While there are a number of financing options available to franchises, one avenue that’s worth considering is the SBA 7(a) loan. In this blog post, we’ll take a closer look at the SBA 7(a) loan program, how it works, and how it can help you finance your franchise.
What is an SBA 7(a) Loan?
First, let’s define SBA 7(a) loans. The SBA (Small Business Administration) is a government agency that helps small businesses secure financing.
The SBA 7(a) loan program is designed to provide funding for small businesses that might otherwise struggle to obtain financing from traditional lenders.
This program offers small businesses a way to borrow money, to achieve goals such as:
- Acquiring, refinancing, or improving real estate and buildings
- Short- and long-term working capital
- Refinancing current business debt
- Purchasing and installation of machinery and equipment
- Purchasing furniture, fixtures, and supplies
- Changes of ownership (complete or partial)
- Multi-purpose loans, including any of the above
Do SBA 7(a) Loans Make Sense for Franchises?
As with any type of financing, there are pros and cons to taking out an SBA 7(a) loan. It’s important to understand these before deciding if this is the right fit for your business.
The pros of this type of loan include a lower down payment requirement, longer repayment terms, and better interest rates than many other types of loans.
Additionally, the SBA works with lenders to help approve loans for businesses that might have more difficulties obtaining financing.
On the other hand, some of the cons of SBA 7(a) loans can include a higher level of scrutiny from SBA lenders, and strict requirements about how you can use the loan proceeds.
Wrapping It Up
While securing financing for your franchise may seem like a daunting task, the SBA 7(a) loan program offers an affordable and accessible option that’s worth considering.
By working with an approved lender, you can navigate the application process with confidence.
Ultimately, by accessing this type of financing, you can leverage the power of franchising to help grow your small business and achieve long-term success.
Gellyfish: Certainty of Execution in Commercial Loans
At Gellyfish Commercial, we offer commercial financing solutions with the certainty of execution you need to take your business to the next level.
We are located in Riverside, and work with clients all over California and beyond. Contact us today by email (info@gellyfishcommercial.com), telephone (877-800-4493), social media (Facebook, Twitter, LinkedIn), or through the live chat on our home page to schedule a free consultation.
