As Artificial Intelligence begins to eat more and more management jobs, executives are looking to business ownership to secure their earning future. The answer, for many, is joining what Ford CEO Jim Farley calls the “essential economy,” which he defined as everything that gets “moved, built, or fixed.”
Services that require humans to perform them will always be with us. The essential economy jobs aren’t glamorous: heating and A/C replacement and repair, home maintenance, plumbing, roofing, painting, car repair… but when we need those services, we can’t dial the phone fast enough. There will always be a market for home and business services.
Here are some ways you can fund a service franchise if you’re considering it:
Personal or family debt. This is the OG funding source: taking out a second mortgage, a home equity line of credit, using your life insurance policy or credit cards, or borrowing from friends and family. If you have the credit rating and assets to make this work, you’re betting on yourself – no approval from strangers needed. You take all the risk, and you reap all the rewards (after you’ve paid back Uncle Denny).
But it also puts some of your future at risk. The reason I recommend franchises to people who want to own their own business is that they have a proven track record and the support of a corporation that has created a model that works. They’re much less risky than starting your own venture, but not completely risk-free, of course.
Traditional bank loans and SBA loans. The 7(a) Loan Program, SBA’s primary business loan program, provides loan guaranties to lenders that allow them to provide financial help for small businesses. You can borrow up to $5 million to finance or expand a business, and you have a team of lenders on your side helping you find the right fit for your business plan.
You have to be an operating business to qualify, and you must be creditworthy enough to convince a lender to provide the funds. The qualifying process can take some time, and, for example, during the government shutdown of 2025, application approvals ground to a halt.
Funding from your own 401(k) or your IRA. The ROBS (Rollover as Business Start-Ups) program has a proven track record, lasting almost 30 years. The program has helped thousands of entrepreneurs receive funding in a way that is safe, effective, and legal, since it was designed in cooperation with the IRS. It’s also quick – many business owners receive their funding in as little as 10 business days.
Some entrepreneurs worry that they’re putting their retirement at risk, but it’s a legitimate way to fund their new company without paying traditional interest and loan fees. To avoid early withdrawal penalties and preserve tax-deferred status, financial planners work with you to create a new retirement plan, taking into account your business plan. You move your existing funds (or the portion you plan to use for your business) into this new retirement plan. I’ve written an article about this process and its advantages.
New programs that finance service companies. The SBA has developed a new program aimed at helping start home-based service companies. SOHO (Small Office Home Office) loans are designed specifically for start-ups, franchises, small businesses, and existing businesses. They are perfect for home-based franchises of all types and service businesses. Lenders will approve up to $350,000 in startup financing with only 10 percent down and a 10-year repayment term. Traditionally, loan programs have required 20–25 percent down and required securing the loan with a personal asset, such as a home or property.
For credit-worthy applicants, this is a fast option (approval in as little as one day and closing within a couple of weeks) with relatively low costs.
The only caveats are that an applicant must have a credit score of 720 or higher and meet post-closing liquidity requirements.
Tax reforms, lower inflation, and a strong essential economy service industry are indicators that may make 2026 the right year for you to buy a franchise. If you’re thinking about becoming a business owner, start with my free online assessment.
Whatthefranchise is a Strategic franchise consulting firm that has helped people for over 30 years to find the best franchise via proprietary assessment tools.
In 2024, he was honored as a Marquis Who’s Who based on his accomplishments, position, visibility, and expertise in franchising.
Marshall’s background includes over 41 years of business ownership, sales, marketing, and consulting experience. His first endeavor as an entrepreneur was as an independent contractor for the southeastern United States, with the Optyl International Eyewear company based in Austria. During his tenure with Optyl, he was awarded the Consultant of the Year for the United States. Marshall parlayed his success with Optyl into a successful partnership of optical retail superstores in Jacksonville. His company also worked as an outside consultant for Vistakon, a Johnson & Johnson company. To contact Marshall, call 904.249.1820 or email Marshall@whatthefranchise.com.