How to Finance a McDonald's Franchise in 2026

Financing a McDonald's franchise starts with a mandatory 25% cash injection — then SBA 7(a) covers the balance. Here's how lenders evaluate the deal and how to structure it.

Key takeaways

• Total investment: $1.4M–$2.5M — most first-time operators acquire an existing restaurant
• McDonald's requires minimum 25% cash injection in non-borrowed, liquid funds — non-negotiable
• McDonald's is on the SBA Franchise Directory — SBA 7(a) covers the financed portion (up to $5M)
• SBA 504 applies if real estate is part of the deal (owner-occupied commercial property)
• Equipment financing can be layered separately for kitchen systems, POS, and technology
• Typical lender timeline: 60–90 days from completed application to funding

McDonald's is among the most capital-intensive franchise systems to enter — and one of the more structured in how it approaches franchisee financing. The brand does not offer in-house lending, but its position on the SBA Franchise Directory means SBA lenders can move through franchisor eligibility review without the delays that come with non-listed brands. This guide focuses on the financing mechanics — not the startup cost breakdown (see the companion cost-to-start guide for that).

McDonald's total investment + what lenders look at

Total estimated initial investment per the current FDD runs $1.4M–$2.5M depending on whether you're acquiring an existing restaurant or building new. Most first-time franchisees acquire an existing unit. Lenders evaluate the following when underwriting a McDonald's franchise deal:

• Equity injection documentation: 25% of total project cost in liquid, non-borrowed cash — bank statements required. This is McDonald's requirement, enforced before the SBA loan structure is built.
• Net worth: Lenders want to see $750K–$1M+ total net worth, consistent with McDonald's own published thresholds.
• Operating experience: McDonald's requires new franchisees to complete a 9–12 month training program. Some lenders weight prior QSR management experience.
• Location cash flow (existing unit): If acquiring an existing restaurant, lenders will underwrite trailing 12-month revenue — DSCR (debt service coverage ratio) typically needs to exceed 1.25x.
• Personal credit: 680+ FICO is a common threshold for SBA franchise deals of this size, though some lenders go lower for exceptionally strong financials.

SBA 7(a) for McDonald's franchises

The SBA 7(a) loan program is the primary financing vehicle for McDonald's franchise acquisitions. Because McDonald's is on the SBA Franchise Directory, lenders skip the independent franchise agreement review — shortening approval timelines by 2–4 weeks. Key parameters for McDonald's deals:

• Maximum loan amount: $5M — covers the financed portion of most single-unit acquisitions
• Terms: Up to 10 years for equipment and working capital; up to 25 years if commercial real estate is included
• Rate: Prime + 2.75% for loans over $350K (variable); fixed-rate options vary by lender
• SBA guarantee fee: Applies on loans over $150K — the lender rolls this into closing costs
• Use of proceeds: Acquisition price, equipment, leasehold improvements, working capital reserve
• What it does NOT cover: The 25% equity injection — that must come from the borrower's own liquid assets

SBA 504 for real estate and build-out

The SBA 504 program applies when real estate is part of the transaction — most commonly when a franchisee is acquiring the land and building rather than leasing from McDonald's Corporation. 504 structure for a McDonald's deal would typically look like: 50% conventional bank loan + 40% SBA 504 debenture (long-term, fixed rate) + 10% borrower equity. Because McDonald's controls the real estate in many of its locations, 504 is less common for initial entry but is relevant for multi-unit operators acquiring freestanding pads.

Equipment financing for McDonald's

Kitchen equipment, POS systems, drive-through technology, and signage can be financed separately via equipment loans or equipment leases — layered on top of the primary SBA 7(a) loan. Equipment loans typically run 3–7 year terms, collateralized by the equipment itself. For an existing restaurant acquisition, major equipment is usually already in place; equipment financing is more relevant for renovation programs or new builds where McDonald's requires upgrades at transfer.

Franchisor financing programs

McDonald's does not operate a direct in-house lending program for franchisees. The company has historically directed franchisees toward established SBA-preferred lenders and conventional banks with experience in QSR franchise lending. McDonald's maintains relationships with a network of preferred-vendor lenders (communicated through the franchisee qualification process), but the financing itself is market-rate debt — there is no subsidized rate, deferred payment, or royalty-offset program from McDonald's corporate.

