SBA 7(a) Q&A
Short answer
No, the SBA does not approve individual franchise locations; it approves the franchise system itself for eligibility.
The SBA maintains a Franchise Directory, listing franchise systems that have been reviewed and deemed eligible for SBA financing. Once a franchise system is on the directory, individual locations operating under that system are generally eligible, provided the specific borrower and business meet all other SBA 7(a) requirements.
A buyer is acquiring a 'Smoothie King' franchise location in their city. The SBA has already approved the 'Smoothie King' franchise system. The lender will then focus on the buyer's qualifications and the financial viability of that specific location, not requiring additional SBA review for the location itself.
Insider move
Lenders must verify the franchise system's inclusion on the SBA Franchise Directory. While the SBA doesn't approve locations, the lender will perform due diligence on the specific location's market, lease, and projections to ensure its viability and the borrower's ability to succeed.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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