Glossary · Reading the business
In short
The share of a franchise brand's SBA loans that lenders charged off — a hard signal of whether the model actually works.
Most "best franchise" lists are sponsored. The failure rate isn't: it's the percentage of a brand's SBA loans (over a fixed cohort of years) that ended in a charge-off, straight from public lending records. A brand with hundreds of loans and a near-zero failure rate has a proven system; a high rate with real volume is a warning. Lenders track this the same way, so a clean record also means easier financing and better terms on that brand.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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