Franchise loans in Australia, approved on property

Franchise loans in Australia are business loans used to buy, open or upgrade a franchise, covering the franchise fee, fit-out, equipment, opening stock and the working capital to get through the first months. We secure them over a house, unit or commercial building, lend between $20,000 and $5,000,000, and don’t depend on whether the brand is on a particular bank’s approved list. With a same-day answer common, you can have the money settled before the franchisor’s paperwork deadlines bite.

How do franchise loans in Australia work?

Franchise loans work like any other property-secured business loan: we lend against equity in a property owned by you, your company’s directors or a guarantor, and you use the money for the franchise. The decision rests on the property, the total cost of the franchise and how the loan will be repaid.

That’s a different approach from the usual bank route. Banks often run franchise lending through accreditation programmes, where they assess a brand’s system and then lend to its franchisees on set terms. If your brand isn’t on their list, or the bank wants a deeper look at a resale site’s figures, the process slows down. With property as security, the brand’s bank status doesn’t decide anything. Our full range of structures is on the products page.

What does a franchise actually cost to fund?

A franchise costs much more than the franchise fee, and the fee is often the smaller part. Fund the whole list or you’ll be back asking for money a month after opening.

The franchise disclosure document is your best guide. Under the Franchising Code, it has to set out the costs of setting up and running the franchise, any significant capital expenditure you’ll be expected to make, and the franchisor’s financial reports for the past two financial years. Use it to build the budget, and add a buffer.

How does the Franchising Code timetable affect your finance?

The Code builds in waiting periods, and a fast lender lets you use them for checks rather than for chasing money. The current Franchising Code of Conduct has applied since 1 April 2025, with some rules starting on 1 November 2025, and the ACCC’s guidance sets out the timings that matter for your money:

1. Information statement. The franchisor gives it within 7 days of you showing interest, before any other documents.
2. Disclosure document, agreement and Code. These must reach you at least 14 days before you enter the franchise agreement.
3. Finance approval. Send us the costs and property details during that 14-day period; approval usually comes the same day.
4. Advice and checks. Use the rest of the period to talk to your accountant and lawyer and to current and former franchisees, whose contact details the disclosure document lists.
5. Signing. Sign the agreement knowing the money is approved.
6. Cooling-off. You can end a new franchise agreement within 14 days of entering it, and the franchisor must refund your money within 14 days of being told, less any reasonable expenses the agreement spells out.

The point of the cooling-off period is to let you change your mind, not to scramble for funding. Lining up approval early keeps it that way. When you have the disclosure document, get your franchise finance approved before you sign.

Buying a franchise with property security: how much can you borrow?

When buying a franchise with property security, the amount comes down to three numbers: a realistic value for the property, the debt already registered against it, and the true all-in cost of the franchise. We lend against the equity, leaving a margin, and size the loan to the full budget rather than just the fee.

A home with a modest mortgage often supports the whole cost of a small franchise. A larger site, such as a food outlet with a full kitchen fit-out, may need a commercial property or a second residential property as well. The structure can be a first mortgage, a second mortgage behind your home loan, or a caveat for a short bridge. Business financials aren’t always needed, because the property and the exit carry the deal.

Does finance differ for a new site or a resale franchise?

Yes, mainly in timing and in what the exit looks like. A new site has no trading history, a longer lead time and a fit-out to fund. A resale has an operating record, a fixed settlement date and stock at valuation to pay for on the day.

For a new site, plan for staged payments to the fit-out builder and a cash reserve that covers wages, rent and royalties while trade ramps up. For a resale, the vendor and the franchisor will both have dates, and the franchisor’s consent to the transfer is part of the critical path. A resale is effectively buying an existing business, so our page on funding for buying a business is worth reading alongside this one. If you’re starting an independent venture rather than a franchise, see start-up business loans.

Can existing franchisees get fast franchise finance for refits?

Yes. Fast franchise finance isn’t only for buyers; existing franchisees regularly need money for a required refurbishment, a renewal, relocation to a new site or a transfer fee. Franchise agreements often require a refit at set points in the term, and the cost can arrive when cash is tight.

Because the decision rests on property security, a refit loan can be approved quickly without waiting on full-year accounts. Hospitality franchisees, in particular, deal with this often; our page on hospitality business loans covers that sector’s cash-flow patterns.

Illustrative example: buying a resale food franchise

Illustrative example: a couple agree to buy an established café franchise for $380,000, with stock at valuation of about $20,000 and a $30,000 transfer and training cost payable to the franchisor. The vendor wants settlement in five weeks. Their bank needs the franchisor’s figures, an accountant’s review and a valuation, and estimates eight weeks.

They own a home worth $1,300,000 with $450,000 owing. We approve $450,000 by second mortgage the day after their enquiry, covering the price, stock, the franchisor’s charges and a working capital buffer. The franchisor sees the approval and consents to the transfer, and settlement happens on the vendor’s date. The exit is a bank refinance after nine months of trading under the new owners.

The figures are round and illustrative only. What made it work was simple: the buyers had the disclosure document, a full cost list and their home loan statement ready on the first call, so there was nothing to chase.

Two details are worth copying. First, they asked the franchisor in week one exactly what proof of funds it needed for the transfer. Second, they borrowed enough to cover royalties and wages for the first quarter, so a slow start wouldn’t force them back to the lender.

What exit works for a franchise loan?

The most common exit is a refinance to a bank once the site has a trading record under your ownership, usually six to twelve months. Other exits include the sale of another property, the settlement of a business you’re leaving, or repaying a smaller refit loan from trading profits over the term.

Plan the exit when you plan the purchase. A bank looking at a refinance will want clean records, a healthy remaining term on the franchise agreement and evidence the site is performing. Fast private funding is more expensive than a bank loan; its job is to secure the site now and step aside for cheaper money once you’ve proven the business.

Talk to us before you sign

There’s no credit check just to find out whether your franchise purchase works, and your details aren’t handed to a queue of other lenders. A lender who understands franchise timetables and urgent settlements reads your file and comes back quickly with a direct answer, including a clear no if the numbers don’t work. Fill in the enquiry accurately, with the full franchise cost and the property details, so the first answer stands. Start your franchise loan enquiry or call 1300 852 150.

Written by the BizLoansFast lending team · Updated 2026-10-05