Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards



Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards




  • Review and choose your best business financing options from 50+ lenders.

Enter loan amount


Find finance for your franchise purchase with Money Matchmaker

Just some of the 50+ business lenders we compare

What is a franchise loan?

A franchise loan is a business loan designed to help borrowers purchase a franchise licence and establish a business as part of a franchise.

A franchise loan may be easier to get approval for compared to a loan to establish an entirely new business, as going into business as a franchisee is generally considered to be less risky. In that sense it is more similar to getting finance to buy an existing business.

If you're looking to buy a franchise licence, there are a number of different finance options you could consider, as well as ways to finance your business once you're up and running.

Secured vs unsecured franchise loans


Secured franchise loan

To be eligible for secured franchise finance, you'll need to own an asset that can act as collateral. This is often a residential property if the borrower owns their own home or commercial property or another business asset if you already own a business.

Some lenders will allow a franchise loan to be secured by the franchise itself, but this is less common as it's riskier of lenders.


Unsecured franchise loan

Unsecured business loans don't require an asset to be used as collateral for the loan. This means you're not risking a personal asset in order to fund your franchise purchase. However, you can expect to pay a higher interest rate due to the increased risk the lender is taking.

The lender will be relying on the strength of the franchise brand and the potential for the venture to generate enough regular revenue to repay the loan.

Other franchise finance options

Low doc business loan

A low doc business loan could be a suitable option for financing the franchise purchase if you're not able to apply for a loan with the standard documentation that lenders expect. Just bear in mind that high interest rates usually apply.

Bad credit business loan

If you have issues in your credit history (e.g. previous defaults causing you to have a low credit score) you may need to apply for a bad credit business loan. It can be more difficult to be approved for a loan with bad credit but buying a franchise could give you a better chance of approval compared to starting your own business.

Chattel mortgage

If you only need finance to purchase a vehicle or piece of machinery (i.e. not to purchase the franchise licence itself) you could consider a chattel mortgage which is a type of secured equipment finance. The vehicle being purchased will be used to secure the loan.

Fit out finance

If you're buying into a retail franchise and need funds to fit out a premises, specialist fit out finance could be more suitable than other broader categories of business finance.

Should you buy a franchise?

When you buy into an established franchise, you get a lot of extras that you don't if you set up in business by yourself such as brand recognition, a proven business model, ongoing training and support, established supply chains, and marketing assistance.

Recent Australian business data shows almost half of newly-established businesses don't survive past their third year of operating. Buying into a franchise is one way of insulating from some of the risks faced by new businesses. But as we'll see below, there are possible downsides too.

Purchasing an existing franchise is also a relatively low-risk option when looking to finance an existing business.

The main downside to purchasing a franchise is meeting franchisor approval criteria. Basically, this is when you’ll speak with the franchisor (a.k.a. the parent company for all the franchises in operation) and decide on an arrangement that suits you both.

However, they may impose strict conditions on how you choose to operate the business. If you’re looking to make something entirely of your own and not conform to the demands of a franchisor, an existing franchise may not be the choice for you.

In summary... pros & cons of buying a franchise

  • You're setting up as a recognised brand
  • greenTickCircle
  • An established customer base providing consistent, ongoing revenue
  • greenTickCircle
  • Existing systems and facilities
  • greenTickCircle
  • Existing processes and operating guidelines
  • greenTickCircle
  • Support from head office if you need it and centralised budgets for the likes of advertising that will benefit you
  • greenTickCircle
  • No delay on business operations (you may be able to hit the ground running)
  • Requires franchisor approval
  • redCrossCircle
  • Existing financials can be complex
  • redCrossCircle
  • Existing equipment or premise leases may expire
  • redCrossCircle
  • You're at risk if the parent company's reputation is damaged
  • redCrossCircle
  • Low flexibility in negotiation with the franchisor

Where to find franchises for sale

A great place to start is to attend one of the franchise conferences organised by the FCA (Franchise Council of Australia) who list their upcoming events on their website.

You can find franchises for sale through:

  • National Franchise Conventions with the - Franchise Council of Australia
  • Gumtree
  • Inside Franchise Business
  • Franchise Direct
  • A business broker

Compare the best business loan options

The type of finance that will suit best depends on your business, what it needs funds for and how soon.

Ready to compare franchise finance options?

Get your best offers from multiple lenders. There's no obligation and checking your rates won't impact your credit score.

FAQs about business franchise loans

Yes it's common for the parent company to offer its own finance solution (known as vendor finance), or to have a preferred lender.

If this is the case, you'll make regular payments to the company you purchased the franchise from, including interest and fees.

This won't always represent the best deal for you, however, and it's worth seeing what external finance deals are available.

When you apply for a franchise loan, the lender will want to see information about you and the business you're buying, plus your plans for operating it once you've bought it. Expect to be asked to provide:

  • Identification documents
  • circle-green-tick
  • Details about your own finances (assets and existing debts)
  • circle-green-tick
  • Details about your experience relevant to the business you're buying into
  • circle-green-tick
  • Information about the franchise parent company and how it is performing overall
  • circle-green-tick
  • A business plan outlining how you will run and grow the business

It generally helps if you can demonstrate to the lender that you are putting in some of your own money. It demonstrates you are serious about the venture (you have 'skin in the game') and it reduces risk for the lender. But it's not always necessary to do this, particularly if you are an established business person with a track record of establishing and growing businesses.

Shaun McGowan Money.com.au founder

Written by

Shaun McGowan

Shaun McGowan is the founder of Money.com.au. He's determined to help people and businesses pay as little as possible for financial products, through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.

Sean Callery Editor Money.com.au

Reviewed by

Sean Callery

Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.


Our Money Promise

Money Pty Ltd (trading as Money) Australian Credit Licence 528698 provides information about credit products and is authorised to do so as the holder of Australian Credit Licence 528698. Money does not compare every Lender all products or issuers available in Australia. We are not a broker or credit provider and when we provide information via this website, we are not providing you with a recommendation or suggestion about a particular credit product.

This material has been prepared by Money Pty Limited (ABN 40 664 954 536) (Money, ‘us’ or ‘we’). Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C). The material is for general information only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with financial or tax advice and does not take into account your objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Money, any of their related body corporates or any other person. To the maximum extent possible, 62C, Money, their related body corporates or any other person do not accept any liability for any statement in this material.

The calculator provided on money.com.au is intended for informational and illustrative purposes only. The results generated by this calculator are based on the inputs you provide and the assumptions set by us. These results should not be considered as financial advice or a recommendation to buy or sell any financial product. By using this calculator, you acknowledge and agree to the terms set out in this disclaimer. For more detailed information, please review our full terms and conditions on the website.


  • The calculations do not account for changes in interest rates or other market conditions that may occur.
  • Results are approximations and may differ from actual payment schedules or amounts.
  • The calculator does not include all fees and charges that you may incur in relation to a financial product.


  • This calculator does not guarantee the availability of any financial product or the accuracy of the calculations. Please consult a financial advisor or the relevant product provider to obtain specific advice tailored to your circumstances.
  • money.com.au does not accept any liability for errors or omissions, or for any loss you may suffer as a result of relying on these calculations.
Money Pty Ltd trading as Money

ABN: 42 626 094 773 / ACL: 528698 / AFCA: 83955
Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C)

Money acknowledges Aboriginal and Torres Strait Islanders as the traditional custodians of country throughout Australia and their continuing connection to land, waters and community.

© Copyright 2024 Money Pty Ltd.