Down payment and liquidity requirements

McDonald's minimum cash injection is 25% of total project cost — in non-borrowed, liquid funds. On a $2M acquisition, that is $500K minimum from the borrower's personal liquid assets. McDonald's is explicit: HELOC draws, 401(k) loans, or borrowed funds from any source do not count. Required net worth is $750K–$1M+ per McDonald's published franchisee qualifications. The typical lender underwriting standard aligns: they want to see the SBA injection, plus additional liquidity post-closing (3–6 months of debt service in reserve).

Timeline to funding

1. Pre-qualification: Lender reviews financial statements, McDonald's approval letter, and FDD. 1–2 weeks.
2. SBA package: Full SBA application assembled: personal financial statement (SBA Form 413), 3 years tax returns, business plan, purchase agreement. 2–3 weeks.
3. SBA approval: SBA review and conditional commitment issued. 3–6 weeks depending on lender's preferred lender status (PLP lenders move faster).
4. Closing and funding: Title, legal, and closing. 2–3 weeks post-SBA commitment. Total: 60–90 days from complete application.

Apply with ClearValue Lending

ClearValue Lending works with franchise operators at every stage — from first-unit acquisition to multi-unit expansion financing. Apply at Find my match. Your file routes to one matched lender in our network. Related guides: SBA 7(a) loan application walkthrough · SBA 504 loan explained.

Sources

• McDonald's is listed on the SBA Franchise Directory, making it eligible for expedited SBA 7(a) franchisor review. — SBA Franchise Directory
• SBA 7(a) loans provide up to $5M for eligible franchise startup and acquisition costs, with terms up to 25 years for real estate. — SBA 7(a) Loan Program
• SBA 504 loans finance owner-occupied commercial real estate with a long-term fixed rate debenture structure — applicable to franchise real estate acquisitions. — SBA 504 Loan Program
• The FTC Franchise Rule requires franchisors to provide a Franchise Disclosure Document (FDD) with Item 5 (fees), Item 7 (estimated initial investment), and Item 19 (financial performance representations). — FTC Franchise Rule — Buying a Franchise: A Consumer Guide
• FDIC data shows SBA-guaranteed loans are the dominant vehicle for high-investment QSR franchise acquisitions where borrower equity meets the 10–25% injection threshold. — FDIC — Financial Institution Letters

What lenders look for in a McDonald's franchise application

McDonald's is listed on the SBA Franchise Directory, allowing SBA-approved lenders to use expedited franchisor eligibility review. At $1.4M–$2.5M, most first-time buyers acquire an existing restaurant rather than build new. Key underwriting factors lenders evaluate:

• Equity injection: McDonald's requires a minimum 25% of total project cost in non-borrowed, liquid cash — this is a hard franchisor gate, not just an SBA guideline. On a $2M acquisition, that means $500K in documented liquid assets. Borrowed funds (HELOCs, 401(k) loans, family gifts) do not satisfy this requirement; lenders verify the source of funds in detail.
• Debt service coverage ratio (DSCR): SBA guidelines require 1.15× minimum DSCR. McDonald's acquisitions use trailing 12-month restaurant P&Ls as the primary DSCR input. Lenders typically want 1.25×–1.35× for deals above $1.5M given the full-service operating model and relatively thin restaurant margins.
• Net worth and liquidity: McDonald's requires a minimum $500K net worth and $250K in liquid assets at the franchisor level — lenders review the same statements to confirm quality. Liquid assets are weighted more heavily than illiquid real estate equity for purposes of the cash injection test.
• Operator approval and training: McDonald's must approve the buyer independently of SBA. Lender commitment letters are typically issued contingent on McDonald's final franchisee approval. First-time restaurant operators face a higher underwriting bar; prior multi-unit QSR experience is material to both the franchisor and lender.
• Acquisition vs. greenfield structure: Existing restaurant acquisitions are underwritten on trailing restaurant cash flow. New builds are underwritten on a pro forma with conservative year-one ramp assumptions. Lenders treat greenfield deals as higher risk and typically require stronger borrower liquidity and a longer operating history.

Deal structuring note

McDonald's acquisitions above $1.5M typically use SBA 7(a) with a 10-year term for equipment and working capital. For larger deals involving real estate purchase, some lenders layer SBA 504 (for owner-occupied real property) with 7(a) (for equipment and leasehold). McDonald's Corporate has a preferred-lender referral program, but the actual debt is market-rate third-party financing — compare multiple lenders. Apply at Find my match.

Frequently asked questions