July 7, 2026 · Ron Taylor
How do people actually pay for a franchise?
SBA loans, retirement rollovers, home equity and cash. A plain look at the options and the tradeoffs.
Very few people buy a franchise with cash alone. Here is how most of the buyers we work with put the money together.
SBA 7(a) loans
The most common route. Expect to put down around 20 to 30 percent of the total project cost. Many franchise brands are pre-reviewed by lenders, which can speed things up. You will usually sign a personal guarantee.
Retirement rollovers
Often called ROBS, this lets you use eligible retirement funds to invest in your own business without an early withdrawal penalty. It is legal and common. It is also complicated, and it puts your retirement at risk. Use a specialist and go in with your eyes open.
Home equity
Lower rates, but your house is on the line. We are careful with this one.
What we tell everyone
Borrow for the business, not for your living expenses. Keep a personal cushion of at least six months. And budget from the high end of Item 7, because that is closer to what you will actually spend.
We will introduce you to lenders who know franchising. That part costs you nothing.