SBA Loans

SBA Loans for Franchise Buyers

Government-backed loans with favorable rates and terms, designed specifically for small business and franchise ownership.

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What Is an SBA Loan

The most popular franchise funding tool in the country

SBA loans are not issued by the Small Business Administration directly. Instead, the SBA guarantees a portion of the loan made by an approved bank or lender, which reduces the lender's risk and allows you to get better terms than a conventional business loan. For franchise buyers, the SBA 7(a) loan is the most commonly used program.

Because many franchises are on the SBA Franchise Registry, approved lenders can process your application faster. This means less paperwork and faster access to capital compared to starting an independent business.

Typical Loan Amount $50,000 to $5 million
Interest Rates Prime + 2.25% to 4.75%
Loan Terms Up to 10 years (25 for real estate)
Down Payment Typically 10 to 30 percent
Credit Score 680 or higher recommended
SBA 7(a) vs SBA 504

Which SBA program is right for your franchise

SBA 7(a) Loan

The most flexible and commonly used SBA program for franchise buyers. Covers working capital, equipment, inventory, and startup costs.

Most popular for franchise startups
Up to $5 million
Working capital included
Longer repayment terms
Lower monthly payments

SBA 504 Loan

Best for franchises that require significant real estate or major equipment purchases. Offers fixed interest rates on the long-term portion.

Best for real estate or equipment
Fixed interest rates available
Up to $5.5 million
Requires a Certified Development Company
Not suited for pure working capital
Steps to Apply

How to get an SBA loan for your franchise

01

Check Eligibility

Review your credit score, liquid capital, and business background. SBA loans are accessible to most franchise buyers who have some skin in the game.

02

Choose a Franchise on the Registry

Franchises listed on the SBA Franchise Registry move through lender approval faster. Our curated list includes many registry-approved brands.

03

Connect With an SBA Lender

We work with SBA-preferred lenders who specialize in franchise financing. We can connect you at no cost to you.

04

Prepare Your Business Plan

Lenders want to see a solid plan. We can guide you on what to include and help you present your opportunity professionally.

SBA FAQ

Common SBA loan questions

Processing time varies, but SBA preferred lenders can often close in 45 to 90 days. Franchises on the SBA Franchise Registry tend to move faster because the franchisor is pre-approved.
Yes. First-time business owners can qualify for SBA loans. Lenders will look at your overall financial picture, credit history, and the strength of the franchise system you are buying into.
SBA lenders will typically require whatever collateral is available, but the SBA guarantee reduces the lender risk, which is why they can approve buyers who might not qualify for a conventional loan.
Yes. The SBA Patriot Express and SBA Express programs have features that may benefit veterans. Additionally, many franchise systems offer veteran discounts on franchise fees.

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