There has been much consternation about the state of franchise financing in this slumping economy, but new data seems to indicate that franchise financing will increase in 2012.
Boefly, "an online small business loan marketplace that connects business owners and franchisees with over 1500 banks", polled 133 lenders to compile data that states that "many banks plan to originate more franchise loans in 2012" than 2011. The study also shows perhaps not surprisingly that franchises consider the access of financing to be "very important".
Some of the other data of note, which was provided by lenders:
- 83% expect to originate more franchise loans than they did last year (94 responded)
- 44% expect to originate $1 million to $20 million in small business loans in 2012 (36 responded)
- 40% require between 11% and 20% equity injection on a start-up, and 39% require between 21% and 25% equity injection (96 responded)
- 88% are willing to fund a borrower’s first franchise unit (92 responded)
- 81.5% would consider participating in programs for veterans (54 responded)
“Based on the insight provided by both lenders and franchisors, it is clear that growth is a priority for both lenders and franchisors this year,” said Mike Rozman, Co-president of BoeFly and the webinar’s moderator.
If this data holds, it could be a bigger year for franchising than we had expected.