Is Financing Available to Purchase Routes?

Buying a FedEx route is a great investment. However, if you’re unable or unwilling to purchase the routes with your own cash, you might wonder if financing is available.

Let’s look at how financing works for the purchase of FedEx routes.


Do banks offer financing for FedEx loans?

Although a conventional bank loan might come to mind, it’s not the most common choice for FedEx routes.

In order to receive conventional financing from a bank, you’ll need plenty of collateral. This includes physical assets, such as a building or product inventory. It’s a standard requirement of conventional bank loans.

Since FedEx businesses are largely limited to trucks and goodwill, the physical collateral typically won’t satisfy the bank’s requirements. As a result, conventional loans are usually not the best option to finance FedEx routes.

From the bank’s standpoint, this makes sense. If you fail to repay the debt according to your loan agreement, the bank is unable to take possession of your routes. Remember, the routes are controlled by FedEx; the company isn’t required to transfer the routes to the bank should you fail to pay the loan.


What type of financing is available for FedEx contractors?

There are several options available when looking to finance FedEx routes. Some of these include:

  • Home Equity Line of Credit
    The equity in your home may provide you with a fast, easy-to-access source of funding for your FedEx route purchase. Depending on the amount of equity in your home, you may opt to leverage these funds to buy a FedEx route. Should the amount of home equity fall short of the purchase price, you and the seller may decide to bridge the gap by using seller financing.
  • Retirement Savings
    Another option is to use your retirement savings to fund the route purchase. It is important to note that accessing retirement funds to purchase a FedEx business must be done in a very specific manner and in accordance with certain federal regulations. With that said, the retirement savings can be used to fund the purchase outright, or leveraged as a down payment to procure a business loan.
  • Private Lenders
    Although a more expensive option, private lenders offer an alternative source of financing for the purchase of FedEx routes. KR Capital has an exclusive database of private, FedEx-specific lenders throughout the country.
  • Small Business Association Loan
    Perhaps the most common loan for purchasing FedEx routes comes in the form of an SBA 7A loan. SBA loans can traditionally be secured with a 10-20% down payment, and a 10-year amortization schedule. Learn more about buying FedEx routes with SBA loans here.


Secure FedEx Financing with KR Capital

With nearly a decade of experience, KR Capital has helped hundreds of buyers procure financing to purchase FedEx routes. We know what information lenders need, so we can help you prepare the required documents.

To learn more about financing for FedEx buyers, fill out our buyer information form or call us at (503) 664-0753.