The 5 Best Franchise Loans: Grow Your Franchise Or Secure Business Loans For Your Franchise Startup

Get Started With SmartBiz

Pros

Rates tend to be inexpensive
Excellent terms and fees
Multiple avenues of customer support

Cons

Some additional fees charged
The application process is slow and involved

SmartBiz is a viable online loan option for franchise owners who want the security and low interest rates of an SBA-backed loan but with the ease and speed of an online loan. SmartBiz does not originate loans. Instead, it is a service that matches business owners with SBA-preferred banks.

SmartBiz Features

SmartBiz offers:

Online SBA loans up to $5 million for commercial real estate purchases
Loans up to $350,000 for debt refinancing and business capital
Bank term loans up to $500,000

This lender is only an option for established franchises. You'll need at least two years in business, a positive cash flow, and good personal credit.

Where SmartBiz Really Shines For Franchisees

SmartBiz is the number one marketplace for SBA 7(a) small business loans online and has an excellent reputation, customer service, and reasonable rates and fees.

If you don't qualify for an SBA loan, SmartBiz can match you with one of its non-SBA partners to secure a loan. While SBA loans have the lowest interest rates and longest repayment terms -- Prime Rate plus 1.5% to 2.75% with a term of up to 10 years for most loans -- you might still be able to get a medium-term non-SBA loan with an interest rate as low as 7.99% through SmartBiz.

2. OnDeck: Franchise Loans For Borrowers With Fair Credit

OnDeck

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Pros

Lower borrower qualifications than banks
Lower costs for repeat customers
Fast and easy application
Funds are disbursed quickly

Cons

Financing isn’t available in some states
Rates can be expensive

If you have a newer franchise or need capital ASAP, OnDeck is one of the easiest and quickest ways to get a short-term loan up to $250K or a line of credit up to $100K. Though OnDeck isn't specifically geared toward franchise owners, it's a viable online loan option for any small business owner who doesn't qualify for a bank loan or doesn't want to wait months to receive loan funds.

OnDeck Features

Term loans up to $250,000
Lines of credit up to $100,000

OnDeck's rates average 62.1% for term loans and 48.9% for lines of credit. Rates are based on loans that originated in the half-year ending March 31, 2022.

Where OnDeck Really Shines For Franchisees

OnDeck's borrower requirements are much more relaxed than those for a bank or SBA loan, and time-to-funding is super speedy. The entire process, from starting your application to receiving your funds, usually only takes a couple of days.

Get Started With OnDeck

3. Credibly: Franchise Loans For Borrowers With Bad Credit

Credibly

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Get Started With Credibly

Pros

Low credit score requirements
Discounts for repaying early
Fast and easy application

Cons

Rates can be expensive
Some additional fees charged
A blanket lien is required

Bad credit is often a major obstacle to getting the franchise financing you need, but it doesn't need to be an impassable roadblock. Lenders such as Credibly can be a good fallback option for borrowers cut off from other sources due to their credit.

Credibly Features

Credibly offers:

Short-term loans up to $400,000
Merchant cash advances up to $400,000
Term loans up to $250,000
Lines of credit up to $250,000
Equipment financing up to $400,000
Invoice factoring up to $400,000

Flat rates start at 15% for advances and short-term loans, while medium-term loans have an interest rate between 10% and 36%.

Where Credibly Really Shines For Franchisees

Credibly's loans should be accessible to most businesses. To qualify for the shorter-term products, you'll need revenue of $15,000 per month, a credit score of 500+, and been in business for six months. For the medium-term loan, you'll need a credit score of 600+ and have been in business for three years.

4. ApplePie Capital: Loans For Starting A Franchise

ApplePie Capital

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Get Started With ApplePie Capital

Pros

Multiple types of financing are available
High borrowing amounts
Long-term financing available
Franchise financing specialist

Cons

The application process can be slow

ApplePie Capital is an online lender that specializes in franchise financing. ApplePie currently has partnerships with over 40 franchises, including 7-Eleven, Dunkin' Donuts, Jimmy John's Pizza, and Wetzel's Pretzels. Other franchise brands can get loans through ApplePie, though the process might take a little longer.

ApplePie Capital Features

Franchise term loans starting at $100,000
Equipment loans starting at $15,000
SBA loans

Franchise term loans are available for both new and existing franchises.

Where ApplePie Capital Really Shines For Franchisees

We like ApplePie Capital's reasonable interest rates, relaxed borrower qualifications, and easy application. ApplePie will approve loans even to brand-new, first-time franchise operators. While it doesn't list specific borrower qualifications on its website, the main requirement is that you work with one of ApplePie Capital's partnered franchises.

5. Funding Circle: Loans For Restaurant Franchises (And More)

Funding Circle

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Get Started With Funding Circle

Pros

High borrowing amounts
Monthly repayments
No prepayment penalty
Few additional fees

Cons

Borrower qualifications might be hard to meet
Financing isn’t available in some states

Funding Circle offers various business lending products, including medium-term installment loans with repayment periods as long as five years, which are ideal for established business owners with a strong credit history.

Funding Circle Features

Funding Circle offers:

Terms loans up to $500,000
Lines of credit up to $250,000
Merchant cash advances
SBA loans

Where Funding Circle Really Shines For Franchisees

Funding Circle has numerous franchise partners across the US, including Papa John's, Pinkberry, Quiznos, and many others. This lender is very flexible, offering various loan products through partnered lenders for franchises in different stages of growth. For qualified applicants, Funding Circle has the advantage of offering faster funding than a bank and having relatively low rates and fees.

While Funding Circle's application process takes a little longer than some other online lenders, it is still much quicker and easier than getting a bank loan. Funding Circle loans aren't suitable for aspiring franchisees who haven't opened up shop yet, but it should definitely be on your shortlist if you have an existing franchise.