Opening a fast food franchise can be a dream come true for many aspiring entrepreneurs. But before flipping burgers or blending smoothies, the biggest question is: how do you pay for it? That’s where smart financing comes in. Whether you’re new to business or expanding your portfolio, getting the right loan or funding source can make all the difference.
In this guide by Business Loan Warrior, we break down all the ways to finance a fast food franchise in 2025, using easy language, real-world examples, and helpful tips. We’ll also link to related blogs throughout so you can dig deeper into each topic. Let’s get started!
Why Fast Food Franchises Are So Popular (And Bankable!)
Fast food franchises are a favorite among lenders because they come with a proven track record. Brands like McDonald’s, Subway, and Dunkin’ already have systems in place, so banks see them as less risky than new startups. If you’re wondering how to get a business loan for a restaurant, this built-in trust works in your favor.
Example: If you want to open a Taco Bell, the franchisor already gives you their operational model, training, marketing support, and layout. That saves you time and helps lenders feel more confident in your loan application.
Your Main Franchise Financing Options
There are several ways to fund your dream franchise, each with pros and cons. Here are the most common options:
Financing Option | Description | Best For |
SBA Loans | Government-backed loans with lower interest rates | Startups with good credit |
Equipment Financing | Loans for buying or leasing restaurant machines | First-time franchise owners |
Business Line of Credit | Flexible borrowing that works like a credit card | Managing cash flow |
Short-Term Business Loans | Quick cash with shorter repayment terms | Immediate startup costs |
Franchise-Specific Lenders | Lenders who specialize in funding franchises | Popular national brands |
If you’re not sure which route is best for you, read our full guide on Franchise Financing vs. Startup Capital: What’s Right for You?
What Do You Need to Qualify?
To apply for restaurant franchise financing, lenders will usually ask for:
- A credit score of 680+
- Business plan and projections
- Proof of franchise agreement
- Some liquid capital or down payment
Pro Tip: Some lenders offer zero down equipment loans if you qualify based on your income and credit.
Don’t Forget About Equipment Loans!
Getting all the gear for your kitchen is one of the biggest expenses. Think fryers, freezers, POS systems, grills, etc.
This is where equipment financing for startups or a commercial equipment loan can help. These loans are specifically made to fund tangible items.
Example: A startup burger joint gets a $50,000 equipment loan to cover ovens, refrigerators, and seating. The equipment itself acts as collateral, so the lender is protected.
For a detailed breakdown of equipment options, read our blog: Top Equipment Financing Tips for Small Businesses
Short-Term Loans: Fast and Flexible
If you need cash quickly and can repay it soon, a short-term business loan is ideal. Many startups use these loans for lease deposits, hiring staff, or covering early marketing.
Use Case: You’re opening your fast food shop in 60 days, but you still need $20,000 to finish renovations. A short-term commercial loan with a 6-month term gives you the money now.
Explore more in our guide: Short-Term Business Loans: Fast Capital for Urgent Needs
What About Business Lines of Credit?
A business line of credit is perfect for covering unexpected expenses. It works like a credit card, where you can borrow, repay, and borrow again.
Benefit | Why It Helps Fast Food Franchises |
Flexibility | Pay for supplies or repairs instantly |
Reusable | Keep using it as you repay |
Only Pay Interest on What You Use | Saves money over time |
This is also great for questions like “how to use business line of credit” or “how much line of credit should a business have”. Pro tip: Start small, then increase as needed.
Special Loans for Bars or Cafes
If you’re looking to open a bar, coffee shop, or similar spot, many of these same funding options apply. Learn more about how to get a loan to open a bar by choosing a lender that understands hospitality businesses.
Bonus Tip: Ask if they offer a secured line of credit for business, where assets like property or equipment are used to guarantee your loan.
Mistakes to Avoid When Applying for Franchise Loans
- Ignoring Loan Terms: Understand interest rates and repayment timelines.
- Skipping the Business Plan: Even for franchises, you need a plan.
- Overestimating Revenue: Be realistic with projections.
- Missing Equipment Costs: Don’t forget about seating, signage, etc.
Related Term: Always study business loan repayment terms before signing anything.
Common Questions Answered
- Can you have 2 SBA loans? Yes, but it depends on your creditworthiness and ability to repay.
- How do I get a business line of credit startup approved? Show solid revenue projections and good personal credit.
- Do equipment leasing companies work with startup businesses? Many do! Especially if you’re working with trusted brands.
Make Your Franchise Dream a Reality
Financing your fast food franchise is a big step, but it doesn’t have to be scary. Whether you choose restaurant business loans, a secured line of credit, or equipment loans for startups, what matters most is that your funding fits your goals.
With help from Business Loan Warrior, you can move from dreaming about your drive-thru to owning one.
Ready to get started? Reach out to us or explore more tools and tips on our site.
