What is the best loan for buying a franchise?

SBA 7(a) loans are the most popular financing vehicle for franchise purchases — they offer up to $5 million, terms up to 10 years, and competitive rates. Franchises on the SBA Franchise Directory are pre-approved, which speeds up the process significantly. ROBS (Rollover for Business Startups) is another option for using retirement funds tax and penalty-free to fund a franchise.

Do I need prior business experience to get franchise financing?

Not necessarily. Many lenders view franchises favorably because of the established brand, proven business model, and franchisor support. Some franchisors provide financing directly. SBA lenders often weight your relevant industry experience and personal financial strength more heavily than prior business ownership history when underwriting franchise loans.

Can I finance both the franchise fee and buildout costs?

Yes — SBA 7(a) loans can cover the full range of franchise startup costs: franchise fee, leasehold improvements, equipment, initial inventory, working capital, and even a portion of the royalty reserve. Lenders will want a detailed use of proceeds statement and the franchise disclosure document (FDD) as part of the application.

Franchise Financing

Fund Your Franchise. Own Your Future.

Buying into a proven franchise system is one of the smartest paths to business ownership. We help aspiring franchisees secure the right funding — from SBA loans to conventional financing — so you can focus on opening day.

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$50K–$5M+Typical Funding Range

As Low as 10%Down Payment (SBA)

Up to 25 YearsRepayment Terms

SBA ApprovedMajor Franchise Brands

Why SBA Loans Are Popular for Franchises

The SBA maintains a Franchise Directory of pre-approved brands. If your chosen franchise is on the list, the loan process is significantly faster and simpler because the franchisor's agreements have already been reviewed and approved.

Popular SBA-eligible brands include McDonald's, Subway, Anytime Fitness, Ace Hardware, and hundreds more. Even if your brand isn't on the list, conventional loans may still be an excellent option. Before you apply, review our fundability checklist — lenders evaluate franchise applicants on the same business credit and entity criteria as any other borrower.

How It Works

1
Select Your Franchise
Choose your brand and obtain the Franchise Disclosure Document (FDD).
2
Pre-Qualification
We review your financials, credit, and liquidity to determine the best loan program.
3
Application & Underwriting
Complete your loan application. We manage communication with lenders and the SBA.
4
Funding & Grand Opening
Loan closes, funds are disbursed, and you're ready to launch your franchise.

What Franchise Costs Can Be Financed?

Franchise fee (initial license fee)
Leasehold improvements and build-out
Equipment and technology
Initial inventory
Working capital for the first 6–12 months
Commercial real estate purchase

Qualification Requirements

Personal credit score 680+ (for SBA)
Sufficient personal liquidity (10–20% down)
Franchise disclosure document (FDD)
Business plan and projections
Relevant industry experience (preferred)

Franchise Financing Options

Program	Amount	Best For	Key Feature
SBA 7(a)	Up to $5M	Full franchise investment	10% down, 25-year term
SBA 504	Up to $5.5M	Property + equipment	Below-market fixed rate
Conventional Loan	$50K–$5M	Strong credit/cash buyers	Faster, less paperwork
ROBS Program	Varies	Using retirement funds	No debt, no interest
Franchisor Financing	Varies	Approved brands only	Streamlined, brand-specific

Illustrative example terms shown for demonstration only. Not an offer or guarantee of financing.

Sources & Further Reading

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