Buying a franchise or acquiring a business takes money. Getting a franchise loan or an acquisition loan is a great way to get into business when you don’t have the capital to make a purchase outright.

What Are the Characteristics of Loans?

Being aware of the characteristics of a franchise loan or acquisition loan is necessary to make an informed and wise loan decision:

Interest rate. This is the cost of borrowing money. Interest rates are linked to market conditions, the type of loan, and applicant qualifications. Rates may be fixed or variable.
Time to maturity. This is the length of the loan contract.
Repayment schedule. This reflects repayment of the loan at certain intervals, along with interest on the loan.
For many loan types, collateral may be required against the loan to protect the lender.

Choosing the Best Franchise Loan or Acquisition Loan

Options to secure a franchise loan or an acquisition loan include:

The first possibility for a franchise loan is to pursue franchisor financing. The franchisor may have financing partners set to assist in paying for the extensive startup costs involved in buying a franchise.
For both types of loans, a traditional commercial term loan can be secured through a bank or credit union.
A key option for small businesses is an SBA loan arranged through a partnering bank or credit union and backed by the SBA. While the qualifications are stringent, an SBA loan offers favorable interest rates and repayment terms compared to other loan sources.
Another possibility for a franchise loan or an acquisition loan is to apply for funding from an alternative lender.

Securing a franchise loan or an acquisition loan will require developing a solid business plan, having a good credit score, and preparing the necessary documentation.

Seek Expert Funding Assistance

Contact Painted Horse Financial to obtain the right commercial finance option for your business today. We provide financing for every business with asset-based, commercial real estate, business financing, and working capital options to help you grow.