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How to Finance a Franchise: 7 Options for Business Owners

How to Finance a Franchise: 7 Options for Business Owners

Owning a franchise is a great opportunity for aspiring business owners, but financing it can be intimidating. Finding the right financing option is key to getting your business off the ground and setting yourself up for long-term success. Here are seven ways to finance your franchise.

Small Business Administration (SBA) Loans

The Small Business Administration (SBA) offers several loan programs designed to help new businesses get off the ground. One of these is the SBA 7(a) Loan Program, which offers long-term, low-interest financing options for businesses in all industries. This program also provides access to capital, so you can use it to cover start-up costs, working capital expenses, and other related costs associated with buying a franchise.


Crowdfunding is an increasingly popular way to finance a franchise. Several crowdfunding platforms, such as Kickstarter and Indiegogo, allow you to raise funds from individual investors or backers who believe in your project. Crowdfunding campaigns typically last between 30 and 60 days and they’re perfect for franchises that don’t require large amounts of capital upfront.

Personal Loans

Personal loans are another option if you’re looking for quick financing with minimal paperwork involved. Most personal loans come with fixed rates and repayment terms ranging from one year to five years depending on the lender. This type of loan is ideal if you have good credit and a steady income because it allows you to borrow money without putting up any collateral or assets as security against the loan amount.                                                               

Retirement Account Financing

If you have retirement savings in an IRA or 401(k), you may be able to use those funds as collateral when applying for a loan from a bank or credit union. Some lenders will even let you use your retirement account as collateral without having to liquidate it first, allowing you full access to your funds while still being able to pay back the loan over time with interest payments deducted directly from your retirement account each month until the full balance has been paid off.  This type of financing could be an attractive option if you need quick cash but don’t want to tap into other sources of funding such as credit cards or home equity lines of credit (HELOCs). 

Financing a franchise can seem overwhelming, but plenty of options are available if you know where to look. From SBA loans and personal loans to crowdfunding and retirement account financing – there are many ways that business owners can fund their franchises successfully without having to put too much strain on their finances or deplete their savings accounts to get started. With careful research and planning, finding the right financing solution should be simple enough so that you can focus on what matters – running your business!

There are numerous benefits to opening a franchise business, such as having an existing marketing team and brand recognition. However, there are still financial hurdles to making your dream of operating a franchise restaurant or store a reality. The professionals at Kenbry Capital can help you become successful through our franchise financing program.

Understanding SBA Loans for Franchises

Understanding SBA Loans for Franchises

Are you a business owner interested in franchising? If so, then you should consider applying for a Small Business Administration (SBA) loan. An SBA loan is an attractive option for those who want to open a franchise because the loan can be used to cover the costs associated with starting or expanding a business. In this blog post, we’ll take a closer look at how to apply for an SBA loan and what you should consider before submitting your application.

Eligibility Requirements

In order to qualify for an SBA loan, you must meet certain eligibility requirements. These may include having good credit, having sufficient collateral, and having adequate cash flow. Additionally, your business must comply with the size standards established by SBA guidelines. The size standards vary from industry to industry and are based on the number of employees or average annual receipts of the business.

Application Process

Once you’ve determined that your business meets all of the eligibility requirements, it’s time to start preparing your application packet. To apply for an SBA loan, you will need to provide information about your business plan and current financial situation as well as personal financial statements and tax returns from yourself and any other owners of the business. It is important that you provide complete and accurate information in order to increase your chances of being approved for the loan. 

Making Your Pitch 

When applying for an SBA loan, it is important to make sure that your application stands out from other applicants. Consider putting together a presentation that outlines why your franchise is unique and why it has the potential for success. Make sure that you emphasize how investing in this franchise will benefit both you and the lender in terms of profits and job creation.

Applying for an SBA Loan can be a great way to finance a new or existing franchise business venture due to its low-interest rates and long repayment period options compared to traditional loans or investors. However, it is important that you understand all of the eligibility requirements as well as prepare a thorough application package including all necessary documents before submitting it to ensure that you have increased your chances of getting approved by lenders or investors who might find value in what your franchise offers them in return for their investment. Doing these things will help ensure that when taking out an SBA Loan, both parties involved are confident that there is mutual benefit involved when agreeing on terms with each other.

Let the team at Kenbry Capital assist your company with tailored financing solutions. Contact us today.

SBA 504 Commercial Real Estate Loans Demystified

SBA 504 Commercial Real Estate Loans Demystified

Are you looking to purchase commercial real estate for your business? The Small Business Administration (SBA) offers a loan program designed specifically for small businesses that need to finance the purchase of the commercial real estate. This loan program is known as the SBA 504 loan. In this post, we’ll explore how the SBA 504 loan works, what types of property qualify, and how you can get started with the application process.

