The fast-growing swim school franchise connects its franchise candidates with SBA-preferred banks and lenders to promote a seamless funding process.

Big Blue Swim School has been one of the fastest-growing swim school brands since its founding in 2009 and the launch of its franchise opportunity in 2019, signing franchise agreements for 227 locations in 25 states. But with startup costs that range from $2,475,200 to $3,966,700, Big Blue Swim School’s franchise opportunity requires its franchise partners to have strong financials. That said, the swim school brand has several lending partners that candidates can use to help finance their investment.

“If you’re interested in becoming a franchise partner with Big Blue Swim School there are multiple avenues to secure funding,” said Dennis Campbell, Big Blue’s Vice president of franchise development. “We have several preferred vendors and very strong relationships with each of them, so we can create that connection for franchise partners to engage with them and get pre-approval for qualified lending.”

The Advantage of an SBA Loan

Campbell mentioned one of the most common funding options available to Big Blue’s prospective franchise partners is a Small Business Administration (SBA) loan, for example. Big Blue Swim School is SBA-approved, which can make it faster and easier for franchise partners to get the necessary funding.

As one potential avenue to help prospective franchisees secure this type of loan, Big Blue partners with Meridian Bank, a Philadelphia-based, full-service funding provider to the franchising industry. Meridian works with several SBA-approved franchising brands across the country and is one of the SBA’s top 50 lenders.

“Meridian Bank is one of the SBA’s preferred lenders, which is a designation the agency gives due to the number of loans we’ve done in the past,” said Nick Patel, a franchise lending specialist with Meridian Bank. “The SBA-7A loan is the main financing option we provide, and typically, our loan terms will be a little bit longer than other terms, and we also offer a higher leverage product. This allows the franchise partner to start up the first or second Big Blue while putting the least amount of liquidity down as an equity injection. It has an attractive, adjustable rate, too.”

One of the first steps Meridian takes with franchise prospects is working toward financing pre-qualification, Patel said.

“To prequalify, we take a look at their initial filing and package – collecting their business plan, tax returns, personal financial statement, and resume. But we can even prequalify the franchise partner prior to a specific site selection with those items,” Patel said. “For some franchise owners, it might be their first time going through the franchise process and loan process. So we come in and help the franchise partner get prequalified on the front end so we can provide an initial terms sheet.”

What Makes Big Blue Attractive for Lenders

Patel pointed to Big Blue’s unique model as a major draw for Meridian to work with the brand, and said the unit-level economics are strong from an investment perspective. In terms of safeguards that help set franchise partners up for success, Big Blue works exceptionally close with franchise owners as they navigate their territory and offers data-driven market insights to ultimately choose the store’s location.

“The franchisor has a process in place for opening a swim school, so we try to parallel that on the financing side,” Patel said. “Once the franchise partner is ready with a site selected, we get them through underwriting and collect other items to help them through the official loan approval process. We are also involved in the closing checklist process. It is about walking them through what the process looks like, as well as guiding them on the timeline and how it aligns with the Big Blue development timeline.”

So, what is the financial makeup Patel looks for in an ideal Big Blue franchise partner?

“We look at the Five C’s of Credit — character, capital, capacity, conditions and collateral,” Patel said. “Character is their personal credit history, their resume and background. Capital is how much liquidity they have available for not only the injection equity requirement, but also post-close liquidity to give them some leeway as they are ramping up the business. Capacity is the ability to repay the loan, including debt-service coverage ratio and cash flow. Conditions are the general market conditions, so in this case the swim school vertical. And collateral is any outside collateral that can be pledged, such as any personal residences, investments, etc.”

How One Big Blue Franchise Partner Secured Funding

One example of an entrepreneur who fit these criteria and qualified for financing is Big Blue Swim School franchise owner Hiag Avsharian. Avsharian was president and part owner of a family-owned, omni-channel direct marketing company in Ann Arbor, Michigan, for more than 15 years. When he set out to do something new, Avsharian immediately connected with the Big Blue opportunity. He signed on to open four swim schools in 2020 and his first location in Ann Arbor is currently in the construction phase.

From the start of the onboarding process, Avsharian says the Big Blue team provided valuable financial data to help paint a picture of the necessary finances. “Big Blue’s financial disclosure document provides you with the total estimated cost to get the business up and running,” Avsharian said. “They then connect you with banks that can help with the SBA loan process, which for many people is the preferred route. They have established relationships with banks that are familiar with the business model, and have worked with other swim schools.”

Avsharian says he worked with LendingClub Bank to secure financing for his units. “If you just start looking for SBA lenders on your own, you never know if they are familiar with this scale of franchise, since Big Blue has a high capex,” he said. “In my case, I was able to leverage Big Blue’s connections to secure a lower lease rate, with an attractive dollar-per-square-foot cost.”

Big Blue is especially strong at helping franchise partners secure multi-unit financing, Avsharian says. The brand connects franchise candidates with banks that are often willing to fund multiple locations, which saves them the hassle of having to go back and secure financing for a second location.

With such strong financing available, Big Blue is swimming in a lane of its own and is continuing to appeal to qualified, passionate franchise partners ready to make a difference in the lives of families in their local communities.

Multi-unit franchise opportunities are available for qualified candidates looking for their next big opportunity, and veterans can receive a 10 percent discount on the $80,000 franchise fee. The total investment necessary to begin operation of a new Big Blue Swim School is $2,475,200 to $3,966,700 (refer to item 7 in FDD). To learn more or inquire about Big Blue Swim School, visit https://www.bigblueswimschool.com/franchising/.