SBA Q&A

Can You Use an SBA Loan to Buy a Franchise?

SBA loans may be used to buy or start a franchise, including franchise fees, build-out, equipment, and working capital.

Can You Use an SBA Loan to Buy a Franchise?

Yes, SBA loans may be used to buy or start a franchise if the franchise, borrower, and transaction meet lender and SBA requirements.

Lenders review the brand, startup costs, build-out budget, owner experience, liquidity, and projected or historical cash flow.

  • Franchise fees may be financed.
  • Build-out and equipment may qualify.
  • Working capital may be included.
  • Borrower experience may help approval.
  • Cash flow must support repayment.

Franchise financing can be a strong SBA use when the borrower and concept are financeable.

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More Use of Funds Questions

Can You Use an SBA Loan to Buy a Business?

SBA loans can be used to buy a business, including acquisitions, partner buyouts, and ownership transfers.

Can You Use an SBA Loan to Start a Business?

SBA loans may be used to start a business if the borrower has strong credit, liquidity, experience, and a credible business plan.

Can You Use an SBA Loan for Working Capital?

SBA loans may be used for working capital to cover payroll, inventory, marketing, and operating expenses.

Can You Use an SBA Loan for Equipment Financing?

SBA loans may be used for equipment purchases, refinancing, or replacing older equipment needed for business operations.

Can You Use an SBA Loan to Refinance Debt?

SBA loans may refinance eligible business debt if the refinance improves cash flow or strengthens the business position.

Can You Use an SBA Loan for a Partner Buyout?

SBA loans may be used for partner buyouts when the business has repayment ability and the transaction is properly structured.

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