Obtaining finance when buying a franchise may be difficult as many lenders hesitate to fund new franchises or new ventures.
At Fox Finance Group our Lending Specialists have many years experience in securing competitive franchise funding. We have strong business relationships with a number of financial institutions and banks that can help put the dream of owning your own business happen.
Rest assured that our experienced Lending Specialists understand what lenders are looking for, they know how to put together the very best submission in order to maximise your chances of getting the very best approval.
Fox Finance Group can assist in obtaining finance for a new or existing business franchise in the following areas:
A secured business loan is a loan that requires you to place something as security. In many cases, when someone takes out a franchise loan, they often put their personal home up as collateral against the loan.
In the event that the borrower is unable to make payments on their franchise loan, the lender can seize their home to absolve the debt.
Secured business loans are nice because you can borrow a lot of money with a high loan-to-value ratio depending on what you’ve put up as collateral. They can also have lower interest rates because the loans are less risky than an unsecured loan.
An unsecured franchise loan does not require collateral so borrowing amounts are lower, interest rates are generally higher, and the repayment agreement is usually capped depending on your approval.
This is nice if you do not have anything to put as security or you simply don’t want to risk it. It’s harder to get an unsecured loan and you may have to pay higher interest but there is a time and place where this is the right option.
Low-Doc is a type of franchise finance where you’re not required to provide traditional proof of income. If you don’t think you meet the usual criteria to receive funding, this might be the right option for you.
If you run your own small business, work on tips, or work a “gig” job, you might be eligible for a low-doc franchise loan.
A business line of credit is when you borrow funds over a period of time as you need them. Instead of receiving a lump sum loan all at once, you’ll borrow money and use it as capital for your business on an ongoing basis.
Getting a business loan for a franchisee requires you to think about a number of factors.
How much do you need to borrow to finance the franchise? This will depend on the franchise you’re buying.
For example, the average cost of a McDonalds franchise is between $1.3 -2.3 million. Much of this you need to put up yourself to get the franchise.
A Boost Juice franchise on the other hand can cost much less.
There are other factors such as location that will impact the total amount you need to borrow. All of these criteria have nothing to do with your financial literacy but will still impact your ability to receive a franchise loan.
Purchasing the franchise is only one piece of the puzzle. You may need to pay for land, leases, equipment, furniture, landscaping, parking, and other factors.
Many of these factors can lead to ongoing costs before you actually even make money. Purchasing the franchise is one step but it could take months and even years before you make a profit. You may need more money to compensate for that grace period.
Not everyone is eligible for franchise finance, you need to be financially sound and have a strong history of success. You’ll need to take inventory of your current assets and liabilities as well as whether or not you can offer enough security to get a secured loan.
Part of buying into a franchise is realising that you will have to pay royalties to the company.
One of the benefits of purchasing a franchise is that you get brand recognition right away. You’re not starting a business that no one has ever heard of.
With that comes royalty fees though. As you start to make money, you may have to pay a certain percentage to the company based on your profits.
A secured business loan is a loan that requires you to place something as security. In many cases, when someone takes out a franchise loan, they often put their personal home up as collateral against the loan.
In the event that the borrower is unable to make payments on their franchise loan, the lender can seize their home to absolve the debt.
Secured business loans are nice because you can borrow a lot of money with a high loan-to-value ratio depending on what you’ve put up as collateral. They can also have lower interest rates because the loans are less risky than an unsecured loan.
Apply for a business loanAn unsecured franchise loan does not require collateral so borrowing amounts are lower, interest rates are higher, and the repayment agreement is usually no longer than 10 years.
This is nice if you do not have anything to put as security or you simply don’t want to risk it. It’s harder to get an unsecured loan and you may have to pay higher interest but there is a time and place where this is the right option.
Apply for a business loanLow-Doc is a type of franchise finance where you’re not required to provide traditional proof of income. If you don’t think you meet the usual criteria to receive funding, this might be the right option for you.
