As an expert business broker, I understand that getting a loan for a franchise can be a daunting task. That’s why I want to provide you with a comprehensive answer to the question “How to get a SBA loan for a franchise?”.

How to get a SBA loan for a franchise?

Getting a loan for a franchise requires you to confirm that your business is eligible for SBA financing, identify a lender and submit an application. To help you along, here are the steps you’ll need to take to get an SBA loan for your franchise:

Gather Your Documentation

Before you can get an SBA loan, you’ll need to provide some documentation to your lender. This includes your business plan, financial statements, personal and business tax returns, credit history, and any other documents the lender may require.

Gather the Franchise’s Documentation

You’ll also need to provide your lender with documentation from the franchise. This includes a copy of the Uniform Franchise Offering Circular (UFOC), which contains vital information about the franchise’s legal, financial, and personnel history.

Identify Your Local Lender

When looking for an SBA loan, it’s important to find a local lender. This ensures that you’ll be able to meet with them in person and discuss the loan in detail.

Submit an Application

Once you’ve gathered all the necessary documents, you’ll be able to submit an application to your local lender. You can submit your application online or in-person.

Are SBA Express Loans Available for Franchises?

In many cases, the answer is yes. Hundreds of franchises are eligible for SBA financing, including SBA Express loans. These loans are ideal for businesses looking for fast financing.

What Do You Need to Start Up a Franchise?

To start up from scratch, you only need $30,000 cash, and then you can get a loan for another $70,000 through an SBA approved lender. So a lot of the start-up costs for a franchise can be covered by an SBA loan.

What Are the Benefits of an SBA Franchise Loan?

An SBA franchise loan has many benefits, including:

  • Lower down payment: 10-30% depending on the strength of the franchise
  • Lower interest rates: 5-7%
  • Longer loan terms: 10 years without real estate, 25 years with real estate

What Are the Requirements for an SBA 7(a) Loan for a Franchise?

To get an SBA 7(a) loan for a franchise, you’ll need to have:

  • A credit score of at least 690
  • A record free of any bankruptcies in the past three years
  • At least two years in business

Getting an SBA loan for a franchise is a great way to get access to the funds you need to start and grow your business. If you have any questions about business brokers or selling a business in Atlanta, please visit Atlantabusinesses.com for great resources and answers to your questions.

Can franchises receive SBA loans?

Approximately 10 percent of all Small Business Administration (SBA) loans are allocated to franchises. Nonetheless, not all franchises qualify to receive SBA funding. Therefore, if you own a franchise and are interested in obtaining financial assistance, it is recommended that you start your application process in order to access the power of choice.

What difficulty is associated with obtaining a franchise loan?

To get a franchise loan from a bank or credit union, you usually need to have exceptional credit, be in a strong financial situation, and have been in business for a few years. Additionally, you likely need to provide collateral to back the loan.

Is it possible to obtain a loan for a franchise business?

Franchisees may be able to obtain a loan from a bank of their choice, but they need to have a good credit score and a comprehensive business plan. Furthermore, since the government provides some support for Small Business Administration loans, they usually have better terms and rates than bank loans.

Is it difficult to obtain an SBA loan for a new business?

If either one is too low, it can be difficult to obtain an SBA loan.