Why banks like franchising
If you’re exploring the idea of becoming a Driver Hire franchisee, one of the first practical questions you’ll face is: How do I fund my new business? For most people, buying a franchise involves a mix of personal investment and external finance. That’s where banks come in – and the good news is that many UK banks actively support franchising.
In this article, we’ll explain why banks are keen to lend to franchisees, what funding options are available, and how Driver Hire helps you through the process.
Franchising carries lower risks
Banks view franchising as a lower-risk way to start a business. Why? Because:
- Proven business model – Franchises like Driver Hire have a track record of success.
- Brand recognition – You’re not starting from scratch; you’re joining an established name.
- Support systems – Training, marketing, and operational guidance reduce the risk of failure.
This makes banks more confident about lending to franchisees compared to independent start-ups.
Specialist franchise lending
Many high-street banks have dedicated franchise teams. These specialists understand the franchising model and often have pre-approved lending arrangements with well-known brands -including Driver Hire. This means:
- Faster decisions
- Competitive rates
- Less paperwork (because they already know our business model)
Funding options available
Banks typically offer several types of finance for franchisees:
- Business loans – A lump sum to cover your franchise fee, training, and initial set-up costs. Repayments are usually spread over the term of your franchise agreement (5 years in Driver Hire’s case).
- Asset finance – If your franchise requires vehicles or equipment, asset finance can help spread the cost.
- Working capital facilities – Overdrafts or revolving credit to manage cash flow during your early months.
- Invoice finance – Enabling you to access immediate funds when you issue customer invoices – helping your cash flow.
- Government-backed loans – Some banks offer loans under government schemes for small businesses.
How much will banks lend?
Most banks expect you to invest 30–50% of the total cost from your own funds. The rest can be financed through a loan. For example:
- If your total start-up cost is £100,000, you might need £30,000–£50,000 of your own money.
- The bank could lend the remaining £50,000–£70,000.
Given Driver Hire is a mature and successful franchise, Driver Hire franchisees can typically access 70% or 75% of their funding from a bank.
What do banks look for?
To secure funding, you’ll need:
- A strong business plan (Driver Hire provides templates and guidance).
- Personal investment – this helps to demonstrate your commitment.
- Good credit history.
- Realistic financial forecasts.
Driver Hire’s role
We don’t just leave you to figure it out. Our franchise team:
- Introduces you to banks with franchise expertise.
- Helps you prepare your business plan and financial projections.
- Supports you through the application process.
Top Tips for Success
- Start early – Speak to banks as soon as you begin exploring franchising.
- Compare lenders – Different banks offer different terms.
- Be prepared – Have your documents ready: ID, proof of funds, credit history.
Ready to Take the Next Step?
Buying a franchise is a big decision, but you don’t have to do it alone. With franchise support and the backing of specialist banks, your journey to business ownership can be smooth and successful.
Contact our franchise team today to learn more about financing options and start building your future with Driver Hire.