For SBA lenders
Short answer
To verify an unlisted franchise's eligibility, a lender must submit the complete franchise agreement, disclosure document (FDD), and any other ancillary agreements to the SBA for review and placement on the Franchise Directory.
If a franchise is not on the SBA Franchise Directory, it must be reviewed by the SBA to ensure it does not include affiliation clauses, management restrictions, or other terms that violate SBA regulations. The lender must provide all governing documents for this review, and the SBA will determine if the franchise system is eligible.
A prospective borrower wants to acquire a franchise that is not listed on the SBA Franchise Directory. The lender must collect the full franchise agreement, the franchisor's FDD, and any addenda, then submit these to the SBA for review prior to loan approval.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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