SBA loan basics
Short answer
Franchises must be listed on the SBA Franchise Directory or receive an individual review by the SBA to ensure they do not impose terms that could hinder the franchisee's success.
For a franchise to be eligible for SBA financing, its agreement must not contain terms that restrict the franchisee's operational control or financial viability to an unacceptable degree. Most established franchises are pre-approved and listed on the SBA Franchise Directory. If not listed, the franchise agreement must be submitted to the SBA for a formal review to confirm eligibility.
A borrower wants to open a new fast-food franchise. The lender checks the SBA Franchise Directory, finds the brand listed, and proceeds with the application. If the brand was not listed, the borrower would need to submit the franchise agreement to the SBA for a specific eligibility determination.
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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