The Commonwealth Bank
Franchise Lending Calculator

This calculator is intended as an estimate only. You should seek advice and information from your banker regarding the amount of money you might be able to borrow given the expected profit of the proposed franchised business.

Why use this calculator?

Many franchisees do not have the cash necessary to establish the chosen franchise. They typically borrow some portion of the establishment costs from a bank or other lender. The purpose of this calculator is to give you an estimate of how much profit you need to generate to support a loan of a given amount.

Things you should know

The Commonwealth Bank would typically gauge an applicant's ability to repay the loan by measuring, amongst other things, the Debt Service Ratio.
The Debt Service Ratio and other criteria used by the Bank vary considerably according to personal circumstance.
For the purposes of providing you with this tool, we have assumed a typical Debt Service Ratio of 1.5 is required.
This means your profit (EBITDA) after drawings must be at least 1.5 times the repayments required.


Establishment Costs *1   Loan Parameters
Company set up   How much will you need to borrow that could be secured against the business? *2
Professional advice   What is the expected interest rate for a secured loan? *3
Equipment   How much will you need to borrow as an unsecured loan? *4
Fit-out   What is the expected interest rate for an unsecured loan? *5
Occupancy bonds   What is the length of the loan (in months) *6
Vehicles    
Pre-opening marketing expenses   Repayments
Staff recruitment and training   Your monthly repayment is:
Computer equipment & Software   Therefore, your annual repayments are:
Initial Franchise Fees    
Other   Affordability
Working capital required   To afford this loan you need to generate the following profit
      Monthly EBITDA after owner's drawings
Total Establishment Costs   Annual EBITDA after owner's drawings

*1 For a Greenfield site, all of the following cost groups should be considered. For an established business, most of these costs are covered by the purchase price of the business.

*2 The Bank will allow you to borrow a proportion of total establishment costs as a loan that is secured against the business. The proportion that can be secured against the business depends on the franchise system, whether the system is accedited by the Bank and the amount you need to borrow. This proportion typically ranges from 30% to 70%.

*3 Interest rates vary over time, however, interest rates for secured loans are typically lower than for unsecured loans.

*4 If necessary, the Bank will allow you to borrow a proportion of total establishment costs as an unsecured loan. The proportion that can be borrowed as an unsecured loan depends on your personal financial circumstances and history.

*5 Interest rates vary over time, however, interest rates for unsecured loans are typically higher than for secured loans.

*6 Typically, the Bank will allow you spread the repayment of your loan(s) over a period that is equal or less than the term of the franchise agreement.

  

To speak to a Commonwealth Bank Franchise Banking team member in your region please call or submit a query.

Melbourne +61 (0)3 8102 9200
Sydney +61 (0)2 8220 8700
Brisbane +61 (0)7 3015 7600
Perth +61 (0)8 6222 1011
Canberra +61 (0)2 8220 8700
 

Or submit a question...

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All queries will receive a response within one business day.