On January 29, 2013 the Franchise Registry (FR) announced it had developed an “Easier to Use SBA Franchise Eligibility Process” and instituted “5 Simple Steps” to make lending to franchises easier for commercial loan officers.
In that announcement FR stated that they “have redesigned the franchisor SBA eligibility detail page to provide a step-by-step process to guide … (lenders) … through the collecting and preparing of the SBA documentation for franchise loans (as detailed in SBA Standard Operating Procedure 50 10 5(E) on page 95)”.
FR’s announcement identified these five steps for loan officers:
- Step #1 - Identify and provide the year of the agreement for which you are trying to determine SBA franchise eligibility.
- Step #2 - Print and read the certificate and follow any eligibility notes that may exist.
- Step #3 - Print any addendums that may be required for eligibility
- Step #4 - Contact the franchisor to get a signature for the certificate and other documentation, as outlined
- Step #5 - Submit executed certificate and other documentation to the SBA
The announcement went on to offer free “personal training or … group webinar” to lenders in how to use the FR. If your bank makes loans to franchises and you are interested in taking advantage of this opportunity, please call 703-740-4700 or e-mail email@example.com for more information on this opportunity.
During 2012 the SBA guaranteed more than 45 loans – 7(a) & 504 – to franchises in eastern Missouri. Franchises that have had their agreements reviewed and accepted by the SBA are listed in the FR making it quicker and easier to secure an SBA-backed loan. If a franchise is not listed on the Franchise Registry, a lender will need to send the franchise or license agreement to an SBA processing center for review by the Center’s counsel. They will determine if that specific franchise is eligible for SBA financial assistance.
Franchises do not appear on the FR list for a variety of reasons. Being included or excluded from the list is not an SBA endorsement or indication of quality and profitability and the borrower and lender should still thoroughly research any potential franchise opportunity.
Lenders may e-mail firstname.lastname@example.org or contact their lender relations representative to request statistical information on SBA lending to a specific franchise operation. This mailbox is not designed to evaluate franchise material, so lenders should not send franchise documents to this mailbox for review.