Buying a franchise? Learn how franchise finance works in Australia, why lenders assess both the business acquisition and household position, and how to prepare for smoother approval.
Buying a franchise can be an exciting step. Whether you are purchasing your first franchise, expanding into another territory, or buying an existing trading business, finance is often one of the most important parts of the journey.
At Viewpoint Finance Group, we regularly assist new and existing franchise partners with funding solutions across Australia. While franchise finance can create great opportunities, it is important to understand that the approval process is not always as simple as looking at the business being purchased.
Lenders take a detailed view of the full application. This includes the franchise opportunity, the business model, the applicant’s personal financial position, existing debts, household expenses, and overall ability to repay the proposed loan.
Understanding this early can help franchise buyers prepare properly, avoid delays, and give themselves the best possible chance of finance approval.
A common misconception is that a lender will only assess the franchise business being purchased.
While the business opportunity is important, lenders usually assess franchise finance applications across two key areas:
Both areas need to make sense for the lender to be comfortable with the proposed funding.
When reviewing the business acquisition, the lender will consider whether the franchise opportunity is viable and whether the business can reasonably support the requested lending.
This may include:
For an existing franchise site, lenders will generally want to understand the historical financial performance of the business. For a new franchise site, they may rely more heavily on forecasts, brand performance, location, industry strength, and the borrower’s overall financial position.
In addition to the business being purchased, lenders also take a broader view of the applicant’s personal and household financial position.
This is often where clients are surprised, as the bank is not simply asking, “Is this a good business?” They are also asking, “Can this client or household afford the proposed debt?”
This may include:
Importantly, the household servicing position needs to be clearly evident. This gives the client or clients the best possible chance of approval, as lenders need to be comfortable that the proposed lending is sustainable not only for the business, but also for the broader household position.
Even when the franchise opportunity appears strong, the application may still be impacted if the applicant has high personal debt, limited surplus income, complex business interests, or household expenses that do not support the lender’s servicing requirements.
In many cases, the first conversation about franchise finance focuses on the positives.
This is understandable. A client may be excited about the business, confident in the opportunity, and keen to move forward quickly.
However, as the application progresses, additional information can come to light. This may include undisclosed debts, existing business obligations, tax debts, credit conduct issues, lower-than-expected household surplus, or other financial commitments.
Sometimes the information provided at the start is not the full picture. In other cases, the client may not realise that a certain liability, directorship, or financial commitment is relevant to the application.
These items can change the direction of the finance strategy. They may affect:
This is why early transparency is so important. The more complete the information is upfront, the easier it is to structure the application correctly.
One of the biggest causes of delay in franchise lending is incomplete documentation.
Most lenders will not begin a full assessment until all required documents have been received. This is because credit teams generally prefer to review a complete application rather than going back and forth multiple times.
Depending on the transaction, required documents may include:
Where documents are delayed, incomplete, or provided gradually over time, this can slow the process significantly.
It can also place pressure on all parties, especially where there are settlement dates, onboarding deadlines, training dates, or planned handover dates.
Every application is different, and timeframes can vary depending on the lender, loan structure, complexity of the client’s financial position, and whether property security is involved.
As a general guide:
Major banks will generally take a minimum of 10 business days to provide an initial assessment once the full application and all supporting documents have been submitted.
However, even after the initial assessment, it is common for the lender to ask further questions or request additional documentation.
A more realistic expectation is approximately 15 business days, or around three weeks, for a decision.
In some cases, it may take longer, particularly if the application is complex or requires multiple levels of credit review.
Second-tier and specialist lenders may be able to provide an initial decision within approximately 5 to 7 business days, provided all required documents are available.
Their process can sometimes be less arduous than a major bank, although the pricing, structure, fees, and conditions may differ.
These lenders can play an important role where a major bank is not suitable, where the transaction is time-sensitive, or where the client’s situation requires a more flexible assessment approach.
Once a loan is formally approved, loan documents are generally issued within 48 to 72 hours.
After the documents are signed, witnessed, and returned correctly, settlement or drawdown can usually occur within 3 to 5 business days.
These timeframes assume there is no property security, refinance, or valuation required.
Where property is involved, an additional 5 to 10 business days may need to be allowed for valuations, mortgage documentation, refinance processing, or security registration.
Some franchise loans are unsecured or business-secured. Others may involve residential or commercial property security.
Where property is used as security, the process can take longer because the lender may need to complete additional checks, such as:
While property security can sometimes improve pricing or borrowing capacity, it generally adds extra steps to the process.
For this reason, franchise buyers should allow more time where property is involved.
Preparation makes a significant difference.
Before applying for a franchise business loan, clients should aim to have a clear understanding of their financial position and provide accurate information upfront.
Helpful steps include:
A well-prepared application gives the lender a clearer picture and can reduce unnecessary delays.
At Viewpoint Finance Group, we specialise in franchise finance and business lending.
We work with franchise buyers to understand the full transaction, assess the lending options, and structure the finance application in a way that aligns with both the business opportunity and the client’s personal financial position.
Our role is to help clients understand:
Franchise finance is not just about getting a loan. It is about creating a structure that supports the client, the business, and the long-term success of the franchise opportunity.
For franchise brands, understanding the finance process can also help with onboarding and training timelines.
Finance approval can take time, especially where major banks, property security, or complex financial structures are involved.
Setting realistic expectations early helps reduce pressure on the franchise buyer, the broker, the lender, and the franchisor.
The more prepared the client is from the beginning, the smoother the process is likely to be.
