SBA Franchise Loans
Business ownership through franchising has several well-known advantages. SBA loans are very popular among franchise owners. Last year SBA did around 6,800 franchise loans. As a franchise owner there are many times when you may need an SBA loan. You may need a franchise startup loan, franchise expansion loan, franchise refinance loan or maybe you simply want to buy another franchise and get a franchise acquisition loan. Heritage Finance can help you with any of these needs. Some of our lenders specialize in franchise startup loans while others in franchise acquisitions and so forth. Our lending partners did over 700 franchise loans last year.
SBA has specific rules that apply to franchises. These rules apply even to some industries that may not be considered franchises but have a similar affiliation model for example, gas stations, hotels and insurance agents among others. You can check if your franchise is eligible for SBA financing if it is listed in the SBA Franchise Directory. If your franchise is not listed in the directory they may still be eligible but this is a good start. The SBA Franchise Directory is located here:
If you’re thinking about starting or buying an existing franchise operations you will need to consider the following: As a startup the loan analysis will heavily rely on your credit score and personal liquidity. Make sure you have a good personal credit score and 10% to 20% down as a cash down payment for your required equity injection. A franchise acquisition loan will rely more on the cashflow generated by the target acquisition however, make sure you also have 10% to 20% down payment for your required equity injection.
An SBA loan may also be ideal to restructure your current business loans through refinancing. Debt refinancing is used to alleviate cashflow by reducing the monthly debt payment amount. Usually SBA loans will consolidate your outstanding business loans and prolong the amortization period. Some things to keep in mind: Generally speaking, it is very complicated to refinance personal debt, other SBA loans, loans recently taken out and defaulted loans.
If you currently operate a franchise and are interested in growing your franchise through acquiring or opening new units, an SBA loan would be ideal to finance this growth. Depending on your balance sheet and cashflow we may be able to offer remarkable terms.
Contact Heritage Finance for your best available franchise loan now.