How Does an SBA 504 Loan Work?

The SBA 504 program is designed to help small businesses obtain long-term financing for the purchase of commercial real estate and major fixed assets such as machinery and equipment. It consists of two loans: one from a private lender and one from a Certified Development Company (CDC). The private lender provides 50% or more of the total project cost, while the CDC provides up to 40%. The borrower must provide 10% or more as a down payment.

What Types of Property Qualify?

The property purchased with an SBA 504 loan must be used primarily by your business; it cannot be an investment property. Eligible properties include owner-occupied buildings such as retail stores, warehouses, manufacturing plants, office buildings, medical facilities, and even some green energy projects. The property must also meet certain size requirements; for example, it must be no larger than $15 million in total project costs or 2,000 sq ft in size if used as rental housing.

How Do I Qualify?

To qualify for an SBA 504 loan, you must meet specific eligibility requirements. First and foremost, you must be a small business with fewer than 500 employees that meets specific size standards established by the Small Business Administration (SBA). You must also demonstrate that you have the sufficient cash flow to repay the loan and show evidence that you have made a reasonable down payment on the property. Additionally, since this is a government-backed program other strict criteria need to be met such as management experience and financial statements.                                                                                         

An SBA 504 loan can provide businesses with access to long-term financing to purchase commercial real estate and major fixed assets such as machinery and equipment. While several eligibility requirements need to be met before applying for an SBA 504 loan including having fewer than 500 employees, having sufficient cash flow to repay the loan, making a reasonable down payment on the property, etc., qualifying businesses may be able to benefit from this government-backed loan program’s low-interest rates and extended repayment terms. If you’re interested in learning more about how an SBA 504 loan could help your business grow through commercial real estate purchases contact us today! We’ll help guide you through each step of the process so that you can make informed decisions about your future investments in commercial real estate!

We provide a large range of loans and leasing programs, from SBA loans and franchise financing to merchant cash advance funding and commercial real estate loans. Let the team at Kenbry Capital assist your company with tailored financing solutions. Contact us today.

7 Ways to Finance a Franchise

7 Ways to Finance a Franchise

If you’re looking to buy a franchise, you may be wondering how to finance such an endeavor. Investing in a franchise involves significant capital, and it’s essential to understand the different ways of financing your dream business. This blog post will discuss seven options for financing when buying a franchise.

1. SBA Loans: A Small Business Administration (SBA) loan is one of the most popular ways of financing a franchise purchase. These loans are typically backed by the federal government and offer competitive rates and long-term repayment plans, making them ideal for those who need more time to pay off their loan. However, SBA loans can be difficult to obtain due to their strict requirements and lengthy application process.

2. Home Equity Loans or Lines of Credit: For those who own a home, tapping into your available equity can effectively finance a franchise purchase. Home equity loans provide lump sum payments while lines of credit allow you to borrow only what you need when you need it, making them great options for those hoping to finance their franchise purchase quickly and easily.

3. Retirement Accounts: If you have an IRA or 401(k), you may be able to use these accounts as collateral for your franchise purchase without paying any taxes or penalties on the borrowed funds. This can be an excellent option for those with substantial retirement savings but also comes with certain risks, so make sure you speak with a financial advisor before taking this route.

4. Personal Loans: Personal loans are another viable option for financing a franchise purchase as they typically offer lower interest rates than other types of loans and don’t require any collateral or down payment. However, these loans usually have shorter terms than other financing types, meaning that borrowers must be prepared to pay off their loans quickly if they don’t want to accrue additional interest charges over time.

5. Crowdfunding: Some entrepreneurs have had success with crowdfunding platforms such as Kickstarter or Indiegogo when looking to finance their franchises – however this type of funding is often not enough on its own and should only be used in conjunction with other forms of financing to ensure that all costs associated with your business venture are covered adequately.

6. Grants: Depending on your location and the type of business that you’re looking to start, there may be grants available from government agencies or private organizations that can help cover some or all of the costs associated with starting up your business venture – so make sure you do some research before assuming that all financing has to come out-of-pocket!

7. Angel Investors/Venture Capitalists: Finally, if you’re looking for more serious funding then seeking out angel investors or venture capitalists might be something worth considering – however this route should only be taken after careful consideration as giving away equity in exchange for capital can significantly reduce the amount of control that you have over your business in the long run! 

When buying a franchise, potential business owners must understand all their options when it comes to financing their dream business endeavor – from traditional lenders such as banks and SBA loans – through more innovative solutions like crowdfunding – there are plenty of ways that entrepreneurs can secure the necessary capital needed in order create successfully launch their successful venture! So take some time today to thoroughly research each option before deciding which is best suited for your unique situation! The professionals at Kenbry Capital can help you become successful through our franchise financing program.