Franchise loan calculator

This simple franchise loan calculator helps you understand the cost of your loan. See monthly interest & repayment amounts, as well as total interest & cost.

Page written by Ian Hawkins. Last reviewed on July 9, 2024. Next review due April 1, 2025.

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This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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Monthly payments

Avg. monthly interest

Total interest

Total cost of finance

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What is a franchise loan?

A franchise loan is a type of financing designed specifically to help individuals start or expand a franchise business in Canada. It covers various initial and ongoing costs associated with franchising, including:

Franchise fees: The initial fee paid to the franchisor for the rights to open and operate a franchise location.
Equipment: Funds for purchasing necessary equipment, such as kitchen appliances for a restaurant franchise or fitness machines for a gym franchise.
Working capital: Money used to cover day-to-day operational expenses, such as payroll, rent, utilities, and inventory.
Leasehold improvements: Financing for modifications or improvements to a leased space to meet the franchise’s operational standards and brand requirements.
Marketing and advertising: Initial marketing efforts to attract customers to the new franchise location.

Franchise loans are tailored to meet the specific financial needs and challenges of franchisees, providing the necessary capital to ensure a successful launch and ongoing operations.

How do I qualify for a franchise loan in Canada?

Qualifications for a franchise loan in Canada vary by lender, but generally include:

Good credit score: A strong personal and/or business credit score demonstrates your ability to manage debt and makes you a more attractive candidate to lenders.
Solid business plan: A comprehensive business plan that outlines your franchise concept, market analysis, financial projections, and operational strategy. This plan shows lenders that you have a clear path to profitability.
Collateral: Some lenders may require collateral to secure the loan. This could be personal assets, business assets, or even the franchise itself.
Franchise agreement: A signed franchise agreement with the franchisor indicating that you have been approved to operate a franchise location.
Experience and background: While not always required, having relevant industry experience or a background in business management can strengthen your loan application.

Read about how to get franchise loans easily with Swoop.

Can I use a franchise loan for any franchise in Canada?

Not necessarily. Most Canadian lenders have a list of approved franchises that they are willing to finance. This list typically includes well-established and reputable franchise brands with a proven track record of success. To ensure your franchise is eligible for a loan, you should:

Check with Your Lender: Confirm that the lender you are approaching finances the franchise brand you are interested in.
Franchisor’s Preferred Lenders: Some franchisors have preferred lenders who are familiar with their business model and offer favourable terms to their franchisees.

Read more about getting specific franchise loans like McDonalds franchise, Domino’s franchise, Chick-fil-a franchise, Popeyes and many more.

What are the typical terms for a franchise loan in Canada?

The terms of a franchise loan in Canada can vary widely depending on the lender and the specific loan product. Common terms include:

Loan amount: The total amount you can borrow varies based on the franchise’s needs and the lender’s policies. It can range from tens of thousands to several hundred thousand dollars.
Interest rates: Interest rates depend on your creditworthiness, the lender, and current market conditions. Rates can be fixed or variable and typically range from 5% to 12%.
Loan term: The duration for repayment can be short-term (1-5 years) or long-term (up to 25 years), depending on the size and purpose of the loan.
Repayment schedule: Monthly repayments are the most common, but some loans might offer quarterly or bi-annual payments. The repayment schedule should align with your business’s cash flow.
Fees: Be aware of additional fees such as origination fees, application fees, and prepayment penalties.

Secure franchise funding with Swoop

Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new business like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across Canada. Just tell us what you need and leave the rest to us.