Business Loans

Pre-Approval

Our pre-approved clients get the business loan they need 99% of the time.

Don't waste time and money getting a "soft pre-approval" - our FranScore® pre-approval business loan tool assesses your credit profile from a lender's standpoint. Using franchise-specific data, we know what loan evaluators want to see.

If we determine that you don't meet the necessary pre-qualification criteria, we'll guide you so you'll be in a better position to qualify in the future.

Credit

One of the most important factors to a lender? A good credit score of 680+ with an established, favorable history. This typically means no current credit collections and no recent bankruptcies, foreclosures, charge-offs, repossessions or short sales unless credit has been rebuilt. If your credit isn’t strong enough to qualify for a loan, don’t worry. There are still other funding options we can help you with.

Equity

Putting your own cash into a business gives you “skin in the game,” and shows lenders that you’re serious with a personal financial stake. Lenders like to see that. You should expect to contribute 10-30% of the total cost you’ll need to start the business. You can even satisfy this requirement with funds from a FranPlan® (401k/IRA rollover).

Collateral

Very often, lenders request both business and personal collateral for small business loans, especially start-ups. Most require a security interest on any business assets and a personal guaranty from each owner with 20% or more ownership. Lenders may also look to collateralize real estate or other personal assets to secure the loan, depending on your circumstances.

burn rate | Franfund

Burn Rate

No surprise here, but lenders want to know you'll be able to pay the loan back. They usually prefer that you have a hefty outside income, strong liquidity, or both. This ensures you can cover both living expenses and at least the new business loan payments during your business's first twelve months of operating.

SBA Loans

The Small Business Administration (SBA) is a government program that allows lenders to offer business loans for start-ups, acquisitions, expansions, refinances, and working capital with values up to five million dollars.

While the SBA does not fund loans directly (except for disaster relief loans), it covers a portion of the small business loan that is unable to be fully repaid in the event of a default. Business owners who may not qualify for conventional loans may qualify for SBA loans since the government guaranty helps alleviate some risk associated with starting a business.

Our lenders have a “Preferred Lender” status with the SBA. This means they can make final credit decisions on SBA-guaranteed loans, instead of submitting them to the SBA for official approval, which makes the process quicker.

Conventional Loans

They are primarily used for acquisitions, expansions, and upgrades.

With no personal collateral requirement or government guaranty, these loans are best suited for strong borrowers with previous business ownership experience.