SBA loan basics
Short answer
Yes, acquiring a franchise business is a very common and eligible use of an SBA 7(a) loan, provided the franchise is approved by the SBA.
The SBA maintains a Franchise Directory of pre-approved franchise systems that meet its eligibility requirements. If a franchise is listed on this directory, it streamlines the application process. If not listed, the franchise agreement must be reviewed for SBA compliance.
A borrower wants to purchase an established sandwich shop franchise for $350,000. If that franchise system is on the SBA's approved directory, an SBA 7(a) loan can be used to finance the acquisition, including the franchise fee, equipment, and working capital.
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 2026-06-14. 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.
More on use of funds - franchise
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