SBA 7(a) Q&A
Short answer
If your desired franchise is not on the SBA's approved directory, it can still be eligible, but the lender must submit the franchise agreement to the SBA for review.
Franchises listed on the SBA Franchise Directory have already undergone SBA review, streamlining the application process. For unlisted franchises, the lender must submit the franchise agreement and related documents to the SBA's Franchise Review Unit. The SBA will then determine if the agreement meets its eligibility criteria, primarily ensuring the franchisee has sufficient control over the business.
A buyer wants to acquire a coffee shop under a new franchise brand not on the directory. The lender prepares the loan application and also sends the full franchise agreement to the SBA for a separate review. This review process can add several weeks to the overall timeline.
Insider move
Lenders will ensure the franchise agreement does not contain any provisions that could impair the borrower's ability to repay the loan or that conflict with SBA regulations. This review is critical to confirm the business's eligibility for an SBA guaranty.
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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