Subway Franchise Loan

How do you qualify for a Subway franchise loan?

Costs can vary depending on the size of the store and their location to prime commercial centres but, generally speaking, banks tend to favour Subway over other franchise models.

How much can I borrow?

Depending on the strength of your case, you’re eligible for the following with some of our commercial lenders:

• Existing store: Borrow up to 70% of total business costs or 100% with an existing residential property as security.
• New store: Borrow up to 60% of the business value.
• Loan term: Typically 10 years or the length of the franchise agreement.
• Loan term with property as security: 25 to 30 years (standard loan term).
• Interest rate discounts available.
• Low doc options not available.
• Past experience and business plan needed. Actual requirements vary from lender to lender.

Which lender can help me?

It really depends on your overall situation including whether you have your own property to put towards the purchase and the amount you have in working capital.

Please call us on 1300 889 743 or complete our free assessment form to find out if you’re eligible for a Subway franchise loan.

How do I qualify?

There are no hard and fast rules with a franchise loan but it’s best to think of it like putting together a resume for a job: you have to highlight your strengths.

So, if you’re buying an existing Subway franchise, the business would have to be generating a certain amount of earnings before interest, tax, depreciation and amortization (EBITDA).

As part of this process, the bank will be thoroughly checking the business financials of the existing franchisee.

If the business is in a good financial position and generating strong profits, it’s probably because the store is benefitting from a prime location and was well-managed.

With the help of a business accountant, you’ll need to draft a business plan that shows working capital requirements and revenue forecasts for the franchise you want to buy and show specifically how you intend to turn around a poor performing business.

Other requirements include:

• 2 years personal and/or business financials including tax returns if you were previously running your own doughnut store or bakery.
• Evidence of prior experience in running a doughnut store or a store in a similar industry in a managerial capacity (usually 2-3 years).
• Debt To Service Cover Ratio (DSCR) of around 1.5 times.

The steps involved in buying a franchise

Make an enquiry with Subway

If you’re interested in owning a Subway franchise, contact their franchise department and request a Uniform Franchise Offering Circular (UFOC).

This is essentially the franchise kit which covers such information as:

• Litigation.
• Bankruptcy.
• Initial franchise cost and ongoing fees.
• Initial investment.
• Restrictions on what you can sell.
• Subway’s obligation.
• Your obligations as franchisee.

There are restrictions and responsibility such as trademarks and patents so you should read the UFOC carefully and even seek out the advice of your solicitor before signing up to anything.

In particularly, don’t lay down any funds unless you know you’ve been pre-approved for a Subway franchise loan.

Request a franchise kit at subway.com.au.

Ask as many questions as possible including what’s included in the purchase and even speak to franchisees about their experience work with Subway.

As part of the process you’ll also generally need to have a face to face interview with the area manager for your location.

They will assess your past business and work experience and work out if you’re a good fit to run your own store.

Just bear in mind, this has nothing to do with your eligibility to a Subway franchise loan with a bank or lender.

Speak to a mortgage broker who can properly assess your situation and tell you whether you qualify for a franchise loan.

Call 1300 889 743 or complete our Subway franchise FAQs

It’s widely known that Subway has one of the lowest start-up costs in the major fast food restaurant franchise sector.

Call us on 1300 889 743 or complete our free assessment form today so we can assess your situation and come back to you with an indicative funding approval.