SBA (Small Business Administration) loans are one type of franchise financing options available tohelp individuals buy a franchise. In an effort to help individuals start a business, the SBA guarantees certain qualified business loans underwritten by approved lenders to individuals that meet certain eligibility requirements similar to the way the FHA guarantees home loans. In other words, the Government doesn’t issue the loan; they simply provide the lending institution with a written guarantee backed by the faith and credit of the U.S. government that they will repay the loan in the event of a borrower default. Thus, giving individuals the ability to secure business loans they otherwise would be unable to do.
Our consultants work with our financial partners to determine the best financing options (hyperlink to Financing Options page) for our prospective franchise clients. For clients that qualify for SBA (7a) guaranteed loans, it’s a fairly straightforward process. We guide you through the entire process and submit an application package through our lending partners.
Since this is a business loan, the SBA requires at least two years industry experience with a strong credit history. You will also need to provide a business plan, tax returns for the past three years, personal financial statement and a current resume. All of this information will become part of your application package.
Once the SBA loan package has been approved, franchise funding will be available for you to buy a franchise or for other business purposes as specified in the application.
Contact us today to learn more about qualifying for an SBA loan to buy a franchise.