Short answer: Financing preparation starts before the loan application. A candidate should know the complete uses of funds, available equity, proposed ownership structure, personal financial position, site assumptions, projected cash flow, and the amount of working capital needed through opening and ramp-up.
Build a complete sources-and-uses schedule
List every expected use of funds, including franchise fees, lease and construction costs, equipment, professional fees, opening inventory, pre-opening payroll, deposits, marketing, and working capital. Then identify the source of each dollar: owner equity, partner equity, landlord allowance, seller financing, or proposed debt.
The schedule should reconcile to the site budget and FDD estimates. Gaps, double counting, or unsupported allowances will weaken the financing request.
- Total project cost and contingency
- Cash equity and verified liquidity
- Loan request and eligible uses
- Landlord contributions and payment timing
Prepare the borrower and operating story
Lenders evaluate the people as well as the concept. Explain ownership percentages, relevant management experience, who will run daily operations, how managers will be recruited, and how financial controls will work.
Prepare personal financial statements, tax returns, resumes, credit explanations where needed, entity documents, and partner information. Requirements vary by lender and program.
- Ownership and guarantor information
- Restaurant or management experience
- Operational role and management plan
- Credit, collateral, and liquidity documentation
Make projections transparent
Build monthly projections for the opening year and annual projections for later years. State the assumptions for transactions, average check, sales channels, seasonality, labor, food, occupancy, fees, debt service, and taxes.
SBA does not lend money directly through the 7(a) program; participating lenders make loans with an SBA guarantee, subject to eligibility and underwriting. No program or franchisor can guarantee approval.
- Show base and downside cases.
- Tie sales assumptions to the actual trade area.
- Allow for opening delays and ramp-up.
- Explain how the business services debt.
How this connects to Russo's
Russo's publishes candidate financial qualifications and current estimated investment information so applicants can have a more informed financing conversation. Independent lenders make all credit and approval decisions.
Use these Russo's resources to continue your research:
Sources and decision guidance
This article is educational. Franchise terms come only from the current disclosure documents and signed agreements. Candidates should use qualified legal, accounting, financing, real-estate, and business advisers where appropriate.
- SBA 7(a) loan program
- SBA Lender Match preparation checklist
- SBA guidance for planning and buying a business or franchise
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