SBA loan basics
Short answer
Yes, if you are buying a franchise, the franchise system itself must be listed on the SBA Franchise Directory or meet specific SBA requirements.
For a franchise business to be eligible for an SBA loan, the franchise agreement must comply with SBA franchise rules, ensuring that the franchisor does not unduly control the franchisee's operations to the point of affiliation. Many popular franchises are pre-approved and listed in the SBA Franchise Directory.
If you plan to open a specific fast-food restaurant franchise, your lender will check the SBA Franchise Directory to confirm its eligibility. If not listed, the franchise agreement would need to be reviewed by the SBA.
Insider move
Lenders must verify the franchise's eligibility to ensure the loan qualifies for an SBA guaranty. They check the directory or submit the franchise agreement for review if it's not pre-approved.
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.
Terms in this answer
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