Franchises are a “pre-tested business model, (have an) operating plan and playbook with which to run the business,” Charles Green said at a webinar. He is the founder of the Small Business Finance Institute, an author and former chief executive of a community bank. Green presented an online program called, “What You Need to Know to Underwrite Franchise Loans.” Coleman Publishingproduced the event for small-business lenders and franchise professionals.
Green said that SBA has extensive data available about its previous lending to franchised businesses since 2001, sorted by brand, default rate and charge-off rate. He said that presently approximately 11 percent of SBA’s lending is to franchise unit buyers, which has been utilized by over 1,000 different brands over the years.
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