How much of a down payment is required for an SBA franchise loan?

Q: How much of a down payment is required for an SBA franchise loan?

It can vary, but generally 10%–20% of the total project cost is expected as your equity contribution. If you’re opening a new unit, the franchisor may require a certain net worth or liquid capital anyway, which overlaps with this. For purchasing an existing franchise (business acquisition), 7(a) loans officially require at least 10% equity injection; in practice lenders often like to see around 20% from the buyer. Sometimes, part of this can be a seller financing note (for an acquisition) if the seller keeps some skin in the game. Always check with your lender on the specific down payment needed for your situation.

It can vary, but generally 10%–20% of the total project cost is expected as your equity contribution. If you’re opening a new unit, the franchisor may require a certain net worth or liquid capital anyway, which overlaps with this. For purchasing an existing franchise (business acquisition), 7(a) loans officially require at least 10% equity injection; in practice lenders often like to see around 20% from the buyer. Sometimes, part of this can be a seller financing note (for an acquisition) if the seller keeps some skin in the game. Always check with your lender on the specific down payment needed for your situation.