Specialized financing for franchise soft costs - permits, licenses, training, marketing, working capital, and all pre-opening expenses not covered by traditional loans.
Calculate financing needed for all your franchise soft costs and pre-opening expenses
Calculate financing needed for all your franchise soft costs and pre-opening expenses
Business permits, health dept, fire dept, signage
Initial training, travel, accommodation, materials
Grand opening, advertising, website, social media
Legal, accounting, insurance, consultants
Initial inventory, payroll, utilities, rent deposits
Technology, security, uniforms, contingency
Connect with franchise financing specialists who understand soft cost requirements and can help structure the right financing solution for your pre-opening needs.
Typical Range: $2,000 - $25,000
Typical Range: $5,000 - $25,000
Typical Range: $8,000 - $40,000
Typical Range: $10,000 - $50,000
Typical Range: $25,000 - $125,000
Typical Range: $10,000 - $100,000
$75K - $200K
$100K - $300K
$50K - $150K
$30K - $100K
| Financing Type | Best For | Interest Rate | Term | Max Amount |
|---|---|---|---|---|
| SBA Microloans | Working capital, inventory | 9.5% - 13% | Up to 6 years | $50,000 |
| Business Term Loans | All soft costs | 12% - 18% | 2 - 7 years | $250,000 |
| Business Lines of Credit | Flexible working capital | 15% - 25% | Revolving | $100,000 |
| Equipment Financing | Technology, POS systems | 9.5% - 14.5% | 3 - 5 years | Equipment value |
| Personal Loans | Small soft costs | 10% - 20% | 2 - 5 years | $100,000 |
Franchise soft costs include all non-equipment expenses needed to open your franchise: permits and licenses, training and travel expenses, marketing and advertising, working capital, professional fees (legal, accounting), insurance deposits, initial inventory, and pre-opening payroll. These are costs that don't involve physical assets but are essential for franchise operation.
Most lenders allow financing of 80-100% of soft costs, depending on your creditworthiness and the franchise brand. SBA loans often require 10-15% down payment, while alternative lenders may finance the full amount. Having some personal investment (10-20%) typically results in better rates and terms.
Plan for 3-6 months of operating expenses including rent, payroll, utilities, and inventory. Quick service restaurants typically need $25K-$75K, full service restaurants $50K-$150K, retail franchises $20K-$60K, and service businesses $15K-$40K. Factor in your local market conditions and franchise ramp-up period.
Hard costs are tangible assets like equipment, furniture, and build-out materials that can serve as collateral. Soft costs are intangible expenses like permits, training, and working capital. Hard costs typically qualify for equipment financing at lower rates (9.5%-14.5%), while soft costs require business loans or lines of credit at higher rates (12%-18%).
Apply for soft cost financing after signing your franchise agreement but before major expenses begin. This typically occurs 60-90 days before your planned opening. Having financing approved early allows you to negotiate better terms with contractors and suppliers, and ensures you have funds available when needed during the development process.
Yes, interest on business loans used for franchise soft costs is typically tax-deductible as a business expense. This includes loans for working capital, training, permits, and other operational expenses. Keep detailed records of how loan proceeds are used and consult with a tax professional to ensure proper documentation and compliance.