There’s no two ways around it: starting a business is a big investment. For many would-be franchise owners, the cost can seem like a barrier to entry. Don’t let franchise startup costs stop you from achieving your dreams of business ownership! There are plenty of ways to finance a franchise, from Small Business Administration (SBA) loans to in-house financing, and one is sure to be a good fit for you.
Interested in learning more about how to finance a franchise? Check out our top tips for stress-free franchise funding.
How Much Money Do You Need to Start a Franchise?
To start, it’s important to understand your franchisor’s financial requirements. As a rule, nearly all franchisors set minimum requirements for net worth and liquidity. Some also require a minimum credit score, but that is growing less common. At Aussie Pet Mobile, our franchise startup costs are:
- $119,950 Initial Franchise Fee
- $47,375 Minimum Working Capital
- $167,325-$208,360 Investment Range
Refer to the 2025 Franchise Disclosure Document for full details.
The idea of these franchise startup costs isn’t to discourage you from investing; rather, they’re meant to make sure you’re in the right position to open a business. Having certain liquid assets means you’ll be able to meet your personal and professional obligations in the time before your business becomes profitable.
What if I can’t afford the franchise startup costs?
If you meet the franchise’s minimum financial requirements, they should be comfortable with you pursuing third-party financing. It’s not uncommon for franchise owners to need help financing their new franchises –in fact, almost half of all prospective franchise owners think they’ll need a loan. Your franchisor has helped many other franchisees find the right franchise financing option, and they’ll be happy to assist you as well. Ask your franchisor if they have any trusted third-party lenders that you can be connected to.
Your Franchise Financing Options
SBA Loan
SBA loans for franchises are a particularly popular option. In most cases, you’ll be applying for a Type 7(a) loan, though qualified veterans are eligible for a special loan program of their own. Guaranteed in part by the federal government, their repayment terms are often more favorable than commercial loans. Since they’re linked to the Federal Reserve’s prime rate, the interest rates may be higher than you’d like.
Home Equity Loan
Homeowners are eligible for home equity loans or home equity lines of credit (HELOC). Home equity loans have a fixed interest rate and provide you with a lump sum of cash, whereas HELOCs have a variable interest rate and let you withdraw funds as needed. Although HELOCs have smaller monthly payments to start, they will get higher over time.
Retirement Rollover
Taking a loan from your retirement account is possible, but we don’t recommend it. Although you can borrow from it, you’ll have to either restore the funds or roll them into another account within 60 days to avoid taxes and penalties. You are not allowed to draw a loan from your IRA.
Other Kinds of Franchise Financing
Aussie Pet Mobile offers up to $80,000 in-house financing to qualified candidates. Franchisees have found success with our other franchise financing options, including using your 401(k) to buy a franchise. Let your franchise advisor know if this is something you’ll be interested in.
Understanding the Application Process
Applying for a business loan is simpler than you may think. Once you’ve identified the right lender, you’re halfway there! After that, you’ll just need to gather all the lender’s requested items, complete your application, and submit it. Your franchisor will be on hand to answer any questions you may have about the process and assist you in completing your application. If you’ll be taking meetings with the lender, they can help you prepare.
Not all lenders ask for the same documents, but in general, you can expect to include the following in a business loan application:
- Employer Identification Number (EIN)
- Franchise agreement
- Articles of incorporation
- Business plan
- Personal information (including your date of birth and Social Security number)
- Three most recent years of tax returns
- One year of personal bank statements
If you’re applying for an SBA loan, you’ll also be required to complete a number of government forms.
What if my credit score is low?
Although many franchisors – including Aussie Pet Mobile – don’t take your credit score into account when making a decision on your candidacy, it’s likely to play a role in your loan application. It may also limit your choices. Some lenders are open to those with lower credit scores; ask your franchisor who they would recommend in this case.
You might also want to consider having a cosigner or entering a business partnership. Using investors to fund a franchise is very commonplace. In fact, many franchises welcome business partnerships. By partnering with an investor, or with someone whose skillset is otherwise different from yours, you’re able to efficiently divide business responsibilities and put your strengths to better use.
Seamless Franchise Financing with Aussie Pet Mobile
We believe that franchising should be accessible to anyone with the drive, work ethic, and passion for running a successful business! Thanks to our parent company, Home Franchise Concepts, a leader in home services franchising, we’re able to provide our franchise candidates with best-in-class financial guidance to help you start your business.
Find your inspiration by experiencing a day in the life of a franchise owner and start seeing yourself as part of the Aussie Pet Mobile family. Inquire now, and one of our franchise advisors will be in touch with more information.