SBA Financing

The vast majority of small business growth in the United States is through franchises; thus, the Small Business Association (SBA) provides some significant benefits for potential franchisees, especially with regard to financing franchises through loans.

The SBA is an independent agency of the executive branch of the United States government. Its role is to help American small businesses with advocacy, procurement, management and financial assistance. It has guidelines for three loan programs, but these loan programs differ from actual loans. They are guaranty programs through which the SBA encourages lending institutions to provide financing for franchise (and other small) businesses. The SBA guaranty helps eliminate some of the lending institution's risk so they can offer financing to franchisees and small business owners who would otherwise not have qualified for a business loan.