The first platform to disrupt the franchise loan market

Alternative loans

ApplePie Capital has announced an exciting new product offering. The platform will now expand into the franchise loan market.

The franchise market is a large but high-growth space, currently with around $42 billion in annual capital demand. ApplePie Capital’s Franchise Loan Marketplace will connect high-quality franchise brands and their entrepreneurs with investors seeking attractive yields on fixed income securities.

It is the first online marketplace exclusively dedicated to the franchise sector. ApplePie Capital hopes this will fill the funding gap for thousands of entrepreneurs hoping to open or expand their franchise business. It will expand access to capital, which will help propel businesses and create jobs.

ApplePie Capital was launched in 2013 and raised $3.77 million in 2014 from Freestyle Capital, QED Investors and Signia Venture Partners, alongside a number of angel investors.

Denise Thomas, CEO and co-founder of ApplePie Capital, said:

“Franchise businesses are critical contributors to economic growth in the United States, accounting for nearly half a trillion of GDP and employing 1 in 20 Americans in 2014. The franchise lending asset class is compelling from a view of risk, because franchise brands have a measurable track record that investors can analyze. The brands have proven business models and have rigorous qualification for franchisees, which we further arrange. They also offer a wealth of resources to help their franchises to succeed, from location selection and training to systems implementation and marketing.

Josh Felser, founder of Freestyle Capital, added:

“The franchise industry is a large and growing market with significant capital demands – over $42 billion in 2013. However, overall small business lending has declined nearly 20% since 2008, and the loan application process can be long and expensive. Marketplace loans transformed the $9 billion personal loan segment in 2014, and ApplePie is bringing this new economy to franchise financing.

The market will launch in the first quarter of 2015 and will offer loans of $100,000 to $1 million to qualified borrowers in all 50 states. Ken Switzer, CFO of Marco’s Pizza, the fastest growing pizza franchise in the United States and one of ApplePie Capital’s founding market brands, explained:

“Market loans and franchises go hand in hand. Franchisees starting new locations can get buy-in from local community investors and build momentum before they open their doors.“

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Priscilla C. Carnegie