Free Resource
Franchise Financing Guide
Understanding your funding options is one of the most important steps in the franchise buying process. This guide covers the six most common franchise financing vehicles — including SBA loans, ROBS, and franchisor programs.
Disclaimer: This guide is for educational purposes only. Brian Braggs does not receive referral fees from lenders. Consult a financial advisor before making financing decisions.
Financing Options
6 ways to fund a franchise
SBA 7(a) Loan
The most common franchise financing vehicle. SBA 7(a) loans offer low down payments (10–20%), long repayment terms (10 years), and competitive rates. Many franchisors are pre-approved on the SBA Franchise Registry, which speeds up the process.
Pros
- + Low down payment
- + Long repayment terms
- + Widely available
Cons
- − Requires good credit (680+)
- − Collateral may be required
- − Approval can take 60–90 days
ROBS — Rollover for Business Startups
ROBS allows you to use retirement funds to invest in a franchise without paying early withdrawal penalties or taxes. You create a C-Corp, establish a new 401(k) plan, and roll your existing retirement funds into it. The plan then buys stock in your new company.
Pros
- + No debt
- + No interest payments
- + No monthly loan payments
Cons
- − Complex setup (requires a ROBS provider)
- − Ongoing compliance requirements
- − Puts retirement savings at risk
Conventional Business Loan
Traditional bank loans for business purposes. Typically require stronger credit, more collateral, and shorter repayment terms than SBA loans — but can close faster.
Pros
- + Faster approval
- + Flexible terms
- + No SBA fees
Cons
- − Higher rates than SBA
- − Stricter qualification
- − Shorter repayment periods
Franchisor Financing
Some franchisors offer in-house financing, deferred franchise fees, or partnerships with preferred lenders. This can simplify the process but may come with restrictions.
Pros
- + Streamlined process
- + May include deferred fees
- + Franchisor-backed
Cons
- − Not available for all brands
- − May have higher rates
- − Limited flexibility
Home Equity Loan / HELOC
Using home equity to fund a franchise is common but carries significant risk — your home is collateral. Best used as a supplement to other financing, not the primary source.
Pros
- + Low interest rates
- + Flexible draw schedule (HELOC)
- + No business collateral required
Cons
- − Home is at risk
- − Reduces personal financial cushion
- − Not recommended as sole funding source
Portfolio Loan / Securities-Backed
Borrow against your investment portfolio without liquidating assets. Rates are typically low and approval is fast, but your investments remain at risk if the loan is called.
Pros
- + Fast approval
- + Low rates
- + No impact on credit score
Cons
- − Portfolio must remain as collateral
- − Margin call risk
- − Not available at all institutions
Not sure which funding path fits your situation? Brian can map it out for you — free.
Ready to Get Funded?
Connect with franchise-specialized lenders
Brian works with Benetrends, Guidant Financial, FranFund, Live Oak Bank, and ApplePie Capital. A single discovery call gets you introductions to the right lenders for your situation.
Ready to explore franchise ownership?
Schedule a free consultation to discuss your goals, evaluate opportunities, and receive independent guidance tailored to your situation.
General Disclaimer: Information provided by Brian Braggs and on this website is for educational and informational purposes and is not legal, tax, accounting, investment, or financial advice. Franchise ownership involves business and financial risk, and individual results vary. No revenue, earnings, profitability, financing, or business-success outcome is promised or guaranteed. Prospective franchisees should review the applicable current Franchise Disclosure Document (FDD), conduct independent due diligence, speak with current and former franchisees where applicable, and consult qualified legal, accounting, tax, and financial professionals before making an investment decision.
No Franchise Offer: This website is for general informational purposes and is not an offer to sell, or a solicitation of an offer to buy, any particular franchise. Franchise offers are made only through the applicable franchisor’s current Franchise Disclosure Document and in compliance with applicable federal and state law. Franchise registration, exemption, filing, broker, and disclosure requirements vary by jurisdiction.
Financial Performance Notice (FTC 16 CFR Part 436): Any financial figures referenced on this page — including revenue, growth rates, or performance data — reflect Brian Braggs’ personal historical experience operating his own Right at Home franchise in Peoria, Illinois, and are presented solely as factual biographical context. They are not a guarantee, projection, or forecast of what any prospective franchisee will achieve. Individual results will vary based on location, market conditions, franchisee effort, capital invested, and many other factors. Franchising is not a guarantee of success. You should review Item 19 of the applicable FDD and speak with existing and former franchisees before making any investment decision.
Independent Franchise Consultant & Compensation Disclosure: Brian Braggs is an independent franchise consultant and is not an employee or agent of any individual franchise brand unless expressly stated. Brian may receive referral or consulting compensation from franchisors or related parties when a candidate enters into a franchise relationship. Compensation arrangements may vary by franchisor. Franchise opportunities are evaluated based on factors including candidate goals, qualifications, financial considerations, market availability, business-model preferences, and due diligence. Prospective franchisees should independently evaluate each opportunity and review the applicable Franchise Disclosure Document before making an investment decision.
For complete disclosures, see our Franchise & Advisory Disclosures.