Ron Feldman
speaker
3,922 appearances
11 recordings
1 series
first heard Jun 2010
last heard Dec 2020
Ron Feldman’s voice in public audio — every appearance, attributed to the second.
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Appearances
It's an ongoing effort.
Well, I'll talk first about investment size.
There's a cost to a bank to write an SBA loan, and I'll speak specifically to SBA.
And that cost doesn't change whether it's a $30,000 loan or a $3 million loan.
The same level of documentation has to happen because SBA requires it.
So banks are not going to do small $50,000 or $100,000 startup SBA loans in the 7A program because it costs them too much to originate it.
I see a lot of franchisors trying to go out and get SBA loans in many of the smaller investment-sized brands when their chances of success are minuscule.
There's another product called SBA Express, but that only carries with it a 50% guarantee.
So a bank is going to have to weigh that against somebody starting a brand new business that has no history.
So from the investment size piece, you really need to know what banks are looking at in terms of a minimum loan size and see if you fit in.
And if you don't, then don't go there because you're just going to keep rowing upstream and you're not going to get anywhere.
From a
From a system standpoint, I can't tell you how many times I see an FDD where they might have had, you know, 10 company-owned units before they franchised but don't disclose any of the metrics in their FDD in item 19 about those units.
So the banker doesn't understand the brand, doesn't understand the metrics behind the brand, and how can they make an intelligent decision on whether to make a loan?
It doesn't make any sense.
to a banker.
So there's a whole level of disclosure that needs to happen because that one thing I know bankers aren't going to do, and when you have that item 19 that is the blank one that says we make no representation, whatever that paragraph of death is, is what I call it, a banker is not going to call other franchisees to get validation on how much money their borrower is going to make.
They're just going to throw the application in the trash.
And that's really –
why specifically when you have a younger brand, a less mature brand, or a brand entering a new market for the first time, you really need to put together a franchisee toolkit that they can go to the bank with.
Showing 1781–1800 of 3,922 · page 90 of 197
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