You’ve saved $40,000 toward opening your business. The franchise you want requires $200,000. Most aspiring entrepreneurs stop here, assuming the gap is insurmountable.
They’re wrong.
Franchises that offer financing exist precisely to bridge this gap. The franchise model gives you access to funding options independent business owners can’t touch—SBA-preferred lending, equipment leasing programs, and franchisor-backed financing that treats your proven business model as collateral.
Why Franchises Unlock Financing That Startups Can’t Access
Lenders view franchises differently from independent startups. When you buy a franchise, you’re purchasing a franchise system with documented success rates, established revenue patterns, and operational playbooks. The franchised brand you’re investing in has already proven its business model works. Banks can underwrite these numbers. They can’t underwrite your untested idea.
About 10% of all SBA loans go toward franchise financing. That concentration exists because the risk calculation shifts when a proven model backs your business plan.
Signarama’s Financing Programs: Equipment, Veterans, and Third-party Options
Signarama structures financing to address the specific capital barriers franchise owners face when they want to open a franchise. Understanding what franchise fees cover helps you identify which costs need financing and which are already included in your initial investment.
Equipment Financing Through Partner Companies
Equipment represents one of the largest upfront costs after the initial franchise fee. Signarama partners with leading financing companies to offer qualified franchisees leases on all equipment costs. This structure preserves your working capital for inventory, payroll, and the inevitable adjustments every new location faces.
Veteran Financing Advantages Through VetFran
Signarama offers returning veterans reduced franchise fees through the VetFran program. Discounts range from 10% to 50% off the initial franchise fee, scaled to years of service. This reduction lowers your total capital requirement before you even approach a lender.
Assistance With Local and Third-party Funding
Different states and municipalities maintain grant and loan programs for small businesses. Signarama’s staff helps franchisees locate and apply for these funding sources. They also connect qualified candidates with third-party vendors who specialize in franchise lending.
Third-Party Franchise Financing: SBA Loans and Alternative Lenders
Beyond Signarama’s direct programs, franchisees can access the broader franchise financing market.
SBA 7(a) Loans for Qualified Buyers
SBA 7(a) loans offer the lowest interest rates and longest repayment terms available—up to 10 years for working capital and 25 years for real estate. These loans can fund up to 90% of your franchise cost. The SBA guarantee reduces lender risk, which translates to better terms for you.
Requirements include a strong credit score (typically 680+), industry experience or transferable skills, and the ability to contribute 10-20% of the total investment from your own capital.
Equipment Leasing as a Capital Preservation Strategy
Equipment leasing through third-party providers lets you acquire necessary machinery without the upfront cash outlay. Lease payments become operating expenses, which can offer tax advantages. When the lease term ends, you can purchase the equipment at fair market value, upgrade to newer models, or return it.
Alternative Lenders for Faster Approval
If you don’t qualify for SBA financing or need capital faster, alternative lenders offer franchise-specific loans. These typically carry higher interest rates but feature more flexible credit requirements and approval timelines measured in days rather than months.
How Franchise Financing Reduces Total Business Risk
The cost savings of franchising versus independent entrepreneurship extend beyond obvious expenses. Access to established financing relationships represents one of those hidden advantages.
When you launch an independent business, you’re proving a concept while building it. Financing reflects that dual risk. When you launch a franchise, the concept is already proven. You’re executing a documented system. Lenders price that difference into their terms.
The franchise model also provides clarity on total investment before you commit. Franchisors disclose the initial franchise fee, operational costs, and all ongoing expenses associated with operating a franchise in the Franchise Disclosure Document. You know the number you need to finance. Independent entrepreneurs frequently underestimate their capital requirements and run out of runway.
Structuring Your Franchise Financing: Mix and Match Approaches
Few franchisees rely on a single financing source. Most combine several:
- Personal savings for 20-30% of the total investment
- SBA loan for the initial franchise fee and working capital
- Equipment leasing for machinery and technology
- Home equity line of credit for additional cushion
This layered approach matches each capital source to its most efficient use. Equipment leases make sense for assets that depreciate. SBA loans make sense for long-term business expenses. Personal capital makes sense for immediate costs that can’t wait for approval.
What Lenders Examine in Franchise Financing Applications
Understanding lender priorities helps you prepare a stronger application and business plan.
Personal Credit and Financial History
Lenders review your personal credit score, debt-to-income ratio, and recent financial behavior. They’re assessing your reliability as a borrower, not your business acumen.
Liquid Capital and Net Worth
For a Signarama franchise, you typically need $75,000 in liquid capital and $60,000 in net worth. These numbers demonstrate your ability to weather slow periods and unexpected costs.
Industry Experience or Transferable Skills
You don’t need sign industry experience to qualify, but lenders want evidence that you can run a business. Management experience, customer service background, or operational expertise all strengthen your application.
The Franchise’s Performance Data
Lenders examine Item 19 of the Franchise Disclosure Document, which shows financial performance data, including gross sales of existing locations. Strong systemwide performance improves your individual application.
Making Your Franchise Financing Decision
Before signing your franchise agreement, explore Signarama’s complete financing options to understand which programs match your financial situation. The franchise model exists to make business ownership accessible to capable operators who lack full capital. Financing isn’t a fallback position—it’s the designed path to ownership for most successful franchisees.