Franchise Financing Options: A Complete Guide
SBA, ROBS, home equity, conventional, franchisor financing, and unsecured personal loans — when each makes sense.
Most franchise buyers use a combination of financing sources. Understanding which to use, in what proportion, and in what order matters as much as the brand you choose.
SBA 7(a) Loans
The dominant franchise financing vehicle. Up to $5M, 7–10 year terms, competitive rates. Best for investments above $100,000 with strong personal credit.
ROBS
Use retirement funds without penalty. Best for buyers with $75K+ in qualified accounts who want to avoid debt or use ROBS as SBA equity injection.
Home Equity
HELOC or cash-out refinance can fund equity injection or smaller franchise investments. Best for buyers with substantial home equity and rate confidence.
Franchisor Financing
Some franchisors defer the franchise fee or finance specific equipment. Often available for veterans, women, or minority operators. Always ask.
Conventional Bank Loans
Available for established business owners with banking relationships and strong collateral. Faster than SBA but generally requires more equity.
Unsecured Personal Loans
Up to $150K with strong credit. Higher rates than SBA but faster and no collateral required. Useful for smaller franchises or to fill gaps.
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