If you run your own small business, work on tips, or work a “gig” job, you might be eligible for a low-doc franchise loan.
Apply for a business loanA business line of credit is when you borrow funds over a period of time as you need them. Instead of receiving a lump sum loan all at once, you’ll borrow money and use it as capital for your business on an ongoing basis.
Apply for a line of creditA secured business loan is a loan that requires you to place something as security. In many cases, when someone takes out a franchise loan, they often put their personal home up as collateral against the loan.
In the event that the borrower is unable to make payments on their franchise loan, the lender can seize their home to absolve the debt.
Secured business loans are nice because you can borrow a lot of money with a high loan-to-value ratio depending on what you’ve put up as collateral. They can also have lower interest rates because the loans are less risky than an unsecured loan.
Apply for a business loanAn unsecured franchise loan does not require collateral so borrowing amounts are lower, interest rates are higher, and the repayment agreement is usually no longer than 10 years.
This is nice if you do not have anything to put as security or you simply don’t want to risk it. It’s harder to get an unsecured loan and you may have to pay higher interest but there is a time and place where this is the right option.
Apply for a business loanLow-Doc is a type of franchise finance where you’re not required to provide traditional proof of income. If you don’t think you meet the usual criteria to receive funding, this might be the right option for you.
If you run your own small business, work on tips, or work a “gig” job, you might be eligible for a low-doc franchise loan.
Apply for a business loanA business line of credit is when you borrow funds over a period of time as you need them. Instead of receiving a lump sum loan all at once, you’ll borrow money and use it as capital for your business on an ongoing basis.
Apply for a line of credit
You can complete your application either online or over the phone with us.
We will ask you to provide proof of income and identification.
We'll run through all the details of your loan approval, so that you know exactly what you're committing to.
Most lenders will allow you to sign your loan documents electronically. Our technology makes the signing process quick and easy!
Your loan will be booked in for settlement, and is often finalised within one business day. It’s that simple!
You can complete your application either online or over the phone with us.
We will ask you to provide proof of income and identification.
We'll run through all the details of your loan approval, so that you know exactly what you're committing to.
Most lenders will allow you to sign your loan documents electronically. Our technology makes the signing process quick and easy!
Your loan will be booked in for settlement, and is often finalised within one business day. It’s that simple!
Lenders take several different components into consideration when assessing a franchise finance application. Factors such as your personal credit history, business experience, financial projections, the franchise brand’s reputation, the profitability of the industry, and the collateral or assets that can be used to secure the loan may be considered. The requirements and evaluation standards may differ depending on each lender. That’s why it’s integral to have an experienced franchise finance lending specialist on your side to aid in offering the best options suited to you. Speak to a lending specialist now, or enquire online.
Yes! Franchise finance can be obtained to purchase both new and existing franchise opportunities. The franchise finance approval will be dependent upon several different factors including the franchise brand’s reputation, the profitability of the industry and the current financial position of the franchise considered. Documentation will be required to prove the stability of the franchise, and its long term financial history. Our lending specialists are professionals in franchise finance, and will be able to discuss tailored lending solutions best suited to your next franchise opportunity. Call us today on 1300 665 906, or enquire here.
The time it takes to obtain an approval for franchise finance varies depending on several different factors including the lender’s SLA’s (turnaround times), the complexity of your application, and the preferences you have in terms of the loan product itself. Lending specialists at Fox Finance Group work hard to ensure turnaround times are as quick as possible for their clients, and provide constant communication regarding the progression of the franchise finance application.
Traditionally, finance for a franchise is obtained for initial startup costs which may include franchise fees, equipment, advertisement and marketing expenses. Some lenders do offer business lines of credit and unsecured business loans to aid in ongoing operational expenses. Speaking to a lending specialist at Fox Finance Group will help clarify which business finance option is best suited to your needs and your next franchise opportunity. Speak to them today, or enquire online.
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