It’s been a while since we looked at franchises. With all the news about PPP, EIDL, deferments and the like, nothing else is happening with SBA lending, right? That’s what I thought, until I got a call from Jean, one of our new clients.
Her CDC had been struggling to get the required number of SBA approvals. So, she was excited to call me about a new request she had received. It sounded like a good deal until she told me it was a Nissan dealership.
RICHARD: Jean, I hate to tell you, but Nissan isn’t an approved franchise. You’ll need to get General Counsel for Nissan to deal with SBA’s General Counsel for SBA, which will take a while.
JEAN: What? Richard you told me to take a look at the Franchise Directory and if the franchisor was on the list, it’s eligible.
RICHARD: True. And Nissan isn’t on the list.
JEAN: I’m looking right at the Franchise Directory. And there, under “N” is Nissan North America, Inc. It’s approved.
Franchise Directory Flooding Out? I rushed to the SBA website and downloaded the most recent list of eligible franchises. And lo, there was Nissan, approved March 31, and Honda and Toyota approved April 2. Yikes, there’s 7- Eleven! And Aaron Rents!! And Chick-fil-A!!! Plus a whole flock of newly approved franchises. The Franchise Directory is exploding. Soon we’ll be flooded with eligible franchises!
Easy, Easy. It’s OK. No need to panic. Check out the notes for these and similar franchises. Some are permanent changes to the Franchise Directory. But some (like 7-Eleven; Aaron Rents and Chick-fil-A) are eligible only under the Paycheck Protection Program and will be listed on the Directory just for the duration of the program. They’re not eligible for 7(a) or 504 loans. So, there is no eligible franchise flood. For the duration of the program:
“The SBA Franchise Team is committed to supporting America’s small business community during this difficult time. We are processing SBA Franchise Directory requests as quickly as possible. We anticipate that this website will reflect updates by close of business Friday of each week; however, the Franchise Team may be able to directly provide lenders and brands Franchise Identifier Codes earlier if a brand has been approved. If you have a question regarding a brand, please contact us at firstname.lastname@example.org.”
Check the List Early and Often. As you know, SBA updates the Franchise Directory as new franchises get approved. Especially now, you can’t rely on an old version. To be current, check the directory whenever you need to verify franchise or brand eligibility. Looks like 294 franchises have been added so far in 2020, and the year is still young.
It’s good to know that even in the midst of this crisis, SBA is doing its thing, approving eligible franchises and adding them to the list. And it’s a good reminder to check the Franchise Directory regularly. Never know what you’ll find.
Senior Associate, CDC/504 Programs