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Franchise

Franchise Acquisition Financing

Buying a franchise that's already open gives you something a new build can't: real sales history, trained staff, an established customer base, and cash flow from the day you take over. Lenders like that track record too, which is why acquisitions are often easier to underwrite than ground up openings. The purchase price, though, can be significant, and it usually includes goodwill that isn't backed by any hard asset.

We help buyers finance single unit purchases and larger multi unit deals. Our job is to match your acquisition to lenders that understand business purchases, explain what they'll ask for, and keep the process moving so you can meet the seller's closing date. It starts with one application and a soft credit pull.

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Programs that fitSBA LoansEFALine of Credit

What This Financing Can Cover

  • 01

    Buying an Existing Unit

    Purchasing a single operating location is one of the most common paths into franchise ownership. The price typically reflects the unit's earnings plus its equipment, inventory, and the remaining rights under the franchise agreement. SBA loans are often the go to tool here because they can finance goodwill along with tangible assets. Before you sign a purchase agreement, review several years of the seller's tax returns and profit and loss statements, confirm the remaining franchise term, and ask whether the franchisor will require a remodel as a condition of transfer. That remodel cost belongs in your budget from the start.

  • 02

    Multi Unit Acquisitions

    Buying a group of locations from a retiring operator, or picking up units in a neighboring market, lets you scale quickly and spread overhead across more stores. Lenders evaluate these deals on the combined cash flow of the portfolio and on your ability to manage it, so a clear management structure matters. Larger groups can push past what a single SBA loan covers, so some buyers pair SBA financing with conventional business loans or equipment financing on individual units. We look at the full picture and help you decide which pieces fit which lenders.

  • 03

    Transfer and Training Costs

    Franchisors almost always charge a transfer fee when a unit changes hands, and many require new owners to complete their training program before closing. That can mean travel, lodging, and time away from your current job. You may also face legal fees, a business valuation, lease assignment costs, and a working capital cushion for the first few weeks. SBA acquisition loans can often include these soft costs in the total project, depending on the lender. Get a written list of transfer requirements from the franchisor early so nothing surprises you at closing.

Why Finance an Acquisition Instead of Paying Cash

A business purchase can consume most of a buyer's liquid savings if paid in cash. Financing lets you keep reserves for payroll, repairs, and the changes you'll want to make once you own the store.

The acquired business also generates the cash flow that repays the loan. When the numbers work, you're using the unit's own earnings to buy it over time. Keeping cash on hand also signals strength to the franchisor, which often has to approve the transfer. Any equipment included in the purchase may qualify for Section 179 deductions; check with your tax professional.

What Your Financing Can Include

Depending on the lender, an acquisition package can include:

  • Goodwill and the business purchase price
  • Existing equipment, fixtures, and vehicles
  • Inventory on hand at closing
  • Franchise transfer fees and required training
  • Legal, valuation, and closing costs
  • Post closing working capital
  • Required upgrades or remodel work tied to the transfer

Programs That Work Well for Franchise Acquisitions

  • Program

    SBA Loans

    Up to $5MM for business acquisitions, including goodwill, which makes them the most common choice for buying an existing franchise.

  • Program

    Equipment Finance Agreement (EFA)

    You own the equipment from day one and make fixed payments, useful when you need to replace worn equipment right after you take over.

  • Program

    Business Line of Credit

    Draw what you need, when you need it. Once you have at least 1 year in business, a line helps operators manage cash across several newly acquired units.

New Business or Established, We Can Help

First time buyers can often finance an acquisition, especially when they bring management experience and a cash injection. Existing operators can use their current units' performance to support a larger purchase. If you're planning a remodel right after closing, see franchise equipment and remodel financing, or visit our franchise financing overview.

What You'll Need

Acquisition lenders typically ask for the seller's recent tax returns and financial statements, a signed letter of intent or purchase agreement, your personal financial statement and resume, the franchise agreement, and the lease. A business valuation may be required for larger deals. Smaller equipment requests under $150K can often be approved on the application alone.

Frequently Asked Questions

Still have a question?

Talk to a real person. We're happy to walk you through your options.

Is it easier to finance an existing franchise than a new one?

Often, yes. An operating unit has sales records that lenders can verify, which reduces the guesswork compared with a new location. Lenders still decide eligibility based on the seller's numbers, your experience, and the deal structure.

Can I finance goodwill when buying a franchise?

SBA loans can finance goodwill, which is the portion of the price above the value of the physical assets. Many conventional lenders are less comfortable with goodwill, which is one reason SBA financing is so common for franchise resales.

Does the franchisor need to approve my financing?

The franchisor usually needs to approve you as the new owner, and some lenders will want to see that approval before closing. Start the franchisor approval process early so it runs alongside your loan application.

Can seller financing work alongside a loan?

In many deals, yes. Some sellers carry a note for part of the price, which can reduce the amount you borrow. Lenders have their own rules about how seller notes are structured, so we'll help you plan it with that in mind.

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