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Franchise

New Franchise Location Financing

A new franchise location has a long list of costs that all land before the first customer walks in. You're paying contractors to turn an empty shell into a space that meets brand standards, ordering a specified equipment package, installing signage, stocking shelves, and carrying payroll through training and soft opening. Financing lets you spread those costs out so you keep the cash reserves your franchisor and landlord expect to see.

We help first time franchisees and multi unit operators build a funding plan for each new unit. That often means an SBA loan for the construction and opening budget, paired with equipment financing that can move on its own timeline. One application with a soft credit pull lets us compare options across 60+ lending sources.

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Programs that fitSBA LoansEFAEquipment Loan

What This Financing Can Cover

  • 01

    Build Out and Leasehold Improvements

    Build out covers the construction that turns a leased space into your finished location: framing, plumbing, electrical, HVAC changes, flooring, ceilings, restrooms, and finishes that match the brand's design guide. Leasehold improvements stay with the property, so lenders can't repossess them like equipment, which is why SBA loans are often the best fit for this part of the project. Before you apply, get a detailed contractor bid and confirm any tenant improvement allowance from your landlord. That allowance reduces how much you need to borrow and shows lenders you negotiated well.

  • 02

    Equipment Packages

    Most franchisors publish a required equipment list, whether that's ovens and refrigeration for a food concept, treatment chairs for a wellness brand, or machines and racks for a fitness studio. Because those items hold value and can serve as collateral, equipment financing is often the fastest piece to approve, and it's available from day one for startups. Ask your franchisor whether they have approved vendors and whether any used or refurbished items are permitted. Some brands allow certified used equipment for back of house items, which can lower the total you finance.

  • 03

    Signage

    Exterior signage is often one of the first things a landlord and city permit office want to review. Channel letter signs, pylon or monument panels, window graphics, menu boards, and interior wayfinding all need to match brand specifications. Budget for permits, engineering drawings, and installation, not just the sign itself. Digital menu boards and lighted signs can often be included in an equipment financing package, depending on the lender, while permit and design fees usually fit better inside the broader SBA loan.

  • 04

    Opening Inventory and Working Capital

    Before you record a single sale, you'll buy opening inventory, pay staff during training, fund grand opening marketing, and cover rent while sales build. Many franchise disclosure documents estimate this startup working capital, and lenders expect you to plan for it. For a new business, SBA loans can often roll working capital into the overall project. Standalone working capital and lines of credit require at least 1 year in business, so they become useful tools later, when you're running the store and planning your next opening.

Why Finance a New Location Instead of Paying Cash

Even well capitalized owners rarely pay cash for a full opening. Construction often runs over budget, and a slow first quarter can strain a business that spent its reserves on the build. Financing keeps cash in the bank for surprises.

It also protects your ability to grow. Franchisors that grant development rights for several units want to see that you can fund the next opening on schedule. Using financing on the first unit leaves room for the second. Equipment you finance may also qualify for Section 179 deductions; check with your tax professional.

What Your Financing Can Include

Depending on the lender and the program, a new location package can cover more than hard construction and equipment:

  • Architectural and engineering plans
  • Permits and impact fees
  • Freight, delivery, and installation for equipment
  • Point of sale systems, security cameras, and back office software
  • Furniture, fixtures, and decor required by the brand
  • Initial franchise fee, in some SBA structures
  • Staff training costs and grand opening marketing

Programs That Work Well for New Franchise Locations

  • Program

    SBA Loans

    Up to $5MM for build out, franchise fees, and working capital in one package, which suits most ground up and second generation openings.

  • Program

    Equipment Finance Agreement (EFA)

    You own the equipment from day one and make fixed payments, so the brand's equipment package can fund separately and quickly.

  • Program

    Equipment Loan

    A loan that usually carries the strongest incentives for paying off early, though the details depend on the lender, which helps if you expect strong early sales.

New Business or Established, We Can Help

Brand new franchisees can finance equipment from day one, and SBA lenders regularly work with first time owners who bring relevant experience. Established operators can use the results of existing units to support the next location. If you plan to buy an operating unit instead of building one, see franchise acquisition financing, or return to our franchise financing overview.

What You'll Need

Equipment requests under $150K can often be approved on the application alone. For a full SBA opening package, lenders typically ask for personal financial statements, tax returns, a business plan with projections, your franchise agreement, the lease or letter of intent, and contractor and equipment quotes. Equipment deals can often fund with just a driver's license and the invoice.

Frequently Asked Questions

Still have a question?

Talk to a real person. We're happy to walk you through your options.

How much cash do I need to bring to a new franchise opening?

Lenders usually expect an owner cash injection, and the amount depends on the program, the lender, and the total project cost. Your franchise disclosure document lists estimated startup costs, which is a good starting point for planning. We can walk you through what lenders will likely want to see.

Can I finance the build out if I'm leasing the space?

Yes. Leasehold improvements are a common part of SBA franchise loans, even when you don't own the building. Lenders will want to review your lease, and they often prefer a lease that runs at least as long as the loan.

Should I finance equipment separately from the build out?

It often makes sense. Equipment financing can approve and fund quickly because the equipment itself backs the deal, which keeps your delivery schedule on track while the larger SBA loan works through underwriting.

Can I finance a second or third location while the first is still new?

It's possible, depending on the lender. Lenders will look at how your first unit is performing and at your overall cash position. Solid early results make the next request stronger.

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