SBA rules · SOP 50 10 8.1

Does a franchise have to be on the SBA Franchise Directory?

Yes, if the brand meets the FTC definition of a franchise, it must be listed on the SBA Franchise Directory to obtain SBA financing.

Quoted from SBA SOP 50 10 8.1Every quote checked word for word

In detail

Mandatory listing: If an applicant's brand meets the FTC definition of a franchise, it must be on the Directory; if it is not, lenders cannot submit non-delegated applications or approve delegated loans.
Franchisor applicants: Even when the applicant is the franchisor rather than a franchisee, the franchisor's brand must be listed on the Directory as an approved brand.
Agreements not meeting the FTC definition: If an agreement does not meet the FTC definition of a franchise and is not on the Directory, the application may proceed once the brand's eligibility is reviewed and confirmed.
Adding unlisted brands: If an eligible brand that meets the FTC definition is not listed, the lender should advise the franchisor to submit its agreement and disclosure documents to SBA to be added.

The source

What the SOP says

“If the Applicant’s brand meets the FTC definition of a franchise, it must be on the Directory in order to obtain SBA financing.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > The SBA Franchise Directory: (lines 548-555)✓ Verified

“For non-delegated loans, SBA Lenders cannot submit the application to SBA, and for delegated loans, SBA Lenders cannot approve the loan under delegated authority.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > If the Applicant’s brand is not on the Directory: (lines 562-564)✓ Verified

“The franchisor’s brand must be listed on the Directory as an approved brand even if the franchisor will not be executing a franchise agreement in connection with the loan transaction.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Applications involving an applicant franchisor: (lines 597-598)✓ Verified

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