|
In anticipation of the issuance of SOP 50 10 8 (which became effective June 1, 2025), the SBA issued SBA Information Notice 5000-866746 which was effective April 21, 2025 (click here to access the notice). Pursuant to the Information Notice, brands that were listed on the SBA’s Franchise Directory as of May 2023 are required to execute the new SBA Franchisor Certification.
Unless extended by the SBA, the current deadline for franchisors and distributors to execute the Franchisor Certification is set to expire on June 30, 2026. If that deadline is not extended by the SBA, and if a franchisor or distributor has not executed the Franchisor Certification by the expiration of the June 30 deadline, the brand will be removed from the Franchise Directory and will no longer be eligible for SBA loans effective July 1, 2026. The SBA has advised that lenders’ SBA guarantees will not be impacted on brands removed from the Franchise Directory if the loan was approved by June 30, 2026.
If a brand meets the FTC definition of a franchise, and is not listed on the Franchise Directory, the following documents must be submitted to franchise@sba.gov for review by the SBA Franchise Team:
- Complete copies of the franchise, license, dealer, jobber, or similar agreement(s) for the brand;
- The Franchise Disclosure Document (if applicable); and
- Any other documents that the franchisor or distributor would require an SBA applicant to sign.
If the documents are submitted by a party other than the franchisor/licensor/fuel supplier/etc., the submission email must also provide the appropriate contact information (name and email address only) to allow the SBA Franchise Team to contact the brand. Only the franchisor/licensor/fuel supplier/etc., has the authority to confirm that the SBA Franchise Team has been given complete copies of all required documents.
It is important for lenders to remember that, if an Applicant’s brand meets the FTC definition of a franchise, and that brand is not listed on the Franchise Directory, then lenders cannot submit non-delegated loan applications to the SBA, and PLP lenders cannot approve loans under the lender’s delegated authority.
If your lending institution has questions about SBA’s franchise requirements or any other SBA lending matters, please contact us at SBAQuestions@JellumLaw.com.
This article is provided for general information and educational purposes only. It does not solicit, establish, or continue an attorney-client relationship. The contents should not be construed as legal advice or opinion. If the organization would like formal legal advice, our professional liability insurer (as well as the applicable attorney ethical rules) requires that we establish a formal attorney-client relationship. If you are interested in learning more about working with Jellum Law, please contact us at SBAQuestions@JellumLaw.com.
| 
