Franchise Down Payment Calculator

Lenders call your down payment an equity injection: the share of the total project you fund yourself so you have skin in the game. How much you need depends far more on the loan program than on the brand. The three paths below are the ones most food-franchise buyers actually use.

SBA 7(a): a 10% floor, often more in practice

The SBA's current rulebook, SOP 50 10 8(effective June 1, 2025), reinstated a hard 10% minimum equity injection for a startup or a full change of ownership. That 10% is a floor, not a target: for a first-time owner with thin collateral, many lenders ask for 15 to 20 percent. Our guide to SBA loans for a food franchise walks through how that underwriting works. The 10% is verifiable; the 15 to 20 percent is commonly reported lender practice, not an SBA-published minimum, so treat it as a planning range.

SBA 504: 10, 15, or 20 percent

A 504 loan splits the project roughly 50 percent bank, 40 percent CDC, and 10 percent you. That borrower share rises to 15 percent if the business is a startup (open under two years) or the property is special-use, and to 20 percent if both apply. Here is the useful part for cafe buyers: CDC lenders typically classify restaurants as multipurpose property, not special-use, so a standard coffee-shop buildout usually should not trigger the special-use bump on its own. A brand-new first location still lands at 15 percent for being a startup. Confirm your specific deal with your CDC, since a highly customized build could be judged differently.

Conventional bank loan: 20 to 30 percent

Without an SBA guarantee reducing the lender's risk, a conventional franchise loan typically asks for 20 to 30 percent down. That is an industry-typical range from finance sources, not a regulatory figure, and a strong balance sheet can move it. One more thing every path shares: the down payment is not your total cash to close. For fiscal year 2026 the SBA reinstated upfront guaranty fees, and every deal carries closing costs, so budget above the equity injection alone. To see what total investment your cash can actually reach from the other direction, use our affordability calculator.