The Small Business Administration (SBA) is reinstating its Franchise Directory and eligibility database after a hiatus of more than two years. Brands must be listed in the directory for their prospective franchisees to be eligible for SBA financing related to development, remodels, or expansions.
Franchisors whose brands were included in the original directory as of May 2023 must file a new SBA Franchisor Certification form by July 31, 2025, to maintain their listing.
The SBA will remove any franchisor from the directory if the form is not submitted by the July deadline. SBA lenders are not permitted to submit loan applications or approve loans while a franchisor is not listed. Although reinstatement is possible, it requires a full SBA review, which could delay the loan process.
If a brand is not currently listed or needs to be reinstated, the franchisor can submit documents for SBA review by emailing franchise@sba.gov. Required documents include:
- The franchise agreement
- The Franchise Disclosure Document (FDD)
- Any other documents the SBA applicant would be required to sign
- The SBA Addendum to Franchise Agreement (Form 2462) – in use since 2018, this form amends provisions related to ownership changes, asset sales, restrictive covenants on real estate and employment
After review, the SBA will send the Franchisor Certification for execution. The brand will not be added to the directory until the signed certification is returned.
Once a brand is listed, lenders can rely on the directory to submit applications or approve loans under their delegated authority – without a formal SBA eligibility review. This should help streamline the lending process – at least in theory. One thing is certain: not being listed will delay an SBA transaction.
This blog was drafted by Christina M. Noyes, an attorney in the Spencer Fane Phoenix, Arizona, office. For more information, visit www.spencerfane.com.
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