SBA loan basics
Short answer
Yes, many franchises are eligible for SBA 7(a) loans, provided the franchise system is approved by the SBA and the individual franchisee meets all other eligibility requirements.
The SBA maintains a Franchise Directory listing franchise systems that have been reviewed and approved for SBA loan eligibility. If a franchise is not on the directory, it can still be eligible if the franchise agreement meets SBA requirements, but it will require additional review by the lender and potentially the SBA.
A new franchisee wants to open a sandwich shop that is part of a well-known national chain. If that chain is listed on the SBA Franchise Directory, the franchisee can apply for an SBA 7(a) loan for the startup costs and working capital.
Insider move
Lenders must verify that the franchise system is either listed on the SBA Franchise Directory or that the franchise agreement complies with SBA rules (e.g., no undue control by the franchisor). They also assess the individual franchisee's experience and financial strength.
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
SBA 7(a) Loans Overview
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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