A few weeks ago in my regular space over on the Small Business Blog, I said I thought the economy had essentially hit rock bottom and we were, albeit slowly, headed back to better times. And according to Bernie Siegel, chairman of Siegel Financial Group, the franchise financing picture is looking up as well.
Siegel told Chain Leader magazine that “Good deals are getting done; few, but they are getting done.” Although many lenders have left the space, Siegel expects to see new lenders entering the fray, partly driven by the SBA’s (Small Business Administration) efforts to boost commercial lending by upping their loan guarantee to 90 percent. Siegel also advises prospective franchisees to try approaching regional banks for a loan.
Potential borrowers need to have a good credit history. Siegel says the lenders are looking for would-be franchisees to put down a minimum of 25 percent of the total amount of the loan.
Though the economic outlook may indeed by looking up, Siegel believes, “Extreme measures are necessary in this market to get lending going.”