Franchise Glossary
Equity Injection
What is Equity Injection in franchising?
The portion of a franchise investment contributed from personal funds rather than borrowed capital. The ideal equity injection comes from what you already have: liquid savings, proceeds from asset sales, a HELOC draw, or retirement funds via a ROBS structure. SBA lenders typically require a 10%–20% equity injection of the total project cost. A $400,000 total investment would require $40,000–$80,000 in equity from the borrower. The more of that you can cover from direct capital rather than additional borrowing, the cleaner your capital stack will be.