Franchise financing can gather the major pieces of your project together in one SBA 7(a) loan: the franchise fee, equipment build-out, inventory, and working capital can all be financed together. With financing available for up to about 90% of Total Project Cost, these financing options often require lower down payments than conventional loans.
- Franchise fee
- Equipment and build-out
- Inventory
- Working capital
If you are a first-time franchisee opening your initial location, this structure can provide a clear path from franchise agreement to opening. If you already own a franchise and are adding a second, third, or tenth location, the same SBA lending expertise found at TowneBank SBA Lending can help you understand which business loans may fit the project.
Have questions about SBA financing? Tell us about your project, and a member of our SBA Lending team will help you explore potential financing options and next steps.
We finance selected franchise concepts, subject to SBA and normal credit requirements. The SBA Franchise Directory determines whether a concept is eligible. Reviewing eligibility is an important first step before moving forward with financing discussions.
If you've arrived here from our startup page, you're in the right place. SBA loans for startups can support a franchise ownership path when the project and concept qualify.
-
![Stopwatch icon]()
SBA Preferred Lender
With in-house approvals, your SBA 7(a) loan and its SBA guarantee do not wait in the SBA's underwriting queue, so decisions come faster, and your closing timeline stays on track.
-
![Shield with star icon]()
Top 50 National SBA Lender
Ranked #34 among U.S. SBA lenders, reflecting a consistent commitment to SBA financing and support for business owners nationwide, from first-time buyers and startups to established, growing companies.
-
![Rising bar chart icon]()
Real Volume and Real Experience
Since October 1, 2025, TowneBank SBA Lending has approved $192.8 million in SBA loans, reflecting extensive experience supporting business acquisitions, commercial real estate purchases, practice financing, and growth-focused transactions.
-
![Briefcase icon]()
SBA Lending Is Our Entire Business
More than 50 professionals work exclusively on SBA lending, bringing specialized expertise to every transaction, from the first conversation through closing and servicing, and supporting business owners across 48 states.
-
![Wreath icon]()
TowneBank SBA Lending
Specialized SBA lending expertise backed by the resources of a $22.6 billion relationship bank with more than 70 banking offices across its footprint, giving you local support at every step.
Whether you're opening your first location, expanding an existing franchise, or purchasing an established unit, SBA financing can help bring the major pieces of the project together in one structure.
You're approved, the agreement is signed or pending, and opening day is approaching. Now the franchise fee, buildout, equipment, inventory, and months of operating costs all arrive before the doors open and revenue starts flowing. With one SBA franchise loan and selected franchise concepts, we finance these startup costs along with the full project together.
Your existing unit has proven the concept, and customers are there. The constraint is capital: your cash is tied up in the business, even as demand makes another location attractive. A business expansion loan can fund the eligible costs of the new franchise location with franchise financing in one loan.
An existing franchise unit offers a faster path to ownership, but buying from a departing franchisee adds an acquisition to the franchise process, with the franchisor involved as well. An SBA loan to buy a business can finance the eligible acquisition and related project needs, financed the same way, through one loan.
Whether you're opening your first franchise location or expanding an established operation, the financing conversation starts in a different place. Understanding where you fit can help you prepare for the process and know what information you'll need.
If you already operate successful units, the conversation begins in a different place. Existing locations should be performing, your financial statements should support additional debt, and you'll want a site or agreement for the next location.
Your successful operating history does real work in underwriting and can allow an additional location to move more efficiently than a first unit because there is an established track record.
Whether you are opening location two or location ten, additional locations are financed the same way: project by project, with each transaction evaluated on its own merits.
If this is your first franchise and SBA loan for franchise financing, start with the fundamentals.
- A concept listed on the SBA Franchise Directory
- A documented equity injection
- Relevant management or industry experience
- Personal financial capacity behind the deal
This is the startup path we finance: a proven franchise concept and established franchisor operating system provide a different risk profile than that of an unproven independent startup.
Gathering a few key documents before your initial discussion can help move the process forward more efficiently.
- The Franchise Disclosure Document
- Three years of personal tax returns
- Management resume
- A personal financial statement
Reviewing the SBA 7(a) loan requirements early can help you understand what the franchise business loan underwriting process will require.
Franchisors often work with firm opening deadlines, so the best way to protect your schedule is to begin the pre-screen before signing the franchise agreement. This gives you an early financing read while the rest of the file comes together.
At the pre-screen stage, you'll provide three years of personal tax returns, a personal financial statement, management resume, and documentation of your equity sources. We also verify the concept against the SBA Franchise Directory early in the process.
Our process follows seven steps: pre-screen and term sheet, submission and underwriting, the additional construction review (if applicable), closing, and servicing. As underwriting progresses, the Franchise Disclosure Document and franchise agreement become part of the file and help us structure the transaction appropriately.
