For SBA lenders
Short answer
For an unlisted franchise, the lender must submit a complete copy of the signed franchise agreement, including all exhibits and amendments, to the SBA for eligibility review.
If a franchise system is not listed on the SBA Franchise Directory, the lender must submit the franchise agreement and all related documents for a 'franchise eligibility review' by the SBA. This review assesses whether the agreement contains clauses that would give the franchisor undue control over the franchisee, violate the 'size' rule, or otherwise make the franchisee ineligible for an SBA loan. The SBA will then determine if the franchise system is eligible.
A borrower wants to acquire a franchise that is not on the SBA directory. The lender collects the full, signed franchise disclosure document (FDD) and the entire franchise agreement with all its attachments. This comprehensive package is then submitted to the SBA for an eligibility determination.
Insider move
Lenders should guide borrowers to select franchises already on the directory. For unlisted franchises, the lender must ensure all necessary documentation is complete and accurate before submission to avoid delays. An adverse SBA determination on franchise eligibility will halt the loan process.
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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