Funding Options for Franchise Investments Under $75K

Funding Options for Franchise Investments Under $75K

For many aspiring business owners, the cost of starting a franchise can feel like a significant obstacle. Even when exploring franchise opportunities with initial investments under $75,000, finding the funds to get started may seem challenging. Fortunately, there are several funding options for franchise investments under $75K that may help make business ownership more accessible.

If you’re considering leaving the corporate world, pursuing a second career, or putting your professional experience to work in a business of your own, understanding how to finance a franchise is an important first step.

You may not need to fund your entire franchise investment from personal savings. Depending on your financial situation and qualifications, franchise financing options may include personal savings, retirement-based funding, business loans, and home equity financing.

At Murphy Business Sales, we recognize that investing in a franchise is a major financial decision. Our business brokerage franchise offers an opportunity for experienced professionals to build a professional services business, with a total estimated initial investment of $65,090 to $85,900, as outlined in our Franchise Disclosure Document (FDD).

This guide explores common franchise funding options, how they work, and what to consider when developing a financial plan for business ownership.

What are the Available Financing Options for Franchises Under $75,000?

Common ways to finance a franchise include personal savings, SBA-backed business loans, retirement rollovers (ROBS), personal loans, and home equity financing. The best option depends on your available capital, credit history, financial obligations, and tolerance for risk.

Some prospective franchise owners use a combination of funding sources to cover their initial investment and maintain adequate working capital.

Financing Option	How It Works	Key Considerations
Personal Savings	Use existing cash reserves to fund the investment.	No borrowing costs, but reduces available savings and financial reserves.
Retirement Rollovers (ROBS)	Use eligible retirement funds through a qualifying business and retirement plan structure.	No traditional loan payments, but involves significant retirement risk and ongoing compliance requirements.
SBA-Backed Business Loans	Apply through a participating lender for financing supported by an SBA loan program.	Subject to lender approval, eligibility requirements, repayment obligations, and applicable fees.
Personal Loans or Business Credit	Borrow funds based on personal creditworthiness or business qualifications.	Interest rates, repayment terms, and collateral requirements vary.
Home Equity Line of Credit (HELOC)	Borrow against available equity in your home.	May offer flexible access to funds, but puts your home at risk if you cannot repay.

Not every financing option is available for every
franchise or applicant. SBA eligibility, loan amounts,
and lender requirements should be verified before
making an investment decision.

Can You Use Retirement Savings to Buy a Franchise?

Yes. Certain retirement accounts may be eligible for a financing arrangement known as a Rollover for Business Startups (ROBS), which allows qualified individuals to invest eligible retirement funds into a new business without taking a conventional taxable withdrawal.

ROBS financing is sometimes considered by professionals transitioning from corporate careers who have accumulated retirement savings but prefer not to rely entirely on traditional loans.

How Does a ROBS Program Work?

• A typical ROBS arrangement involves:
• Establishing a new C corporation to operate the business.
• Creating a qualifying retirement plan sponsored by the corporation.
• Rolling eligible retirement funds into the new plan.
• Having the retirement plan purchase qualifying stock in the corporation.
• Using the proceeds from the stock purchase to fund eligible business startup expenses.

What Are the Advantages and Risks of ROBS Financing?

Potential advantages:

• No conventional loan payments or interest charges associated with the rollover itself.
• Access to eligible retirement assets for business funding.
• May be combined with other financing sources, subject to applicable requirements.

Important risks and considerations:

• Retirement savings invested in the business are exposed to potential business losses.
• ROBS arrangements involve complex IRS and ERISA requirements.
• Setup costs, ongoing administration, and retirement plan compliance obligations apply.
• Not all retirement accounts or funds are eligible.

A ROBS arrangement is not a risk-free way to finance a franchise. Prospective owners should consult qualified tax, legal, and retirement plan professionals before proceeding.

Can You Get an SBA Loan to Buy a Franchise?

SBA-backed loans may help qualified borrowers finance franchise startup expenses, working capital, equipment, and other eligible business costs.

