First, find out if your franchisor offers in-house franchisor financing. You should be able to find this information in the franchise disclosure document (FDD). If you want to look into other franchise financing options, research which lenders offer loans to your type of franchise. After that, you can narrow down the list of lenders based on which ones you qualify for. Be sure to check lenders’ reviews as well.

Once you’re ready to apply, most online lenders will allow you to get pre-approved quickly with a simple online application. After that, they’ll reach out to you for more information that they’ll need during the final approval and underwriting process.

Early on in the application process, it’s a good idea to start putting together the business documents lenders will ask for during the underwriting process. These include your business plan, franchise agreement, last three months of bank statements, last three years of tax returns, proof of business registration, and relevant business permits and licenses, to name a few.

Some types of franchise financing require a business loan down payment, while others do not. Generally, larger business loans, including SBA loans, bank loans, and commercial real estate loans to purchase or build a franchise do require a down payment of approximately 10% to 30%. Online lenders, which typically offer smaller loans that max out at $250-$500K, often do not require any down payment; however, they usually require a UCC blanket lien on your business assets, as well as a personal guarantee.