How to Fund Your Business Without Breaking the Bank

Hire Yourself Podcast with Pete Gilfillan

Pete Gilfillan tackles one of the most common concerns among aspiring franchise owners: How do I fund my business? In this episode, Pete breaks down various funding options, from SBA loans to leveraging retirement funds, offering practical strategies to help you secure the capital you need to launch and scale your franchise successfully.

In this episode, Pete discusses:

• SBA Loans and Traditional Loans

Pete explains how Small Business Administration (SBA) loans work, including their guarantees, rates, and timelines. He also highlights how traditional loans can be an option for experienced business owners or existing franchises.

• Using Home Equity

Pete emphasizes the value of tapping into home equity as a funding source, enabling you to leverage one of your largest assets to invest in your business.

• Leveraging Retirement Accounts

Discover how you can use your 401(k) or IRA to fund your franchise in a tax-compliant way, turning your retirement savings into an investment in your future.

• Combining Capital Sources

Pete shares examples of how entrepreneurs can mix and match funding options—such as cash, loans, and retirement funds—to open multiple franchise locations over time.

Key Takeaways:

• Know Your Options

From SBA loans to ROBS (Rollover for Business Startups), understanding the various funding methods available can help you craft the best approach for your business goals.

• Leverage Your Assets

Using home equity or investment portfolios strategically can unlock the capital needed to kickstart or scale your franchise.

• Plan for Growth

Combining funding sources allows you to expand your business systematically, reducing risk while maximizing opportunities.

"Investing in a franchise isn’t just about having the money—it’s about knowing how to leverage the right resources to build your dream business." — Pete Gilfillan

CONNECT WITH PETE GILFILLAN:

LinkedIn: https://www.linkedin.com/in/petegilfillan/
Website: https://www.hireyourself.com/

CONNECT WITH HIRE YOURSELF PODCAST:

Website: https://www.hireyourself.com/podcast
Apple: https://podcasts.apple.com/us/podcast/the-hire-yourself-podcast/id1472038217
Spotify: https://open.spotify.com/show/7eTKOLjuUWbf7BRtGtp6dP?si=eb2f7b38bd884804
YouTube:

CONNECT WITH PETE GILFILLAN:
🔗 LinkedIn: https://www.linkedin.com/in/petegilfillan/
🌐 Website: https://www.hireyourself.com/

CONNECT WITH HIRE YOURSELF PODCAST:
🎧 Apple: https://podcasts.apple.com/us/podcast/the-hire-yourself-podcast/id1472038217
🎧 Spotify: https://open.spotify.com/show/7eTKOLjuUWbf7BRtGtp6dP?si=eb2f7b38bd884804
▶️ YouTube: http://www.youtube.com/@hireyourself7642
📅 Meet with Pete: https://go.hireyourself.com/gilfillan?utm_source=LinkedIn&utm_medium=Social&utm_campaign=IR

