What is a Franchise Loan?

A franchise loan is business finance specifically designed for purchasing or expanding a franchise business in the UK. Because franchises operate under a proven business model with an established brand, lenders often view them as lower risk than independent startups — meaning franchise finance can be available at competitive rates and with more favourable terms than standard new business lending. Seven Hills Capital Group knows which UK lenders are active in franchise finance and which have preferred relationships with specific franchise brands.

You identify a franchise opportunity and agree terms with the franchisor

The lender assesses the franchise system's track record, franchisor support, and your personal profile

Finance is agreed — typically covering 50–70% of the total franchise investment

Funds are released to cover the franchise fee, premises fit-out, equipment and initial working capital

Repayments are made from the franchise's operating revenue

Pros

• Lenders familiar with franchise models — often more willing to lend than for independent startups
• Established franchise brand track record supports the lending decision
• Finance can cover the complete investment including franchise fee, fit-out and working capital
• Some major UK banks have specific franchise lending programmes with preferential terms

Things To Consider

• You still need to contribute personal equity — typically 30–50% of the total franchise investment
• Personal guarantee required in most franchise finance cases
• Finance is tied to the specific franchise — cannot easily be repurposed if you exit
• Some smaller or newer franchise brands may struggle to find willing lenders

How Seven Hills Capital Group Could Help Your Business

Every business situation is different. The illustrative examples on our case studies page are based on common scenarios we see from UK business owners and landlords - showing how the right finance product, found through a whole-of-market broker, can make a real difference.

How much can I borrow for a franchise?

Franchise lenders typically fund 50–70% of the total franchise investment including the franchise fee, premises costs, fit-out, equipment and initial working capital. The balance must come from your own resources. Seven Hills Capital Group will identify the maximum funding available for your specific franchise.

Do I need sector experience to get franchise finance?

Not necessarily. Lenders assess your overall business and management experience alongside the franchise brand's track record. For many established brands, the franchisor's training programme is sufficient to satisfy lenders on the experience requirement.

Can I get a franchise loan for a new or unproven franchise brand?

This is more challenging. UK lenders prefer franchise brands with an established track record and multiple operating units. Newer franchises face more lender scrutiny. Seven Hills Capital Group will be honest about what is achievable for your specific franchise before any application is made.

How long does franchise finance take to arrange?

Franchise finance typically takes 4–8 weeks from application to approval. Seven Hills Capital Group will manage the process and work to your timeline — particularly important if you have a franchise territory reservation deadline.

Can I use a government startup loan to fund a franchise?

Yes. The government-backed startup loans scheme can be used to fund a franchise if the business is in its early stages. Up to £25,000 per director is available — often used alongside other franchise finance to make up the required equity contribution.