What are the disadvantages of a franchise business loan?

Franchise business loans tend to have very high limits in order to cover the high costs of purchasing an existing business franchise. While the loans may be necessary if you do not have the cash to buy a franchise on your own, the high limits can mean a number of disadvantages. First, the cost of financing increases as limits increase. You are paying interest on a larger sum than you may pay if you were to take a smaller start-up loan. Further, the franchise owners themselves may have specific financial requirements imposed beyond lender requirements. This may include a large down payment provided without the assistance of a lender.