504 loan for SBA Pre approved Franchise new location
Hi, I just put in an offer on a property here in AZ and am looking at doing the 504 application now for the land, building, equipment and some working capital.
It’s a proven Coffee and Expreso drive thru franchise with over 69 locations throughout the US and it’s going to be 51% women owned and 100% owner occupied.
I currently have 10% – 15% down for my loan. Even though it’s pre approve by SBA do I have to go in as a start up company because it’s a new build? Also with what I shared what do you think my terms and down payment will be? Please share your thoughts.
What do you mean “go in as a startup company”? Do you mean apply for the loan? If that’s the case then yes, it’s a startup. What determines that is your current revenues. Just because you’re getting a franchise doesn’t mean that the revenue from other franchise locations has anything to do with your operation. If you struggle then they won’t be giving you money to sustain yourself. So if you have no revenue then you’re considered a startup.
You can check out our SBA loan rates article to learn about what the current rates you’re likely to get are. They could be going up in the first quarter of the year, so you’ve chosen a good time to take action. I would expect that you’ll be required to put 10-20% down on this type of loan as well, depending on what your credit profile looks like.
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