For SBA lenders
Short answer
Lenders verify a franchise's listing status by searching the official SBA Franchise Directory website and reviewing the current Franchise Agreement Addendum or Negotiated Addendum.
The SBA maintains an online Franchise Directory that lists eligible franchise systems. Lenders must check this directory. If a franchise is listed, the specific addendum (SBA negotiated or approved standard) that the borrower must execute will be linked, which must be incorporated into the franchise agreement.
A borrower applies for a 7(a) loan to purchase a sandwich shop franchise. The lender navigates to the SBA Franchise Directory online, searches for the franchisor, confirms its listing, and downloads the required SBA Addendum, ensuring it is properly executed by the borrower and franchisor.
Insider move
Failure to properly verify the franchise's eligibility or ensure the correct SBA Addendum is used can render the loan ineligible or lead to a guaranty denial. It is a critical early eligibility check.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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