SBA 7(a) provides up to $5M for franchise acquisitions with as little as 10-20% borrower equity, depending on franchise risk profile and lender requirements. Terms range from 10 years (working capital) to 25 years (real estate), with rates tied to Prime plus a margin of 1.75-2.75%. The franchise must be listed on the SBA Franchise Directory.
Written by Ed Freeman, Capital Advisory — PeerSense
Acquire an SBA-eligible franchise with 10-20% equity using SBA 7(a) financing. Up to $5M, 10-25 year terms, competitive rates. PeerSense matches franchise buyers with the right SBA lender.
Minimum 10-20% equity required. First-time or experienced franchise buyers with $50K+ liquid capital, good personal credit (680+), relevant industry experience or transferable management skills, and a business plan demonstrating the franchise's projected cash flow.
LTV Target
80-90% (10-20% equity)
Est. Rate Range
Prime + 1.75% - 2.75% (currently ~9.25% - 10.25%)
Term
10-25 years
Recourse
Full recourse (personal guarantee)
DSCR
1.25x minimum (projected)
Closing Speed
30-60 days
Min Loan Size
$150K
Loan Products
SBA 7(a)
SBA 7(a) is the default financing vehicle for franchise acquisitions under $5M. The franchise system's brand recognition, operating playbook, and unit economics data give SBA lenders confidence to provide high-leverage financing that independent businesses rarely receive. Use SBA 7(a) when acquiring a franchise listed on the SBA Franchise Directory, when you have 10-20% equity available, and when projected cash flow supports 1.25x DSCR on the total debt service. If the franchise includes real estate (e.g., gas station, car wash, hotel), SBA 504 may provide better terms on the real estate portion. For acquisitions above $5M, conventional or private credit may be necessary.
If you are acquiring a franchise hotel with real estate (Hampton Inn, etc.)
Learn moreIf you already hold an SBA 7(a) on a franchise and want to convert to fixed rate
Learn moreIf the franchise acquisition includes a significant real estate component
Learn morePeerSense pre-underwrites every deal before presenting it to our institutional capital sources. With 500+ lender relationships and live market rate intelligence, we match your franchise deal with the right capital source — right now.
No upfront retainer · Fee at closing only · Complimentary initial consultation
Written by Ed Freeman, Capital Advisory — PeerSense. Updated March 2026.
Disclaimer: The information on this page is provided for educational purposes only and does not constitute financial, legal, or investment advice. Rates, terms, and availability are subject to change based on market conditions, property characteristics, and borrower qualifications. The rate ranges cited reflect approximate market pricing as of March 2026 and may not reflect current conditions at the time of reading. PeerSense is a capital advisory firm, not a lender. We do not originate, fund, or service loans. All financing is provided by third-party lenders subject to their own underwriting criteria and approval processes. Borrowers should consult with qualified financial and legal professionals before making any financing decisions.