• 504 Loans Are a Good Choice for Franchise Financing

    The 504 Loan Program is a good financing choice for franchises. Since the SBA has streamlined the approval process for franchisees, it is easier than ever to get the financing needed, especially when entrepreneurs open multiple franchises. The down payment needed for a commercial bank loan is often too high, usually 20% of the project cost, for most borrowers to accommodate. The capital outlay for franchisees typically includes franchise fees, royalties, marketing fees, and sometimes required products. This is on top of the cash needed to build or renovate a franchise property.

    We recently helped a client in Louisiana when the franchisor required that they open several locations within a tight timeframe. With a 20% down payment required for a commercial mortgage on each location, the borrower did not have enough capital to meet the requirements.

    This is what makes the 504 Loan Program a great option for franchisees. The 10% down payment required for a 504 Loan not only reduced the initial cost outlay, but the low fixed interest rate produced a lower monthly mortgage. This allowed the business to keep more of its precious working capital to cover recurring monthly franchise debts.

    You can get started with a 504 Loan for your franchise by filling out a short online form. You can also contact our offices directly:

    In Texas, call Bill Ebersole at 713-457-1650, ext. 201, or email him at bill @communitybusinessfinance.com.

    In Louisiana, call Jeanne Bergeron at 1-800-462-1017, or email her at jeanne@communitybusinessfinance.com.


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