If you're considering buying a franchise for a quick service restaurant (QSR), such as a fast food chain or coffee shop, you may be wondering about your financing options. In this blog post, we'll explore some of the financing options available for QSR franchises, including those that may not be on the approved list for the Small Business Administration (SBA).

Equipment Financing

One option for financing your QSR franchise is through equipment financing. Many equipment financing companies work with franchises and can provide financing for both the equipment and tenant improvements needed for your franchise. While your franchise may not be on the approved SBA directory, these lenders may still be able to provide financing for your business. This is often a quicker process than going through the SBA, and many equipment lenders have experience financing franchises in the past.

Rollovers as Business Startups (ROBS)

Another option for financing your QSR franchise is through a ROBS, or Rollover as Business Startups. This is where you roll over funds from a retirement account, such as a 401k, into a self-directed vehicle that can be used for the purposes of investing in your business. This can be a good option if you have significant funds in your retirement account that you can use to finance your franchise.

Unsecured Term Loans

If you have good credit and a stable W-2 job, you may also be eligible for an unsecured term loan. These loans are not secured by any collateral and are based on your credit profile and debt-to-income ratio. Some lenders can provide loans ranging from $25,000 to $450,000, depending on your credit profile. This type of loan can be used to finance the franchise fee or other expenses associated with your QSR franchise.

Layering and Stacking Financing Options

In many cases, QSR franchise financing may require a combination of financing options to cover all the necessary expenses. Even if your franchise is not on the approved SBA list, there are still ways to layer and stack financing options to cover the costs of your franchise. This may include using a combination of equipment financing, ROBS, and unsecured term loans, depending on your financial situation.

Conclusion

If you're considering buying a QSR franchise and need financing, there are many options available beyond those on the approved SBA list. Equipment financing, ROBS, and unsecured term loans are all potential financing options to consider, and in many cases, a combination of financing options may be necessary to cover all the expenses associated with your franchise. Consult with a financing expert to determine the best financing options for your specific situation.