For SBA lenders
Short answer
Lenders must check the official SBA Franchise Directory (or its equivalent list of eligible franchises) by searching for the specific franchise name and ensuring its status is 'eligible' or 'on the addendum'.
The SBA maintains a Franchise Directory to simplify eligibility determinations for franchises. If a franchise is listed as eligible, its standard franchise agreement has been pre-approved, reducing the lender's burden to review the agreement for problematic clauses that could violate SBA rules.
A borrower applies for a loan to open a new 'Coffee Cloud' franchise. The lender navigates to the SBA Franchise Directory and searches for 'Coffee Cloud'. Upon finding it listed as 'Eligible', the lender can proceed with the franchise eligibility aspect of underwriting.
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on franchise eligibility
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