SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can be used to finance the purchase of a new franchise location, provided the franchise is approved by the SBA and all eligibility requirements are met.
SBA loans support eligible small businesses, including new and existing franchises. The franchise must be listed on the SBA Franchise Directory or receive an SBA addendum approval. The loan can cover startup costs, equipment, working capital, and even real estate for the new location.
A buyer wants to open a new smoothie shop franchise location, requiring $300,000 for build-out, equipment, and initial working capital. An SBA 7(a) loan can finance these costs, assuming the franchise is SBA-approved.
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 financing
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