Excerpt from April 2019 Franchising.com Article on how brands rely on lending firms help franchise candidates and franchise brands secure the best loans. Click read more to view the full article at franchising.com
Got Funding? ApplePie and BoeFly Make Lending Better
By: Eddy Goldberg
Once upon a time (about 10 years ago), a franchisee in search of funding had few choices: their own savings and home, friends and family, an SBA loan, or a traditional loan. This usually meant traipsing from bank to bank, lender to lender, making the case that yes, they were a good credit risk. Today, thanks to technology and some innovative thinking, life for loan seekers has gotten easier–not easy to be sure except for larger franchisees, but quicker and less painful than it used to be…[In the beginning, says Artery (COO of Launch Trampoline, a growing Franchisor), BoeFly didn’t simply ask him for information to enter into a database or spreadsheet. “They said, ‘Let us understand your concept, how it’s different, and are other parks profitable? It was more of an explanation of our concept and how we position ourselves in the market,” he says. And that impressed him. “It was a validation point for us–them looking at us the right way.”
Finding the right fit for each individual or group of would-be borrowers is made much easier through BoeFly’s online platform. “Thousands of lenders can take a look at what we’re looking for,” Artery says. “We say its costs $2 million to $2.5 million to open one of our parks.”
And, as noted, BoeFly also pre-qualifies each franchisee, saving the franchisor time better spent on growing the system. Artery says BoeFly looks at four critical criteria right away before moving ahead: liquidity, net worth, credit score, and a background check.
Once that’s done to everyone’s approval, BoeFly and the franchisor agree to work together to connect the loan applicant with their pool of lenders. BoeFly sets things up on their platform, and interested lenders will respond, saying they’ll issue a term sheet and would like to extend the loan, says Artery.]
Read more here about the borrower’s experience and what to expect in the lending process at franchising.com