How to Get Franchise Financing (Even With a 620 Credit Score

Thinking about buying a franchise but worried your credit score will slam the brakes on your dream?

You're not alone—and you’re not out of the game. In fact, thousands of people are getting franchise loans, startup capital, and working capital—even if their credit score is “meh.”

In this guide, I’ll break down how YOU can get the money to buy a franchise—even if banks have turned you down before. We’ll dig into proven strategies like SBA loans, ROBS plans, and non-traditional lenders that say YES when others say no.

Let’s dive in…

Why Credit Score Matters (But Isn’t Everything)

Yes, lenders use credit scores as a snapshot of your financial responsibility.

But here’s the truth no one tells you: In the world of franchising, the strength of the business model often carries more weight than your credit score.

Why? Because lenders know that franchises have built-in support, proven operations, and a higher chance of success than starting from scratch.

That’s good news for you—even if you have a 620 credit score.

The Big 3 Franchise Funding Options (You Probably Haven’t Fully Considered)

When you’ve got decent income, some assets, and the drive to run a business—but not perfect credit—here are your top 3 funding options:

1. SBA Loans (Small Business Administration)

SBA loans are the gold standard for franchise financing. But here’s the twist:

The SBA doesn’t lend you money—the bank does. The SBA just guarantees a portion of the loan, which lowers the bank’s risk.

This makes banks more willing to lend—even to borrowers with mid-level credit.

Typical Requirements:

• Credit score: 620+ can qualify, though 650+ is ideal

• 10–20% down payment (can be borrowed or gifted)

• Some business or management experience

• A solid business plan (which the franchise can help you with)

Pro Tip: Franchises that are pre-approved in the SBA Franchise Directory have a MUCH smoother path to funding. Work with a lender that knows how to navigate this.

2. ROBS (Rollovers as Business Startups)

Got a 401(k) or IRA from a past job?

You may be sitting on $50k–$250k in tax-free, penalty-free capital—thanks to something called a ROBS plan.

ROBS allows you to roll over your retirement funds into a new business entity (like an LLC or C-Corp) and use that money to fund your franchise purchase.

Why It Works:

• No loan application. No credit check.

• No interest payments—because it’s YOUR money

• Keeps you debt-free while launching your business

Catch? You’ll need a compliant setup with a ROBS provider who specializes in this. But when done right, it’s completely legal and IRS-approved.

Best For: Buyers with lower credit who have $50K+ in retirement savings and want to avoid monthly loan payments.

3. Non-Traditional Lenders (AKA: The Real MVPs for Mid-Credit Buyers)

There’s a booming market of alternative lenders who love financing franchise businesses.

Think:

• Revenue-based financing

• Unsecured business lines of credit

• Equipment and working capital loans

• Home equity lines (if you’ve got equity)

What makes them different?

Fast approvals
More flexible on credit
Based on potential cash flow, not just past credit

You’ll often pay a bit more in interest, but these lenders can say “yes” in 72 hours—when banks take 6–8 weeks to “maybe.”

Some franchise funding consultants even bundle these into a funding stack tailored to your situation.

3 Rookie Mistakes That Kill Franchise Deals (Don’t Let This Be You)

1. Applying for Random Loans Before You Have a Plan

Multiple hard pulls on your credit tank your score further. Work with a specialist who pre-qualifies you with soft pulls across multiple programs at once.

2. Waiting Until You’ve Found “The Perfect Franchise”

Wrong move. Get pre-approved first. Then use that confidence to negotiate with the franchisor and move faster than other buyers.

3. Thinking You Need to “Save More First”

You’re closer than you think. Between ROBS, equipment leasing, and low-down SBA deals, you may already have enough. Let a pro help you run the numbers.

How to Boost Your Funding Odds—Even With 620 Credit

Here’s how the smart franchise buyers stack the deck in their favor:

• Partner with a funding consultant who specializes in franchising (they’ll unlock doors you didn’t know existed)

• Pick a franchise in the SBA directory (fast-tracks approval)

• Use a co-signer or spouse with better credit if needed

• Include ALL sources of income (W-2, 1099, rental, spousal, etc.)

• Be ready with 10–20% down—this shows skin in the game, even if it’s borrowed

Real Talk: You Don’t Need to Be “Rich” to Buy a Franchise

What you DO need is:

• A good support team

• A funding strategy

• And the willingness to move when the opportunity is right

Most franchise buyers aren’t trust fund kids. They’re everyday people who made a few strategic moves and backed themselves.

Where to Get Help (Without Wasting Time)

If you're serious about owning a franchise—but you're not sure how to make the numbers work—don’t go it alone.

There are franchise funding consultants (we can connect you with one) who will:

• Review your finances confidentially

• Pre-qualify you for multiple loan options (soft pull only)

• Stack SBA, ROBS, and non-bank lending as needed

• Walk you through every step

You’ll go from “not sure if I can afford this” to “here’s my pre-approval letter” in days.

Final Word: Credit Isn’t the Final Word

Let’s be blunt. If you’re sitting on a 620 credit score, the banks might act like you’re invisible.

But you’re not.

With the right game plan, the right people, and a franchise that fits—you can get financed, get open, and get profitable.

And when you look back, you’ll realize:

That 620 score wasn’t a roadblock. It was just the beginning of a comeback story.

Need help getting franchise financing?
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