For SBA lenders
Short answer
A lender determines if a franchise is listed on the SBA Franchise Directory by searching the current online directory, which indicates if the franchise agreement has been pre-approved by the SBA.
The SBA maintains an online Franchise Directory of franchise systems whose agreements have been reviewed and determined to meet SBA eligibility requirements. If a franchise is listed, lenders can proceed with an expedited eligibility review for the franchise agreement itself. If not listed, the lender must submit the franchise agreement to SBA for a full review.
A borrower applies for a loan to acquire a 'Burger Joint' franchise. The lender accesses the SBA Franchise Directory online, searches for 'Burger Joint,' and finds it listed with an 'FDD Addendum' note. This indicates the franchise is pre-approved, expediting the lender's review of the franchise agreement.
Insider move
Lenders must always consult the most current SBA Franchise Directory to confirm a franchise's status. Relying on outdated information or failing to check the directory can lead to delays or issues with eligibility if the franchise agreement has not been pre-approved or has changed, potentially jeopardizing the guaranty.
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
SBA Document Search
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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