How Long Does It Take to Get a Franchise Loan?
Quick Answer
3–12 weeks depending on the loan type. SBA franchise loans take 6–12 weeks, conventional bank loans take 4–8 weeks, and alternative or online lenders can fund in 1–3 weeks.
Typical Duration
Quick Answer
Getting a franchise loan typically takes 3–12 weeks from application to funding. The timeline depends heavily on the loan type: SBA loans are the most popular for franchise financing but take the longest, while conventional bank loans and alternative lenders offer faster timelines.
Timeline by Loan Type
| Loan Type | Typical Timeline | Loan Amount | Rate Range |
|---|---|---|---|
| SBA 7(a) loan | 6–12 weeks | Up to $5M | Prime + 2.25%–4.75% |
| SBA 504 loan | 8–14 weeks | Up to $5.5M | Below-market fixed |
| Conventional bank loan | 4–8 weeks | Varies | 7%–12% |
| Online/alternative lender | 1–3 weeks | Up to $500K | 8%–25% |
| ROBS (Rollover for Business Startups) | 3–5 weeks | Varies | No interest (uses 401k) |
| Franchisor financing | 2–6 weeks | Varies | Varies |
SBA Franchise Loan Process (6–12 Weeks)
The SBA 7(a) loan is the most common franchise financing vehicle. Here is the typical timeline:
| Step | Timeline |
|---|---|
| Pre-qualification and lender selection | 1 week |
| Application and document gathering | 1–2 weeks |
| Lender underwriting | 2–4 weeks |
| SBA authorization | 1–2 weeks |
| Closing and funding | 1–2 weeks |
| Total | 6–12 weeks |
SBA Franchise Directory Advantage
The SBA maintains a Franchise Directory of pre-approved franchise systems. If your franchise is on this list, the lender can skip the franchise agreement review step, potentially saving 1–2 weeks.
Conventional Bank Loan Process (4–8 Weeks)
Banks that specialize in franchise lending — particularly those with relationships with major franchise systems — can move faster because they already understand the franchise model.
| Step | Timeline |
|---|---|
| Application and financials | 1 week |
| Credit review and underwriting | 2–4 weeks |
| Approval and commitment letter | 3–5 days |
| Closing and funding | 1–2 weeks |
| Total | 4–8 weeks |
What Lenders Evaluate
| Factor | What They Look For |
|---|---|
| Personal credit score | 680+ for SBA; 700+ preferred for conventional |
| Net worth | Typically 1x the loan amount |
| Liquidity | 10%–30% of total project cost |
| Franchise system strength | FDD Item 19 financials, brand recognition |
| Management experience | Industry or business management background |
| Business plan | Detailed projections and market analysis |
Common Delays
- Incomplete Franchise Disclosure Document (FDD) — lenders require the full FDD, and requesting it from the franchisor can take 1–2 weeks.
- Personal financial statement gaps — missing tax returns or asset documentation delays underwriting.
- Appraisal for real estate — if the loan includes property, appraisals add 2–4 weeks.
- Entity formation — setting up the franchise LLC and operating agreement takes 1–2 weeks.
- Lease negotiation — SBA lenders require a signed lease or LOI before closing, which can become a bottleneck.
Tips to Speed Up Approval
- Choose an SBA Preferred Lender — Preferred Lending Program (PLP) banks can authorize SBA loans internally, skipping the 1–2 week SBA review.
- Prepare financials in advance — have 3 years of tax returns, personal financial statement, and bank statements ready before applying.
- Work with a franchise-specialized lender — banks like Live Oak Bank, Guidant Financial, and ApplePie Capital specialize in franchise loans and move faster.
- Get the FDD early — request the Franchise Disclosure Document during your initial discovery process.
- Choose a well-known franchise — established systems with strong unit economics get approved faster.
Costs Beyond the Interest Rate
- SBA guarantee fee — 2%–3.5% of guaranteed portion
- Origination/packaging fee — 0.5%–2%
- Franchise fee — $20,000–$50,000+ (paid to franchisor)
- Buildout and equipment — often the largest cost component
- Working capital reserve — lenders typically require 3–6 months of operating capital