Can you buy a business or franchise with zero money and no collateral? Yes you can. Is it a good idea? Maybe. No money down business financing and the types of businesses you can buy, today on Franchise City.
There are several “gurus” selling online courses right here on YouTube showing you how to acquire businesses with no money down. In most cases these are scenarios where the owner is holding some or all of the financing. Dangers of this strategy here:
Today we are speaking about funding a business, through traditional institutions, not owner finance. How much can you get and what type of businesses and franchises are available. Let’s take a look.
One option is an unsecured term loan, funding amounts between $10,000 up to $300,000. Unsecured term loans are based on verifiable income so you dont need to put up any collateral, just demonstrate you have income. very fast, takes about 3-4 weeks to get your money.
Second option is an unsecured line of credit. $25,000 – $150,000 690+ credit score, minimal recent credit inquiries, and credit utilization below 50%. There are a lot more funding options if you have money to put down including 401k rollovers, sba loans, and more, if you are looking for franchise and financing contact us for details, link at the end of this video.
If you have no money chances are you dont have a lot of business experience, so buying a franchise provides the training and support you need to be successful, as opposed to just buying a business where you are left on your own to sink or swim.
Food franchises like McDonalds, Burger King, Taco bell, almost all of these require much more money down and liquidity, generally over a million dollars so they wont work. There are some smaller food options like carts or kiosks that can be acquired for around the $100,000 range, but unless you are tied to food for some reason, or you have a real need in your area, there are more profitable options.
Service type businesses. Cleaning, flooring, handyman, plumbing, electrical, painting. We’ve spoken about service type businesses before, low overhead, strong growth, can be very profitable, some brands averaging over a million dollars a year or more, making as much or more as some fast food brands with a much smaller investment. You arent doing the work you are hiring and running the business in an executive capacity, so you dont need industry experience, but you should have some business experience. Investment all-in including your working capital and franchise fees from about $80k up to $200k.
Staffing, if you have B2B sales experience, Staffing can be a great business, investment about $150- $170k all-in, an average office in one system does over 6 million per year, many offices do more than that. You’ll need sales and executive experience to qualify, this is not a good business for an introvert.
Vending business. these are basically passive businesses where you spend a few hours each week restocking your machines. This is a scalable business where you can build an empire of machines in your territory, and some franchise companies will help you to place the machines, which is the hardest part of the business. There are also unique options like Bitcoin ATM’s or water filtration units, available with no money down. Investment depends on how many machines starting at about $40,000 to over a million.
Salons and beauty shops. This will be at the higher end of the investment between $220 – $300k, more in expensive cities, but again a salon is a semi passive business, you can keep your job and spend about 10-15 hours a week check in in on your location. Some of these concepts have EBITDA’s over $100k, so they can be quite profitable, and a good alternative in case the markets drop.
Medical billing or consulting type of businesses. Great industry, work from home or from anywhere in the world, most of your business can be conducted over the phone. Low investment about $25,000 – in some cases you can keep your existing job and start part time, quit your job when the business reaches profitability. You should have sales experience as you are speaking with people a lot of the time, these businesses can be quite profitable as well and overhead is virtually zero.
What are the risks? Well if you are bad at running the business you will not do well, and either have to sell at a loss or lose your money. We see many inexperienced buyers buy struggling businesses, not know how to research them, sell at a loss. Also, if you cant reach profitability fast enough you can run out of money. The best way to avoid those risks are to A) spend as little as possible, always leaving a good padding of money available, not spending all of your money on the business, and B) making sure the business you buy is one that you will be competent at operating.

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