Financing Options for Purchasing a Cleaning Franchise
If you want to purchase a cleaning franchise but aren't sure how you'll cover the investment, you're not alone; financing is one of the first questions most prospective franchise owners have to work through. The right option depends on your current financial assets, your creditworthiness, and the total investment required for the franchise system you're considering.
One practical way to reduce that financing burden from the start is to choose a franchise brand with a lower total investment. MaidPro, for example, has one of the more accessible entry points in the home services and cleaning franchise space, with a total initial investment in the range of {{ initial-investment }}, which is considerably lower than many other franchises.
Here are four financing options worth considering when funding a franchise purchase.
1. Cash and Personal Savings
Personal cash and savings remain the most common way franchise owners cover their startup investment. Some have the cash and many sell investments. This is the simplest financing path available, since it lets you purchase your business without taking on debt or navigating a lender's approval process.
2. Retirement Fund Rollovers
If you have savings set aside for retirement, tapping into those funds is another route to financing a franchise purchase, and it comes with a meaningful advantage: you can start your business without starting it in debt.
Withdrawing directly from an IRA or 401(k) before age 59 ½ typically triggers income tax plus a 10% early withdrawal penalty, so most franchise owners avoid a straight withdrawal. Two more common approaches are:
- A 401(k) loan, which lets you borrow against your own retirement balance and repay yourself with interest, rather than paying a penalty.
- A Rollover as Business Startup (ROBS), which allows you to roll retirement funds into a new 401(k) plan tied to your franchise business, funding the purchase without early-withdrawal taxes or penalties.
Both options involve specific IRS rules and reporting requirements, so it's worth working with a qualified financial or tax advisor before choosing this route.
3. SBA Loans
Small Business Administration (SBA) loans are partially guaranteed against default by the federal government, which makes them less risky for lenders and often more accessible for borrowers than a conventional loan. The SBA 7(a) loan is the standard option most franchise buyers pursue, used for working capital, equipment, and the initial franchise investment itself. To qualify, you'll generally need solid personal credit, some of your own capital to contribute toward the purchase, and a business plan that demonstrates you can repay the loan from projected cash flow.
For borrowers who want a faster process, the SBA Express loan operates under the same 7(a) program but with an expedited response, often within a couple of business days, for loans up to $500,000.
4. Secured & Unsecured Loans
Many franchise owners turn to traditional banks or credit unions to finance their upfront costs. Because there are so many lenders competing for this business, it's worth shopping for multiple options for the best rate and terms. In general, secured loans (which require collateral) come with better rates, while unsecured loans are faster to obtain but usually carry less favorable terms. Comparing several offers before committing is one of the simplest ways to improve your financing terms.
Some loan options include:
- Home equity loans
- Personal loans
- Business loans
Other Financing Support
Beyond these four core options, several other resources can help reduce the cost of financing a franchise:
- Veteran and military benefits: The SBA's Veterans Advantage program offers reduced guarantee fees on SBA Express loans and certain 7(a) loans for veteran-owned businesses, and the SBA 504 Veteran Advantage program offers a similar fee reduction on 504 second mortgages. Do note that the SBA's earlier Patriot Express loan program was discontinued in 2013 and the current veteran-specific benefits are fee reductions built into the standard SBA loan programs, not a separate loan.
- Franchisor-specific discounts: Some franchisors, including MaidPro, offer dedicated discounts for veterans. MaidPro currently offers a 20% reduction on its initial franchise fee for qualifying veterans.
Choosing the Right Path
There's no single best way to finance a franchise, the right combination depends on your available capital, your risk tolerance, and how quickly you want to move. Many franchise owners end up combining two or more of these options: personal savings to cover part of the investment, an SBA loan for the remainder, and a franchisor discount to reduce the total amount needed in the first place.
Want to talk through your specific financing options for a MaidPro franchise? Get started today so our franchise development team can walk you through what fits your situation.
Frequently Asked Questions
What is the most common way people finance a franchise purchase?
Cash and personal savings remain the most common financing source since it avoids debt and lender approval processes entirely. For those that don't have the cash, many franchise owners combine savings with an SBA loan or franchisor discount.
Can I use my 401(k) or IRA to finance a franchise?
Yes, both allow you to use retirement funds without triggering the early-withdrawal tax and penalty that applies to a direct withdrawal before age 59½.
Does MaidPro offer a discount for veterans?
Yes. MaidPro offers a 20% discount on its initial franchise fee for qualifying veterans, in addition to any SBA veteran loan fee reductions a franchise buyer may also qualify for.
How much does it cost to open a MaidPro franchise?
MaidPro's total initial investment ranges from approximately $109,860 to $158,650, including a $45,000 franchise fee, a comparatively low entry point relative to many home services franchises.
