What the SBA Franchise Directory actually establishes

Read the directory in its intended role

The SBA describes its Franchise Directory as a tool for identifying franchises and other brands whose business models have been reviewed for eligibility for SBA financial assistance. Its planning page says the directory is updated weekly. Consult the current version rather than relying on an old screenshot or a broker’s remembered status.

The SBA expressly separates directory placement from an endorsement or approval of the brand and from assurance that the business will succeed. A research directory operated by a magazine is different again: inclusion here does not establish SBA eligibility.

Bring the exact offering to the lender

Identify the proposed legal entity, agreement and operating model. Ask the lender what it needs to confirm current program and transaction eligibility. A familiar trade name alone may not settle whether the documents for your proposed transaction match the relevant record.

Keep model eligibility, borrower underwriting and the suitability of the project as separate questions. Even when a brand appears in the directory, a lender still needs to evaluate the proposed financing. Do not make a nonrefundable commitment merely because someone describes a concept as SBA approved.

Keep the source date in your file

Save the directory version or reference you consulted, the date and the lender’s explanation. Recheck material assumptions before proceeding. This article explains the directory’s stated function; it is not a determination that any particular brand or borrower qualifies for a current program.

Put it on paper

• Consult the latest SBA directory and guidance.
• Confirm the exact offering with the lender.
• Keep eligibility, underwriting and investment judgment separate.

Continue with the franchise research checklist, our FDD guide, and the research directory.