Bank Lending for Small Business Franchises with Ben Johnson, VP of Commercial Lending at First Bank Texas. He explains the potential advantages of securing financing for a first-time franchise business and why a franchise may provide an advantage from the bank’s perspective. Ben shares the types of loan programs, including the SBA 7A, and what a bank is looking for to qualify.
Ben Johnson is VP of Commercial Lending at First Bank Texas. He is a Lender, Certified Business Appraiser, Experienced Senior Business and Credit Analyst and Portfolio Manager, Loan Broker, and Financial Services Professional. Previously he was an independent Business Consultant, working with Centinel Financial Corporation and North Texas Appraisers to help business owners conduct funding transactions, facilitate the successful purchase or sale of their business, and provide accredited business valuation services.
Ben lives in Dallas/Ft. Worth area.
The topics and questions we cover in this episode include:
- What are some of the unique advantages of a franchise business, when it comes to potentially securing a bank loan?
- Are there any disadvantages, or perhaps types of franchise businesses that as less favorable, from a lending perspective?
- What are the common types of loans (i.e. conventional, SBA) you often see franchise businesses qualify for?
- What is a typical or expected LTV?
- What are acceptable sources of the cash portion?
- What is the bank looking for?
- Do I need a Business Plan?
- What weight is given to the franchise? What do they need from the franchisor?
- Will I still have to personally guarantee the loan?
- Do I need to have previous business ownership experience?
- Does a stable and proven franchise potentially allow me to overcome a poor credit score or history?
- What is the process, at a high-level from initial inquiry to closing on a loan, and how long does it typically take?
NOTE: This information is provided for educational purposes only, and in no way is a guarantee or offer of credit.
Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.
Related Lending Episodes: