Can I refinance my franchise in Michigan?

Can I refinance my franchise in Michigan?

Yes—Michigan franchise owners can refinance through an SBA 7(a) loan or private lender, typically getting 8–10% APR for 48–84‑month terms if they meet credit and collateral rules.

See if you qualify now.

The specifics

In 2026, a Michigan franchise owner who wants to refinance can tap an SBA 7(a) loan. According to the SBA, the average 7(a) interest rate that year ranges from 8–10% APR, and terms typically run 48–84 months. Credit thresholds are clear: a FICO score of 740 or higher gives standard rates; scores in the 620‑679 fair‑credit band qualify as well, though the APR is a 3–5% premium unless the borrower pledges collateral, which the SBA allows to reduce the rate by 1–3%【SBA】.

Revenue and debt service figures also matter. The SBA requires a debt‑service coverage ratio (DSCR) of at least 1.25× and a monthly debt‑service ceiling of 8–12% of gross monthly revenue【SBA】. For larger terms beyond 48 months, expect a 20–30% increase in overall interest cost, so owners should weigh short‑er pay‑back against lower monthly payments.

Owners often bundle working‑capital needs and equipment purchases into the same refinance. The SBA offers equipment‑financing rates of 9–12% APR for loans of 48–84 months and typical equipment down‑payments of 15–20%【SBA】. Using our affordability calculator can help visualize the net cash flow after your new loan.

Retail franchisors also list approved lenders on their sites. You may start with an /acquisition-financing search to find lenders familiar with Michigan franchise structures.

Qualification & edge cases

Not every Michigan franchise owner qualifies for the standard 8–10% APR. If your FICO is below 740, the SBA will impose the 3–5% APR premium, and you may need to provide additional collateral or a co‑guarantor. A debt‑service ratio above 12% of revenue or a DSCR under 1.25× will most commonly trigger a “re‑underwrite” that can push approvals beyond the 90‑day window.

Owners whose franchise sold or changed ownership within the past 12 months face an extended underwriting period; the SBA requires that new owners demonstrate stability before approving a refinance.

For those with poorer credit scores, the Michigan Franchise Financing for Bad Credit Buyers program demonstrates that an SBA‑backed capital structure, combined with equipment leases and working‑capital lines, can still underpin a refinance. The program uses collateral‑backed terms to keep interest in the 8–15% APR range【Michigan Franchise Financing for Bad Credit Buyers】.

Background & how it works

In the U.S., the SBA’s 7(a) program is the chief vehicle for franchise refinancing because it caps personal liability, offers non‑recourse protection, and sets transparent repayment guidelines. Private lenders emulate this structure but often trade faster approval for higher APRs (usually 9–15%) and shorter loan-to-value ratios.

When a franchise owner submits an application, the lender reviews financial statements, franchise fee agreements, and projected cash flow. The SBA uses the DSCR and revenue ratio thresholds to decide the loan amount, while the private lender may also consider industry benchmarks or peer comparisons. Once approved, the franchise updates its operating plan to integrate the new debt schedule, ensuring the monthly debt service remains within the 8–12% revenue cap.

Bottom line

If you’re a Michigan franchise owner with a reliable revenue stream and a FICO of 740 or higher, you can refinance your loan for 8–10% APR over 48–84 months through the SBA or an approved private lender. The process is straightforward—focus on meeting DSCR and collateral criteria and you’ll enjoy lower costs and a smoother repayment schedule.

Disclosures

This content is for educational purposes only and is not financial advice. franchiseeloan.com may receive compensation from partner lenders, which may influence which products are featured. Rates, terms, and availability vary by lender and applicant qualifications.

Sources

• SBA
• NerdWallet
• CrestmontCapital
• Bridgemarketplace
• Michigan Franchise Financing for Bad Credit Buyers (cross‑network link)