Our goal is to provide a pre-screen answer in two to three days, while the credit decision goal for SBA 7(a) loans is 10 business days once an underwriter is assigned to a complete file.
A 7(a) transaction can move through our in-house process, while a 504 transaction includes additional Certified Development Company (CDC) underwriting. As a result, 504 requests generally take longer.
If your franchise business loan includes a build-out, construction adds its own review and coordination, extending the timeline.
To accelerate the process, check the SBA loan requirements, verify the SBA Franchise Directory early, and submit all requested documents promptly. Complete, organized documentation is one of the most effective ways to keep a franchise financing project moving forward.
Before spending time and money pursuing a franchise opportunity, it's important to understand whether both the franchise concept and borrower meet SBA financing requirements.
Franchise consultants can help evaluate business opportunities, but financing eligibility is ultimately determined through SBA rules and underwriting.
Start with the SBA Franchise Directory. This is the Small Business Administration's official list of franchise brands eligible for SBA financing. If a franchise concept is not listed in the Directory, the franchise business loan is not eligible for SBA financing. This is an SBA requirement, not a TowneBank SBA policy.
In addition to the SBA's Directory, the TowneBank SBA Lending team works with selected franchise concepts. Our credit team focuses on concepts that fit our lending approach, and our first conversation with you confirms whether a particular franchise is a good fit. If it is not, we can help you understand that early, before you invest time moving a project forward.
- U.S. citizens who own for-profit, U.S.-incorporated businesses can apply.
- The SBA's alternative size standard applies.
- An equity injection is required.
- The source of your equity injection must be documented.
We handle collateral according to SBA requirements. For 7(a) loans, the all-available-collateral rule generally applies to owners with 20% or more ownership, which means collateral requirements could extend to personal assets.
The fastest way to determine whether your franchise project fits is to ask. That's exactly why our pre-screen process exists. We'll help identify any eligibility concerns early so you can move forward with confidence.
Before investing significant time, money, or effort into a franchise opportunity, it's important to confirm that both the concept and the financing structure align with SBA requirements and the TowneBank SBA Lending team's approach.
Tell us about the franchise concept you're considering, and we'll help determine whether it fits our selected concepts and SBA financing requirements. Complete the form below to begin the conversation and gain clarity before you invest further in the opportunity.
Learn More About an SBA Loan for Franchises
-
First, check the SBA Franchise Directory. Only the listed concepts are eligible for SBA financing. Beyond the SBA list, TowneBank SBA finances only selected franchise concepts, so the first conversation confirms whether your specific concept fits our lending approach before you invest more time or money.
-
Yes. For eligible franchise projects, the franchise fee can be included in the same SBA 7(a) loan as equipment, build-out, opening inventory, and eligible working capital. Bringing those costs together means one coordinated financing structure, instead of arranging separate funding for each major expense before opening.
-
Your equity injection is the cash you contribute toward the project, rather than a standard down payment, and its source must be documented. Financing may cover up to about 90% of Total Project Cost, depending on the project and normal credit standards. The amount you bring depends on the complete transaction.
-
Yes. Additional franchise locations are financed project by project, with each transaction evaluated on its own merits. An established operating history can help because your existing units demonstrate how you manage the concept and generate cash flow. Your financials, additional debt capacity, and the next location all become part of the underwriting decision.
-
Not necessarily. Underwriting looks at the complete picture, including your management or industry experience, personal financial capacity, equity injection, the franchise concept, and the projected ability of the business to service its debt. For first-time franchisees, a proven concept and established franchisor operating system provide important context.
-
Yes. Buying an existing franchise unit is an acquisition, so the transaction includes both the business purchase and the franchisor’s involvement. The underwriting considers the existing operation, purchase terms, franchisor requirements, and your ability to support that debt. The same SBA financing principles apply, but the transaction has additional moving parts to evaluate.
-
Yes. Eligible leasehold improvements and build-out costs can be included in the same SBA 7(a) loan as other eligible project expenses. Since construction represents a significant part of many franchise projects, our dedicated resources manage the financing through the build, coordinating with you and your contractor as work progresses and funds need to be released against documented progress.
-
We work toward clear milestones, including a pre-screen answer goal of two to three days and a credit decision goal of 10 business days once an underwriter is assigned (on 7(a) loans only). Those are goals, however, not guarantees. Since franchisors often set opening deadlines, starting the pre-screen before signing is the best way to protect your schedule.
Whether you're evaluating your first franchise opportunity, expanding to an additional location, or purchasing an existing franchise unit, understanding your financing options early can help you move forward with confidence.
Tell us about the franchise concept, location, and project you're considering. We'll help you understand your franchise financing options, evaluate eligibility requirements, and determine whether an SBA-backed small business loan may fit your plans. Complete the form below to get started.
Some applications may require further consideration, and additional information may be required.
Credit terms are subject to approval.
Amount of Credit is subject to SBA program.