Can I open a franchise with only 10% down?

The 10% figure is real under SBA rules for a new business, but it is a floor rather than a promise, and how it is measured catches people out. SBA guidance generally expects at least a 10% equity injection on a start-up, and lenders routinely land somewhere in the 10% to 20% range, asking toward the top of it when the concept is unproven or the borrower brings no operating experience in the industry.

On $560,000 that is $56,000 at the SBA floor and $112,000 at the top of the range lenders normally ask for. Your $70,000 sits inside that band. Two details decide the rest: a home equity line used for the injection is usually acceptable only if it can be serviced from income other than the new business, and part of the injection can sometimes come from a properly structured seller or family loan held on full standby for the life of the note.

The warning is what the $560,000 leaves out. Published franchise investment ranges rarely carry enough working capital for the ramp, and an undercapitalized opening is the most common way a well-chosen franchise fails in year one. Ask the franchisor for unit-level revenue timing from Item 19 of the disclosure document, then add three to six months of operating cost to the number you finance.

Franchise Financing and SBA Loans are the two structures worth pricing here, and usually together. Call the desk with the Franchise Disclosure Document before you sign the franchise agreement — once it is signed, your leverage over the financing structure is gone.