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Are you considering financing a restaurant franchise that only has a few units? Perhaps you're facing challenges in obtaining SBA financing due to perceived higher risk. In this blog post, we'll explore potential solutions and strategies to help you navigate this situation and secure the funding you need. Whether you're a new entrepreneur or an experienced business owner, finding the right financing options is crucial for the success of your venture.
Understanding the Challenge
The first step in addressing this issue is acknowledging the lender's concerns. When a franchise has only a handful of units, it may be considered an emerging concept with slow growth and limited market presence. Lenders often prioritize franchises with a proven track record and a large number of successful franchisees. However, this doesn't mean that financing is impossible for your chosen franchise; it simply requires a different approach.
Finding the Right Lender
To overcome the hurdles of obtaining financing for a franchise with limited units, it's essential to identify lenders who are receptive to your specific vertical or franchise concept. This can be achieved by working with a commercial mortgage advisor who has expertise in navigating the lending landscape. Unlike approaching a single local bank, a commercial mortgage advisor can connect you with multiple lenders, including non-bank SBA lenders, broadening your options.
Exploring Multiple Options
When working with a commercial mortgage advisor, you'll engage in high-level conversations with various lenders to gauge their interest in your franchise concept. These discussions will help identify the lending institution that is most likely to move forward with your application, offering the highest leverage and favorable interest rates. Typically, the interest rates for SBA loans are based on the Wall Street Journal prime rate, plus a negotiable margin. By exploring multiple options, you can maximize your chances of securing the best deal.
The Role of a Commercial Mortgage Advisor
A commercial mortgage advisor acts as your guide throughout the financing process. Their primary objective is to find the right lender who can provide the highest leverage and best terms for your specific franchise concept. Importantly, commercial mortgage advisors are motivated to bring deals to lenders, as it benefits all parties involved. They don't charge a fee for their services, and their success is tied to facilitating successful transactions. This alignment of interests ensures a win-win scenario for you, the advisor, and the lending institution.
Get in Touch
If you're seeking SBA financing for your restaurant franchise or any other business endeavor, consider booking a call with a commercial mortgage advisor. They can provide comprehensive guidance on SBA 7(a) and 504 loans, as well as other financing options suitable for your needs. Whether you're a startup or expanding an existing business, their expertise will be invaluable in navigating the intricacies of the loan process.
To book a call and discuss your project in detail, simply click the link below. The advisor will walk you through the various financing solutions available and answer any questions you may have. Take advantage of their knowledge and experience to secure the funding necessary to achieve your business goals.
Conclusion
Financing a restaurant franchise with few units may pose challenges, but with the right approach, you can overcome them. By working with a commercial mortgage advisor, you can tap into their network of lenders and find the institution that aligns with your franchise concept. Remember, it's not just about obtaining funding—it's about securing the best deal with favorable terms. So, take the next step, book a call, and let the advisor guide you towards financial success.
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