What Options Exist For Funding?
Franchise Funding
Fortunately, there are several ways to fund your franchise.
Below, I’ve listed some of the most popular options people use to get started.
SBA 7(a) Loans
For many franchise buyers, SBA loans offer one of the most accessible and affordable paths to funding. The U.S. Small Business Administration doesn’t lend money directly, but it does guarantee loans issued by approved banks — which reduces lender risk and makes financing more attainable, especially for first-time owners.
The most common option is the SBA 7(a) loan, which can be used to purchase a franchise, including costs like franchise fees, equipment, working capital, and build-out. These loans typically offer competitive interest rates, longer repayment terms (up to 10 years), and lower down payments — often around 10% to 20%.
Many franchises are already SBA-approved through the SBA Franchise Directory, which can speed up the process. That said, SBA loans still require good credit, some personal investment, and a solid business plan — all things I help my clients prepare for.
While not the fastest option, SBA loans can be a great fit for thoughtful buyers who want a structured, low-cost way to launch their franchise.
If you're exploring funding options and want to know if an SBA loan might be right for you, I’m happy to talk it through with no pressure.
Rollover For Business Startups
An increasingly popular way to fund a franchise is through an IRA rollover, also known as ROBS — Rollover as Business Startup. This structure allows you to use funds from a qualified retirement account (like a 401(k) or traditional IRA) to invest in a business without paying early withdrawal penalties or taxes.
Here’s how it works: you create a C-corporation and establish a new 401(k) plan under that entity. Your existing retirement funds are then rolled into that plan, which uses the funds to purchase stock in your new franchise. The result? You’ve legally funded your business with your own money — without going into debt.
ROBS can be a smart option for buyers who want to avoid loans or interest payments, especially if they have substantial retirement savings and are confident about their investment. It also allows you to keep more control and start with better cash flow.
That said, it’s a complex process that must be done properly to stay compliant with IRS rules. I work with partners who specialize in setting up ROBS correctly and can guide you through it if this is something you’d like to explore.
Securities-Based Funding
Securities-based funding allows you to borrow against the value of your investment portfolio, such as stocks, bonds, or mutual funds, without having to sell those assets. This type of loan can be an effective way to access capital for your franchise investment while keeping your portfolio intact and potentially continuing to grow.
With a securities-based loan, you use your investment holdings as collateral to secure a line of credit or a lump sum loan. Interest rates are often lower than unsecured loans because the loan is backed by tangible assets. This can make securities-based funding a cost-effective option for franchise financing.
One major advantage is that you avoid capital gains taxes that might result from selling investments to raise cash. Additionally, you maintain your investment strategy and exposure to the market.
However, it’s important to be aware that the value of your portfolio can fluctuate. If the value drops significantly, you may be required to deposit additional funds or securities to maintain the loan, known as a margin call.
Securities-based lending is best suited for investors with a well-diversified, sizable portfolio and a good risk tolerance. Always consult with your financial advisor to understand the implications and ensure this funding aligns with your overall financial goals.
Personal Loans
Personal loans are another popular financing option for aspiring franchise owners. These loans are typically unsecured, meaning they don’t require collateral like your home or business assets. You can often apply online, get approved quickly, and receive funds within days—making personal loans a convenient way to cover startup expenses or bridge gaps in your funding.
One of the key benefits of personal loans is the fixed repayment schedule and interest rate, which can help you budget your monthly payments. The loan amounts vary but generally range from a few thousand to tens of thousands of dollars, which can be enough for smaller franchise investments or to supplement other funding sources.
However, interest rates on personal loans tend to be higher than traditional business loans, especially if your credit isn’t strong. Additionally, since they’re unsecured, lenders often rely heavily on your credit score and income to approve your application.
Before using a personal loan, it’s important to assess your ability to make consistent payments, especially during the early stages of your franchise when cash flow might be tight. Personal loans can be a flexible funding option but should be used thoughtfully and ideally alongside a broader financial plan.
Consult with a financial advisor to understand how a personal loan fits into your franchise financing strategy.
0% Credit Cards
Many aspiring franchise owners consider using 0% interest credit cards as a creative financing option to help cover startup costs. These cards offer an introductory period—typically 12 to 18 months—during which you can make purchases without paying interest. This can provide valuable short-term breathing room as you launch your business and begin generating revenue.
However, while 0% credit cards can be a useful tool, there are important factors to keep in mind. First, the credit limit on these cards may not cover your entire franchise investment, so you might need multiple cards or additional funding sources. Also, it’s crucial to have a solid repayment plan to pay off the balance before the promotional period ends, as interest rates after that can be quite high.
Using credit cards responsibly can help build your credit history, but mismanagement risks damaging your credit score and increasing your debt load. Additionally, some franchisors or lenders may prefer traditional financing options over credit card debt.
In summary, 0% credit cards can be a helpful piece of your funding puzzle if used wisely and strategically. Always consult with a financial advisor to ensure this approach aligns with your overall financing plan and business goals.
Home Equity Line of Credit
If you own a home and have built up equity, a Home Equity Line of Credit (HELOC) can be a flexible, low-cost way to fund your franchise. It allows you to borrow against the equity in your home — often up to 80–90% of its appraised value — and access that money as needed.
