Financing Options

Financing your EarthWise Pet Supply franchise may be easier than you think. Consider the following strategies for achieving your goals.

Qualified franchise candidates must have $150,000 in liquid assets and a net worth of at least $300,000. Once you’ve met those benchmarks, you can tap into a variety of sources to get your business started. 

Most banks will finance 80% of the project costs, which in this case would include such items as franchise fees, construction, equipment, inventory, working capital and financing costs. EarthWise offers in-house financing and has partnered with third-party lenders to help you get the assistance you need.

There are certain questions candidates should ask themselves when considering financing:

  1. What is the least expensive expansion capital available to me?
  2. What is the most attainable financing available?
  3. What financing strategy will tie up the least of my liquid assets?

Ultimately, you’re trying to answer the golden question: What is my best strategy for achieving my goals?

EarthWise Pet Franchisee Smiling

Financing Options

The following are among the most common methods franchisees use to finance their franchise:

Home Equity Line of Credit (HELOC)

A HELOC traditionally offers low interest rates; are highly flexible, with payments that can be interest-only if needed and no set repayment schedule; and relatively low documentation. You don’t need to write a robust business plan or disclose where the funds will be utilized. As the name indicates, your home mortgage is the collateral. A HELOC also helps you conserve your cash and helps your pet supply franchise be more resilient.

Important considerations:

  • You will need to demonstrate your ability to repay the loan through existing sources of income. Projected income generated from your new business will not be considered.
  • You can borrow up to 80% loan-to-value. Multiply the value of your home by 80% and then deduct the outstanding balance of your first and second mortgages. Volatile real estate markets (such as Florida) may be 70% loan-to-value. Certain states, like Texas, do not allow second mortgages. Real estate appraisals are required.

401K rollover/self-directed IRA.

This method allows you to start your business using qualified 401K and IRA funds with no declared income or 10% penalty. You won’t need a robust business plan nor will you have to participate in an elaborate loan closing. You can conserve your liquid assets, and you can pay yourself the interest, not the bank.

Important considerations:

  • Many people consider their retirement plans a safety-net nest egg. You will need to start looking at your business as your nest egg.
  • You should determine whether the combination of the interest you save and income you make as a franchisee will beat what you predict the stock market would give you.


This is a government-backed loan that eliminates the bank’s risk and makes them more willing to approve you for financing. Typically, you will receive a 30% cash injection, which allows you to conserve your cash. The cost of money is reasonable, usually 2.75 points over prime. There is no pre-payment penalty, and more money is available with less collateral once you have a track record of success.

Important considerations:

  • SBA loans take longer to process, often 90 days or more. 
  • High documentation means you’ll need a great deal of time and effort to gather and complete paperwork.
  • Balance of the loan requires 100% collateral. If most of your collateral is in home equity, you should consider HELOC before SBA.
  • Work experience is an important consideration for obtaining an SBA loan.

Friends and family

Because they know you, friends and family are usually flexible on repayment terms and may not require any collateral. Some may bring certain areas of expertise into your business before supporting your pet supply franchise..

Important considerations:

  • If business performance is not as predicted, it may impact important relationships moving forward.
  • If friends and family are seeking equity in the business, see “Partnerships” below.


Partners should have complementary skill sets that add value to each other. Partnerships can offer greater leadership and management capacity as well as the ability to grow faster. You’ll have more eyes on the business, and differing schedules may allow for more flexibility.

Important considerations:

  • Partners divide the rewards and equity. This may be your most expensive source of financing.
  • Business relationships are different than family and friend relationships.
  • Partners need to have discussions about who is responsible for what, who is investing what and how partners will divide income, shares and benefits.
  • Hard to dissolve without impacting the business.