How to Help Your Franchisees Find Financing

The good news for franchising is the economy is coming back. Hit hard by the 2008 economic recession, franchise indices show an uptick in new franchise concepts and pent up demand for franchises among buyers. FranData, an independent franchise industry research firm, estimates that in 2013, banks will loan $23.9 billion to franchise businesses, the highest level since 2009. A quarter of these loans will come from the SBA's loan programs, which guarantee as much as 80 percent of the loan principal for a bank, with the rest conventional bank loans. But even with this improved outlook for franchising, FranData estimates a nearly 10 percent lending shortfall in 2013. There is simply far greater demand for franchise financing than there is money to lend. Read more.