Doug Cullinan is a Senior Vice President SBA Franchise lending expert at Atlantic Capital Bank and understands what it takes to become a Franchisee. How so? He’s a partner in the ownership of four Newk’s Eatery locations in metro Atlanta and is currently in the process of opening his fifth. He knows the requirements to finance a franchise from both the SBA and Franchise avenues. Now, Doug helps other aspiring franchisees in their pursuits.
Leveraging his knowledge of SBA loans and franchise lending, Cullinan has a unique grasp compared to typical lenders in what items are needed throughout the process. Here are three items to check off your list as you consider financing your first franchise:
- Create a business plan. Any financial institution will want to know what your plan is to launch and grow a franchise. Your business plan needs to answer the following questions:
- Do you have a business partner? What value or skills does your partner bring to the relationship?
- What experience or skills do you have that will prove valuable to the growth of your franchise?
- Why did you choose your particular location?
- What is your marketing plan to draw foot traffic to your unit?
- What is your budget? How will you manage cash flow to ensure expenses are kept under control and profit margins are maintained?
Though your plans may change as your business grows, a basic business plan is important for banks to gauge your viability as a franchisee.
- Gather your financial information. Anybody involved in the financials of your business plan will want to determine how you manage your personal financial information. This means you will need to provide your last three years of tax returns as well as statements and personal balance sheets from other businesses you may own. Your personal financial information should be organized and all accounted for when presented.
- Boost your personal credit score. Your personal credit score, more often than not, is as important to lenders as your business experience. Lenders not only look at your capital and capacity to repay loans, they want to know your character. Your personal credit score indicates to lenders your trustworthiness as a borrower. Collateral is not as important for an SBA loan as it is for a conventional loan since the SBA does not lend purely on a collateral basis.
According to Doug, “Franchises do the bulk of vetting franchisees. They go through a rigorous due diligence process before signing the franchise agreement. After signing the agreement, we work with franchisees to secure the financing they need to get started. Our process is simple and streamlined because of how often we have done it.”
The Small Business Administration has granted Preferred Lender Status to Atlantic Capital. Our SBA franchise lending team is led by a franchisee who understands what it takes to be successful. Contact Doug Cullinan if you’re ready to take the next step on your journey to financing your first franchise.