Transcript

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Welcome to the Hire Yourself Podcast. Are you stuck in the corporate rat race, worrying about layoffs, and longing to take control of your destiny? This is the place for frustrated executives like you who want to escape the grind, live life on your own terms, and build wealth. Whether you're ready to make a full transition into franchise ownership or wanna start building a side business along with your corporate job, Pete guides you every step of the way. He'll talk about how to create career and income security, diversify your assets and income, and live life on your own terms. Your path to controlling your own destiny starts now.
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Welcome to the Hire Yourself podcast. My name is Pete Gilfillan. I am an entrepreneur. I am the international best selling author of the book, “Hire Yourself”. I'm a nationally recognized franchise consultant, and I am a proud corporate escapee. My mission in life is to help executives take control of their destiny, live life with their own terms, and certainly build wealth. And today, what I wanted to do is answer a question. People always ask me, Pete, you know, how do I fund a business? If if I do find a franchise, how do I fund that business? You know, it's a lot of money to invest in a franchise. And yes, the investment range can be significant. It can be a smaller investment. It can be a larger investment. It really depends on what type of business you have. Fortunately, the answer to your question is there are many different resources or combinations of resources that you can utilize when we look to fund the franchise business. So I thought we do is we would kinda talk a little bit about the different sources and then also maybe use an example of how we could essentially leverage this capital to fund our business or leverage the different funding sources to scale multiple units or multiple locations. Alright. So let's talk about this. I always kind of factually think of this as the funding wheel. So when we talk about franchising, investing in a franchise, there is also a resource called the SBA or small business administration loan. This isn't a loan that's being offered by the small business administration. It's a loan that is basically from a financial institution. Think of, Fidelity or or, Citibank or whatever it may be. It is a loan, that you're taking out a business loan and the small business administration is guaranteeing that loan for that financial institution. And generally speaking, you are gonna pay a rate of prime plus a couple points. You're gonna pay origination fees, closing fees, from that standpoint. So this is not cheap money, in because it is involved, or kind of sponsored by the government in terms of the SBA watching over these or or or for lack of better terms, guaranteeing it for the financial institution. There is more paperwork. It just takes time to get a SBA loan. And there are qualification qualifications where if you've got too much liquid capital, you will not qualify for an SBA loan. But people use SBA loans all the time. It is a very good resource. There are traditional loans out there very similar to an SBA loan. It is a fixed or excuse me. It is a variable rate. So it's prime plus a couple points. Generally speaking, when we think about a traditional loan, this is something that usually usually have to have experience, in the industry or it has to be an existing business. So we don't see a lot of people using a traditional loan at least starting out. Some franchise companies will actually provide in house financing or have set up third party financing for the franchisees. So this is nice. It's a good resource, from that standpoint. A lot of people use equity in their home. It's one of our biggest assets. In many cases, those assets are frozen. They're kinda captured in there. And so through a home equity line, you can tap into that equity and use it to help capitalize your business. And then there are some people that use friends and family money Where, you know, parents will set up their kids or, parents, will, sponsor, say an uncle or or bottom line is it can be about anybody in your family can help help set you up. There are outside investors, and there are also a lot of people that are leveraging their retirement dollars. Believe it or not, you can actually use your IRA, your 401 k to invest in a franchise in a tax compliant way. It has to be done through a set process, but it can be done so that instead of your investments, being in stocks and bonds, your retirement account is actually investing in your business. Yes. Your retirement account owns your business. Yes. You actually work for your retirement account. It's pretty crazy, but it is a great technique. There are also if you have a, equity, account, like Fidelity, portfolio, asset portfolio, you can always take a line against that. And it's nice. It's a great way to again, tap or leverage your available capital. Now as we're talking about this, there are many different ways in which we can, basically leverage our capital. And I wanna give you an example. So as we think about these, let's say that you decide that you're gonna invest in 3 franchise concepts, and you're gonna open those up over a period of time. And so when it comes time to fund the 1st franchise concept, and we'll just use the example of $300,000. So the first location to get it open is gonna be a $300,000 investment. And you're gonna take $90,000 of your cash, and you're gonna do an SBA loan for $210,000 for a total of $300,000. So you're gonna leverage your cash and an SBA loan to fund the first location. Now when it comes time for the 2nd location, maybe decide, hey. Listen. I'm gonna take a little equity out of my house, $90,000, and I'm gonna do a ROPS. So I'm gonna use my retirement dollars to invest in the business in a tax compliant way of 210,000 for a total of 300,000. And let's say it comes time to the 3rd location, and you're gonna fund that business by using a little bit more of your retirement dollars to the ROPS 90,000. And you're gonna do a conventional loan for 210,000, again, for a total of $300,000. So the answer to your question today is, you know, it takes a capital to invest in the business. There are many different capital sources out there that you can tap when you're looking at investing in a franchise. And the cool thing is is that you can use a combination of these sources to fund your business. So with that, we'll talk to you on your next podcast. Thanks so much, and have a great day.
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Thanks for joining us on the hire yourself podcast. Pete's here to help you break free from the corporate rat race, take control of your destiny, and finally live life on your own terms. Whether that's jumping into franchise ownership full time or starting it as a side hustle. If this episode resonated with you, don't forget to subscribe, share it with a fellow frustrated executive, and leave a review to let us know your thoughts. Ready to start building your bridge to freedom? Visithireyourself.com for resources, insights, and a clear path forward. Until next time, take charge, build your future, and live life on your own terms.