SBA Loans for Franchise Purchases
The SBA Franchise Directory came back in June 2025. We know which brands are listed, which have an active FIC, and which lenders are leaning into franchise volume — whether you're buying your first unit or stacking your fifth.
How SBA Financing Works for a Franchise
SBA eligibility for franchises changed in June 2025 when SOP 50 10 8 reinstated the SBA Franchise Directory. To finance a franchise with SBA, the brand has to be listed in the Directory and have an active Franchise Identifier Code (FIC). If the brand isn't listed, the franchisor applies directly with SBA — but it can take 30–90 days, which is too long to be discovering at term-sheet time. We confirm Directory status as step one of any franchise package.
For a resale (existing unit changing hands), the deal is a 7(a) change-of-ownership: 10% equity injection minimum, third-party business valuation over $250K, franchisor consent to the transfer. For a new unit (de novo), the deal is an SBA startup: no historical cash flow, so the lender leans on the franchisor's Item 19 disclosures, your industry experience, franchisee validation calls, and a larger injection (15–20% typical).
For real estate deals — buying or building the location alongside the franchise — the 504 program is often the better tool: 50% bank first lien, 40% CDC second lien at fixed long-term rates, 10% down. Many of the deals we package are dual-structured: 504 on the building, 7(a) on the franchise + working capital.
If you're a multi-unit developer, SBA caps total exposure at $5M per borrower. We help structure separate eligible entities under SBA's affiliation rules so you can keep developing past the cap without affiliation collapse on the SBA side.
Typical Franchise Deal Structure
Deal Size
$200K – $1.5M per unit for most categories. QSR resales run $500K–$2M; multi-unit development packages range higher.
Down Payment
10% on resales; 15–20% on de novo. New-unit SBA pricing reflects the additional risk profile.
Term
10 years on operating + working capital. 25 years when real estate is part of the deal (separate 504 note typical).
Rate
Variable: prime + 2.25–2.75%. Branded national franchises with strong Item 19s often price at the low end.
Timeline
60–90 days on resales. 90–120 days on de novo (build-out timing usually drives the back end).
Directory Status
SBA Franchise Directory listing + active FIC required. We check this first — before structuring, before submitting.
[PLACEHOLDER] "Bought 3 existing units of a national fitness franchise for $2.4M total. HelmPoint confirmed Directory status the day we engaged, structured a single 7(a) up to the cap with the right entity work, and shopped it to the two lenders that actually price multi-unit fitness right. Closed in 75 days."
[PLACEHOLDER] — Multi-unit operator, City, ST
Franchise Categories We've Financed
Most national SBA lenders are comfortable across these segments — the specifics of pricing, injection, and lender appetite shift category to category.
Quick-Service Restaurants (QSR)
Drive-thru, fast-casual, coffee, dessert. Resales are easier than de novo. Item 19 financial performance disclosures are the lender's anchor.
Fitness
Boutique fitness, gyms, group training, recovery concepts. Highly lender-friendly on resales with proven unit economics; trickier on greenfield.
Home Services
Cleaning, lawn care, painting, restoration, pest control, HVAC. Strong recurring-revenue profile. Lenders love these.
Automotive
Quick lube, car wash, auto repair, tire. Often dual-structured with 504 on the real estate. Car washes have specific SBA injection rules (special-purpose property).
Child Care & Education
Daycare, tutoring, learning centers. State licensing layered on top of SBA eligibility — we coordinate the timing.
Senior Care & Home Health
Non-medical home care, senior placement, in-home services. Strong demographics tailwind; lenders are increasingly comfortable.
Frequently Asked Questions
How does SBA franchise eligibility actually work?
The SBA reinstated the SBA Franchise Directory in June 2025 under SOP 50 10 8. To finance a franchise with SBA, the brand must be listed in the Directory and have an active Franchise Identifier Code (FIC). If the brand isn't listed, the franchisor can apply directly with SBA — but timelines vary, and we recommend confirming Directory status before signing the FDD. We check Directory status as the first step of any franchise package.
Can I finance a franchise resale (existing unit) the same way as a new build?
Yes, but the mechanics differ. A resale is treated as a change-of-ownership 7(a) deal — same 10% equity injection, third-party business valuation required if over $250K, and the franchisor needs to consent to the transfer. A new unit (de novo) is a startup loan — no historical cash flow, so the lender will lean harder on the franchisor's Item 19 financial performance representations, your industry experience, and stronger collateral or a larger injection (15–20%).
What franchise concepts are SBA lenders comfortable financing?
Most national SBA lenders are comfortable across the major franchise categories: quick-service restaurants (QSR), fitness, home services, automotive, child care, senior care, retail, and B2B services. Lenders are more cautious on full-service restaurants (higher failure rates) and unproven concepts. The Directory listing + a strong Item 19 + franchisee validation calls usually get you across the line.
How much can I borrow for a multi-unit franchise development?
SBA 7(a) is capped at $5M total exposure per borrower across all SBA loans. If you're developing 2–3 units at $700K–$1.2M each, you can comfortably stay under the cap. Beyond that, lenders pari passu with conventional debt on the larger units, or you structure each unit in a separate eligible entity (subject to SBA's affiliation rules under SOP 50 10 8).
What does the franchisor have to provide for the SBA package?
The current FDD (Franchise Disclosure Document), evidence of Directory listing + active Franchise Identifier Code, and a fully executed franchise agreement at closing. Some franchisors are SBA-savvy and have a packet ready; some need coaching. We've worked with the major franchise development brokerages and know which franchisors run a smooth SBA process.