SBA Franchise Lending in 2024
SBA 7(a) Franchise Lending in 2024
SBA Franchise Funded Loans in FY 2024
457 banks funded 3,680 franchise loans for $2.7 billion to franchise borrowers from 1,115 different brands in 222 industries. The average loan amount funded was $722,652. SBA franchisee loans were funded in all 50 states to borrowers from 1,633 cities. 81% of SBA franchisee loans were funded for a project state which is different than the bank’s state. The average bank spread over the prime rate was 2.37%. Franchise business loans accounted for 13% of all funded SBA 7(a) dollars.
Borrower’s business age for franchise funded dollars
39% Startups
30% Change of Ownership
16% Existing Business > 2 Years
15% Existing business < 2 Years
About SBA Franchise Loans
36% of banks funded a franchise loan of which 59% of banks funding a franchise loan only funded one or two.
72% of all non-franchise loans were funded by out of state lenders and 81% of franchisee loans.
28% of all banks funded a franchise loan under $500K loan amount.
21% of all banks funded a franchise loan over $500K loan amount.
14% of all banks funded a franchise loan over $1 million.
Startup loans represented 39% of franchise funded loan dollars.
Change of ownership loans represented 30% of franchisee funded dollars.
59% of banks who funded a loan in last 12 months funded a startup loan but only 23% funded a franchise startup.
49% of banks who funded a loan in last 12 months funded a change of ownership loan but only 13% funded a franchise change of ownership loan and only 9% if the franchise loan was over $500K.
SBA 7(a) Franchise Lending
All-time there have been 3,169 banks who have funded an SBA franchise loan. More than 122,510 franchisee loans for $65.4 billion have been funded through SBA lending to franchise borrowers from 8,081 brands to borrowers from 8,369 cities.
Trailing 20 Years Historical Franchise Funded SBA 7(a) Loans ending Q3 2024
There are currently 50,847 SBA franchise loans currently active today.
Top Franchise Brands With Active SBA Loans
THE UPS STORE 899
SUBWAY 832
ANYTIME FITNESS 591
QUALITY INN 463
SUPER 8 421
DAYS INN 411
JIMMY JOHN'S 403
ACE HARDWARE 389
THE GODDARD SCHOOL 364
DAIRY QUEEN 340
FIREHOUSE SUBS 331
MOTEL 6 312
HOTWORX 309
TROPICAL SMOOTHIE CAFE 303
MARCO'S PIZZA 298
COMFORT INN 285
PRIMROSE SCHOOLS 283
JERSEY MIKE'S 272
BEST WESTERN 265
SMOOTHIE KING 264
Top Franchise Brands for Paid in Full SBA Loans
SUBWAY 3943
QUIZNOS 1609
DAIRY QUEEN 995
MAIL BOXES ETC. 977
DUNKIN' DONUTS 845
THE UPS STORE 702
DOMINO'S 650
DAYS INN 574
SUPER 8 537
COLD STONE CREAMERY 532
JIMMY JOHN'S 470
MATCO TOOLS 412
ANYTIME FITNESS 407
GREAT CLIPS 398
SPORTS CLIPS 390
COMFORT INN 387
SERVPRO 378
BASKIN-ROBBINS 371
BLIMPIE 361
ACE HARDWARE 350
Top 20 Franchise Brands in SBA Lending
FY2024 SBA 7(a) Funded Loans
Why is a franchise brand being top ranked in SBA lending a good thing?
Because it conveys that SBA lenders are not only familiar with the brand but love it. Overall, banks like the concept, the story, and the cash flow of the deals. When a brand becomes top ranked it draws the attention of other lenders adding to the pool of lenders available to the franchisees. When you are a franchisee of a franchise brand top ranked in SBA lending it means you have lenders lined up ready to do your loan.
