Financing the Purchase of a New Franchise or Existing Business

While cash is always king, there are some financing alternatives available for many investors wanting to start their own business:

  • With good credit and a strong net worth, some franchisors will finance a portion of the franchise fee and equipment costs.
  • With good credit and a strong net worth, some franchisors will provide a loan for a portion of the initial investment through an affiliated finance company.
  • A bank loan guaranteed by the SBA (Small Business Administration) may be available. The SBA guarantees certain business startup loans up to 90% of the loan amount on attractive terms. We can provide you with additional information. See: Small Business Administration-SBA Loans.
  • Many buyers are utilizing 401 (k) or IRA rollover funds to acquire a franchise. This involves reallocating your investments from your current holdings to your own company. See: Acquire a Business with Self-Directed IRA and 401k Accounts.
  • Today, many investors are using the proceeds of a Reverse Mortgage to acquire a franchise or new business. Investors that are age 62 or greater may qualify for a loan that carries no monthly payments until their house is sold. See: Reverse Mortgage Loans-Buy a Franchise or Existing Business.
  • Another common option is to obtain a home equity loan. This can be a standard home equity loan or a home equity line of credit.
  • For certain types of business, the principals of Pacific Business Advisors may provide a portion of the initial investment. Call for information.

The business broker consultants with Pacific Business Advisors can assist you in comparing the various alternatives available. There is no cost for a consultation.


Advantage to Buying a Franchise

Franchise Disclosure Document (FDD)

Sample FDD Table of Contents

What is a Franchise?

Credit Enhancement
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Direct: 818-991-9019