Franchise Restaurant Financing: SBA-Backed Build-Out for Fast Casual Expansion
Introduction
Fast casual franchise expansion: Tailored financing for scalable growth. Cornovus Capital successfully placed structured financing for the build-out of a new fast casual franchise location led by an experienced independent restaurant owner. With a well-established track record and plans for long-term franchise expansion, the borrower sought capital to fund a dynamic concept combining fast casual service with a full-service bar, indoor-outdoor seating, and an elevated customer experience. The financing strategy addressed the capital-intensive nature of the launch, incorporating working capital, construction, FF&E, and lease compliance under SBA guidelines.
Amidst tightening lender appetite for startup franchise locations, Cornovus Capital’s expertise in structuring restaurant financing delivered a scalable solution that minimized upfront equity and preserved liquidity throughout the ramp-up period.
Challenge
The borrower—an experienced operator of a successful independent restaurant—was entering the franchised fast casual space with a brand-new prototype location. The concept offered a hybrid model featuring a full bar, dine-in seating, and patio dining, distinguishing it from standard franchise models. Despite strong sponsor experience and brand affiliation, the capital needs were significant. The borrower faced several key challenges:
- Sourcing financing for a first-time franchise build-out with substantial capital requirements
- Structuring the deal to cover tenant improvements, FF&E, working capital, and inventory
- Ensuring the lease met SBA 7(a) guidelines, with appropriate terms and assignability
- Mitigating cash flow risk during the pre-revenue construction and launch period
- Demonstrating long-term scalability to justify lender support for the prototype location
Solution
Cornovus Capital led a targeted financing strategy that addressed both project execution and long-term scalability. The capital stack included a structured SBA 7(a) loan that featured:
- Interest-only period during construction, maximizing flexibility during the build-out
- 116-month fully amortizing loan post-completion to reduce debt service stress
- Financing for tenant improvements, FF&E, and initial inventory
- Working capital allocation to support staffing, marketing, and operational ramp-up
- Business plan, financial modeling, and lease negotiation support, ensuring SBA compliance
Cornovus Capital collaborated with the borrower to build a proforma aligned with SBA underwriting metrics, negotiate critical lease terms, and create a compelling franchise financing package designed to support repeatable growth.
Results
With Cornovus Capital’s strategic support, the borrower secured flexible, low-equity financing that enabled the successful launch of the prototype location. Key outcomes included:
- Timely construction and launch, supported by milestone-based capital disbursement
- Full coverage of startup costs, including equipment, build-out, and opening inventory
- Cash flow optimization via an interest-only period and long-term amortization
- Improved lender confidence, positioning the borrower for future franchise expansion
- Institutional-quality capital structure, tailored for repeatable multi-unit growth
About Cornovus Capital
With over 60 years of combined experience, Cornovus Capital is a trusted financial partner specializing in business financing, commercial real estate lending, and hospitality funding solutions. We design customized capital strategies that help businesses acquire, expand, and optimize operations, ensuring long-term growth and financial stability.
Our expertise spans SBA 7(a) and 504 loans, CMBS and LifeCo financing, private capital solutions, and structured debt strategies. By focusing on certainty of execution and closing assurance, we guide businesses and investors through complex financial landscapes, securing funding tailored to their long-term objectives.
Why Partner with Cornovus Capital?
At Cornovus Capital, we understand that complex transactions require sophisticated financing solutions. Whether you’re acquiring a business, buying out a partner, expanding operations, or combining real estate into a growth plan—we deliver capital strategies designed for certainty and efficiency.
What Sets Us Apart?
• Advisory expertise across business stages and sectors: We structure financing for acquisitions, expansions, partner buyouts, and practice ownership transitions.
• Innovative capital structuring: We integrate seller notes, working capital, CapEx, and goodwill financing into efficient, customized capital stacks.
• Lender alignment and competitive terms: We match each transaction with lenders who understand your industry—ensuring smooth approvals and favorable terms.
• End-to-end execution and advisory support: From deal modeling and loan packaging to lender communication and closing, we manage the entire process to ensure successful outcomes.
For business owners, professionals, and entrepreneurs seeking flexible SBA financing, Cornovus Capital delivers strategic insight, execution certainty, and long-term support.
Contact Cornovus Capital
At Cornovus Capital, we simplify the financing process with tailored solutions, competitive loan terms, and expert advice. Whether you’re acquiring, refinancing, or developing a property, we’re here to help you succeed.
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📞 513-653-4246
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