Franchise finance
What it means
Most franchises are bought with a mix of your own money and borrowed funds. Franchise finance covers the loan side: business loans (secured or unsecured), equipment and fit-out finance, and lines of credit for working capital.
Established, well-known systems can be easier to finance because lenders can assess the network's track record, several major Australian banks have franchise lending teams that pre-assess accredited brands, which can speed approval and increase how much they will lend.
In practice
Expect to fund roughly 30 to 50 per cent of the total investment yourself, with genuine savings, and borrow the rest. Get finance pre-assessed early; being finance-ready is often what lets you secure a territory before another buyer.
A real example
To buy a $250,000 gym franchise, Sam contributes $100,000 in savings and borrows $150,000 through a bank's franchise lending team, which pre-assessed the accredited brand and offered a lower rate secured against his home.
Franchise finance, FAQs
How much deposit do I need to finance a franchise?
Commonly 30 to 50 per cent of the total investment from your own genuine savings, with the balance borrowed. The exact figure depends on the system, your assets and the lender.
Is it easier to finance a well-known franchise?
Often yes. Lenders can assess an established network's track record, and several banks pre-assess accredited brands, which can speed approval and lift how much they will lend.
See the full franchise glossary, the Fee Index or our buyer guides.