For SBA lenders
Short answer
A lender must submit the unlisted franchise agreement directly to the SBA for review, along with a completed Franchise Agreement Addendum, to determine its eligibility for 7(a) financing.
Franchise systems not listed on the SBA Franchise Directory have not undergone formal SBA review. For these, the lender must submit the full franchise agreement, disclosure documents, and a completed SBA Franchise Addendum to the SBA Franchise Team for a determination of eligibility. This review ensures the agreement does not contain objectionable clauses (e.g., undue franchisor control) that would render the franchisee ineligible.
A borrower applies for a 7(a) loan to open a new concept franchise that is not on the SBA Directory. The lender collects the entire franchise agreement package, including the Franchise Disclosure Document, and submits it to SBA's franchise team with the required addendum for eligibility determination prior to full underwriting.
Insider move
Lenders must never assume an unlisted franchise is eligible. Proceeding with a loan to an unlisted franchise without SBA's explicit determination of eligibility is a common cause for guaranty denial, as the underlying agreement might contain disqualifying provisions.
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
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day