If you're looking to renovate your franchise business and funding is a little tight, it may be necessary to apply for financing in the form of a remodel loan. You'll find numerous sources for these loans, ranging from the federal government to your local bank, and it's essential to choose the one that best suits your individual purposes.
SBA loans ideal for franchise renovation
Business owners looking to finance the renovation and remodeling of their existing facilities may want to consider lenders providing loans guaranteed by the U.S. Small Business Administration (SBA). For this situation, the agency's 7(a) loan program, which is known for having the widest variety of applications, would likely be the most appropriate.
The uses of 7(a) loans include (but are by no means limited to) financing the expansion or renovation of existing facilities, as well as purchasing the equipment, machinery, materials, land and inventory you will need to finish the job properly. Since the 7(a) is considered the most prominent SBA loan, you shouldn't have too much trouble finding a lender in your area who provides this financing.
Searching for a franchise loan based on your industry or circumstances
It may be helpful to base your search for a franchise renovation loan on the business sector you belong to, whether you're running a restaurant or a hotel. This will involve researching the backgrounds of various lenders and seeing if they have a tendency to lend to particular types of businesses. If you find a few that often lend to companies similar to your own, consider these institutions as your best prospects.
There are also some loan programs and initiatives backed by federal and state government departments that focus on specific business sectors. One example is the Pennsylvania Fresh Food Financing Initiative, which supports the development of supermarkets and grocery or convenience stores in that state's underserved communities. However, since there are a select few of these programs, you might have better luck seeking conventional loans or financing from private equity groups and venture capitalists in this instance.
Finally, if your need for franchise lending to cover renovation costs is the result of a natural disaster, several government loan programs are available to address that particular circumstance.