What is the SBA Franchise Directory?
Learn what the SBA Franchise Directory is, why franchise eligibility matters for SBA loans, and how to check if a franchise is approved for SBA financing.
The SBA Franchise Directory is the official list of franchise brands that have been reviewed and approved for SBA lending. If you want to use an SBA loan to buy or operate a franchise, the franchise system must be listed in this directory — unlisted franchises cannot receive SBA-guaranteed financing.
Why the Directory Exists
The SBA reviews franchise agreements to ensure they do not include terms that would make the franchisee ineligible for SBA loans. Specifically, the SBA wants to confirm:
- The franchisee maintains control over day-to-day operations (not excessively controlled by the franchisor)
- The franchise agreement does not give the franchisor excessive control over the business
- The franchisee can make independent business decisions
- The relationship is truly a franchise, not an employment arrangement
Affiliation Rules
The SBA has "affiliation" rules that determine if a franchise is truly an independent small business. If the franchisor has too much control, the franchisee may be considered affiliated with all other franchisees, making the business too large for SBA eligibility.
How to Check the Directory
The SBA Franchise Directory is available online at sba.gov. You can search by franchise name to see if a brand is listed and what conditions may apply.
Each franchise listing shows the brand name, SBA identifier, and any specific conditions for SBA lending eligibility.
What If a Franchise Is Not Listed?
If the franchise you want to buy is not in the directory, you have a few options:
- Request franchisor to apply: The franchisor can submit their Franchise Disclosure Document (FDD) to the SBA for review
- Wait for approval: The review process typically takes 10-15 business days
- Consider alternatives: If the franchisor will not apply or is denied, you would need non-SBA financing
Directory Status Categories
Franchises in the directory may have different status designations:
- Eligible: Approved for SBA financing without conditions
- Eligible with conditions: Approved, but specific addenda or modifications may be required
- Under review: Application submitted but not yet decided
- Not eligible: The franchise structure does not meet SBA requirements
Before Signing a Franchise Agreement
If you plan to use SBA financing to buy a franchise:
- Check the SBA Franchise Directory before signing any agreements
- Confirm the franchise is listed as "Eligible" or "Eligible with conditions"
- If not listed, ask the franchisor to apply and wait for approval
- Work with an SBA-approved lender who has franchise experience
Do not sign a franchise agreement or pay deposits until you have confirmed SBA eligibility if you are counting on SBA financing. Getting stuck with an ineligible franchise could force you into more expensive financing options.
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Read more →Important Disclosure
Not Financial Advice: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. You should consult with qualified professionals before making any financial decisions.
No Guarantee of Financing: Liminal Lending Co. is a business loan marketplace that connects borrowers with third-party lenders. We are not a lender and do not make credit decisions. Submitting an application does not guarantee approval or funding. Loan terms, rates, and availability vary by lender and are subject to borrower qualifications and lender criteria.
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Rate Information: Rates, terms, and fees mentioned in this article are estimates based on publicly available information and may not reflect current market conditions or specific lender offers. Actual rates depend on creditworthiness, business financials, and lender policies.
Information May Change: Financial markets, lending regulations, and economic conditions are subject to rapid change. While we strive to keep our content accurate and up-to-date, information in this article may become outdated. Always verify current rates, terms, program availability, and regulatory requirements with lenders and official sources before making financial decisions.