Franchise finance
Compare Franchise
Finance
What we do
Compare Advantage is a free comparison service. Tell us which franchise you are buying and what it will cost, and our partner, FCA-authorised broker Halo Corporate Finance, checks your enquiry against the 130+ lenders on its panel, for the loan, the vans and equipment, and the working capital to get you open.
- New franchises, resales and second units
- Loans plus asset finance for vans, kit and fit-out
- Lenders that know franchise models
Prefer to talk? Call 0330 057 7175
- 130+ lendersOn our partner’s panel
- £5k to £1mLoans and asset finance
- One enquiryInstead of one per lender
- FCA-authorised partnerHalo Corporate Finance
- Free to enquireNo obligation to apply
Compare before you apply
Do not take the first lender the franchisor suggests
Most franchisors can point you to a lender that knows their brand. That is useful, and the offer may be good, but it is still one lender. Others on the panel may lend more, ask for less security, or fund the vehicles and equipment more cheaply through asset finance. Comparing before you sign the franchise agreement gives you a clear picture of what the whole opening will really cost.
- 1
Tell us once
Two minutes on the form: how much, what it is for and a few details about the business.
- 2
The panel is checked
Halo Corporate Finance matches your enquiry against the 130+ lenders on its panel.
- 3
You choose
Halo talks you through the options that fit. You decide whether to apply. There is no obligation.
What to compare
- The franchisor’s preferred lender against the panel. Many franchisors have a bank they work with. It knows the brand, but it is one offer. See what else is available.
- One loan against a mix. Vans and equipment are often cheaper and easier to fund through asset finance, leaving a smaller loan for the fee and working capital.
- Repayments against the ramp-up. A new unit takes time to reach full sales. Check whether a lender offers a lower start or a capital repayment holiday.
- Personal guarantees and security, which most lenders will ask for on a new franchise. Know what you are putting at risk.
- The total cost over the term, including arrangement fees and any charge for paying early if the business does better than planned.
What you are paying for
The franchise fee is only part of the cost
A common mistake is to borrow for the fee and fit-out, then run short of cash in the first months. Budget for all six.
Franchise fee
The up-front fee for the licence, training and launch support.
Premises and fit-out
Shop fitting, signage, deposits and legal costs on a lease, for premises-based franchises.
Vehicles and equipment
Liveried vans, kitchens, machines, IT and tools specified by the franchisor.
Working capital
Wages, stock, local marketing and your own living costs until the unit pays its way.
Ongoing fees
Management service fees or royalties and a marketing levy, usually a share of turnover. Build them into the forecast.
Professional advice
A solicitor to review the franchise agreement, and an accountant to test the numbers.
Putting it together
Building the funding mix
Most franchises are funded from more than one source. Matching each cost to the right kind of finance usually lowers the total, and keeps the business loan to a size you can comfortably repay.
Your own money
Lenders expect you to put in part of the cost yourself. It shows commitment and lowers what you need to borrow.
A business loan
For the franchise fee, fit-out and working capital. Lenders that know franchising look at the brand’s record as well as your plan.
Asset finance
For vehicles and equipment. The asset secures the agreement, so it is often easier to get and spreads the cost over the asset’s life.
A Start Up Loan
A government-backed personal loan of up to £25,000 per person, which can sit alongside other finance. Applied for directly.
The lender’s view
How lenders assess a franchise
The brand
How long it has franchised, how many units trade, how many have closed, and how the existing franchisees are doing. A proven model is the main reason a franchise can be easier to fund than a new independent business.
You
Your experience, your personal credit and how much you are putting in. Lenders want to see that you can run the unit, and that you can survive a slower start.
The location
For premises-based franchises, the site, the lease terms and the local catchment. The franchisor’s site approval helps, but lenders form their own view.
The numbers
A cash flow forecast built on realistic sales, with the ongoing fees included. Lenders will test it, so test it yourself first.
Franchising in figures
A large, established part of UK business
The 2024 National Franchise Survey, the first since 2018, counted more than 50,000 franchise units across the UK.
£19.1bn
contributed to the UK economy by franchising, according to the 2024 National Franchise Survey
1,009
franchise systems operating in the UK in 2024
89%
of franchise units reported being profitable in the 2024 survey
Source: British Franchise Association and NIC Services Group, National Franchise Survey 2024 (October 2024).
Before you borrow
Check the franchise as hard as the lender will
- Have a solicitor who knows franchising review the franchise agreement, especially the term, renewal, exit and restrictions after you leave
- Speak to several existing franchisees, not only the ones the franchisor suggests
- Ask how many units have closed or changed hands, and why
- Ask your accountant to rebuild the franchisor’s projections with cautious sales
- Check whether the franchisor is a member of the British Franchise Association
What is franchise finance?
Funding to buy and open a franchise: the franchise fee, premises, equipment, vehicles and working capital. It is usually a mix of a business loan, asset finance and your own money, rather than a single product.
Is it easier to borrow for a franchise than a new independent business?
Often, yes. A lender can look at how the brand’s other units perform, which reduces the risk compared with an untested idea. You will still need a personal stake, a credible plan and usually a personal guarantee.
How much of the cost will a lender fund?
It depends on the brand, your own contribution, your experience and your credit. Lenders typically expect you to put in a meaningful share yourself. Halo can tell you what lenders on the panel will consider for your franchise.
Does it matter if the franchisor is a BFA member?
It can help. British Franchise Association members are reviewed on the viability of their model, how well it can be transferred to franchisees, the information they disclose and their ethics. Lenders may take comfort from that, but it is not a guarantee of success.
Can I use asset finance for franchise vans and equipment?
Yes, and it is often the most efficient way to fund them. See our vehicle finance and equipment finance pages.
Can I get franchise finance with no business experience?
Many franchisees have never run a business before; the franchisor’s training is part of what you are buying. Lenders will look at your transferable experience, your personal finances and the brand’s support.
Can I finance buying an existing franchise?
Yes. Buying a resale means the lender can look at that unit’s actual accounts, which can make it easier to fund than a new opening. The franchisor will usually need to approve you as the buyer.
Can I get finance for a second franchise unit?
Yes. With a first unit trading, lenders can look at your own results, which often makes the second easier to fund than the first.
What should I check before I borrow?
Read the franchise agreement with a solicitor, speak to existing franchisees about their real results, and test the franchisor’s projections with your accountant. Borrow against realistic figures, not the best case.
Can I use a Start Up Loan for a franchise?
Start Up Loans can be used to start a business, including a franchise, at up to £25,000 per person. You apply to the programme directly. See our new business loans page for the current terms.
Sources
- British Franchise Association: 2024 National Franchise Survey (October 2024)
- British Franchise Association: franchisor membership
- Start Up Loans: changes to interest rate and eligibility
- Halo Corporate Finance: products
- FCA register: Halo Corporate Finance Ltd (FRN 726655)
Written by the Compare Advantage team, Chorley. Facts checked against the sources above on 4 November 2026. This page is general information, not financial advice.
Compare Advantage Ltd (FRN 1028452, company no. 14289362) is an Introducer Appointed Representative of Halo Corporate Finance Ltd (FRN 726655). We introduce business finance enquiries to Halo. We are not a lender and do not give financial advice. If you take out finance, the lender may pay commission to Halo Corporate Finance, and Halo may pay us a fee for the introduction. Finance is subject to status and is available to UK businesses only.