Franchise Business Loans in India 2025
Franchise Business Loans are specialized financing solutions designed to help entrepreneurs start or expand franchise operations in India. LoanPao partners with over 500 RBI-compliant banks and NBFCs to offer tailored loan products with competitive interest rates, enabling you to invest in franchise fees, equipment, inventory, or operational costs.
What is a Franchise Business Loan?
A Franchise Business Loan is a term loan or working capital loan provided by banks and NBFCs to fund the setup, expansion, or operational needs of a franchise business. These loans support entrepreneurs partnering with established brands in sectors like food, retail, education, or healthcare.
Benefits of Franchise Business Loans
These loans offer several advantages for franchisees:
- Quick Funding: Access funds for franchise fees, setup costs, or working capital.
- Flexible Repayment: Tenures range from 1 to 7 years, with EMI options.
- Competitive Rates: Interest rates starting from 10% p.a., depending on credit profile.
- Collateral Options: Secured and unsecured loan options available.
- Brand Support: Leverage the reputation of established franchises to secure better terms.
Eligibility Criteria
Eligibility for franchise business loans varies by lender but typically includes:
| Criteria | Requirement |
|---|---|
| Applicant Age | 21-65 years |
| Business Type | Franchise agreement with a recognized brand |
| Credit Score | Minimum 650 (preferably 700+) |
| Business Vintage | New or existing franchises (some lenders require 1-2 years of operation) |
| Documents | KYC, franchise agreement, business plan, financial statements, ITR (last 2-3 years) |
Types of Franchise Business Loans
LoanPao offers various loan types to suit franchise needs:
| Loan Type | Purpose | Features |
|---|---|---|
| Term Loan | Franchise setup or expansion | ₹5 lakh to ₹10 crore, 1-7 years tenure, 10-15% p.a. |
| Working Capital Loan | Inventory, salaries, or daily operations | ₹1 lakh to ₹5 crore, short-term, 12-18% p.a. |
| Machinery Loan | Equipment purchase for franchise | Up to 80% of equipment cost, 3-5 years tenure |
| Overdraft Facility | Flexible cash flow management | Limit-based, repay as per usage, 11-16% p.a. |
Interest Rates for Franchise Business Loans
Interest rates depend on the lender, loan type, and applicant profile:
| Lender Type | Loan Type | Interest Rate (p.a.) |
|---|---|---|
| Public Sector Banks | Term/Working Capital | 10-13% |
| Private Banks | Term/Working Capital | 11-15% |
| NBFCs | Term/Working Capital | 12-18% |
| Secured Loans | Collateral-backed | 10-14% (lower due to security) |
Note: Rates are indicative and subject to change. Use LoanPao’s EMI calculator to estimate monthly payments.
How to Apply for a Franchise Business Loan with LoanPao
Follow these steps to secure a loan:
- Compare Loan Options: Explore loans from 500+ RBI-compliant lenders on LoanPao.
- Check Eligibility: Verify your eligibility and required documents.
- Apply Online: Fill out the application form on our platform.
- Submit Documents: Upload KYC, franchise agreement, business plan, and financials.
- Loan Approval: Get approval within 24-72 hours from our partner lenders.
- Disbursement: Receive funds in your account within 3-7 days.
Why Choose LoanPao for Franchise Business Loans?
LoanPao simplifies your financing journey:
Trusted Lenders
Connect with 500+ RBI-compliant banks and NBFCs.
EMI Calculator
Plan repayments with our EMI calculator.
Secure Process
Safe and transparent application process with dedicated support.