The SBA does not typically lend directly to franchise owners. Instead, participating lenders evaluate applications and make lending decisions under applicable SBA program requirements.

Eligibility may depend on factors such as:

• Personal credit and financial history.
• Available cash contribution and collateral.
• Business plan and projected cash flow.
• Relevant management or industry experience.
• Franchise eligibility under applicable SBA requirements.

Prospective franchise owners should speak with participating lenders to determine which loan programs, if any, are suitable for their circumstances.

How Much Money Should You Have Saved Before Starting a Franchise?

The cost of purchasing a franchise is only one part of your financial plan.

Before investing in a franchise, consider both the total startup investment and the personal living expenses you’ll need to cover while your business becomes established.

This is particularly important in business brokerage, where building relationships, developing a pipeline of potential buyers and sellers, and completing transactions can take time.

Plan for Business Startup Expenses

Review the total estimated initial investment disclosed in Item 7 of the franchise’s FDD. This may include franchise fees, training-related expenses, technology, insurance, marketing, and additional working capital for an initial operating period.

Establish a Personal Financial Runway

Determine how much money your household needs each month for housing, food, insurance, transportation, healthcare, and other financial obligations.

Consider maintaining sufficient personal reserves for an extended period without dependable business income. The appropriate amount depends on your financial obligations, other income sources, and the time your business may need to generate revenue.

Avoid Overextending Your Finances

Borrowing the maximum amount available is not necessarily the best financial decision. Consider your ability to meet repayment obligations while managing business expenses and maintaining personal financial stability.

A realistic financial plan can help you make more informed decisions as you prepare for franchise ownership.

What If You Don’t Have Enough Money to Buy a Franchise Yet?

Not having the full investment available today doesn’t necessarily mean you need to abandon your interest in business ownership. There are several paths worth exploring, depending on your financial circumstances and professional goals.

1. You Have Some Savings but Need Additional Capital

Consider building your savings while researching available financing options. Reviewing your credit profile, financial obligations, and projected startup costs can help you understand what additional funding may be needed.

2. You Have Retirement Savings

If you have eligible retirement assets, you may want to explore whether a ROBS arrangement is appropriate for your situation. Compare the risks and costs with traditional financing before making a decision.

3. You’re Interested in Business Brokerage but Aren’t Ready to Invest

Working with an established business brokerage firm may provide an opportunity to learn more about the profession before considering franchise ownership.

At Murphy Business Sales, some franchise owners work with independent business brokers or agents. Opportunities and requirements vary by office and applicable state licensing laws.

4. You Have Access to Credit or Potential Investment Partners

Business loans, credit facilities, or a business partnership may provide additional funding possibilities. Each arrangement should be evaluated carefully for its repayment obligations, ownership implications, and financial risks.

What Does It Cost to Own a Murphy Business Sales Franchise?

Murphy Business Sales offers a professional services franchise model focused on helping business owners buy, sell, and value businesses.

The franchise can be operated from a home-based office, subject to applicable requirements, and does not require the inventory or physical storefront typically associated with some retail franchise models.

Current franchise investment information includes:

• Initial franchise fee: $47,500.
• Total estimated initial investment: $65,090–$85,900.
• Minimum liquid capital requirement: $50,000.
• Minimum net worth requirement: $250,000.

These figures represent different financial requirements. The initial franchise fee is only one component of the total estimated investment, and meeting the minimum financial qualifications does not guarantee approval or financing.

For complete information about fees, estimated startup expenses, and ongoing obligations, prospective franchise owners should review the current Murphy Business Sales Franchise Disclosure Document.

Take the Next Step Toward Business Brokerage Franchise Ownership

Exploring franchise ownership starts with understanding both the opportunity and the financial commitment.

Whether you’re considering a second career, transitioning from corporate leadership, or looking for a business that draws on your professional experience, Murphy Business Sales can help you learn more about the business brokerage profession and what franchise ownership involves.

Ready to explore your options?

Download the Murphy Business Sales Franchise Guide to learn about our business model, training and support, franchise investment requirements, and next steps in the ownership process.

---