SBA 7(a) loan

Most first-time franchise buyers don't pay cash: they borrow through the SBA 7(a) program, where a bank lends the money and the federal government guarantees most of it. Because the government is on the hook, the SBA keeps records of every loan — and releases them under FOIA, which is where our loan-outcome data comes from.

Two things matter for a buyer: whether a brand is in the SBA Franchise Directory at all (if not, this financing route is closed), and how past loans to that brand's franchisees actually performed. A brand whose buyers keep defaulting is telling you something no brochure will.