Services / Franchise Financing

    Franchise financing,
    structured properly.

    Most franchise deals do not fail on the brand. They fail because the project was underfunded at opening. We build the full cost picture, plan the injection, and arrange financing across SBA, equipment and working capital sources.

    Who we work with.

    First-time franchisee

    You have a brand in mind or an FDD in hand and need the full capital stack, not just a loan referral.

    Multi-unit operator

    Unit two through ten, development schedules, and refinancing early debt into terms that match the portfolio.

    Resale or transfer

    Buying an existing unit from a departing franchisee, including seller notes and transfer approvals.

    Existing franchisee expanding

    Remodels, relocations, equipment refresh and owner-occupied real estate for units already running.

    Funding pathways we structure.

    Most franchise projects use two or three of these together, not one.

    SBA 7(a)

    AmountUp to $5M
    Terms10 yrs, 25 with real estate
    Best forFranchise fee, buildout, equipment and working capital in one facility

    SBA 504

    AmountProject based
    Terms20 to 25 yrs
    Best forOwner-occupied real estate and heavy equipment at a fixed rate

    Equipment financing

    Amount$50K to $3M
    Terms3 to 7 yrs
    Best forKitchen, production, fitness and technology packages

    Working capital line

    Amount$50K to $1M
    TermsRevolving
    Best forRamp-up payroll, inventory and the gap before breakeven

    Retirement rollover (ROBS)

    AmountBalance dependent
    TermsEquity, not debt
    Best forFunding the injection without an early withdrawal penalty

    Seller and franchisor financing

    AmountDeal dependent
    TermsOften on standby
    Best forBridging the injection on resales and development deals

    How the engagement runs.

    Step 1

    Scope the project

    We build the real number: fee, buildout, equipment, inventory, marketing, training and a working capital reserve.

    Step 2

    Structure the stack

    Which dollars come from you, which from debt, which from equipment or the seller, and what each costs.

    Step 3

    Package and arrange

    Projections, personal financial statement, franchise documents and forms prepared before a lender sees the file.

    Step 4

    Support through opening

    Entity, banking, accounting and draw coordination so the funding actually reaches the buildout on schedule.

    What is included.

    SBA Franchise Directory eligibility check on your brand
    Full project cost model from franchisor Item 7 ranges
    Equity injection and liquidity planning
    Debt service coverage modeling before you apply
    Lender matching across SBA, conventional and equipment sources
    Entity formation, banking and accounting setup
    The short answer

    Franchise financing is the capital stack behind opening, buying or expanding a franchised business. A typical project combines an SBA 7(a) loan for the franchise fee, build-out and working capital, equipment financing for the floor, and a 10 to 20 percent equity injection from the franchisee. Kala structures the file and arranges the financing; lenders make the credit decision.

    Frequently asked questions

    How much money do I need to open a franchise?
    Plan on at least 10 percent of total project cost as your own injection, plus the post-closing liquidity the lender wants to see. The exact figure can differ widely by program, brand and deal structure. Franchisors often have detailed liquidity requirements of their own, so it is best to rely on their projections and historical data, alongside your own understanding of your lifestyle costs, the time commitment, and the business activities involved, to fully grasp the commitment. Total project cost is the franchise fee, build-out, equipment, opening inventory, grand opening marketing, training and payroll, and a working capital reserve, not just the fee in the brochure. Kala Financial supports our clients in understanding all of these perspectives and more.
    Can I use an SBA loan to buy a franchise?
    Yes, if the brand carries a valid SBA franchise identifier code and the franchise agreement passes the affiliation review. SBA 7(a) funds up to $5 million and is the most common structure for a first unit, a resale or a multi-unit development schedule.
    Can I keep my job while opening a franchise?
    Often yes, for semi-absentee and manager-run models, and lenders are more comfortable when outside income covers household expenses during ramp up. Owner-operator systems usually require you full time at or shortly after opening, so the franchise agreement and the lender both need to agree with your plan.
    Can I use retirement funds for the down payment?
    A rollover for business startups structure lets you fund the injection with retirement assets without an early withdrawal penalty. It has real compliance obligations and is not right for everyone, so we walk through the tradeoffs and coordinate with a specialist provider before anything is executed.
    What does a lender look at on a first-time franchisee?
    Personal credit, liquidity and net worth, relevant management or industry experience, the brand track record, the market you selected, and whether the projected unit cash flow services the debt with room to spare.
    How long does franchise financing take?
    A complete SBA package generally reaches approval in 30 to 60 days and funds at build-out milestones after that. Equipment and working capital facilities move faster. Incomplete documentation is the usual delay, which is why the file is packaged before it goes to a lender.
    Can I finance more than one unit?
    Yes. Multi-unit operators typically finance unit by unit early on and move to a development facility or conventional debt once a portfolio history exists. The first unit performance sets the terms available on everything after it.
    Does Kala lend the money?
    No. Kala advises, prepares and structures the file and arranges financing through a lender network. Lenders and capital partners underwrite, approve, price and fund.

    For franchisors

    Growing your franchise base?

    Candidate funding is the most common reason a signed deal never opens. We work with franchisors to pre-qualify candidates, prepare their files, and arrange financing so your development schedule holds. Tell us about your system and we will build a support path for your pipeline.

    Ready to price out your franchise?

    Build your project cost, tell us what you can inject, and we will come back with the structures that fit.

    Important disclosures

    Kala Financial LLC is a business advisory and consulting firm and is not a law firm, CPA firm, registered investment adviser, broker-dealer, lender, or insurance carrier. Services are provided only under a written engagement agreement, and all credit decisions are made solely by lenders and capital providers.