Qualifications can vary by loan program, but generally lenders consider:
- Credit Score: A solid personal credit score (often 680 or higher for SBA loans) helps, though we have some options for lower scores depending on circumstances.
- Down Payment / Equity: For new franchise startups, you may need to invest some of your own capital (often 10-20% of the total project cost for an SBA loan). Some loans, however, offer 100% financing if you qualify.
- Collateral: This depends on the loan. SBA loans may require collateral (like a lien on your house or business assets), while equipment loans use the equipment itself as collateral. We also have unsecured working capital options that don’t require specific collateral.
- Business Plan: Lenders want to see a solid business plan or projections, especially if you’re starting a new franchise. If it’s an existing franchise purchase, they’ll look at the franchise’s financial history.
- Franchise Brand Approval: If you’re buying into a franchise, the franchisor usually needs to approve you as a franchisee and often they must be listed on the SBA Franchise Directory for SBA loans. We’ll help ensure all those boxes are checked.
Don’t be intimidated by requirements – our team will walk you through each item and help present your qualifications in the best light. If there are any hurdles, we’ll advise on how to address them or explore alternative financing that fits your situation.
