Franchise Financing – OverFund Capital
Franchise Financing – OverFund Capital
Fall is a great time to repair, reorganize, and even rebuild. As a result, many franchisees find it the best moment to invest in new equipment and technology. However, keeping your franchise up to date can be tricky unless you have the resources to safeguard your bottom line. So it is when franchise financing comes in handy. The application procedure may appear complicated at first, but it becomes a lot easier once you’ve done your homework.
OverFund Capital offers franchise financing in New York. We provide innovative, customized financing programs to franchisees and customers of industry-leading franchise concepts and distribution companies. Our team is ready to assist you in locating the best financing option for your company. To learn more, please get in touch with us today!
Call OverFund Capital
At 1-516-519-2226 Now!
To Get Started!
Franchise Financing: What You Need To Know
What Are The Key Factors That Lenders Consider In Evaluating Your Franchise Business?
The five most important things that lenders assess while analyzing your franchise business are:
1. Your Brand
Your franchise’s brand is likely to have a significant impact on your application. Same-store sales, average unit volumes, labor expenses, operating margins, and predicted unit-level earnings before interest, taxes, depreciation, and amortization (EBITDA) would all be affected. How do you compare against these benchmarks as a single-unit or multi-unit franchisor? Compared to the industry’s averages? Lenders can use these measurements to put things in context.
2. Ownership Profile And History
Because you are in charge of your company, we will look at you as an owner when establishing your creditworthiness. For example, we’ll check into it if you’re a financial buyer with operating partners or an existing owner/operator. The purpose of your franchise funding, as well as your short- and long-term growth goals, will be of interest to us. We might also look at your operational infrastructure to see if it’s strong enough to support your franchises’ success.
There are two sorts of attrition that can raise red signals for a lender. Orderly attrition is defined as a planned closure for strategic or financial reasons, whereas disorderly attrition is defined as an unintended closure due to poor performance. While business closures aren’t always a bad indicator, a trend of unscheduled closures will undoubtedly raise a lender’s suspicions.
4. Asset Quality
Before requesting financing, you should be entirely sure of the quality of your business. The traffic patterns around your locations, how frequently your establishments have been refurbished, and how closely they fit the standard for all of your franchise’s sites could all be factors in a lender’s comprehensive examination.
5. Asset Quality
Broad category trends may influence your loan application. We’ll look at which franchises are on the rise and which are in the fall. We will assess your brand to see if you’re responding to, driving, or ignoring market shifts and needs. Most lenders will look at portfolio performance across years, if not decades, to get a broad picture of sector patterns.
Why Should A Small Franchise Business Consider A Non-Bank Loan?
Even though bank loans typically have lower interest rates than alternative lender loans, there are certain advantages and instances in which an alternative lender loan is the best option for your small franchise business.
Suppose you have invoices or equipment that you can use as collateral. In that case, an alternative franchise lender may offer you a cheaper interest rate because they are more willing to work with your situation to provide your business the funds it requires. Banks, on the other hand, are more stringent, requiring excellent financials as well as a blanket lien on all of your company’s assets.
2. Quick Funding
Filling out a bank loan application, waiting for approval and funding takes a long time. If you’re in a hurry and need money for your business right away, alternative lenders can help. Their application processes and turnaround times are much faster than traditional bank loans. For example, OverFund Capital offers 90% of your loan to value. We offer generous terms of up to 25 years and no pre-payment penalties if you choose to pay early. We are able to offer competitive interest rates, currently as low as 6% and you can rest easy knowing that we pride ourselves on processing your application quickly.
3. Less Favorable Credit
When it comes to choosing who to lend money to, banks are much more selective. Even if you have excellent credit and flawless payment history, a single judgment on your credit report could result in a traditional bank turning you down. It is where alternative lenders play an essential role. As I previously stated, alternative lenders are more likely to cooperate with you in your situation to assist you as much as possible. Alternative lenders may need some concessions, such as taking a smaller loan or putting some equipment up as security, but they want to help your business flourish at the end of the day. Looking to an alternative lender like OverFund Capital can be beneficial if you have been denied by a bank or want to have a better chance from the start of receiving a loan for your business.
Frequently Asked Questions
Is It Possible To Receive Franchise Financing?
Yes, a franchise is financed by a bank or credit union. While many banks are hesitant to give money to a startup company, franchising may be an exception. However, some banks are keen to lend money to franchisees, especially those with solid credit buying a franchise with an established business concept and track record.
How Does Financing A Franchise Work?
Many franchise-based businesses provide customized financing options for their franchisees, either through relationships with specific lenders or by delivering funds directly from the company.
Is It Possible To Acquire An SBA Loan For A Franchise?
You can obtain short-term operating capital and equipment through SBA loans with maturities of five to six years. The majority of the funds will be for franchise fees, upgrades, or operating capital. Borrowers must be creditworthy, typically invest some equity, and repay the SBA loan from the franchise’s cash flow.
Dependable Franchise Financing In New York
OverFund Capital is an industry leader for franchise financing in New York. Our customers rely on us to share our financial expertise and give the appropriate direction necessary in today’s turbulent market as an approved lender for some of New York’s most well-known franchise concepts. Our franchise team has over a century of commercial finance knowledge, and we strive to make the process as simple as possible for our customers.
OverFund Capital provides straightforward, quick franchise financing for everything from remodels and new locations to equipment upgrades, extra inventory, and more. We’ve worked with store owners from some of New York’s most well-known franchises to help them get the money they need to enhance and expand their stores. So get in touch with us right away to get started!
We Also Offer Healthcare Financing
Providing healthcare to your community is a vital service that necessitates consistent cash flow. At OverFund Capital, We provide medical institutions with healthcare funding that may be used for various purposes. Here’s how you can put this money to good use to market your practice:
Consolidation Of Debt
Consolidating many monthly payments into a single, simple one can help relieve stress. In addition, we can begin our rapid 24-hour approval procedure immediately if you wish to pay off your obligations in one week.
Leasing Of Equipment
Providing care for your patients frequently necessitates the purchase of costly diagnostic and therapeutic equipment. We may cover up to 50% of your soft costs for a lease or loan at OverFund Capital.
Acquisitions Of Practice
If you want to buy out a partner or buy another practice, you’ll need some more cash. If you qualify, you may be able to get up to 100% financing for this costly procedure.
Our contracts can run up to 72 months, and there are no upfront fees. In addition, it is not reported to personal credit bureaus because it is for your medical practice. It is part of our commitment to offering easy-to-use working capital with no additional difficulties.