Loan Payment / SBA Calculator for Franchise

SBA 7(a) loans are the single most common financing path for franchise purchases — and for good reason. The SBA maintains a registry of approved franchise brands, and if your franchise is on that list (most established systems are), the loan approval process is streamlined compared to financing an independent startup. The SBA 7(a) program offers up to $5 million in financing with terms up to 10 years for working capital and 25 years for real estate. Interest rates are typically Prime + 1.5–2.75% depending on loan size. The key metric lenders evaluate is your Debt Service Coverage Ratio (DSCR) — your net operating income divided by your total debt payments. For franchise loans, lenders typically require a DSCR of 1.25 or higher, meaning your franchise must generate $1.25 in operating income for every $1.00 in debt payments. Here's where FDD Item 19 becomes invaluable: if the franchisor's Franchise Disclosure Document includes Financial Performance Representations (the section where they may disclose actual revenue and profitability data from existing locations), lenders can use that data to project your revenue more confidently. Franchises with strong Item 19 data often get faster approvals and better terms. You'll typically need 10–20% down payment from your own funds (not borrowed), strong personal credit (680+), and relevant industry or management experience. The initial franchise fee, buildout, equipment, inventory, and working capital all roll into the SBA loan. Budget $2,000–$5,000 for a franchise attorney to review the FDD before you commit — it's the best money you'll spend in the entire process.