Comments on: Financing a franchise http://www.franchisebrief.com/blog/2007/09/07/financing-a-franchise/ Franchise business opportunity for sale information. Sun, 15 Mar 2009 06:56:32 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: TSBG http://www.franchisebrief.com/blog/2007/09/07/financing-a-franchise/comment-page-1/#comment-472 TSBG Thu, 11 Oct 2007 18:14:26 +0000 http://www.franchisebrief.com/blog/2007/09/07/financing-a-franchise/#comment-472 No offense, but I found this article contradicting itself. In the first line it says franchisors require you to obtain financing ...but then it goes on to say the person to talk to is your franchisor about financing. Then it states how all the information for financing is in the UFOC. This article seems to be putting down lenders / loans and promoting the franchisor for financing yet the last line advises to obtain a lender that specializes in franchise financing. It seems to me the person who wrote this didnt do their homework. I don't know of a UFOC that carries information about actual financing, although the UFOC may vaguely recommend a loan program type, it will not specifically list lenders or actual resourcs. It's usually up to the franchisee to find financing options. However, a good franchisor may have specific resources handy, that specialize in franchise financing to recommend to you so yes, you should ask. Chances are when a bank requires 30% down or more, they do not specialize in franchise financing. I am an SBA franchise loan consultant and the lenders I work with always require only 20 - 25% down (depending on whether its brand new to franchising or has been around for a while with many units already up and running) for start-ups and 15-20% down for acquisitions (depending upon whether or not the seller will hold a sellers note). If there is real estate involved with the purchase, it could be as little as 10-13% down but ALL is dependent upon how you qualify for financing! this is why we pre-qualify franchisees at no cost or obligation. Michele Slevin www.theslevingroup.com No offense, but I found this article contradicting itself. In the first line it says franchisors require you to obtain financing …but then it goes on to say the person to talk to is your franchisor about financing. Then it states how all the information for financing is in the UFOC. This article seems to be putting down lenders / loans and promoting the franchisor for financing yet the last line advises to obtain a lender that specializes in franchise financing. It seems to me the person who wrote this didnt do their homework. I don’t know of a UFOC that carries information about actual financing, although the UFOC may vaguely recommend a loan program type, it will not specifically list lenders or actual resourcs. It’s usually up to the franchisee to find financing options. However, a good franchisor may have specific resources handy, that specialize in franchise financing to recommend to you so yes, you should ask.
Chances are when a bank requires 30% down or more, they do not specialize in franchise financing.
I am an SBA franchise loan consultant and the lenders I work with always require only 20 – 25% down (depending on whether its brand new to franchising or has been around for a while with many units already up and running) for start-ups and 15-20% down for acquisitions (depending upon whether or not the seller will hold a sellers note). If there is real estate involved with the purchase, it could be as little as 10-13% down but ALL is dependent upon how you qualify for financing! this is why we pre-qualify franchisees at no cost or obligation.

Michele Slevin
http://www.theslevingroup.com

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