Use of funds: franchise transfer
A transfer comes with a fee, a remodel deadline and a question every funder asks: how long has this business been yours? Here is how to read your situation and when funding the remodel makes sense.
✓ Checking what you qualify for does not affect your credit score.
Updated October 13, 2026 · Merchant Fund Express
Revenue-based funding is underwritten on the bank statements of the business that is applying. When you buy a franchise unit, the key fact is whether the revenue history moved with you. If you bought the assets into a new company with a new bank account, a reviewer will usually see a business as old as your purchase. Our published floor is 6+ months in business. So a buyer who closed recently is often better served by seller financing, franchisor programs or slower bank money for the purchase, and by working capital later, for the required remodel, once there is history in their own name.
We do not promise funding for the purchase price itself. The strongest use here is the post-closing remodel or reimage the transfer agreement requires.
| How you bought | What carries over | What it means for funding |
|---|---|---|
| Asset purchase into a new entity | New EIN and bank account | Clock usually starts at closing; apply after 6+ months of deposits |
| Equity (stock or membership) purchase | Same entity and account | Business start date stays; reviewer checks the new owner's credit and ownership |
| Not yet closed | No account in your name | Revenue-based funding does not fit yet; look at the options below |
Ownership also matters: Tier 1 requires at least 50% ownership by the applicant. If you bought with a partner, list everyone with their percentage.
A buyer closed an asset purchase on April 1, 2026, into a new LLC with a new bank account. The franchisor's transfer fee was paid at closing. The transfer agreement requires a reimage by June 30, 2027, quoted at $68,000. Revenue is $52,000 a month. By mid-October 2026 the business has six full months of statements (April to September). Funding is illustrated at a 1.30 factor, no fee deducted, repaid weekly over 52 weeks.
| Item | Amount |
|---|---|
| Funding and net proceeds | $68,000 |
| Total repayment at 1.30 | $88,400 |
| Cost of the funding | $20,400 |
| Weekly payment, 52 weeks | $1,700 |
| Monthly equivalent | About $7,367, or 14.2% of revenue |
| Payments run | Nov 2, 2026 to Oct 25, 2027 |
Downtime. If the reimage closes the store for 10 days, that is about $17,300 in sales (10/30 of a $52,000 month). Schedule it in the slowest month.
Wait or fund now? The deadline is June 30, 2027. Waiting until early 2027 adds history and keeps the funding cost off the books for a few more months, but leaves less room if the contractor runs late. If the remodel can be done in January, applying in November is reasonable. If the franchisor allows a later window, waiting is often the cheaper choice.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Find your closing date and count the full months of deposits in your own account. At six or more, check the requirements and apply with the transfer agreement attached. For a new unit instead of a transfer, see buying a franchise.
We do not promise funding for the purchase price. Revenue-based funding reads bank history in your name, which a buyer usually does not have until after closing.
In an equity purchase, the business and its bank account continue, so history usually carries. In an asset purchase into a new entity, a reviewer generally starts from your closing date.
The published floor is 6+ months in business, with $60,000 in verifiable revenue and a 600+ FICO on the revenue-based tier.
The fee is usually due at closing, before you have history in your own name, so it is better covered in the purchase financing.
List it. Reviewers see all debt payments on your statements, and the revenue-based tier allows up to 2 current advances.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
