Borrower guide · Use case
SBA loan for a franchise
Franchises are SBA-friendly by design — a known brand is a known quantity. But the brand you pick changes your odds more than almost any other choice.
The SBA Franchise Directory
To use an SBA loan, your franchise must appear on the SBA Franchise Directory, which confirms the franchise agreement meets SBA affiliation and control standards. If a brand is not listed, the loan cannot proceed until it is — check before you sign a franchise agreement.
Why brands underwrite more easily
A franchise gives a lender something an independent startup cannot: a system with a documented track record, unit economics and support. That lowers perceived risk and often makes for a smoother file — particularly for a first-time owner.
The brand is the risk
“Franchise” is not a safety guarantee. Default rates run from low single digits to well over 20% depending on the brand. Our franchise pages show how each brand’s SBA loans have actually performed — read yours before you commit.
Lender matcher
See which lenders have actually funded deals in your industry and state.
Find lenders for your brand →What the franchise data shows
our dataAcross the record the median franchise brand defaults at about 3.0% — below the 5.7% all-7(a) rate — but the spread between brands is enormous, which is the whole point of checking. Every published brand has its own page with its real default rate and named receipts. Then find lenders who fund your brand with the matcher.
Common questions
Can you use an SBA loan for a franchise?
Yes, as long as the brand is on the SBA Franchise Directory. Franchises often underwrite more easily than independents because the brand provides a track record.
What is the SBA Franchise Directory?
An official SBA list of franchise brands whose agreements meet SBA standards. A brand must be listed for its franchisees to use SBA financing.
Are franchises safer than independent businesses?
On average the median franchise brand defaults below the all-7(a) rate, but default varies enormously by brand — check the specific brand’s record before committing.
Keep going
Rules described here follow SBA SOP 50 10 8 (effective June 1, 2025) and can change; lenders add their own overlays. This is education, not advice — confirm specifics with your lender. Figures cited as “our data” come from the SBA 7(a) & 504 FOIA record, released 2026-06-30.