The future prosperity of every franchise (as well as every other business) requires growth and expansion. Growth obviously requires funding. Self-funding through revenue growth is one way to grow, but that is the long slow way. A widely-embraced solution to facilitate growth for a franchise is an SBA loan.

What is an SBA Loan?

The Small Business Administration (SBA) is a federal agency that helps small businesses get access to business loans. The SBA guarantees loans for up to 85% of the loan amount which is provided by an SBA-approved lender, typically a bank.

Compared to other types of loans, an SBA loan can have a lower down payment and longer payment terms. It does require lengthy paperwork and often has longer approval times versus other loan types.

Is My Franchise Eligible for an SBA Loan?

The SBA Franchise Directory provides a list of all brands reviewed by the SBA. Those listed are pre-qualified for SBA financial assistance. If your franchise is not listed, you can apply for eligibility, but this will take additional time and steps. The franchise owner will also have personal qualifications to meet.

How Do I Apply for an SBA Loan?

  • Determine whether you meet the requirements of the SBA. This includes having a franchise business size less than 500 employees, having net income of less than $5 million and be operated and headquartered in the United States.
  • Choose an SBA loan program. There are several options to choose from in order to select one that is the best solution for you.
  • Decide on an SBA partner lender. Consult the financial institutions of your choice and ask for a referral to an SBA intermediary. The SBA website also offers a Lender Match service to aid you.
  • omplete an SBA Loan application, then be available to follow-up.

Where Can I Get Expert Assistance?

Contact Monstera Lending Group for assistance with your franchise financing.