How Do I Know if the Franchise I’m Buying is on the SBA Approved Directory

How Do I Know if the Franchise I’m Buying is on the SBA Approved DirectoryShow more

Are you a real estate investor or business owner looking to expand? Book a discovery call with Beau to learn all the ways he can help you - https://investorfinancingpodcast.com/rumble

Hey Beau,

I’m looking at purchasing a franchise called Temporary Wall Systems. How do I check to see if it’s approved for SBA financing?

I’m only interested in purchasing franchises I can get SBA financing for.

Thanks so much!
Bobby

In this episode, Bobby asks how to determine if a franchise called Temporary Wall Systems is approved for SBA financing. Beau explains that the SBA franchise directory, which was used for verification, will be discontinued on May 12th. After the directory is taken down, all franchises will be considered eligible unless proven otherwise.

Banks may refer to the previous directory for fast-tracking approved franchises. However, they must now evaluate franchise disclosure documents and other factors more closely.

Beau mentions that many banks and credit unions are ramping up their franchise divisions for SBA financing due to the increasing interest in starting home-based franchise businesses. It is advised to provide franchise disclosure documents to the lender promptly for evaluation. He believes there may be some initial uncertainty in the franchise industry but overall expects positive outcomes and mentions alternative financing options for concepts like brick-and-mortar Tech Concepts.

Finally, Beau emphasizes the importance of preparing documents and adhering to SBA guidelines.

If you'd like to ask me a question about real estate, do it here -- https://investorfinancingpodcast.com/ask

Timestamps:
(00:24) - The SBA franchise directory will be discontinued on May 12th, and all franchises will be eligible for financing until proven otherwise.
(01:01) - Many banks and credit unions ramp up their franchise divisions for SBA financing during the pandemic.
(01:23) - Home-based franchise concepts are popular due to lower startup costs and fewer employees.
(01:54) - The franchise directory no longer matters, so borrowers must provide franchise disclosure documents to lenders for evaluation.
(02:18) - Different management agreements between the franchise or the franchisee will still disqualify based on what they were disqualifying before.
(02:36) - Finding a bank that understands franchise financing and has financed the system before is essential.
(03:27) - Use the SBA's preferred projection worksheet when building projections.
(04:21) - The SBA will likely come out with a memo outlining best practices for underwriting franchises to see if they meet SBA guidelines.

💥 Thanks for watching 💥
#SBA #SBAfranchisedirectory #franchisebusiness

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

🎥 The video interviews we do on IFP will help you scale your real estate business and learn how to finance all your projects.

About the Channel: Want to structure your investments in the right and secure way?

Learn great insights and make the right decisions through the Investor Financing Podcast hosted by Beau Eckstein.