£50 Million Lending Fund For The Franchise Industry

Franchise Finance has announced a new £50 million lending fund for the industry. Here’s how the initiative works

In January 2017 Franchise Finance launched an exclusive £50 million lending fund for the franchise industry, which provides franchisees, franchisors and British Franchise Association affiliates with easy to access funding for a variety of reasons, including for new start-ups, the purchase of existing businesses or for growth, refurbishment or rebranding purposes.

The credit line has been provided to the franchise industry by a highly regarded global finance organisation and is accessed solely through Franchise Finance.

Turnaround times

Chris Roberts, Franchise Finance’s business development director, says: “While we will continue to work closely with the UK high street banks, our clients have increasingly been requesting faster turnaround times.

“So we drew up a shortlist of other lenders and after extensive negotiations were able to create a range of loan and asset finance products typically taking just 48 hours for sanction from completion of the application process.

“We’re passionate about helping people to start and grow their businesses with sufficient and easily accessible funding and look forward to helping business owners maximise their opportunities in the coming year.”

The main funding options available are loans, equipment leases and hire purchase facilities up to a maximum repayment term of five years for amounts between £5,000 and £500,000. This provides significant flexibility and allows a package of suitable finance to be put in place.

Since the launch of the fund, Franchise Finance has processed many finance applications with successful outcomes. Here are just a few examples:

• Working capital loans.
• Vehicles for multiple different franchise brands have been sanctioned, including vans and a tanker.
• Medical and catering equipment.
• The purchase of existing franchise businesses.
• Tax loans.
• New franchise licences.

Accessing the fund

How do you gain access to this fund? Your first step is to contact one of the Franchise Finance team. They will need to understand what the finance is being used for and be able to ascertain the viability of the proposition and that the repayment proposals are realistic.

If the funding is for a new startup business or the purchase of an existing business, then in order to do this they will need a comprehensive business plan with a full set of financial projections (projected monthly profit and loss account, cash flow forecast and end of year balance sheets).

The good news is that if borrowers do not have their own business plans then, for a competitive fee, Franchise Finance has a business planning service that can be used to provide this part of the process.

However, for existing businesses that, for example, need new vehicles or equipment or need to rebrand or refurbish their property, a full business plan will not normally be required providing viability and repayment can be demonstrated by up to date accounts showing profitable trends and a simple cash flow showing the business has sufficient working capital and should be able to make the new additional repayments.

This new lending fund is only the start of a push by Franchise Finance to make life easier when it comes to all things financial in the franchise sector. A direct debit solution for collecting payments is also now available and the company is looking to launch an innovative credit card linked lending product in the near future.