SBA 7(a) Q&A
Short answer
Yes, a franchise not on the SBA Franchise Directory can still be eligible for 7(a) financing, but the lender must review and submit the franchise agreement to the SBA for approval.
The SBA Franchise Directory lists franchises with pre-approved addenda, streamlining the process. If a franchise is not listed, the lender must submit the franchise agreement and any related documents to the SBA for a review to ensure it meets SBA's eligibility requirements, particularly regarding control and affiliation.
A buyer wants to purchase a new, small franchise not yet on the directory. The lender gathers the franchise agreement and sends it to the SBA for a compliance review. If approved, the loan can proceed.
Insider move
Lenders need to ensure the franchise agreement does not contain any provisions that would make the business ineligible (e.g., undue control by the franchisor, prohibited business activities). This review process adds time to the application.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. 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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