SBA Lenders for Franchises: 7(a) and 504 League Table, FY2024 to June 2026

This edition: SBA lenders for franchises, April to June 2026

Franchise lending was less concentrated in the latest quarter. In FY2026 Q3 (April 1 to June 30, 2026) the largest franchise lender’s share fell to 10.1% from 16.4% in Q2, and the franchise HHI fell from 455 to 328 (SBA 7(a) and 504 FOIA files, as of June 30, 2026).

The Huntington National Bank made 182 franchise-coded 7(a) loans in Q3, against 398 in Q2. Live Oak Banking Company made 179 (197 in Q2) and United Midwest Savings Bank made 119 (158 in Q2). The quarter’s top 10 held 44.3% of franchise-coded loans. The full Q3 list is in the downloadable file tbl-latest-quarter.csv.

For the first time in the 19 quarters since FY2022 Q1, franchise-coded lending was less concentrated than other 7(a) lending: HHI 328 against 363. One quarter is not a trend; the next FOIA file will show whether it holds.

League table: SBA 7(a) lenders for franchises, FY2024 to June 2026

Table 1 ranks lenders by the number of franchise-coded SBA 7(a) loans approved from October 1, 2023 to June 30, 2026. It reports counts and dollars only; it does not rate lenders or measure loan outcomes.

823 of the 1,766 lenders that made any 7(a) loan in the period made at least one franchise-coded loan. 209 made 10 or more and 28 made 100 or more. Franchise-coded loans were 9.9% of all 189,144 7(a) loans in the period (SBA 7(a) and 504 FOIA files, as of June 30, 2026).

The Huntington National Bank leads by count with 3,839 loans and $1,146.1 million. United Midwest Savings Bank follows with 1,469, then First Bank of the Lake (902) and Live Oak Banking Company (796). Ranked by dollars the order changes: GBank ($1,188.8 million on 340 loans) and The Huntington National Bank ($1,146.1 million) lead, because GBank’s median franchise loan is $3,522,500 against $192,700 at Huntington.

First Bank of the Lake describes itself as the 3rd most active SBA franchise lender since 2023 (First Bank of the Lake). The FOIA file is consistent with that statement: by count of franchise-coded 7(a) loans from FY2023 to June 30, 2026 it ranks 3rd with 1,139.

How concentrated is franchise SBA lending?

Franchise SBA lending leans on one lender more than other 7(a) lending does, but it is not more concentrated across the top 10, and the gap has narrowed since FY2023. Concentration here is the Herfindahl-Hirschman index (HHI): the sum of squared percentage shares, which reaches 10,000 when one lender holds every loan (2023 Merger Guidelines).

From FY2010 to FY2016 franchise-coded lending was less concentrated than other 7(a) lending. It was more concentrated in 8 fiscal years: FY2017, FY2020, FY2021, FY2022, FY2023, FY2024, FY2025, FY2026. The franchise HHI peaked at 931 in FY2023, 2.8 times the 333 for other loans, when The Huntington National Bank held 29.1% of franchise-coded loans. In FY2026 to June 30 the franchise HHI was 401 against 331 (1.2 times), and the top-10 share was 46.8% against 50.0%.

Two checks support the comparison. Removing SBA Express loans, which dominate some lenders’ books, gives FY2026 HHIs of 314 (franchise) and 396 (other), so franchise lending is the less concentrated group without Express. And drawing random samples of other 7(a) loans the size of the franchise group gives a median FY2026 HHI of 332, so the smaller franchise group does not raise its HHI mechanically. By dollars, the pooled FY2024 to June 2026 HHI was 244 for franchise loans and 196 for other loans.

None of these values comes near the 1,800 level that federal merger guidelines call highly concentrated. Those thresholds apply to defined antitrust markets, so they are a scale reference only.

Lender specialization: franchise share and startup mix

Some of the largest franchise lenders are franchise specialists; others are large SBA lenders for whom franchises are a small part of the book. 6 of the top 25 made 50% or more of their 7(a) loans to franchises: United Midwest Savings Bank National Association; First Bank of the Lake; Citizens Bank; GBank; United Community Bank; Magnifi Financial CU (SBA 7(a) and 504 FOIA files, as of June 30, 2026).

The specialists mostly finance new units. 5 of the 6 had a startup share above 50% and lent in 26 to 48 states. United Midwest Savings Bank’s franchise loans were 60.2% of its 7(a) book and 95.5% startups, in 48 states; First Bank of the Lake’s were 53.3% and 88.5%, in 44 states. GBank is the exception: franchise loans were 69.0% of its book, but 67.4% were changes of ownership and only 1.5% startups.

