For SBA lenders
Short answer
If a franchise agreement is not on the SBA Franchise Directory, the lender must submit the franchise agreement and all related documents directly to the SBA for a formal review to determine eligibility before submitting the loan application.
For a franchise to be eligible for SBA financing, its agreement must be on the SBA Franchise Directory or receive individual approval from the SBA. The lender is responsible for submitting the complete franchise agreement package, including all addenda and exhibits, to the SBA's Office of Franchise and Business Opportunity for review and listing determination.
A borrower applies for a 7(a) loan to purchase a new franchise. The lender checks the SBA Franchise Directory and finds it's not listed. The lender then compiles the franchise disclosure document (FDD) and all agreements and submits them to SBA for an eligibility review before processing the loan application to E-Tran.
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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