Franchise loan

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The microcredit company VAYVND issues microloans to individuals online and in branches.
The microcredit company FinaGuru issues short-term and long-term online loans to individuals. The organization does not have a branch network; it operates remotely via the Internet.
Creditnice is a microfinance company operating since 2013. It specializes in loans with online processing, including to pay for purchases from partners; it also issues virtual credit cards and provides credit lines.
Creditify is a service for issuing urgent online loans to a bank card. You can take out a loan on a card from this company for various purposes. Income certificates and guarantors are not required.

Who can apply for a franchise loan?

Financing is available for individual entrepreneurs and LLCs to open a new business under a franchise scheme in two options.

First, you can apply for a targeted loan for the purchase of a franchise. To do this, you must provide the bank with a detailed business plan and a concluded commercial concession agreement with the franchisor. You will also need to invest your own money in the project, 20-30%.

Secondly, you can take out a loan or line of credit to replenish working capital secured by valuable property. In this case, funds are issued without a down payment and supporting documents.

Programs in different banks may differ; we recommend that you carefully compare all conditions. For example, a small amount of several million rubles can be obtained without collateral. But it is extremely difficult to find offers for beginning entrepreneurs in 2024; almost all provide for a company that has already been operating for at least 1-2 years with regular turnover.

Frequently asked questions and answers

What needs can the loan funds be used for?
If a targeted loan has been issued for the purchase of a franchise, then the franchisee can spend the money on certain needs:

Payments under a franchise agreement – lump sum and royalties
Purchase of equipment, transport or repair of fixed assets
Acquisition, construction, renovation of real estate
Payment for advertising and promotion
Replenishment of working capital
Other expenses specified in the commercial concession agreement
Is it profitable to take out a loan for a franchise?
It is necessary to carefully calculate the entire business model, including initial investments, regular expenses, profit taking into account loan payments. This will allow you not to go broke until the franchisee repays the debt to the bank. We also recommend investing no more than 60% of borrowed funds into the business, the rest should be your own.

What are the differences between a loan, line of credit and overdraft?
An overdraft is suitable for solving urgent financial problems and requires full repayment within one to two months. The loan is issued as a one-time payment, and the credit line is issued in installments as needed within the approved limit. That is, you do not need to submit an application to the bank every time and wait for approval, and interest is accrued only on the money spent. A renewable CL can be used again after redemption; a non-renewable CL is not available for reuse.

What additional costs may affect the borrower?
If there is a deposit, you will need to pay a real estate valuation report, property insurance, and a state fee for registering the transaction. Also, money will be required to pay for the services of a notary to certify documents and hired specialists to draw up a business plan. Ready-made financial planning issued by the franchisor is not always suitable; it is necessary to take into account all individual features, for example, location.

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