How to Get Funding for a Franchise
Owning a franchise is a smart way to start a business with a proven model, recognizable brand, and built-in support. But let’s be honest—getting into a franchise often comes with a big price tag.
Whether you’re looking to open a fast-food restaurant, a fitness center, or a home services franchise, you’re going to need startup capital. The good news? You’ve got several solid options for franchise funding.
💡 How Much Does It Cost to Start a Franchise?
Depending on the brand, location, and industry, franchise startup costs can range from $50,000 to over $1 million. These costs may include:
- Franchise fees
- Build-out and equipment
- Initial inventory
- Marketing and signage
- Working capital reserves
Thankfully, there are many ways to finance a franchise without wiping out your savings.
🏦 1. SBA Loans for Franchises
The U.S. Small Business Administration (SBA) offers loans specifically designed for small business owners—including franchisees. The SBA 7(a) loan is a popular option, offering:
- Low interest rates
- Longer repayment terms (up to 10 years or more)
- Loan amounts from $50,000 to $5 million
Pro tip: The franchise you’re buying should be listed in the SBA Franchise Directory for approval.
💳 2. Equipment or Asset-Based Financing
If a significant portion of your franchise startup cost includes equipment or vehicles, you can fund that portion through an equipment loan. This keeps your overall loan amount smaller and easier to manage.
🤝 3. Franchise Financing Through Specialized Lenders
Some lenders specialize in franchise loans. These lenders understand franchise models and offer financing tailored to specific brands, often with faster approvals and more flexible terms than traditional banks.
💼 4. Use of Retirement Funds (ROBS)
Through a Rollover as Business Start-up (ROBS), you can use funds from your retirement account to invest in your franchise without early withdrawal penalties or taxes. While it’s legal and IRS-compliant, you’ll want a professional to guide you through it.
💰 5. Unsecured Working Capital Loans
Short-term or unsecured business loans can be used for working capital, initial marketing efforts, or to bridge a gap until the franchise becomes profitable. Approval is usually based on personal credit, income, and business projections.
🧠 Final Thoughts
Getting franchise funding doesn’t have to be a nightmare. The key is to work with a financing partner who understands your industry, knows the lending landscape, and can present multiple options—because one size doesn’t fit all.
🚀 Ready to Launch Your Franchise?
At Finance Pros Inc., we help entrepreneurs get the funding they need to start and grow successful franchise businesses. Whether you’re exploring an SBA loan, looking for fast funding, or need guidance on your capital strategy, we’ve got your back.
Let’s take the next step toward making your franchise dream a reality.
