New SBA Requirements – Significant Policy Changes for 2025

The bar is being raised for potential franchisees and franchisors with the changes upcoming for SBA lending in May. Some of the key things to be aware of:

• 100% U.S. ownership required
• Collateral is likely to be required for loans $50k – $350 (was not a requirement in the last few years)
• Minimum 10% equity injection required (was more lenient in previous years)
• The SBA (Small Business Association) registry is coming back! Only SBA approved franchises will qualify for SBA lending

For some, these new changes will eliminate SBA lending as an option (strong credit, collateral and liquidity will be mandatory). Luckily, there are several other options that can be viable as a back-up strategy:

• Real Estate-Backed Loans (HELOC, etc.)
• Unsecured Loans (income and credit may eliminate the need for collateral)
• ROBS (Rollover for Business Startup)- the use of retirement funds without penalty.

Consult a financial expert for the option that works for you!

Submitted by Franchise Expert and Consultant Shawn Gurn