{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-the-business-i-want-to-buy-is-a-relatively-new-franchise-not-yet-on-the-sba-s-registry-","api_url":"https://dealroom.so/api/public/questions/if-the-business-i-want-to-buy-is-a-relatively-new-franchise-not-yet-on-the-sba-s-registry-","question":"If the business I want to buy is a relatively new franchise not yet on the SBA's registry, can it still be financed?","topic":"Franchise financing","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, a relatively new franchise not yet on the SBA's registry can still be financed, but it requires the lender to submit the franchise agreement for SBA review.","rule":"Franchises must be on the SBA Franchise Directory or receive a 'determination of eligibility' from the SBA. For unlisted franchises, the lender must submit the franchise agreement to the SBA for review to ensure it does not contain any provisions that could be deemed 'undue control' by the franchisor, which would make it ineligible.","example":"A buyer wants to acquire a new 'Smoothie Shack' franchise, which isn't on the SBA list. The lender submits the franchise agreement to the SBA. After review, the SBA determines it meets eligibility requirements, allowing the loan process to continue.","what_lenders_check":"Lenders are cautious with unlisted franchises due to the risk of eligibility issues. They carefully review franchise agreements for undue control clauses and may perform extra due diligence to ensure the franchise concept is viable before submitting it to the SBA.","required_facts":["New franchise","SBA registry","Franchise agreement","SBA review","Eligibility determination","Undue control"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"What due diligence does the lender perform to ensure a franchise is eligible for SBA 7(a) financing?","url":"https://dealroom.so/sba-7a/questions/what-due-diligence-does-the-lender-perform-to-ensure-a-franchise-is-eligible-for-sba-7-a-f"},{"question":"What are the requirements for a franchisor to be listed on the SBA Franchise Directory?","url":"https://dealroom.so/sba-7a/questions/what-are-the-requirements-for-a-franchisor-to-be-listed-on-the-sba-franchise-directory"},{"question":"What is the typical down payment (equity injection) percentage for a franchise acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-typical-down-payment-equity-injection-percentage-for-a-franchise-acquisition"},{"question":"Are there minimum operating history requirements for a franchise system to be eligible for SBA loans?","url":"https://dealroom.so/sba-7a/questions/are-there-minimum-operating-history-requirements-for-a-franchise-system-to-be-eligible-for"},{"question":"Does the franchisor's financial strength and stability impact my SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/does-the-franchisor-s-financial-strength-and-stability-impact-my-sba-7-a-loan-approval"},{"question":"Can I use an SBA 7(a) loan to finance a franchise acquisition not listed on the SBA Franchise Directory?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-finance-a-franchise-acquisition-not-listed-on-the-sba-franchi"}],"related_terms":[{"term":"New Business Entity","url":"https://dealroom.so/glossary/new-business-entity"},{"term":"Franchise business","url":"https://dealroom.so/glossary/franchise-business"},{"term":"Call on the guaranty","url":"https://dealroom.so/glossary/call-on-the-guaranty"},{"term":"Not-for-Profit Business","url":"https://dealroom.so/glossary/not-for-profit-business"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"New venture","url":"https://dealroom.so/glossary/new-venture"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/if-the-business-i-want-to-buy-is-a-relatively-new-franchise-not-yet-on-the-sba-s-registry-","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}