Franchise Start-Up Financing

Considering starting up a franchise location?

Are you a franchisor frustrated with lack of financing options for your future franchisees?

Let us help.

Franchises are exciting because you are stepping into a business that has demonstrated success with a replicable model.  However, figuring out where to start is not so exciting.  There are so many things to consider; where to lease, what’s your business plan, who and how to hire, training, inventory and the least favorite part… how to get it financed.  Look to your franchise for the business operations.  Look to us to provide clarity and assistance with the financing. 

We focus on loans as low as $300,000 to $5,000,000 through SBA 7a 10-year term loans.  Working with us gives you quick access to our established nationwide, regional and local lender relationships all in one place.  Understanding your situation and helping you navigate through the SBA guidelines from underwriting to approval and funding is our utmost priority.  

We recognize the difficulty in starting up a new franchise.  Let us ease your loan by taking the uncertainty of financing off of your plate.  Together we can explore options and loan terms that are fair, competitive and standard for each individual situation. 

Starting up a franchise provides a proven, stable, exciting opportunity for individuals to become business owners. Franchises typically have proven track records with systems and models that allow for an individual to step into a functioning business model and have success. Monarch Commercial Capital helps arrange financing through the SBA 7(a) loan for franchise start-ups.

Where does the SBA place their focus for underwriting purposes?

Historical franchise performance with existing SBA loans.

The franchise must be on the SBA approved registry to be eligible, and the SBA provides data or delinquent loans, performing loans, etc. that play a big role in a lender’s comfort level for financing.

Projections and business plan.

Underwriting places a high value on an applicant’s ability to explain and demonstrate projected cash flow with underlying assumptions. Most franchises have an internal financial officer that helps put together these items using real-time numbers from the overall franchise performance.

Experience.

Underwriters are looking to evaluate how an applicant’s background, experience, education and skills overlap with the franchise concept. They also take into consideration the experience that comes with the franchise and its overall involvement.

Collateral.

The SBA allocates values to tangible assets such as commercial real estate, machinery, equipment, inventory, etc. An underwriter will closely evaluate and identify the amount of SBA determined collateral values for tangible assets. For loans that exceed $350k and fall short of business collateral coverage, the SBA may require personal assets be pledged to help secure the loan.

Financial Strength.

After reviewing the cash flow, trends and collateral associate with a business and the buyer’s industry related experience, the focus turns to the overall financial strength of the applicant. This includes current liquidity, post-closing liquidity, credit scores, personal net worth, all outside income (W-2, affiliate businesses, etc.) and equity in personally held real estate for collateral purposes.
Each scenario deserves equal consideration for your individual situation. That’s where we come in.
For a free consultation please complete an application. It shouldn’t take more than 5 minutes and we will NOT be pulling your credit.