Business Loans

Pre-Approval

By using our franchise-specific pre-qualification tool and tapping into our extensive network of franchise-friendly lenders, our pre-approved clients get the business loan they need 99% of the time.

The last thing you want is to waste time and money getting a “soft pre-approval” only to be denied the loan. So, our FranScore® pre-approval business loan tool assesses your credit profile from a lender's standpoint, using franchise-specific data we know loan evaluators want to see. If we determine that you don’t meet the necessary pre-qualification criteria, we’ll guide you so that you’re in a better position to qualify in the future.

Lenders look at four main factors when considering a loan application:

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

No surprise here, but lenders want to know you’ll be able to pay the loan back. So, they usually prefer that you have a hefty outside income or strong liquidity, or both. This assures them that you can cover both living expenses and the loan payments during the first twelve months your business is 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.

Use our calculator tool to understand the specific requirements for SBA Express/Small Loans.