SBA 7(a) Q&A
Short answer
No, an SBA 7(a) loan cannot be used to acquire a franchise business unless it is listed on the SBA Franchise Directory or has received an individual SBA review and approval.
For a franchise to be eligible for SBA financing, it must either appear on the SBA Franchise Directory, indicating it meets SBA's affiliation and eligibility requirements, or it must undergo a specific, individual review by the SBA. Unlisted franchises are generally ineligible without this review.
If you want to buy a 'New Burger Joint' franchise, but it's not on the SBA directory, the lender would need to submit the franchise agreement for an individual review, which can add significant time and uncertainty to the loan process. It's often easier to choose a pre-approved franchise.
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.
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