A franchise’s liquid-capital threshold and net-worth threshold answer different questions. Neither is automatically the amount you will spend opening the business. Start with your own balance sheet, then reconcile the brand’s definitions with the proposed project.
Classify assets by accessibility
Cash in an accessible account differs from property equity, retirement assets or a minority stake in another company. Record ownership, withdrawal restrictions, existing pledges and the time needed to realise each asset. Ask the franchisor which categories it accepts instead of assuming that every valuable asset qualifies.
Keep household and business cash separate
An applicant may meet a wealth test while having too little cash for deposits, launch losses and living expenses. Deduct funds already committed elsewhere before presenting available capital. Borrowing against an asset creates a repayment obligation; it does not turn the borrowing into additional net wealth.
Reconcile eligibility with the funding plan
Request written definitions and the evidence required at application. Build a separate project budget showing your contribution, proposed finance and a reserve. Passing the applicant screen does not establish loan approval, site approval or the suitability of committing your available savings.
A worked research example
Illustrative example: assets of 400,000 less liabilities of 250,000 produce net worth of 150,000. If only 35,000 is immediately accessible cash, the two figures remain 150,000 and 35,000. They must not be added together to claim 185,000 of funding.
Evidence to gather
- List assets and existing liabilities
- Identify accessible, uncommitted cash
- Request the brand’s accepted definitions
- Reconcile funds with opening and household budgets
Before you move forward
Frequently asked questions
Is net worth the same as cash?
No. Net worth includes the value of assets less liabilities; some assets may be difficult or costly to sell.
Does meeting a liquidity threshold cover every opening cost?
No. Applicant eligibility and the complete funding requirement are separate checks.
Can borrowed money count as liquid capital?
Ask the franchisor and lender. The treatment depends on their criteria, and the debt must remain in your funding model.
Sources and scope
References checked 6 November 2026. The questions, examples and diagrams are our editorial research tools; they are not statements that every franchise has the same terms.
- SBA — Plan your business
General US business-planning reference, not franchise-specific costs or a forecast.
- British Business Bank — Leasing and hire purchase
UK asset-finance background; actual ownership and payment terms depend on the agreement.
General editorial information, not personalised legal, tax or financial advice. Confirm local requirements and the actual documents with appropriate advisers. Examples are hypothetical. Contact the editor or suggest a correction.
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