Buying a System4 franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 6 7(a) loans to buy an existing System4 (classified mostly as All Other Personal Services), totaling $8.2M. The median loan was $1,478,500, 129% higher than the $645,250 median for all SBA-financed acquisitions. 4 of these loans were approved in the last two fiscal years.
Seller note standby terms and third-party consents are reviewed before closing.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of System4 resale loans landed between $583,750 and $2,014,750.
- Lender experience exists. Santander Bank, National Association alone has financed 2 System4 resales.
- Guaranty. The SBA guaranteed 73% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a System4 resale
The median SBA 7(a) loan for a System4 resale was $1,478,500 across 6 loans (FY2018 to FY2026). Santander Bank, National Association, The Huntington National Bank and HomeTrust Bank have financed the most System4 resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
System4 acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 0 | $0 | - | |
| FY2019 | 0 | $0 | - | |
| FY2020 | 0 | $0 | - | |
| FY2021 | 0 | $0 | - | |
| FY2022 | 1 | $2.1M | $2,079,000 | |
| FY2023 | 1 | $1.1M | $1,135,000 | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 0 | $0 | - | |
| FY2026 | 4 | $5M | $1,111,000 |
How often do these acquisition loans fail?
Fewer than 20 System4 acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing System4 resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Santander Bank, National Association | 2 | 33.3% | $3M | |
| 2 | The Huntington National Bank | 2 | 33.3% | $2M | |
| 3 | HomeTrust Bank | 1 | 16.7% | $2.1M | |
| 4 | Newtek Small Business Finance, LLC | 1 | 16.7% | $1.1M |
States where System4 units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Rhode Island | 2 | 33.3% | $3M | |
| 2 | Arizona | 2 | 33.3% | $2M | |
| 3 | Colorado | 1 | 16.7% | $2.1M | |
| 4 | Kentucky | 1 | 16.7% | $1.1M |
Seller note standby terms and third-party consents are reviewed before closing.
Submit Transaction DetailsSBA-financed deals. All 50 states.
How lenders classify System4
Lenders code each loan to a NAICS industry. For System4 the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | All Other Personal Services | 4 | 66.7% | $5M | |
| 2 | All Other Professional, Scientific, and Technical Services | 1 | 16.7% | $2.1M | |
| 3 | Janitorial Services | 1 | 16.7% | $1.1M |
Questions buyers ask
How much do buyers borrow to buy a System4 franchise?
The median SBA 7(a) loan for a System4 resale was $1,478,500 across 6 loans (FY2018 to FY2026). The middle half of loans ran from $583,750 to $2,014,750. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance System4 acquisitions?
Santander Bank, National Association has made the most SBA acquisition loans for System4 (2, 33% of the total). The Huntington National Bank, HomeTrust Bank, Newtek Small Business Finance, LLC follow.
What interest rate and term do System4 acquisition loans carry?
The average initial rate at approval was 7.71% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a System4 resale riskier than other SBA-financed acquisitions?
Too few System4 acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are System4 units being bought with SBA loans?
Rhode Island (2), Arizona (2), Colorado (1), Kentucky (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
Seller note standby terms and third-party consents are reviewed before closing.
Submit Transaction DetailsAlex Lubyansky leads every engagement.
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Related
- All All Other Personal Services acquisitions
- Rhode Island acquisitions
- Arizona acquisitions
- Colorado acquisitions
- Santander Bank, National Association
- The Huntington National Bank
- HomeTrust Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "System4" (franchise code S1659). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.