Important Changes to the SBA Process that Franchisees Need to Know About

By Published On: February 8th, 2018

Many new and current franchisees depend on loans and financing from the Small Business Administration to get their franchises up and running or to expand their existing operations. The SBA recently updated its loan procedure for franchisors and franchisees, and every franchisee should be aware of these changes.

The SBA Directory

As of Jan 1, 2018, the SBA has centralized all franchisors whose franchisees are eligible for SBA loans into an SBA Franchise Directory. This change is an effort to streamline the SBA lending process. Lenders can now quickly review the list to determine whether a franchisee qualifies for funding.

According to the SBA, “the Directory will only include business models that SBA determines are eligible under SBA’s affiliation rules and other eligibility criteria.”

Franchisors that were already deemed eligible for SBA-backed loans are most likely already included in the SBA Directory. Franchisees should check the SBA Franchise Directory to make sure their franchisor is listed.

If Your Franchisor Isn’t Listed

If your franchisor is not listed in the SBA Franchise Directory, then you will not be eligible for SBA financing. We advise you to reach out to your franchisor and encourage them to take the necessary steps to be added to the directory.

If your franchisor is not listed in the directory and you are a member of a franchisee association, bring this to the attention of your association!

Learn more about the SBA Franchise Directory.

Share this article