For Love Of Java

Financing 101

No-hassle loans for franchise borrowers

By Lori Francisco

For many entrepreneurs, a franchise opportunity is very appealing--nationwide support, guidance, an established name--but the cost usually isn't. Often the problem is where to find financing. Well, look no further. Since 1993, the AMRESCO Business Lending Group has originated more than $1 billion in loans, much of which went to franchisees.

Based in Dallas with loan offices nationwide, AMRESCO is a diversified financial services company that specializes in commercial and residential real estate as well as asset management services and commercial finance. In 1993, the company began franchise lending, providing financing to franchisees of Burger King, Taco Bell and KFC.

"Since our inception, the franchise borrower has been a vital part of our business," says Marvin Franklin, AMRESCO's managing director. "We strongly feel franchisees are a critical part of our transaction pipeline and a critical part of the restaurant finance industry." The company looks not only at the structure of the transaction in terms of loan devaluation and fixed charge cover ratios, but also the borrower's credit history in terms of payment consistency, credit lines and whether he or she has ever filed for bankruptcy.

AMRESCO is a cash-flow-based lender, so there's no maximum loan amount; the money can be used to refinance existing units, acquire additional units, develop new units, remodel existing facilities, enhance returns on capital or consolidate existing debt. Many loans are non-recourse, meaning they don't require the loan to be guaranteed by the borrower.

Bryan Applefield, president of Goldco Inc. in Dothan, Alabama, and a Burger King franchisee for 19 years, is one of AMRESCO's biggest supporters. Applefield says, "They're focused on serving the customer and are able to analyze deals very quickly; give you clear, concise answers; and then follow through expediently. That's important in this business."

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This article was originally published in the June 1999 print edition of Entrepreneur with the headline: For Love Of Java.

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