Finding Franchise Funding Amid A Credit Crunch

Wall Street Journal:

Like other borrowers, franchise buyers seeking financing are feeling the credit squeeze.

Not long ago, would-be franchisees who are U.S. citizens with good credit would have had about 20 lenders willing to lend them money, says Bernie Siegel, founder of Siegel Capital LLC, a broker of loans to small-businesses. Now, that number may be only 1 or 2.

He works to keep an up-to-date Rolodex of active franchise lenders participating in the Small Business Administration Loan Guarantee Program, he says. Most lenders require this backing before making loans to new franchisees.

‘Every day, week or month, another lender is going to have a change to their program,’ making securing a loan more challenging, says Mr. Siegel, a former Dunkin’ Donuts franchisee who is based in Philadelphia. Read more.