How to get funding for a franchise in the US

Panna Kemenes

Owning a franchise business offers a hybrid form of business model that combines aspects of sole proprietorship with those of a corporation.

However, just like in any other businesses, sourcing out capital for a franchise can be quite challenging. In this article, we’ll show you several financing options for franchisees in the US.

Collect your US franchise funding with ease - whatever the currency.
Discover Wise Business

How to get funding for a franchise in the US - Top options

1. Personal Investment

Having your skin in the game can make it more motivating to run your business. This can either be your own cash or with collateral on your assets. It will also prove to your franchisor and other money lenders that you are committed to this business venture.

Investing your hard earned money to your franchise business is a good start for your long-term goals, but it’s always associated with risks. There are many factors that can determine the outcome of your business venture.

2. Franchisor Financing

This financing option is always a plus to new franchisees, many corporations like UPS Store, Fastsigns and Cruise planners offer financing options to its franchisees.¹

Franchising companies help franchise owners especially those who are just starting as both of them will benefit from it. These companies offer innovative solutions to help new franchisees, and even existing and prospective investors get into business or expand their business.

It’s a good option if you lack funding since franchise owners know the ins and out of the business. It’s a must to search for the best franchise system that offers the better opportunity; not just brand recognition but also financial support to franchisees.

3. Bank Loans

There are many financing options for your franchise business, but making the right choice is vital to your success. Bank loans offer different payment plans which can be personalized.

Commercial banks fund many franchises, but they always favor business with brand names and long track records of consistent cash flow, so your choice of a franchise system can help or hurt you.

Another concern with banks loan is your credit rating. You are required to present a good business plan and copies of personal tax returns for three years and the reliable source of your down payment.

Always remember that both personal and business credit history is important in applying for a bank loan. If you don’t have a business credit, personal credit worthiness is considered.

4. Small Business Administration (SBA) Loans

SBA loans are loans partially guaranteed by the U. S. Small Business Administration (SBA) making them less risky. This government agency provides SBA loan guarantees of up to 85% of the loan amount provided by SBA approved lenders – typically banks.³

SBA loans are the most desirable funding options for franchise business owners since it offers lower interest rates and longer repayment terms than a typical loan from commercial banks.

Typically, requirements needed to qualify for SBA loans are almost the same as bank loans: (business plan, tax returns, bank statements, balance sheet, profit and loss statement, cash flow statement). The most important factor to consider is your credit score, so take into account the history of your chosen franchise system.

Based on Fundera customers, most customers who were approved of SBA loans had annual revenue of over $180K, credit score of 680, and have been doing business for over 4 years

SBA only acts as a federal agency dedicated in helping small businesses that uses federal money to guarantee a percentage of loans administered by traditional banks making it easier to lend money to small business like franchise owners.

5. Crowdfunding

Crowdfunding can be an alternative resort in getting the capital you need for your franchise business. It is the practice of funding your business venture by raising small amounts of money from a larger number of people.

Crowdfunding is typically done on the internet and it became a game-changer for investors who want to be part of a certain industry, it accelerates angel investing and results in a new market for investment.

The top online fundraising and crowdfunding platforms are:

  • GoFundMe – total raised fund of $15B with $50M supporters, platform fee 0%, payment fee 2.9% + $0.30. GoFundMe Guarantee protects donors and beneficiaries from fraud.²

  • INDIEGOGO - total raised fund of $1.5B with 10M supporters, platform fee 5%, and payment fee 3% + $0.30. It also offers flexible funding, and specializes in technology and hardware product launches.²

  • KICKSTARTER - total raised fund of $3B with 15M supporters, platform fee 5%, payment fee 3% + $0.20. Specializes in creative projects with robust reward level feature, limited email support hours and requires Kickstarter approval to launch a fundraiser.²

  • FUNDLY - total raised fund of $330M, platform fee 4.9%, payment fee 2.9% + $0.30. Can withdraw immediately and deposits take 2-5 business days; limited email support hours.²

  • JustGiving –with 22M supporters, platform fee 0-5%, for non-profits, 0% for personal, payment fee 2.9% for non-profit, 2.9% + $0.30 for personal; supports UK gift aid; limited email support hours.²

  • Facebook – platform and payment fee, personal: 6.9% + 0.30, for non-profit 0%, can withdraw immediately and deposits take 7+ days, no donor guarantee policy.²

Collect your US franchise funding with ease - try Wise Business

Now you have some ways to raise money for a franchise - you need to consider how to receive the funding.

The Wise Business account helps you receive your US franchise funding. If you plan to use crowdfunding platforms, you can use Wise to receive transfers that are in a different currency to avoid losing money from poor exchange rates and receiving fees.

With a multi-currency account, you can get ten major account details to receive money like a local in those currencies. You can also hold your money in dozens of different currencies, and switch between them when you need to, using the real exchange rate.

See how much you could save
with Wise Business

If your franchise is operating overseas, you can benefit from using the account to manage cash flow in a different currency. This keeps all your financial transactions in one place, reduces admin, and gives more time to focus on scaling up your business.

There’s no markup, no hidden costs, and accounts are free to open in the US, with a one-time fee for full account details.


  1. Biz2Credit blog post
  2. blog post
  3. Fundera blog post

Sources checked December 20, 2022.

Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

Money without borders

Find out more

Tips, news and updates for your location