Thinking about owning a franchise but not sure how to secure the money before committing to a brand? You’re not alone. One of the most common roadblocks for aspiring franchise owners is figuring out financing before making a decision. The truth is, preparing financially before you sign a franchise agreement can make the entire process smoother — and often gives you better negotiating power.
At Starting Gate Financial (SGF), we specialize in helping small businesses and franchise owners access flexible funding solutions. In this guide, we’ll share practical franchise financing hacks that can set you up for success before you even pick your brand.
Why You Should Secure Financing Early
Waiting until after you’ve chosen a franchise can limit your funding options. Lenders and investors often want to see that you have your financial groundwork in place. By exploring financing early, you’ll:
- Know your budget range for franchise fees.
- Strengthen your loan applications with pre-approval or capital in hand.
- Increase confidence when comparing franchise opportunities.
- Position yourself as a serious candidate in the eyes of franchisors.
📌 According to the International Franchise Association, early financial planning is one of the top predictors of long-term franchise success.
Hack #1: Explore SBA Loans Before Committing
The U.S. Small Business Administration (SBA) offers several programs that franchisees frequently use. Even if you haven’t chosen a franchise brand yet, you can start the process of learning about SBA loans, what documentation is required, and how much capital you may qualify for.
For example, the SBA 7(a) Loan Program is one of the most popular for franchise financing because it covers working capital, equipment, and even real estate.
👉 Pro Tip: Work with a financial partner like SGF to streamline the SBA loan process. Many first-time franchisees find the paperwork overwhelming, but a lending partner can simplify the steps.
Hack #2: Leverage Your Retirement Savings (ROBS)
Did you know you can use your retirement funds to start a franchise without penalties or early withdrawal taxes? This is called a Rollover for Business Startups (ROBS).
Platforms like Guidant Financial explain how this works: you essentially set up a C-corporation and invest your retirement funds directly into your business. While this process requires legal and tax expertise, it’s a powerful way to secure capital before picking a brand.
Hack #3: Build Relationships with Alternative Lenders
Traditional banks can be slow and rigid, but alternative lenders offer more flexible franchise financing options. These can include:
- Equipment financing (great for franchises with heavy equipment needs).
- Revenue-based financing (payments tied to your sales).
- Short-term working capital loans.
At SGF, we specialize in connecting business owners with lending solutions that match their timeline and goals. Unlike big banks, we can tailor loans to your unique situation — even if you’re still in the exploration phase.
Hack #4: Strengthen Your Personal Financial Profile
Even before you apply, start preparing your personal financial picture:
- Improve your credit score by paying down debts.
- Organize tax returns and bank statements.
- Document any personal assets you may use as collateral.
Investopedia notes that lenders often evaluate the franchise owner more critically than the franchise itself. By shoring up your finances early, you’ll increase your approval odds no matter which brand you choose.
Hack #5: Consider Partnerships and Investors
You don’t always need to fund a franchise alone. If you have strong business skills but lack capital, consider partnering with an investor who provides funding in exchange for equity or profit-sharing.
Platforms like AngelList and networking events in your area are good places to start building connections. At SGF, we’ve also seen clients successfully combine investor funds with small business loans to reduce their overall risk.
Hack #6: Compare Franchise Fee Structures Before Applying
Not all franchises are created equal when it comes to financing. Some require high upfront franchise fees, while others keep startup costs lower. By securing pre-approval for financing, you’ll know what you can realistically afford.
Example: A restaurant franchise may require $500,000 in liquid capital, while a service-based franchise could start under $100,000. With financing in hand, you can confidently target the brands within your reach.
Hack #7: Work With a Financing Partner Early
One of the best hacks is to stop going it alone. A trusted financial partner can:
- Help you identify the best funding options.
- Guide you through SBA and alternative loan applications.
- Save you from wasting time on financing paths that don’t fit your profile.
That’s exactly what we do at Starting Gate Financial — we give aspiring franchise owners clarity, confidence, and capital.
Conclusion: Set Yourself Up for Franchise Success
Securing financing before picking a franchise brand isn’t just smart — it’s a competitive advantage. Whether you tap into SBA loans, retirement funds, or alternative lenders, being proactive ensures you’re ready when the right opportunity comes along.
At Starting Gate Financial, we specialize in helping entrepreneurs like you find the right financing solutions. If you’re ready to explore funding options before choosing your franchise, we’re here to help.