Does Buying An Existing Franchise Qualify For An SBA Loan?
Entrepreneur.com:
Question:
I want to buy a franchise from an existing owner. Can I use an SBA loan to finance the sale and to finance working capital?
Answer by Jeff Elgin
Yes–buying an existing franchise business is a transaction that falls within the acceptable parameters of SBA loans, but that’s not saying you will be able to get one.
SBA loans can cover financing for a business purchase and they can also cover the financing of working capital reserves. You’ll still have to meet all of the qualification standards–both personal and business–before you can get a loan and you’ll have to find a bank willing to lend. Though the latter has not been a problem until the past year or so, it is definitely an issue in today’s very tight small business credit market. Read more.
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