You’ve researched the category, compared a few brands, and a home services franchise opportunity is on your short list. Now you need to figure out how to fund your investment.
New franchise owners often finance their new business from multiple sources, such as bank loans, retirement savings, home equity, and cash. The right mix depends on what you have and how much risk you’re comfortable carrying. Here are five things to weigh before you talk to a lender.
Evaluate the full cost, not just the franchise fee
The franchise fee is one line in your total initial investment. The total also covers things like travel for training, insurance, professional fees, launch marketing, and the cash you need to operate in the first months. For Ace Handyman Services, the total initial investment runs $132,200-$226,000, and the franchise fee makes up $70,000–$100,000 of that.
You can find the full investment breakdown in Item 7 of a brand’s Franchise Disclosure Document (FDD). Ask for the FDD early and read it carefully before you shop for loans. Lenders will want to see it, so having the right numbers matters.
Explore SBA-backed loans as a baseline option
An SBA 7(a) loan is a common place to start with franchise financing. The U.S. Small Business Administration guarantees part of the loan, so banks are more willing to lend to a new business. SBA 7(a) loans go up to $5 million and can cover working capital, equipment, furniture, fixtures, and supplies. The maximum term is 10 years, unless the loan finances real estate or equipment with a longer useful life.
When lenders evaluate a franchised business for SBA eligibility, they use the SBA Franchise Directory, so ask your lender about the brand’s status early. Ace Handyman Services is a national brand backed by the Ace name, with the kind of documented systems and FDD numbers lenders look for. Whether you’re approved for an SBA 7(a) loan and on what terms still comes down to your own credit and collateral, as well as the lender you choose.
Consider a retirement rollover (ROBS) if you have qualifying funds
A Rollovers as Business Start-Ups arrangement, or ROBS, lets you put eligible 401(k) or IRA funds into a business without taking an early withdrawal. You set up a new C corporation with its own retirement plan, your existing funds roll into that plan, and the plan buys stock in your company.
The IRS permits the use of ROBS, but it’s important to work with a professional to set it up and handle the ongoing administration. Compliance gaps like missed annual Form 5500 filings can easily disqualify your plan. ROBS usually makes the most sense for owners with a meaningful rollover balance who want to save their borrowing capacity for working capital.
Supplement with home equity and portfolio-backed options
A home equity line of credit (HELOC) or a securities-backed line of credit can fill gaps in your funding plan. They work best as a smaller piece next to an SBA loan or ROBS. Some owners use one as bridge capital during launch or keep it open as a working capital buffer.
Both options put a personal asset on the line—either your house or your investment portfolio—so borrow only what you need and always talk with a financial advisor before you sign.
Plan working capital and cash reserves separately from launch costs
Keep launch capital and operating runway in two separate buckets. Launch capital pays for the franchise fee, training, equipment, and opening marketing. Operating runway keeps your business going while you build a customer base. Ace Handyman Services recommends between $30,000 and $45,000 in working funds for the first three months of operation.
Handyman work also changes with the seasons, with more indoor projects in colder months and more outdoor work once the weather turns. With enough runway and a proven business model behind you, you can plan around that pattern instead of fighting it.
Financing a Franchise with Ace Handyman Services
However you structure the capital, your business still runs on the franchise system behind it. Lenders and investors will closely evaluate the brand, its training, and its support model as much as your own finances.
Ace Handyman Services runs on a proven business model built around W-2 Craftsmen and a defined service process, with territories set by zip code and the backing of the Ace Hardware brand. If you’re working through your financing plan, connect with our franchise development team to talk through available territories and next steps.
