Business loans for franchise businesses
Wednesday 10th September 2025
Last updated: 15th January 2026
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Cash flow challenge: Franchise businesses facing significant upfront costs including franchise fees, equipment, and setup expenses before revenue begins to flow, putting early pressure on cash flow.
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Perfect for: Entrepreneurs looking to launch, acquire, or expand a franchise, and existing franchise owners seeking finance to grow, hire staff, or invest in equipment.
Novuna helps franchise businesses access fast, flexible funding to support their ambitions either through our award-winning in-house lending services or by comparing trusted UK finance providers to find the right solution for your business.
What is a franchise business loan?
A franchise loan is a type of business finance designed to help franchisees fund startup, acquisition, or growth costs associated with running a franchise.
This funding can cover:
- Franchise fees and setup costs
- Premises refurbishment or fit-out
- Equipment and vehicles
- Marketing and launch campaigns
- Staffing and payroll costs
- Working capital for ongoing operations
Unlike standard business loans, franchise loans are tailored to the needs of franchise systems where the brand, business model, and expected cash flow are already established.
Why franchise businesses use loans
Franchise loans help owners and investors:
- Launch a new franchise location with confidence.
- Manage upfront costs without depleting personal savings.
- Maintain healthy cash flow during the first trading months.
- Fund new marketing or staff recruitment drives.
- Expand operations by opening additional locations.
Because franchise businesses operate within proven models, lenders often view them as lower risk, which can make financing quicker and easier to secure.
Types of business loans for franchisees
| Loan Type | Purpose | Typical Range | Key Benefit |
| Start-up loans | Launch a new franchise | £5,000–£25,000 | Fixed rates, government-backed |
| Unsecured business loans | General franchise funding | £10,000–£500,000 | No collateral required |
| Asset finance | Purchase or lease vehicles, equipment, or furniture | £5,000–£1m | Spread costs over time |
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Working capital loans |
Manage day-to-day operations | £10,000–£250,000 | Stabilise cash flow |
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Merchant cash advances |
BRetail or hospitality franchisesased on invoice value | £5,000–£300,000 | Repay via a % of card sales |
Benefits of franchise business loans
- Tailored to your business: Designed specifically for franchise models with predictable income streams.
- Flexible terms: Choose repayment schedules that suit your cash flow.
- Fast approvals: Access funding within days, not weeks.
- Supports scalability: Expand to new territories or upgrade existing sites.
- Strengthens stability: Maintain consistent cash flow through seasonal or growth periods.
How to apply for a franchise loan
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Prepare your business plan: Include details of your franchise agreement, revenue forecasts, and expected costs.
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Gather key documents: Business registration, proof of ID, bank statements, and franchisor approval.
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Choose your funding type: From unsecured loans to asset finance.
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Apply through Novuna: We’ll help you find and secure the right finance structure for your goals.
Our process is straightforward, transparent, and designed to get funding to your business quickly.
Franchise loans vs general business loans
| Feature | Franchise Loan | General Business Loan |
| Purpose | Designed for franchise models | Broad business use |
| Lender familiarity | Lenders understand franchise cash flow | Generic risk assessment |
| Approval speed | Faster, due to proven business model | Variable |
| Security | Often unsecured | May require collateral |
| Ideal for | Franchise startups and expansions | Established, standalone businesses |
When franchise loans work best
Business loans for franchise businesses are ideal when you need funding for:
- Launching a new franchise location
- Expanding into new regions
- Upgrading your premises or equipment
- Managing seasonal cash flow
- Marketing or recruitment drives
Whether you’re part of a hospitality chain, retail franchise, or service brand, a tailored finance facility can help you scale sustainably.
How Novuna Business Cash Flow can help
At Novuna, we understand the challenges and opportunities franchise owners face, from securing startup finance to managing multiple locations.
Get in touch with our experts today and we will help you find a great fit for your situation.