Franchises
Franchise Financing
Franchise owners finance additional units, the purchase of existing franchise locations and buildouts that brands require on a set schedule. Sagamore is a commercial loan broker matching franchisees with at least a year of operating history in all 50 states with lenders for SBA loans, term loans, equipment financing and commercial mortgages.
Written by Jordan Levy, Founder & CEO · Last updated
How do franchisees use SBA loans?
- Who it's for
- Franchisees with an operating unit who are adding units, refinancing, or buying the real estate for a location.
- The problem
- Multi-unit growth needs long-term capital. A development agreement commits you to opening units on a schedule, and each one needs franchise fees, a buildout and equipment before it earns anything.
- What fits
- SBA 7(a) loans can combine franchise fees, buildout, equipment and working capital in one loan with long terms, and SBA 504 loans finance the building and major fixed assets. The lender confirms the brand's franchise agreement is SBA-eligible during underwriting. A commercial mortgage is the conventional route for the real estate.
Products that fit
How do you finance buying an existing franchise location?
- Who it's for
- Existing franchisees buying an open location from another franchisee, or multi-unit owners buying a group of units in their market.
- The problem
- The seller wants cash at closing, the franchisor has to approve the transfer, and much of the price is goodwill, which a bank can't lend against the way it lends against equipment.
- What fits
- SBA loans are the standard tool for franchise acquisitions because they can finance goodwill over long terms, underwritten largely on the location's own sales history. A term loan fits smaller purchases. A bridge loan can cover a deposit or the gap before SBA funding lands.
Products that fit
How do franchisees pay for buildouts and remodels?
- Who it's for
- Franchisees building a new unit under a development agreement, or completing a brand-mandated remodel at an existing one.
- The problem
- The brand sets the design, the equipment package and the deadline. A required reimage every several years, or the next opening on a development schedule, comes due whether or not the cash is ready.
- What fits
- A term loan funds the construction and fit-out budget. Equipment financing covers the brand's required kitchen, fitness or service equipment package separately, which keeps the term loan smaller. SBA loans fit larger buildouts that include real estate.
Products that fit
Eligibility
What do you need to qualify?
Sagamore is a broker, not a lender. One application is matched with lenders across all 50 states, and every program starts from the same minimums. We work with established businesses only, so startups are not eligible.
- Credit score
- 600+
- Time in business
- 1+ year
- Annual revenue
- $400K+
Frequently Asked Questions
Common questions about franchise financing
Yes, if the brand's franchise agreement meets SBA eligibility rules, which the lender checks during underwriting. Sagamore works with franchisees that already have at least a year of operating history, a 600+ credit score and $400K+ in annual revenue.
No. Every program requires at least one year in business, so a first-time franchisee opening a new unit falls outside it. Existing franchisees adding units or buying an open location can apply.
Most often with an SBA loan, which can include goodwill, equipment and working capital and is underwritten on the location's sales history. The franchisor must also approve the transfer, so lenders plan the closing around that approval.
Usually, yes. Kitchen lines, fitness equipment, salon stations and similar brand-required packages are standard equipment collateral. Financing them separately keeps the buildout loan smaller.
Guides
Which guides cover franchise financing?
- How Do I Finance Buying an Existing Business?How to finance a business acquisition in 2026: SBA 7(a) rules, down payment, seller notes, valuation, and a worked example of an underwritten deal.
- SBA 7(a) vs. SBA 504 Loans: Which Fits Your Business?SBA 7(a) vs. 504 in 2026: down payments, rates, fees, and uses compared, with a worked $2 million building example showing the monthly difference.
- What Are the Requirements for an SBA Loan in 2026?SBA loan requirements for 2026: eligibility, the new citizenship rule, cash flow, collateral, guaranties, equity, and the documents lenders want.
- What Is a Personal Guarantee on a Business Loan?A personal guarantee makes you liable for your business's loan if it can't pay. The types, what happens on default, and which terms you can negotiate.
Related Funding Options
Which funding options fit franchises?
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