What types of franchise loans are available?

Franchise aspirants have access to an array of financing solutions to either start new outlets or expand existing ones. Some key categories are:

• General Business Loans: These loans are offered by banks and Non-banking Financial Companies (NBFCs) for varied business purposes. Can fund franchise purchases, working capital, or business operations based on the loan amount and tenure selected.
• Custom Franchise Loans: Certain lending institutions design loan products exclusively for funding franchise outlets based on their specialised funding needs.
• Equipment Financing Schemes: These schemes enable businesses to purchase essential franchise equipment, such as kitchen machines, furniture, and tech accessories, through tailored loans. The procured assets become loan collateral.
• Short-term Working Capital Loans: These loans meet the day-to-day expenses of a franchise, ensuring smooth functioning. They are useful for vendor payments, inventory, staff costs, and other operational expenses.
• Government-Backed Loans: State-owned financial institutions provide funding to franchise Small and Medium Enterprises (SMEs) and startups at             subsidised interest rates and flexible repayment options.
• Emergency Credit Lines: Pre-approved loan limit that franchisees can draw from on demand to meet urgent capital requirements. It is generally useful as a contingency funding option.
• Collateral-Free Loans: These are unsecured loans offered to existing franchise owners with steady cash flows for expansion needs. They carry slightly higher interest rates.
• Micro Credit: These are small ticket size loans for tiny franchise outlets like roadside eateries or home-based tutorial services to meet basic capital expenses.