Franchise Financing is Not a One-Size-Fits-All Deal

franchise financing first financial

What Lenders Consider When Funding Emerging vs. Established Franchise Brands

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Franchise lenders look at many factors before awarding small business loans. From the industry itself to the amount of time the brand has been in business, or the strength of the borrower, there are many considerations. So how do you know if you will receive funding for the franchise you fell in love with? A great place to start is with a franchise funding expert.

Dan Pace and Cindy Watson are the co-founders of First Financial, a company that provides flexible and creative financing for aspiring small business owners. The husband-and-wife team are extremely passionate about their role in their clients’ journeys into business ownership. Together they have helped thousands of entrepreneurs obtain the funding to become business owners. Here, they discuss need-to-know funding information for emerging brands.

What are Special Considerations for Funding Emerging Brands?

Attention must be given to the direction of the industry the emerging brand is participating in. Is the industry trending in the right direction? Will lenders be willing to loan funds to an emerging brand, given the maturity and performance of the industry? The financial strength of the franchisor will also be taken into consideration. Do they have corporate-owned locations open and are they successful?

What is Your Advice to a Potential Investor of an Emerging Brand Versus a Legacy Brand?

This is a difficult question to answer as every brand is different and comes with its own set of characteristics, strengths and weaknesses. Our advice is to do your homework before you decide to invest.

In the Eyes of Lenders, What Defines an Emerging Brand?

  • Time in business
  • Number of locations opened
  • When the brand began franchising

Is an Emerging Franchise Brand Less Likely to Get Funding?

If compared to an established successful franchise brand, of course! But just because it is an emerging brand doesn’t mean it can’t receive funding. The strength of the borrower is critical and will be a major consideration for the lender.

What Should Investors Know Before Considering an Emerging Brand?

As we mentioned above, the strength of the borrower is extremely important. Borderline applicants need to look at a more established brand as the lenders are more likely to lend to candidates who are investing in a franchise with a successful track record. Ensure you are financially strong before pursuing franchise ownership with emerging brands.

Anything Else to Add?

Securing financing for emerging brands is part of our expertise. If you have a candidate looking at an emerging brand, please reach out and we will be happy to assist!

About First Financial

First Financial works with individuals looking to break free from the corporate world and engage in first-time business ownership. Here are some fast facts about First Financial.

  • Established in 1997
  • Nationwide operations
  • Small business and SBA expertise
  • Express loans with 30 business-day turnaround
  • Special loans for active military and veterans (M5)
  • SBA loans up to $5 million
  • Specialties include SBA loans, M5 (military) loans, commercial real estate loans, equipment leasing, 401(k) rollover options and flexible small business loans

For more about First Financial, visit or email

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