Buying into a franchise or purchasing an existing business can be a smart path to ownership — especially if you want to avoid the uncertainty of starting from scratch. But one of the first and biggest hurdles is finding the right finance to make it happen.
In this article, we’ll walk through the main ways to fund a franchise purchase in Australia, including small business loans, equipment finance, vendor finance, and other useful strategies.
Table of Contents
- Why Buy a Franchise or Existing Business?
- How Much Do You Need to Finance a Franchise?
- Top Franchise Financing Options in Australia
- Tips to Improve Your Loan Eligibility
- Talk to a Finance Broker Before You Commit
Why Buy a Franchise or Existing Business?
Franchises give you the advantage of:
- A proven business model
- Established branding and systems
- Ongoing training and support
- Easier access to finance than startups
Similarly, purchasing an existing business means you can step into operations that are already running — with staff, customers, and revenue in place. But both paths usually require a substantial upfront investment.
How Much Do You Need to Finance a Franchise?
Franchise costs vary widely depending on the brand and industry. Expect to cover:
- Franchise purchase or licence fee
- Fit-out or refurbishment
- Equipment and stock
- Legal and setup costs
- Working capital for early operations
In Australia, franchise setup costs can range from $50,000 to over $500,000, depending on the type of business and its location. That’s why it’s important to explore all available business finance options early on.
Top Franchise Financing Options in Australia
Let’s break down the most common funding options:
1. Secured Business Loans
A traditional small business loan secured against property or assets. Offers lower interest rates and higher borrowing limits but requires collateral.
Best for: Buyers with equity in property or an existing business.
2. Unsecured Business Loans
No collateral needed, but rates are typically higher. These loans are often used to cover part of the upfront franchise fee or short-term working capital.
Best for: Applicants with strong credit history and cash flow.
3. Equipment Finance
If your franchise requires machinery, vehicles, or commercial equipment, equipment finance lets you pay it off over time. The asset itself usually serves as security.
Best for: Hospitality, transport, health, retail, and trade franchises.
4. Vendor Finance (Seller Finance)
Sometimes, the franchise seller or business owner may agree to finance a portion of the sale. You repay them over time, often in combination with a bank or lender loan.
Best for: Private business purchases or smaller franchise groups.
5. Line of Credit or Overdraft
Flexible, revolving access to funds. Can be used to manage working capital during the early months of ownership.
Best for: Buffering against seasonal or early cash flow fluctuations.
6. Franchise-Friendly Lenders
Some lenders in Australia have dedicated programs for major franchise groups and may offer pre-approved finance, making the process quicker and easier.
Tip: Ask the franchisor if they have preferred lenders or partners.
Tips to Improve Your Loan Eligibility
Getting finance for a franchise or existing business purchase is easier when you:
- ✅ Prepare a clear business plan and revenue forecast
- ✅ Show experience in the industry (or relevant management skills)
- ✅ Have equity or savings to contribute to the purchase
- ✅ Provide up-to-date personal and business financials
- ✅ Demonstrate the franchise’s past performance (if buying an existing outlet)
A finance broker can help you package and present your application to improve your chances of approval — especially if you’re new to business ownership.
Talk to a Finance Broker Before You Commit
Franchise and business acquisition finance can be complex. Lenders will want to know you’ve done your homework — and that your finances stack up.
At Capital Plus Finance, we work with over 40 lenders to help Australian business owners fund franchise purchases, expansions, and fit-outs. We’ll help you compare options and find the best loan structure for your goals, cash flow, and industry.
👉 Contact Capital Plus Finance to discuss your franchise finance needs and take the next step toward business ownership.
About Capital Plus Finance
Based in Sydney, Capital Plus Finance is an experienced equipment finance broker and small business lending expert. We help Australians buy franchises, purchase equipment, and manage cash flow with tailored finance solutions. Learn more at capitalplusfinance.com.au.
