Franchise Finance

Franchise finance is business funding used to purchase, establish, expand or refinance a franchise business. It can help cover the franchise purchase price, franchise fees, equipment, fit-out, stock and working capital, depending on the lender and finance structure.

We assess the franchise opportunity, total purchase or establishment cost, expected or existing business performance, your experience, contribution, credit profile and available security. We then compare suitable options across our panel of 80+ banks and non-bank lenders to find a competitive rate and structure for your circumstances.

Yes, subject to eligibility and lender approval. Finance can be available to purchase an existing franchise or establish a new franchise location. The lender will consider the franchise system, business financials or forecasts, your experience, contribution, security and ability to service the finance.

Potentially. New franchise businesses can be financed even without an existing trading history, although lenders generally assess the strength of the franchise system, your experience, business plan, financial forecasts, contribution and available security.

Yes. Purchasing an established franchise can provide lenders with historical financial information to assess, including turnover, profitability and cash flow. The purchase price, franchise agreement, remaining franchise term and your experience can also influence the finance available.

The amount you can borrow depends on the franchise, purchase price, business performance, your contribution, financial position, credit profile, available security and ability to service the debt. We compare suitable finance structures based on the total amount required.

There isn't one deposit requirement that applies to every franchise. Your required contribution depends on the franchise system, whether you're buying a new or existing location, business performance, total project cost, your experience and any security available.

Potentially in some circumstances, particularly where sufficient additional security or equity is available. However, many franchise purchases require the buyer to contribute some of their own funds. The amount required depends on the strength and structure of the transaction.

Potentially. Unsecured or asset-backed finance may be available for some franchise transactions without residential or commercial property security. Larger purchases or new franchise establishments may require additional security or a larger contribution.

Potentially. Equity in eligible residential or commercial property may be used to support a franchise purchase or establishment, potentially increasing borrowing capacity or reducing the cash contribution required.

Franchise finance rates vary depending on the amount, term, franchise, business performance, credit profile, contribution and security available. We compare rates, fees and structures across suitable lenders to help find a competitive finance option for your circumstances.

Timing depends on whether you're buying an established franchise or opening a new location and the complexity of the transaction. An indicative assessment may be available quickly, while final approval can take longer where financial analysis, valuations, franchise documentation, leases or legal work are required.

Some smaller or straightforward components of a franchise funding package may qualify for fast approval, but complete franchise acquisitions generally require more assessment than a standard unsecured business loan. We work to secure an indicative decision as quickly as possible once the required information is available.

Depending on the structure, franchise finance can potentially cover the business purchase price, initial franchise fee, fit-out, equipment, vehicles, stock and inventory, technology, signage and working capital required to establish or operate the business.

Potentially. The initial franchise fee may form part of the overall funding requirement. Whether it can be financed depends on the lender, franchise system, transaction structure and your contribution.

Yes, subject to eligibility. Fit-out finance can help fund items such as cabinetry, counters, flooring, lighting, signage, commercial kitchens, furniture and other improvements required to open or refurbish a franchise location.

Yes. Eligible equipment, machinery and vehicles can often be financed separately using asset finance. Structuring these assets separately can reduce the amount that needs to be funded through the main franchise purchase facility.

Potentially. Working capital or other business finance can be used to help purchase opening stock and inventory. It's important to include these costs when calculating how much funding you'll need before opening.

Potentially. Having enough working capital after settlement or opening can be just as important as funding the purchase itself. Additional finance may be available to cover wages, suppliers, inventory, rent, marketing and other operating expenses while the business becomes established.

Lenders may consider the franchise brand and system, financial performance of the location being purchased, projected revenue for a new location, your industry and management experience, contribution, credit history, lease terms, franchise agreement, available security and ability to repay.

Yes. Lender appetite can vary between franchise systems. An established franchise network with a strong operating history may be viewed differently from a newer or less established franchise system. The individual business and applicant are still assessed on their own merits.

No. Lender appetite varies, and not every lender will finance every franchise system or industry. That's one reason comparing multiple finance options can be valuable when purchasing or establishing a franchise.

Not necessarily, but relevant industry, management or business experience can strengthen an application. Franchise training and support may also be considered, particularly if you're entering the industry for the first time.

Potentially. You don't necessarily need to have owned a business previously. Lenders may consider your professional or management experience, financial position, contribution and the support provided by the franchise system.

Potentially. Previous credit issues don't automatically rule you out, although they may reduce the available lender options or affect your rate, contribution and security requirements. The nature and age of the credit issues and the strength of the overall transaction will be considered.

Potentially, although franchise purchases and new franchise establishments often require more information than straightforward working capital finance. Low-doc options may be available for certain parts of the transaction or where suitable security is available.

Requirements vary, but you may need identification, details of your proposed business structure, franchise agreement or disclosure documents, contract of sale for an existing business, financial statements, tax returns, BAS, bank statements, forecasts, business plan, lease information and evidence of your contribution or equity.

It depends on the transaction. A detailed business plan and financial forecasts can be particularly important when financing a new franchise without an existing trading history. An established franchise purchase may rely more heavily on historical financial performance.

Potentially. Existing franchise finance may be refinanced to seek a more competitive rate, restructure repayments, consolidate eligible debts or release cash flow, subject to the costs and terms of refinancing.

Yes, subject to eligibility. Existing franchise operators may be able to finance additional locations. Strong performance from your existing business can help support an expansion application.

Potentially. Multi-site operators may be able to structure finance across several locations, depending on the performance of the existing businesses, proposed acquisitions, overall debt position and available security.

Potentially. Business finance may be available to fund the purchase of another owner's interest in a franchise. The lender will assess the value of the business, its financial performance and the proposed ownership structure after the buyout.

Yes, subject to approval. Finance can be used to acquire an existing franchise business from its current owner. The lender will generally assess the historical financial performance, purchase price, franchise agreement, lease and your ability to operate the business.

Yes. The remaining term of the franchise agreement can influence how a lender structures the finance. A lender may be reluctant to provide a loan term that extends significantly beyond the period you have the right to operate the franchise unless renewal arrangements are satisfactory.

Yes. For premises-based franchises, the lease term, options and occupancy costs can be important. Lenders may consider whether the lease provides sufficient tenure for the proposed finance term and whether rent is sustainable based on business cash flow.

Where possible, it's sensible to understand your finance position before making an unconditional commitment. Franchise agreements, leases and business purchase contracts can create significant obligations, so independent legal and financial advice should be obtained before signing.

Getting an initial quote with Overdrive does not require an upfront credit check. We can assess the proposed franchise and compare suitable options before progressing to a formal application. If you decide to proceed, the selected lender may conduct a credit enquiry as part of its assessment.

Franchise finance can help fund the purchase, establishment or expansion of a franchise without requiring you to cover the entire cost from your own cash. The right structure depends on the franchise, total project cost, your contribution, experience, security and the working capital required after opening.