Top 5 Questions - Franchise Funding Options

SBA (Small Business Administration) Loans

SBA loans are one of the most popular ways to fund a franchise—especially for first-time business owners. Backed by the government, SBA loans reduce risk for lenders, making it easier for you to qualify.

‍Pros:
• Low down payments (often 10-20% of the total project cost).
•Longer repayment terms (up to 10 years for business loans; 25 years for real estate).
• Competitive interest rates compared to other loans.

‍Cons:
• Lengthy approval process—it can take 60-90 days to secure an SBA loan.
• Requires strong credit (typically 680+), collateral, and personal guarantees.
• Involves significant paperwork and documentation.

‍Pro Tip: Not all franchises are SBA-approved. Ask franchisors if they are listed in the SBA Franchise Directory for smoother processing.

Rollover for Business Startups (ROBS)

ROBS lets you use retirement funds (like a 401(k) or IRA) to fund your franchise—without taxes or penalties. This method is often misunderstood but can be a smart move for the right investor.

‍Pros:
• No loan to repay—you’re using your own money.
• Can fund your entire franchise investment, including working capital.
• Avoids early withdrawal penalties or taxes.

‍Cons:
• Complex setup (requires forming a C-Corp and creating a retirement plan for the business).
• Requires strict IRS compliance (typically needs a third-party administrator).
• Risk of losing retirement funds if the business fails.

‍Pro Tip: Work with an experienced ROBS provider to ensure compliance. Don’t DIY this process!

Traditional Bank Loans

Banks sometimes offer small business loans for franchise investments—but these are harder to qualify for than SBA-backed options.

‍Pros:
• Straightforward for experienced borrowers with great credit.
• May offer custom terms based on relationships with the bank.

‍Cons:
• High credit and collateral requirements.
• Shorter repayment terms than SBA loans, which may stress cash flow.
• Banks may hesitate to lend to first-time owners or newer brands.

‍Pro Tip: Build relationships with banks early and present a robust business plan, including franchise earnings data.

Franchisor Financing

Some franchisors offer direct financing, especially for fees, equipment, and build-outs.

‍Pros:
• Fast and franchise-friendly.
• Possible deferred payments to give you breathing room.

‍Cons:
• Often limited in scope—may not cover all costs.
• May include higher rates than banks or SBA.

‍Pro Tip: This program is an absolutely rarity, so don’t expect the franchisor to offer it. And if they do, always compare franchisor financing against outside options for fairness.

How to Choose the Right Franchise Funding Option

Choosing the right funding method depends on:

Available assets—home equity, retirement funds, cash.

Credit profile—score, debt, collateral.

Total investment—startup, fees, working capital.

Risk tolerance—what are you willing to risk?

Example Scenarios:

Low cash, great credit? SBA loans.

Big retirement savings? ROBS.

Equity-rich homeowner? HELOC.

High net worth? Cash or private partners.

How We Help You Access the Best Franchise Funding Options

At Better Days Franchise Co., we know that finding the right funding option is often what makes or breaks a franchise investment. And here’s the reality—not all lenders are created equal.

‍With 100+ collective years of franchise experience on our team, we've seen firsthand which lenders and funding partners truly understand franchising—and which don’t.

Over time, we've built strong relationships with the nation’s leading franchise funding institutions, giving our clients priority access to programs and rates that aren’t always easily available to the public.

‍What does that mean for you?

Bottom line—we don’t just help you pick the right franchise, we help you secure the funding to make it a reality—on terms that set you up for success.

what are my franchise funding options?

SBA (Small Business Administration) Loans

Rollover for Business Startups (ROBS)

Traditional Bank Loans

Home Equity Loans and HELOCs (Home Equity Line of Credit)

Franchisor Financing

Equipment Leasing and Financing

Personal Savings (Bootstrapping)

Friends, Family, and Private Investors

How to Choose the Right Franchise Funding Option

How We Help You Access the Best Franchise Funding Options

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