SBA 7(a) Q&A
Short answer
If a franchise is not on the SBA Franchise Directory, the lender must submit the franchise agreement to the SBA for review and eligibility determination, which can extend the application timeline.
The SBA maintains a Franchise Directory of eligible franchise systems. If a franchise is not listed, the lender must submit a copy of the franchise agreement and other required documents to the SBA for a direct review to determine its eligibility. The SBA will assess whether the agreement meets their standards, particularly regarding control, affiliation, and financial risk, before approving financing.
You identify a promising emerging franchise brand that is not yet on the SBA directory. Your lender will need to send the full franchise agreement to the SBA for a thorough review. This process could add several weeks to your loan application timeline, as the SBA needs to evaluate the agreement's compliance with their rules.
Insider move
Lenders prefer franchises on the directory for streamlined processing. For unlisted franchises, they meticulously prepare the submission to SBA, ensuring all required documents are included and accurately reflect the franchise relationship. They manage borrower expectations regarding the potential for delays or even ineligibility.
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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