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How to get a loan to buy an existing franchise Business?

Source of Finance plays a major role in setup and accomplishment of an existing franchise Business Australia. One of the most adaptable sources is Loan. This loan could be Loans from Banks, franchisors, or financial institutions in Australia. Here is range of guidelines in the context of similar—

Where to obtain finance for a franchise business

Not every source comes out to be effective, sensible, and effortlessly obtainable and yes, authentic. Either you can opt for Traditional loans—loans from banks or credit unions, raising additional equity, the franchisor or franchise loan companies Australia. Loans are the best to go for as you have a wide choice in between loan granting institution and banks. Moreover, these loans are funded in a minimum period of time.


Get a small business can help

Loans are easy to access when the business is small-scale and demands comparatively less of acquisition cost. Entrepreneurs who choose to buy a small-scale existing franchise business, they can develop and expand the business in future with the profit earned rather than buying a large-scale existing franchise business and get stuck with the long-term obligation of paying back to the bank a large amount along with interest. Indeed, small business acquisitions are more often considered by the franchisors and banks as the cost to put is high in the later and they try to avoid such risk.

Why may traditional loan not help?

The eligibility criteria set up by the commercial banks or credit unions to access a loan for the acquisition of a business is way too high. For an instance, Traditional loan demands a down payment of minimum 5%, alongside, an excellent business credit score and low debt-to-income ratio. Hence, the repayment of traditional loans usually ends up in business to the commercial banks.


Ways business owner can prepare themselves to qualify for finance

Having to offer an equivalently worth collateral, getting SBA Approval, Factoring while opting to borrow from B2B Business, Processing purchase order financing so as to get your suppliers satisfied, and target reputed franchise business to acquire who also facilitates franchisor loans. These are several methods to get easily qualify for financing.

How to maximize the benefits of the funding

You can maximize funding benefits via Giving rise to quick profits via advertising, asset acquisition, company rental conveyances and others, avoid using personal credit to buy collaterals and payment of interest, and consider to invest retirement fund to the franchise (in case of retirement only) to expand the business.

Finance Expert, Writer, Entrepreneur

Tammy Richards is a passionate finance expert who is also a writer and business owner. With over 10 years of experience as a finance expert, Tammy wants to share her knowledge with her readers.

Tammy covers and simplifies a range of financial topics, including how start-ups can raise capital and how established businesses can grow successfully. It is clear that she is firmly on the side of Australian small business owners.
Tammy keeps her fingers on the pulse of financial updates. Through her articles, she regularly shares the latest tips and traps around financial products such as business loans and credit cards. She also delivers her information in an easily consumable and interesting way.

Tammy is a keen advocate of promoting financial literacy. She aims to educate small business owners by providing financial insights into common financial problems that businesses face.

“More than anything, I am enthusiastic about using my experience to help Australian small business owners to achieve their financial and business goals,” she says.

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