Today's Best Franchise Financing
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Try Our Free Franchise Financing Calculator!
 

Learn How Much You Can Qualify For And What Your Best Franchise Loan Is.
 

Do you want to open a franchise but don't know how to finance it?

Use our free franchise financing calculator to see how much you can qualify for and what your best loan options are.

We have a wide variety of lenders who offer loans specifically for franchises, so you're sure to find the perfect fit for your business.

There are different types of franchise financing. You can use a 401K Rollover, an SBA loan, or an unsecured credit line. Compare these options to find the best one for you.

Opening a top franchise can give you the experience of being an entrepreneur. However, as a franchise owner, you have a big advantage.

When you open a franchise, the franchisor gives you the right to use its business name, product and brand. The franchisee agreement usually lasts for a set amount of time, usually 10-20 years, but it can be renewed.

What are the benefits of this agreement? You're getting a company with a well-known brand and a proven business model. To make sure you have the startup costs covered, it's important to find the best franchise loan or other financing.

 

We've listed the costs of financing a franchise and some good places to get money, depending on your personal credit score and whether you're starting out or need money to grow.

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Costs of opening a franchise

Starting a franchise involves many of the same initial expenditures as starting any other business, such as real estate, equipment, and inventory. In exchange for the franchisor's proven training, operating standards, and marketing assistance - which makes running and expanding your business considerably easier in the long run - franchisees must factor unique expenditures.

Franchise fee: The majority of today's top franchises charge a one-time fee to get started, which is paid in a single sum. The amount varies by franchise, but it's typically between $30k and $100k and isn't refundable once a franchisee is purchased.

Royalty and advertising fees: Many of the best franchises in 2022 charge a recurring fee. This fee is usually a percentage of a franchisee's sales. The percentage varies depending on the company.

Refer to the franchise disclosure document, which the Federal Trade Commission requires parent firms give to prospective franchisees, for specific company's franchise fees. This file also contains information about the franchisor's financial performance, as well as franchisees' obligations to the franchisor and financing alternatives accessible.

Where to find financing to open a franchise?

It is easier to find financing for a new franchise than it is to get financing for a small business you start yourself. Franchisors often offer discounts on charges and online services that are meant just for franchisees. Franchisees can also roll their 401k without any tax or penalty, get general business loans, and borrow money from the Small Business Association.

 

The franchisor: 

Some franchisors provide assistance in obtaining financing for new franchises by waiving expenses or collaborating with lenders to assist franchisees obtain loans. The terms of the franchisor's financing are generally stated on its website as well as in Section 10 of the franchise disclosure document. Compare the franchisor's financing terms to those from other sources to identify the best source of funding for your franchise.

 

Traditional loan: There are many banks and credit unions that can help finance a business, including top franchises. Most lenders are more likely to finance a franchise if it is associated with a well-known, successful brand. However, you will still need to meet the bank's underwriting standards and lending policies. This means the bank will review your net worth and credit history to approve you for the loan. Having a credit score of 700+ and less than $15,000 in credit card debt is advisable.

SBA loan: The SBA guarantees a variety of loan products developed by banks, credit unions, and other lenders, including 7(a) loans, which are the most common and most general. SBA loans may be applied for through your lender by franchisees and other small-business owners.

Compare small-business loans.

The Franchise Insiders has partnered with several of today's top franchise lending firms to allow you to compare loans side by side based on your needs and objectives.

Opening a franchise is a big investment, but with the right franchisor and the right financing, it can be a smart way to start your own business.

Get started today by exploring some of the top franchises in our directory. And if you need help financing your franchise, be sure to check out our franchise lending partners below.

Best Franchise Financing: Find and Compare Options

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