Introduction to Franchise Business Loans
In 2025, franchise business loans provide entrepreneurs with the capital needed to cover franchise fees, setup costs, and working capital for starting or expanding franchise operations. Loanpao explores financing options to help you succeed in the franchise model.
Types of Franchise Business Loans
Franchise Fee Loans
Loans up to ₹50 lakh at 10–14% p.a. to cover initial franchise fees and licensing costs.
Equipment and Setup Loans
Loans up to ₹75 lakh at 9–13% p.a. for purchasing equipment, furniture, or store setup.
Working Capital Loans
Loans up to ₹30 lakh at 11–15% p.a. to manage daily operations, inventory, and staffing.
Comparison of Franchise Business Loan Options
Key financing options for franchise businesses in 2025:
| Loan Type | Loan Amount | Interest Rate | Tenure | Key Feature |
|---|---|---|---|---|
| Franchise Fee Loans | Up to ₹50 lakh | 10–14% p.a. | 1–5 years | Covers licensing costs |
| Equipment and Setup Loans | Up to ₹75 lakh | 9–13% p.a. | 2–7 years | For store setup and equipment |
| Working Capital Loans | Up to ₹30 lakh | 11–15% p.a. | 1–3 years | Supports daily operations |
Note: Rates and terms vary by lender and business profile.
Benefits of Franchise Business Loans
These loans offer:
- Funding for high initial franchise fees and setup costs.
- Flexible repayment options tailored to business cash flow.
- Support for established franchise brands with proven models.
- Potential tax benefits on interest for business expenses.
- Quick disbursal to meet franchise agreement timelines.
Tips for Securing Franchise Business Loans
Improve your approval chances:
- Franchise Agreement: Provide a copy of the franchise contract to show brand credibility.
- Business Plan: Submit a detailed plan outlining revenue projections and costs.
- Credit Score: Maintain a score above 700 for better rates.
- Collateral: Offer assets for secured loans to reduce interest rates.
- Lender Comparison: Use Loanpao to compare banks and NBFCs for the best terms.
Frequently Asked Questions
Loans to finance franchise fees, setup costs, and working capital for franchise businesses.
Some require collateral, but unsecured options are available based on creditworthiness.
Disbursal typically takes 3–10 days, depending on the lender and documentation.
Yes, with a strong business plan and franchise agreement, new entrepreneurs can qualify.
Loanpao connects you with lenders, provides EMI calculators, and offers eligibility guidance.