The amount of capital needed to open a franchise can vary greatly. Typically, $40,000 in liquid capital and is the absolute minimum required to qualify for any opportunities. However, at this level of capital your options will be quite limited. Once you reach the $100,000+ in liquid capital, your options will increase tremendously.
If you do not have the necessary capital, there are a few ways you can still achieve franchise ownership:
- Obtain necessary funds from a generous family member or friend.
- Find a business partner and cut your personal capital costs in half.
- Retirement Plan Rollover Funding – If you have greater than $50,000 in a retirement account such as an IRA or 401k, you may qualify to use the savings in your retirement plan to fund your new business. It’s important to understand that you are not borrowing against your 401(k). Your new retirement plan has simply invested in your business instead of investing in another company’s stocks or bonds. This strategy is often used to provide capital for the down payment on SBA loans