The collateral will usually be the assets of the franchise business itself – things like equipment, furniture, fixtures, and any real estate being purchased. In an acquisition, you’re buying these assets and the lender will take a lien on them. If it’s expansion and involves equipment or property purchases, those serve as collateral. However, because franchise businesses often have a lot of intangible value (like the brand and customer base), lenders often require additional collateral. This could mean pledging your existing business assets or giving a lien on personal assets (like your home or other investments) to secure the loan. SBA loans require taking available collateral when possible. So, while the loan is primarily secured by the franchise business you’re funding, be prepared that you might have to fortify the collateral with personal guarantees and possibly personal property if the lender deems it necessary.