SBA 7(a) Q&A
Short answer
The SBA maintains a Franchise Directory to pre-approve franchise systems, simplifying eligibility for specific locations, though individual borrowers and businesses must still qualify.
Franchises are generally eligible if they appear on the SBA's Franchise Directory, meaning the franchise agreement has been reviewed and found to comply with SBA's affiliation and eligibility requirements. If a franchise is not on the directory, the lender must submit the franchise agreement to the SBA for review and determination.
If you want to buy a 'Coffee World' franchise, a lender would first check if 'Coffee World' is listed on the SBA Franchise Directory. If it is, the franchise system itself is pre-approved, and the focus shifts to your personal and the specific business's eligibility.
Insider move
Lenders must ensure the franchise system itself is eligible, primarily by checking the SBA Franchise Directory. For unlisted franchises, the lender undertakes the responsibility of submitting the agreement and addressing any concerns regarding franchisor control or affiliation.
SOP 50 10 - Lender and Development Company Loan Programs
13 CFR Part 121 - Small Business Size Regulations
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
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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