Franchise Affordability CalculatorHow Much Franchise Can You Afford?
Enter your financial profile to see exactly what franchise investment level you can support — with SBA loan calculations, working capital buffers, and personalized franchise matches from our database of 5,700+ systems.
Your Financial Profile
Tell us about your financial situation to calculate your franchise investment range.
SBA 7(a) loans require credit score 680+, relevant experience, and the franchise must be SBA-approved.
How Much Franchise Can You Really Afford?
Most franchise affordability calculators ask a single question: how much money do you have? That's insufficient. The real question involves four variables: your liquid capital, your access to SBA financing, your required income, and your risk tolerance. This calculator models all four.
With SBA 7(a) financing, your buying power is dramatically amplified. A prospective franchisee with $100,000 in liquid assets can qualify for franchise investments up to $1,000,000 — a 10x leverage factor. But leverage cuts both ways: a larger investment means larger monthly loan payments, which means the franchise needs to generate significantly more revenue to cover debt service, operating costs, and your target income.
This calculator factors in current SBA interest rates (prime + 2.75%), standard 10-year loan terms, working capital requirements (12 months of estimated operating losses), and your target take-home income. The result is a realistic investment range — not a sales pitch.
Understanding SBA 7(a) Franchise Financing
The SBA 7(a) loan program is the most popular financing vehicle for franchise acquisitions. The SBA doesn't lend directly — instead, it guarantees a portion of the loan made by an approved lender (typically 75-85%), which reduces the lender's risk and makes franchise loans more accessible.
Key requirements include a personal credit score above 680, a 10-20% equity injection (your down payment), relevant business or management experience, and the franchise must be listed in the SBA Franchise Directory. Current rates are typically prime + 2.75% for loans over $50,000, with terms of 7-25 years depending on the use of proceeds.
For a detailed comparison of franchise investment levels and SBA default rates, visit our SBA loan default rate database or use the franchise investment calculator to model specific costs.
Why Working Capital Is the Hidden Cost of Franchise Ownership
Most first-time franchisees underestimate the working capital required to sustain operations during the ramp-up period. New franchise units typically take 6-18 months to reach break-even, during which you need to cover rent, payroll, utilities, insurance, royalty fees, and SBA loan payments entirely from reserves.
This calculator budgets 12 months of estimated operating losses as your working capital buffer — significantly more conservative than the 3-month estimate found in most FDD Item 7 disclosures. The goal is to ensure you don't run out of cash before the business has a chance to become profitable.
For a complete breakdown of initial investment costs, use our FDD Item 7 calculator and our attorney question generator to prepare for your FDD review.