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The loan officer takes your application, and in some cases, all of the applications she has received during a set time period, to a credit committee, and the committee determines whether or not a loan gets approved. This is why it’s so important to have the loan officer on your side–you need someone standing up for you in front of the credit committee when you can’t be present.
Many companies, however, don't have established credit, so they cannot obtain a business loan without a guarantee from the owners. In other words, you'll probably have to "co-sign" for the company's loan, putting your own credit on the line. If you'll be applying for a loan and your credit matters, do all you can to boost your own score before applying. This means paying down debts so your credit utilization ratio is low, and always paying bills on time. 
“ApplePie Capital can accelerate the growth of franchisees because we start by spending time with the franchisee up front to assess their situation, and then identify the best financing options to reach their short and long term goals. Sometimes that will be SBA, and sometimes it will be other options that the local bank doesn’t offer. And unlike the local bank, ApplePie knows the brand metrics. We can underwrite the loan ourselves for our core product, or can educate our lender network on the brand so the franchisee doesn’t have to.”

An investor looks for a more high-risk opportunity to get a higher reward and will put their money in established businesses that have the potential for high growth. Investors generally expect to be involved in the business in the form of a seat on the board of directors or some other role in which they have a say in how the business is managed. For the most part, investors want to get in on a company while it is in its early growth stage, and they get out once the business has reached a certain level of growth.
If you need financial assistance, a commercial loan through a bank is a good starting point, although these are often difficult to secure. If you are unable to take out a bank loan, you can apply for a small business loan through the Small Business Administration (SBA) or an alternative lender. [See related story: Best Alternative Small Business Loans]
Reviewing the brands franchise disclosure document (FDD), speaking with existing franchisees and financial professionals, in conjunction with support from the franchisor, will help you formulate your business plan and build financial projections. Outlining your management and marketing skills, past successes and future goals by including resumes for yourself, planned partners and other employees will allow all parties involved, from the franchisor to lenders, to understand the strengths of the ownership and management team. Personal credit history and financial strength will also play an important role in opening a franchise business.
The loan officer takes your application, and in some cases, all of the applications she has received during a set time period, to a credit committee, and the committee determines whether or not a loan gets approved. This is why it’s so important to have the loan officer on your side–you need someone standing up for you in front of the credit committee when you can’t be present.
Venture capitalists tend to start investing at $1,000,000, and they prefer to invest in high-growth and high-risk businesses. High-growth investment means the venture capital investor would see a return in 3-7 years by selling the company or going public. Venture capitalists tend to require a large amount of equity in your business, including a position on the board of directors.
While many business experts believe that you should get into a business you are passionate about, it is important that you consider the market’s demand as well as your target demographics. You can’t start a business about something you love and expect people to patronize your services or your products on the get go. The success of a franchise hinges on a lot of factors, but demand and the target market should top your list.
The lender will want to know how much funding you are seeking and how the loan proceeds will be used. Will the loan be for equipment or capital expenditures? Expansion or hiring? Increase in inventory? Enhanced sales and marketing efforts? New research and development of technology? New product development? Expansion into new facilities or territories?
If you’re like the majority of new startups, cash flow will be your primary concern. You can have the best business plan in the world, but it won’t be of any use if you don’t have the money to keep the lights on while you’re getting your feet on the ground. With this, it’s important to know what resources are available to make the initial growth period a lot easier.
Bank loan: You’ll need excellent business and personal credit to qualify for an SBA-backed bank loan. The U.S. Small Business Administration provides general small-business loans through banks with its 7(a) loan program. According to NerdWallet, the average SBA loan size is $371,000, although amounts can vary between $5,000 and $5 million. To qualify, you’ll need to provide:

Franchise fee: Most companies charge an upfront fee to start a franchise, paid in a lump sum or installments. The amount varies by company, but it’s typically tens of thousands of dollars and usually is not refundable once a franchisee is accepted. For example, Jamba Juice charges $25,000 per store, and Hilton Worldwide charges $75,000 to start a 150-room Hilton Garden Inn.

Looking for a quick and easy way to get growth capital for your franchise? Look no further than Balboa Capital. We can provide you with the franchise finance solution you need, with the flexible terms you want. From franchise re-imaging initiatives to new equipment to property improvement programs, we finance it all… and fast.  We have a long track records of success in working with many franchise brands, some of which we are a Preferred and/or Qualified Lender for.


“ApplePie Capital can accelerate the growth of franchisees because we start by spending time with the franchisee up front to assess their situation, and then identify the best financing options to reach their short and long term goals. Sometimes that will be SBA, and sometimes it will be other options that the local bank doesn’t offer. And unlike the local bank, ApplePie knows the brand metrics. We can underwrite the loan ourselves for our core product, or can educate our lender network on the brand so the franchisee doesn’t have to.”
Government small business loans help put your own business within reach. First there’s the quest for a decent location, then comes building a customer base, followed by all the initial hiccups of generating a cash flow before your business grows roots and gains momentum. The beginning of a business is crucial because it’s when you gain or lose market credibility. If you disappoint your customers, they may not give you a second chance. If your business gets off to a rocky start (most do), and you believe you can recover but need further financing to make this happen, you can apply for government small business loans.
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