A HELOC works like a credit card: you’re given a credit limit, and you can draw funds, repay, and redraw during the draw period (typically 5–10 years). You only pay interest on what you use, and rates are usually much lower than unsecured loans or credit cards, because your home backs the loan.
This option can make sense for buyers with significant home equity who want to avoid selling investments or dipping into retirement accounts. It also allows for flexible use of funds — whether it’s the franchise fee, marketing budget, or working capital.
Of course, it’s important to consider the risk: your home is the collateral, so this strategy works best when you have a clear repayment plan and a franchise you believe in.
If you'd like help comparing a HELOC to other options, I'm happy to walk you through the pros and cons based on your goals.
Cash Value Line of Credit
If you have a whole life or permanent life insurance policy with built-up cash value, you may be able to tap into it through a cash value line of credit (CVLOC) to fund your franchise — without liquidating investments or taking on traditional debt.
This option allows you to borrow against the cash value of your life insurance policy, often at competitive interest rates, and typically without a credit check or income verification. The policy remains in force, and your cash value can even continue to grow while you're borrowing against it.
Unlike bank loans, CVLOCs offer flexibility in repayment and no restrictions on how the funds are used. That means you can apply it to franchise fees, startup costs, or operating expenses.
It’s a smart option for buyers who want to leverage existing assets to fund a business without disrupting retirement plans or investment accounts. However, if the loan isn’t repaid, it can reduce the policy’s death benefit — so it’s important to use this strategy responsibly.
If you're considering this funding path, I can help you explore whether it fits your goals and introduce you to professionals who specialize in setting it up correctly.
Crowdfunding
While less traditional, crowdfunding is emerging as a creative option to raise funds for certain franchise concepts — especially those with local appeal, social impact, or a compelling personal story behind them.
Crowdfunding platforms like Kickstarter, Indiegogo, or Fundable allow you to raise small amounts of money
from a large number of people, typically in exchange for perks, early access, or simple support (not equity). This works best when you can build a strong pitch — one that shows your vision, connects emotionally, and clearly explains how the funds will be used.
There’s also equity crowdfunding, where supporters actually invest in your business in exchange for a small ownership stake. These campaigns typically happen on regulated platforms like StartEngine or Wefunder, and they require a more formal structure, including legal filings and disclosures.
Crowdfunding isn’t easy — it takes marketing, video, and story-driven effort — but it can work for the right brand and the right buyer. It’s especially useful if you’re launching a community-oriented or highly visible concept.
If this path interests you, I can help you assess whether your franchise pick is crowdfunding-friendly — and whether it fits your overall funding strategy.
TESTIMONIALS
What Our Clients Say
Hear firsthand experiences from our satisfied customers.
"Thank you for your time, effort and patience to help me find the right franchise opportunity. Being a first time purchaser of a franchise, I wasn't sure what to expect; however, your guidance proved to be a tremendous time saving exercise at no cost to me. After we discussed my financial and personal goals, you really helped get me focused on those businesses that really "fit". Thank you for being involved throughout the process and answering my many questions along the way. I would recommend your service to anyone considering a franchise opportunity. I look forward to future success and wish you the same. Thank you! Warmest Regards."
"About a month and a half ago I contacted you to have you find me the right match for a franchise. Well, after our discussion, you were able to ascertain my wants, goals and needs. You matched me perfectly to the ideal business, with my background and desires. Also the financial investment was less than what I would have expected to embark on this exciting path.
Thank you for being AWESOME at what you do."
Frequently Asked Questions
How can working with you not cost me anything?
Working with me is absolutely free. Similar to real estate agents that receive a commission from the seller, I receive any fees directly from the franchise.
And no, you will not end up paying more by working with me. Franchise sales and fees are federally and state regulated and the cost is unable to be changed regardless of whether you work with me or not.
What that means for you is that you get expert franchise guidance, consulting, and introductions, without any risk of a price mark up.
Why do you make it a point to state that your Q&A session is "not a sales call"?
This is a great question and one I get often. The answer is simple: executing a franchise agreement is a big decision that involves in-depth steps and is not something that someone can be "sold".
The goal here is to help inform you and get you the answers you need.
If you are the right fit and get your questions answered then I know that only you can choose to move forward or not.
Why should I use you to help me decide which franchise to buy?
The truth is, finding the right franchise on your own can be overwhelming. Most websites are designed to sell — not to guide. They don’t know your background, goals, or market. You might find dozens of options that look great online, only to realize later they’re not a good fit for you personally or financially.
Worse, many franchise companies get thousands of inquiries each month and only respond to a small percentage. Without an inside track, your questions may go unanswered — and you could miss out on great opportunities.
That’s where I come in.
I take the time to understand you — your goals, skills, personality, financial picture, and local market — then I help match you with franchise opportunities that truly align with your vision. Think of me as your guide, advocate, and industry insider. I help you avoid costly missteps, save time, and find the right business faster, with clarity and confidence.
How long does the process take?
By following the right process, I am usually able to help a client become a franchise owner in about 4 to 6 weeks.