For SBA lenders
Short answer
For an unlisted franchise, the lender must submit the franchise agreement and all related documents for SBA review to determine eligibility, ensuring it does not contain terms granting the franchisor undue control.
While the SBA Franchise Directory lists pre-approved franchises, a franchise not on the list can still be eligible. The lender must submit the complete franchise agreement, along with any addenda, to the SBA for a formal review. The SBA will assess whether the agreement complies with 7(a) program requirements, particularly regarding the franchisee's operational independence and control over business assets.
A borrower wants to purchase a new franchise concept not yet on the SBA Directory. The lender collects the full franchise agreement, disclosure document (FDD), and other related contracts. The lender then submits these documents to the SBA for an eligibility determination before processing the loan further.
Insider move
Lenders must ensure all unlisted franchise agreements undergo a formal SBA review to prevent eligibility issues that could result from franchisor undue control or restrictions on the borrower's ability to operate the business.
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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