ApplePie Capital works with borrowers, franchises, and both individual and institutional investors to provide term loans exclusively for franchise investments. The company seeks out investors who want to provide funding to borrowers to purchase, remodel, or expand qualified franchise units. ApplePie Capital was founded in 2014 and made its first loan in January 2015. Interested borrowers apply online and can be pre-qualified in two business days. Borrowers will receive a commitment letter in five business days and funding in 30 days or less.
ApplePie Capital claims it is the only marketplace lender arranging loans exclusively for franchise businesses. The company screens franchise brands to partner with ones that it considers high quality and low risk. Entrepreneurs who want to own or expand their franchise units apply online and are notified if they have pre-qualified for a loan within two business days. Benefits of the ApplePie Capital service include:
Simplified Application Process
Because franchisees have already shared their financial information with the franchisor, ApplePie Capital can use that data, as well as the historical financial performance of the franchisor’s locations to quickly assess the risk of the loan and get funding to qualified borrowers in 30 days or less.
Funding for a Variety of Franchise Uses
You can use ApplePie Capital loans to:
- Purchase new franchise units
- Expand to multiple franchise locations
- Recapitalize to add capital
- Refinance your debt
- Remodel existing locations
- Purchase an existing franchise business
Loans for New Businesses
ApplePie Capital can arrange funding for new business owners to purchase a new unit- in fact, it’s the company’s primary type of loan. This loan covers expenses such as franchising fees, building costs, equipment purchases, and more.
No Prepayment Penalties
There are no penalties for early payment of loans on loans under $1 million.
No Personal Collateral
Borrowers do not have to offer their house or other personal assets as collateral for loans.
Larger Loan Amounts
For business owners who want to purchase multiple franchise locations or expand their existing franchise’s reach, ApplePie Capital can arrange loans up to $1 million.
Available in all 50 States
ApplePie Capital makes loans available to business owners throughout the United States.
Investor Support for Loans
In April 2015, ApplePie Capital announced it has closed a $6 million Series A round led by Signia Venture Partners, with participation from Freestyle Capital, QED Investors, and Ron Suber, president of the consumer lending marketplace Prosper. Also in April 2015, the company announced it had raised over $28 million in debt capital commitments from institutional and individual investors to fund franchise loans.
ApplePie Capital does not have a lengthy track record of locating funding for franchise businesses. The company did not provide loans to franchisees until January 2015. ApplePie Capital is also focused exclusively on its partner franchises, which may limit its pool of qualified borrowers. Here are areas where we think the company can improve its support to borrowers:
Not All Franchises Qualify
You have to apply with ApplePie Capital to find out if the franchise you are interested in is one of its qualified franchise partners. If you are interested in a franchisor that is not currently a partner with ApplePie Capital, you must contact the company and request that the franchisor be qualified before you can apply for the loan. ApplePie Capital should provide a complete list of its qualified franchisors on its website (36 in total) so borrowers can quickly decide if the franchise they are interested is on that list.
Not as Fast as other Alternative Lenders
The fastest ApplePie Capital reports that businesses might receive funding once they have been approved for a loan is 30 days, which is longer than other alternative lenders who advertise that funding from their lenders can be received in as fast as one business day. ApplePie Capital also has an online application process that reviews the business owners’ credit history and data about the financial strength of the franchise and the location. Although ApplePie Capital has pre-vetted the franchisors, it can take two business days to find out if you pre-qualify for a loan, which is more time than many other alternative lending websites that pledge to let you know if you pre-qualify for funding within minutes of your application.
*Star Rating is determined by evaluating APR range, minimum credit score requirement, revenue requirement, length in business requirement, and other related approval data.
ApplePie Capital has a range of interest rates on its loans that the company states “are based on a number of factors, including, but not limited to, the brand’s historical performance, your experience and credit history, and the franchise’s business performance if the loan is on an existing unit.” ApplePie Capital’s lowest interest rate is 7%. The company offers borrowers a range of terms from 3-7 years and loans from $100,000 to $1 million.
ApplePie Capital states it loan portfolio as of September 18, 2015, shows the following averages:
- Loan Size: $391,238
- Term: 66.9 months
- Interest Rate: 8.39%
- Borrower’s Equity (for new units) 27.4%
- Borrower’s FICO: 729
Types of Loans Offered
- Business Loans (for franchises only) – Borrow $100k – $1 Million
8 – 12%
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