Franchising
Financing a Franchise Business
You could be closer to owning that franchise business than you think.
How much do you need?
A franchiser will generally expect a franchisee to fund between 35% and 50% of the initial
purchase price with equity (your own cash), with the rest being financed by debt (borrowed funds).
How much can you borrow?
Depending on the ability of your business to service debt, you may be able to finance up to 100%
of the ingoing cost. Finance options can include:
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Property-secured business loan
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Franchise business loan secured by company assets
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Working capital.
Property-secured business loan
You use your own home, an investment property or commercial property as the security for a business loan.
This is often the most economical finance option, and is the most common choice for new franchise holders.
Note that normal borrowing limits will apply - i.e. up to 80% of the value of a residential property and
60% of a commercial property.
Franchise business loan secured by company assets
These types of lending facilities are only available to companies. A charge, is taken by the bank against
the assets of the business. In some cases non-business assets (such as residential property) may also be
required as security.
For successful and established franchise businesses, we have developed a tailored lending package. This
lets you fund a portion of the set-up costs using your business assets as security, without the need for
residential security. Our lending criteria will apply.
Working Capital
Funding for the day to day cash needs of your business can usually be provided by an overdraft or
revolving credit facility. These facilities are normally secured against the business assets,
outside assets (e.g. residential property), or a combination of the two.
More Information
For more information about these finance options, visit our
Business Lending section.
For information on fees & charges and terms & conditions, or for a copy of our comprehensive brochure,
e-mail us or call 0800 251 858.