The SBA has extended the re-certification deadline (originally set for July 31, 2025, and extended to December 31, 2025) for franchise brands that were listed on the SBA Franchise Directory as of May 2023. To complete the required re-certification process described in SBA Information Notice 5000-866746 effective April 21, 2025, Franchisors/Distributors now have until June 30, 2026, to execute the new SBA Franchisor/Distributor Certification. Click here to access the notice. The SBA has announced that, until then, if the Franchisor Certification box on the Directory does not display a “Y,” lenders must continue to use the designated Addendum and follow any notes included with the franchise brand listing. Both the Franchisor/Distributor and Franchisee must sign the Addendum (if required) prior to loan disbursement. If a Franchisor/Distributor has not executed the Certification by the June 30, 2026 deadline, the franchise brand will be removed from the Directory.
For franchise brands that wish to be added to the Directory, the franchisor must submit the agreement, Franchise Disclosure Document (FDD) if applicable, and all other documents the franchisor requires the franchisee to sign to franchise@sba.gov for an eligibility determination. If the documents are submitted to SBA by someone other than the franchisor, contact information for the Franchisor (name and email address only) must be included in the email.
Lenders processing loans to franchisees under their delegated authority are tasked with the responsibility to ensure that brands meet the applicable SBA eligibility requirements.
- If the brand meets the FTC definition of a franchise, the lender must document in its file that the brand is on the Directory and identify the name of the franchise and SBA Franchise Identifier Code when entering the application or request for loan number into E-Tran. The lender must ensure that the brand name (and where applicable, the type of agreement) the Applicant will be operating under matches the brand name (and where applicable, the type of agreement) listed on the Directory.
- If the brand is not listed on the Directory and the lender determines that the brand does not meet the FTC definition, SBA will review this decision at time of guaranty purchase or when conducting lender oversight activities and the delegated lender bears the risk of an incorrect determination.
The SBA Franchise Directory can be accessed at https://www.sba.gov/document/support-sba-franchise-directory
If your lending institution has questions about the SBA Franchise Directory, or other SBA lending matters, please contact us at SBAQuestions@JellumLaw.com.