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USING RETIREMENT ACCOUNTS TO
FUND A FRANCHISE

Retirement funds are one of the most common ways franchise owners help fund their initial investment without taking on traditional debt. 

Key points to know: 

  • Penalty-free Access: Certain structures allow you to use eligible retirement funds without early withdrawal penalties.
  • Debt-free Funding: Funds can often be accessed without creating monthly loan payments.
  • Actve Control: You maintain control of your retirement investment by investing in your own business.

This option is often used by candidates who have strong retirement savings but limited cash on hand and want to invest in a business they actively control.

SBA FRANCHISE LOANS

Small Business Administration loans are a popular financing option for franchise buyers who qualify. SBA loans are designed to help small business owners access capital with more favorable terms than conventional loans. 

Why franchise buyers consider SBA loans: 

  • Improved Cash Flow: Longer repayment terms that help manage cash flow
  • Lower Entry Cost: Lower downpayment than traditional loan
  • Competitive Rates: Competitive interest rates compared to traditional business loans
  • Comprehensive Funding: Ability to finance a portion of the franchise fee, build-out, and working capital
  • Keep Your Upside: Non–Revenue-Based Payments. Owners keep upside as the business scales.
  • Future Flexibility: Very limited prepayment penalties and ability to refinance as cashflow grows.

Because Restoration 1 is approved on the SBA Franchise Registry, many lenders are familiar with the brand and business structure, which can help streamline the lending process. 

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HELOCs AND HOME EQUITY LOANS

Some franchise buyers leverage equity in their home to help fund part of their investment. A Home Equity Line of Credit or home equity loan can be used as a standalone option or combined with other financing sources. 

How HELOCs are commonly used: 

  • Initial Capital Support: Covering a portion of the franchise fee or startup costs.
  • Bridge Financing: Acting as a bridge while other financing is finalized.
  • Revolving Access: Providing flexibility with revolving access to funds as needed.

This approach may be attractive to candidates who have built significant home equity and want flexibility in how and when funds are accessed. 

COMBINING MULTIPLE FUNDING SOURCES

Many successful franchise owners use more than one financing method. Combining retirement funds, SBA financing, and home equity can reduce risk while preserving liquidity for operating expenses. 

Our franchise team can help you: 

  • Typical Funding Mixes: Understand typical funding mixes used by current owners
  • Personalized Fit: Identify which options may fit your financial profile
  • Lender Preparation: Prepare for conversations with lenders and financing partners
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If you are not ready to dive headfirst into learning about becoming an R1 owner, but want to learn more about funding strategies, schedule some time with our VP of Franchise Development:

  
    

READY TO FUND YOUR FUTURE?
CONNECT WITH OUR TEAM TO EXPLORE
YOUR PERSONALIZED FINANCING OPTIONS