Top Ranked Franchise Brands by Total Number of Loans
THE UPS STORE: 76 loans
HOTWORX: 55 loans
NATURALS2GO: 33 loans
ANYTIME FITNESS: 32 loans
SUBWAY: 25 loans
THE GROUNDS GUYS: 25 loans
THE LEARNING EXPERIENCE: 25 loans
QUALITY INN BY CHOICE HOTELS: 24 loans
SCOOTER'S COFFEE: 24 loans
SUPER 8 BY WYNDHAM: 24 loans
ALLOY PERSONAL TRAINING: 23 loans
TROPICAL SMOOTHIE CAFE: 23 loans
BIGGBY COFFEE: 20 loans
BUDGET BLINDS: 19 loans
SCENTHOUND: 19 loans
AIRE SERV: 18 loans
D1 SPORTS: 18 loans
DOMINO'S: 18 loans
FLOOR COVERINGS INTERNATIONAL: 17 loans
JERSEY MIKE'S: 16 loans
Top Ranked by Total Funded Loan Dollars
QUALITY INN: 24 loans, $72,168,200
SUPER 8: 24 loans, $56,546,200
BEST WESTERN: 14 loans, $54,801,100
COMFORT INN: 12 loans, $44,847,100
HOLIDAY INN EXPRESS: 9 loans, $42,710,000
LA QUINTA: 11 loans, $40,399,000
MOTEL 6: 13 loans, $34,851,500
DAYS INN: 15 loans, $34,253,400
THE UPS STORE: 76 loans, $34,207,600
RED ROOF INN: 11 loans, $33,332,000
URBAN AIR ADVENTURE PARK: 8 loans, $29,880,800
AM/PM MINI-MART: 12 loans, $28,294,600
SCOOTER'S COFFEE: 24 loans, $28,095,800
COUNTRY INN & SUITES: 9 loans, $28,043,000
THE GODDARD SCHOOL: 13 loans, $27,278,300
HOTWORX: 55 loans, $26,334,400
SLEEP INN : 6 loans, $23,895,700
BAYMONT: 9 loans, $22,396,500
EXTENDED STAY AMERICA SUITES: 7 loans, $21,233,500
PRIMROSE SCHOOLS: 14 loans, $21,067,800
Bank Activity in Franchise SBA Lending
Most ‘t SBA lenders have little experience with franchise loans. In FY 2024 of the banks funding an SBA 7(a) loan only 36% funded a franchise loan. Of these, 42% funded one loan, 55% funded one or two loans, 72% funded less than 5 and 93% funded less than 20 franchise loans.
Out-of-State Banks Dominate SBA Franchise Lending
Out of state SBA 7(a) lender dominance for franchise lending
81% of franchise loan dollars funded by out of state lenders.
81% of franchise funded dollars for loans over $1 million amount funded by out of state lenders
87% of funded franchise dollars for loans up to $150,000 funded by out of state lenders
84% of funded dollars for change of ownership franchise loans funded by out of state lenders
85% of startup franchise dollars are funded by out of state lenders.
90% of startup franchise loans under $150K are out of state bank funded while
77% of franchise startups over $1M are funded by out of state lenders.
84% of change of ownership franchise dollars are funded by out of state lenders.
77% of change of ownership franchise loans under $150K are out of state bank funded while 87% of franchise change of ownership over $1M are funded by out of state lenders.
Franchise Lending Forecast
About Our Forecast Model
Our forecast model is far from a crystal ball, it’s just an AI-powered best guess. We created our SBADNA forecast model in 2020 and while we continue to make adjustments, it’s a powerful tool. Our analytics platform allows for forecasts to be created based on a combination of multiple different filters. Our forecast model is based on Holt-Winters Forecasting model a.k.a. Triple Exponential Smoothing. The forecast is calculated as a weighted average of all historical data. Recent data is weighted exponentially higher than older data. The Holt-Winters method is based on either additive or multiplicative components. The AI-powered platform internally calculates results by both algorithms and shows the best results of the two.
Loan Amount Tiers in SBA Franchise Funded Lending
Franchise loan amount tiers
26% loan amounts < $150,000
22% loan amounts $150,000-$350,000
35% loan amounts $350,000-$1 million
17% loan amounts > $1 million
Startup franchise amount tiers
28% loan amounts < $150,000
27% loan amounts $150,000-$350,000
38% loan amounts $350,000-$1 million
8% loan amounts > $1 million
Change of Ownership franchise
4% loan amounts < $150,000
15% loan amounts $150,000-$350,000
35% loan amounts $350,000-$1 million
46% loan amounts > $1 million
12% loan amounts > $ 4 million
FY2024 Volume Down
Number of banks funding a franchise SBA loan:
FY2021: 714
FY2022: 663
FY2023: 630
FY2024: 457
Number of startup franchise loans funded:
FY2021: 3,213
FY2022: 2,858
FY2023: 3,599
FY2024: 2,133
Number of change of ownership franchise loans funded:
FY2021: 1,236
FY2022: 985
FY2023: 785
FY2024: 498
This article is authored by Darin Manis, founder of LoanBox.
Source: All SBA 7(a) data shared is based on all SBA lending from all sources and not from SBA lending through LoanBox. SBA data and reports are not from the SBA but from SBA data from the lending analytics platform developed and maintained by SBADNA Analytics. SBADNA and LoanBox are both owned by the same parent company FuseSync LLC. LoanBox and SBADNA does not validate or verify the data released by the SBA and provides no warranty of data accuracy or completeness.
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