Financing

The numbers are in and they aren’t pretty. According to the Wall Street Journal, the last fiscal year saw defaults on SBA 7a loans for franchisees increase over 50% over the prior year. In real dollars, the loan losses totaled just over $93 million, which is an increase in percentage terms, a staggering 167%.

Some of big name franchises that were part of the list includes, Subway, Quiznos, Curves for Women and Cold Stone Creamery, just to name a few. Quiznos led the pack with over 100 plus defaults.

Those franchises with the highest, as a percentage of SBA guarantee loan defaults since 2000 are, Mr. Goodcents Subs and Pasta, Philly Connection Sandwiches, All Tune and Lube, Carvel and Blimpie. Clearly those intending to get into a franchise will need to do their due diligence and see how their prospective franchise is doing in the market place and are existing stores able to meet their terms of repayment. Clearly SBA lenders will be reviewing applications with fine toothcomb before bringing requests for funding to their approval committee.

Opportunities still do exist and for those who want to strike out on their own and successful launch and operate a franchise business funding is still available. If you have found the perfect franchise and are looking for $100k to $200k contact us a financing.org for a free consultation.