SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can typically cover reasonable franchise transfer fees and other associated costs incurred when acquiring an existing franchised business.
SBA loan proceeds can be used for eligible business expenses, which include franchise fees, transfer fees, and certain other costs directly related to the acquisition and establishment of the franchised operation under new ownership.
If you are acquiring an existing sandwich shop franchise for $400,000, and the franchisor charges a $15,000 transfer fee, this fee can be included as part of your total project costs financed by the SBA 7(a) loan.
Insider move
Lenders verify the reasonableness of all fees and ensure they are customary for the specific franchise system. They meticulously review the Franchise Disclosure Document (FDD) and franchise agreement for fee structures.
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 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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.
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