FUNDED Series
By Thomas Hartwell
ISBN: 979-8-9947079-5-1 (Paperback) | 979-8-9947079-4-4 (Ebook)
Everything you need to know about SBA financing for franchise purchases—from directory requirements to deal structure.
Available now on Amazon
Franchise financing with SBA loans has unique requirements that trip up even experienced business buyers. The SBA Franchise Directory, FDD review process, franchise fee rules, and franchisor approval requirements all add complexity that generic SBA guides don't address.
FUNDED: The Complete SBA Loan Guide for Franchise Owners walks you through every franchise-specific requirement, from checking whether your franchise is on the SBA Directory to structuring your deal so the franchise fee is properly handled. Whether you're acquiring an existing franchise unit or planning multi-unit expansion, this guide shows you how to get your franchise funded.
Throughout this guide, you'll follow two franchise buyers through the SBA lending process:
Derek is buying a home services franchise with a total project cost of $175,000. He has corporate management experience but has never owned a business. His challenge: the franchise is newer and not yet on the SBA Directory, so he needs to work through the addendum process.
Priya is expanding to her third fitness franchise location with a $1.4 million multi-unit deal. She has a successful track record with her existing locations but needs to demonstrate management capacity for three units. Her challenge: structuring the financing for phased openings while maintaining cash flow.
Why franchise deals are different from other SBA loans.
How to check eligibility and the addendum process.
What lenders look for in your Franchise Disclosure Document.
Why it can't be financed and how to structure around it.
How franchisor training affects lender expectations.
What SBA loans can (and can't) cover in a franchise deal.
Structuring deals for franchise expansion.
Choosing the right program for your franchise.
Documents, timeline, and coordinating with your franchisor.
Closing the loan and meeting franchisor timelines.
Hartwell leverages concrete figures and real-world scenarios to help readers understand otherwise-complex concepts — engaging and simple when he could have bored readers with vague definitions.
— Charles M., Amazon Verified Purchase · Mar 31, 2026
An outstanding business guide offering funding advice and tactics to those seeking franchise funding. The author simplified everything, the law and statistics, making the book easy to read and understand.
— Charles Magesa, Amazon Verified Purchase · Apr 14, 2026
To get an SBA loan for a franchise, your franchise must be on the SBA Franchise Directory (or complete the addendum process), you need 10-20% equity injection (including the franchise fee), acceptable credit (typically 680+), and business or management experience. The process takes 60-90 days through an SBA Preferred Lender.
Yes. SBA 7(a) loans are the most common financing method for franchise purchases. You can finance equipment, buildout, inventory, working capital, and real estate—but not the franchise fee itself, which must come from your equity injection.
Yes. For SBA financing, your franchise must either be listed on the SBA Franchise Directory or go through the SBA's addendum process. If your franchise isn't listed, the franchisor will need to complete SBA Form 2462 and submit their FDD for review. This process takes 2-4 weeks.
No. SBA loans cannot be used to pay the initial franchise fee to the franchisor. The franchise fee must come from your equity injection. However, SBA loans can finance equipment, buildout, inventory, working capital, and real estate associated with the franchise.
Lenders review Item 19 (Financial Performance Representations), Item 20 (Outlets and Franchisee Information), and Item 21 (Financial Statements). They look for unit economics, franchisee turnover rates, litigation history, and the franchisor's financial stability.
Franchise loans have more flexible experience requirements than independent business loans because the franchisor provides training and systems. However, lenders still prefer relevant business or management experience. The franchisor's training program can help compensate for lack of direct industry experience.
The SBA requires minimum 10% equity injection. For franchises, this typically includes the franchise fee plus 10% of other project costs. Some lenders require higher equity for newer franchisors or first-time business owners.
Expect 60-90 days from application to funding. If your franchise isn't on the SBA Directory, add 2-4 weeks for the addendum process. Working with an SBA Preferred Lender experienced in franchise financing can speed up the timeline.
Yes. SBA loans can finance multi-unit franchise purchases, though lenders will want to see your management plan and may require phased openings. Your DSCR projections need to account for the ramp-up period of each location.
Most SBA lenders require a minimum credit score of 680 for franchise loans. Some will consider 650+ if the franchise brand is strong and you have other compensating factors like higher equity or relevant management experience.
Stop guessing about franchise financing. Get the franchise-specific SBA guidance you need.