Many franchises have established relationships with lenders. Check with the franchise you are considering. Also check with www.internationalfranchiseassociation.com. They offer great information on buying a franchise and other franchise related topics.
Many of the challenges in obtaining financing for a franchise are similar to those of any new business lending. It is difficult to get a bank loan for a new business. The simple truth is that new businesses are risky and bankers are conservative. Lenders want to make “safe” loans and many small businesses “strike out” every year. Franchises can have an advantage if you can demonstrate a record of success.
When approving loans, lenders look at the four C’s; credit, collateral, commitment, and capacity. What is your credit score? Do you have any hard asset collateral to pledge like real estate? How much money are you contributing? What are you bringing to the party? Who’s invited to the party (your target market); how viable is your project (industry trends)? Finally, can you make the payments with and without the business?