Franchise Financing Solutions
Buying or expanding a franchise can involve a franchise fee, real estate, build-out, equipment, inventory, and cash needed until the location stabilizes. Financing should account for the full opening budget and the franchise agreement, not just the initial fee.
What to explore
- Evaluate acquisition, startup, and expansion costs
- Compare SBA and conventional business loan structures
- Plan for equipment, leasehold improvements, and eligible working capital
- Review the franchise agreement alongside lender requirements
Build a complete sources-and-uses budget
List the franchise fee, build-out, equipment, opening inventory, deposits, professional costs, and cash reserve. Lenders will also review the brand, location, business plan, ownership experience, and proposed operating projections.
Understand lender and franchisor rules
Some lenders have franchise experience or eligibility requirements for particular brands. A franchise agreement may affect transfer rights, collateral, or step-in rights. Coordinate the lender review with your attorney and franchisor before assuming a program will fit.
Compare the repayment plan
Match debt service to realistic opening and ramp-up assumptions. Ask about owner cash contribution, guarantees, collateral, repayment term, and how construction delays could affect available funds.
Common questions
Can an SBA loan finance a franchise?
Potentially, if the borrower, franchise, and use of proceeds meet the applicable SBA and lender requirements. Eligibility must be verified for the particular transaction.
Can I finance multiple locations?
Some lenders consider multi-unit acquisitions or expansions, based on operating history, cash flow, brand, and overall leverage.
Compare your options
Tell us about your goals and we can review financing options available for your situation. All loans are subject to lender eligibility and approval.
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