Trying to become a franchisor is one of the most entrepreneurial actions that you can take; but unless you’ve got several hundred thousand dollars in the bank, you’ll need a robust source of funding. This is where the business loan comes into the picture – with the most significant traditional choices being the Small Business Administration (SBA) federal loan program, and banks.
The above have stringent requirements, however, making them tough choices for franchise financing for someone just starting out and with relatively little business experience. Thankfully, there are alternative lenders that have swopped in to fill a need: we have some of them below.
OnDeck: A Solution for Franchise Financing
OnDeck is a highly-regarded financier with a reputation for fast cash and lending to prospects with a fair credit history. These two attributes make them the lender of choice for franchisors in need of short-term loans up to about $250,000. The great news is you only need a credit score of 600 to qualify, and a franchise at least 12 months old. It sure beats trying to get a bank loan within a few months when OnDeck can get you the money in mere days.
Just Starting Out – Consider ApplePie Capital
Most lenders require that you already be in business by the time you approach them – which can make it difficult to get your foot in the door. ApplePie Capital understands caters to newcomers to franchise funding, and can provide loans from $100,000 and up to help you get started. There are many types of financing available to suit all your needs – from equipment leasing, to franchise startup loans. The high borrowing amounts give credence to this, and the long-term payment options keep monthly payments low enough to keep you profitable. The only downside is the slow application process.
The Federal Route for Franchise Funding – SmartBiz
SmartBiz is a government-approved lender that enjoys the huge support provided by the SBA; the borrower is the primary beneficiary of this support. With that said, it is important to know that the requirements are stringent – your credit history must be excellent, and you must display a measure of success. Loans of up to $5 million are available, as well as $500,000 for bank loans alone and $350,000 for debt refinancing. You need to have two years in business, good credit, and a positive cash flow to even consider applying.
Fortis Funding offers the most comprehensive financing solutions for both new and existing franchise owners. Contact our offices today to learn more.