Franchise lending is always impacted by decisions made by the Federal Reserve.
And that means aspiring franchisees will be impacted too. It always trickles down.
Heck, even current franchisees will be affected. Especially if they have variable small business loans they’re paying back.
That’s right. Those rates also go up when the Fed decides to raise rates.
But before I share a way you can protect yourself from those nasty rate hikes, watch what Federal Reserve Chairman, Jerome Powell, recently said.
“Ongoing increases will be appropriate.”
Great. That sounds fantastic said no one ever. Let’s continue.
Franchise Lending: Currently, Rates Are…
I’ve found that most of the people who get guidance from me on buying and researching franchises use SBA 7(a) loans to finance their franchise businesses. But that may start to change.
Regardless, here’s some information about SBA small business loans, specifically 7(a) loans that are used for franchise business lending.
The SBA 7(a) Loan Program
Variable Small Business Loan Rates
$50,000 or more
Base rate plus 2.25% up to 7 years
Base rate plus 2.75% over 7 years
Fixed Small Business Loan Rates
$50,000 to $250,000 Prime rate in effect on the first business day of the month, plus 6.0% (600 basis points)
I know. You want to know what your rate will be.
For that, you’ll need to contact a local SBA lender.
In the meantime, here’s another franchise financing idea.
Watch This Short Video On A Franchise Loan Alternative
Did you watch it?
What do you think?
Are you now at least open to financing your new franchise business with a portion of your retirement funds? (Affiliate link)
If you did it like that, it would certainly help protect you from rate increases courtesy of the Federal Reserve!
Which would mean more money for you and your franchise business.
I bet you’d like that.
“Good advice is never as helpful as an interest-free loan.”
– Mason Cooley