The Situation: Start-up Capital For New Franchise Location


After a successful career of more than 20 years as a manager in IT sales/service/operations, our client decided to pursue his entrepreneurial dream and open a new café in the Richmond, Virginia area. After due diligence, he decided on a My Favorite Muffin franchise. Although he had held management roles in the restaurant industry earlier, the franchisor’s support and training was attractive. However, starting a new restaurant business can be challenging given the risk many lenders view as inherent to the industry. Add to that the lingering COVID-19 pandemic, and it is not surprising that many traditional lenders remain averse to financing start-up projects.

  • Financing Construction
    Projects with a significant construction component carry higher risk. When a leased space is under construction, there’s no real estate asset to serve as a mitigant. The SBA guaranty on a portion of the loan amount has a huge impact on a lender’s ability to approve such requests.
  • Collateral Shortfall
    The lending package was secured by just equipment and leasehold improvements because there was no commercial real estate in this loan request.
  • Working Capital & Start-up Financing
    To make his dreams come true, the client’s biggest need was capital to cover the leasehold improvements and other start-up expenses.

The Solution: 7(a) SBA Loan From First Business Bank


First Business Bank, an SBA-designated Preferred Lending Partner, provided an SBA 7(a) loan totaling $429,000, which included funds for leasehold improvements, inventory, furniture, fixtures, and equipment (FF&E), and working capital for operations.

  • Reliability
    First Business Bank’s SBA Lending team worked closely with the client and contractor to achieve a rewarding end result. They’ll soon be celebrating their grand opening!
  • Dependability
    First Business Bank’s SBA Lending team guided the client through the loan process and provided the financing facility in a timely manner.
  • Functionality
    Using the SBA 7(a) program, First Business Bank’s loan facility was the right loan for this client, allowing him to establish a business of his own.