SBA loan basics
Short answer
Yes, SBA 7(a) loans are commonly used for financing franchise businesses, provided the franchise agreement meets SBA eligibility requirements.
Many franchises are eligible for SBA 7(a) loans. The SBA maintains a Franchise Directory, and if a franchise system is listed and approved, it generally streamlines the eligibility review. If not listed, the lender must review the franchise agreement to ensure it doesn't contain terms that restrict the franchisee's control or independence, which would make it ineligible.
You want to buy an existing Subway franchise. Since Subway is typically on the SBA Franchise Directory, the business itself is generally eligible, and the loan application proceeds focusing on your financial strength and the unit's performance.
Lenders verify the franchise system's eligibility, either through the SBA Franchise Directory or by reviewing the franchise agreement for problematic clauses. They ensure the borrower has sufficient control over the business's operations.
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.
More on franchise eligibility
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