At the large generalists franchises are a minority of SBA lending: 15.1% at Live Oak Banking Company, 2.3% at Newtek Bank and 20.2% at The Huntington National Bank. Across all lenders, 58.2% of franchise-coded loans were startups and 13.7% changes of ownership. 77.6% were approved under the Preferred Lenders Program and 17.0% as SBA Express, against 58.9% and 36.0% of other 7(a) loans.

Lender footprint: in-state vs out-of-state franchise lending

Franchise SBA lending is mostly long-distance lending. 82.2% of franchise-coded 7(a) loans financed a project in a state other than the lender’s state in the SBA file, against 74.3% of other 7(a) loans (SBA 7(a) and 504 FOIA files, as of June 30, 2026).

The lender’s address state understates the reach of banks with branches in many states, so we also matched each FDIC-insured lender to its branch list (FDIC BankFind, index dated October 2, 2026). FDIC-insured lenders made 91.3% of franchise-coded loans. Of those, 52.9% went to a state where the lender had no branch, against 36.6% of other 7(a) loans from the same lenders, a gap of 16.3 points. The top 10 franchise lenders made 63.8% of their franchise loans outside their branch footprint; all other lenders 41.9%.

Reach does not need branches. 7 of the top 10 franchise lenders have FDIC-listed branches in a single state, yet each made franchise loans in 32 to 48 states. The Huntington National Bank lent in 50 of the 51 (all but AK); 30.8% of its franchise loans were outside the 21 states where it now has branches. No lender reached all 50 states and DC, 7 reached 40 or more, and 472 of the 819 franchise lenders lent in only one state.

Every state and DC had franchise-coded loans. The number of lenders active in a state ranged from 5 (Vermont) to 215 (Texas), and The Huntington National Bank was the largest franchise lender in 41 of them (Table 4). Branch lists are current, not as of each approval, so lenders that acquired banks during the period look less out-of-footprint than they were.

SBA 504: CDCs and third-party lenders on franchise projects

A 504 loan has two lenders: a Certified Development Company, an entity SBA authorizes to deliver 504 financing (13 CFR 120.10), and a third-party lender, usually a bank, that funds the senior loan. Franchise 504 lending is regional on the CDC side and spread thin on the bank side.

From October 2023 to June 30, 2026, 142 of 181 CDCs approved 1,390 franchise-coded 504 loans (8.1% of all 504 loans) worth $2,780.5 million, alongside $4,409.5 million of third-party loans (SBA 504 FOIA file, as of June 30, 2026). Mortgage Capital Development Corporation led with 123 loans, then Florida Business Development Corporation (91) and Capital Certified Development Corporation (70). 78.5% of franchise projects were in the CDC’s own state.

CDC concentration on franchise projects (HHI 279, top 10 44.0%) was close to other 504 projects (HHI 273, top 10 44.7%). Third-party lending was far less concentrated: 536 lenders, HHI 85, with Celtic Bank Corporation (70 projects, $381.5 million of third-party loans) and Bank Five Nine (61) the most active. Only 48.0% of franchise projects were in the third-party lender’s own state. Startups were 33.7% of franchise-coded 504 loans.

What changed for franchise lenders on October 1, 2026

SOP 50 10 8.1 applies to applications SBA receives from October 1, 2026 (SBA Information Notice 5000-882227). Three changes touch franchise lending.

• SBA Express and 7(a) Small loans may finance changes of ownership under Appendix 15, which matters for franchise resales.
• 504 third-party lenders may send their underwriting analysis directly to SBA’s loan processing center, and the rule that the third-party loan could not amortize beyond the 504 debenture term was removed.
• The franchise rules carry over: a brand that meets the FTC franchise definition must be on the SBA Franchise Directory, and lenders must check it before they submit or approve a loan (SOP 50 10 8.1).

Given SBA’s quarterly schedule, loans approved under the new SOP can first appear in the FOIA file dated December 31, 2026. Interest rates by lender tier are covered in our franchise loan interest rates monitor.

Methods and next edition

Data: SBA 7(a) FOIA files FY2010 to present and the 504 file FY2010 to present, all as of June 30, 2026, the newest posted as of October 6, 2026 (SBA 7(a) and 504 FOIA files, as of June 30, 2026). A loan is a franchise loan if the lender entered a franchise code. Lenders are keyed by FDIC certificate, NCUA charter or, for non-depository lenders, name. Startup = BusinessAge ‘Startup, Loan Funds will Open Business’. States served counts the 50 states and DC. Borrower names and addresses were never read.

Next edition: after SBA posts the files as of September 30, 2026, expected late October 2026. It will add FY2026 Q4 and the first full-year FY2026 league table.