ask about initial investment and work experience.
We can help you analyze your personal financial situation and effectively assist you in obtaining a franchise loan that will put you on the road to financial freedom and wealth accumulation.