SBA Loan Changes: What Franchisees Need to Know—and How ApplePie Can Help

As a franchisee, your access to reliable, affordable financing is essential to launching, operating, and expanding your business. That’s why it’s important to stay informed about the changing lending landscape—and right now (April 2025), the Small Business Administration (SBA) is making major updates that could directly impact how franchisees secure capital.

At ApplePie Capital, we want to make sure you understand what’s changing, how it might affect you, and what alternatives may be available to help you move forward with confidence.

What’s Changing at the SBA?

Due to rising loan defaults and evolving political priorities, the SBA has begun rolling out new rules that will likely raise the cost of loans and slow down the approval process. Some of these changes have already taken effect, while others are in the works.

Already Implemented:

Upfront Fees Are Back: For loans over 12 months and greater than $150,000, new upfront fees now range from 3% to 3.5%. Previously, there were no upfront fees.
Stricter Ownership Rules: Lenders must now verify 81% of ownership, and foreign ownership is prohibited. This could reduce overall loan approval rates.
Longer Processing Times: Cuts in SBA staffing are already leading to slower turnaround times for loan applications.

Proposed Changes:

Higher Equity Requirements: For both acquisitions and start-ups, the SBA may require larger equity injections, limiting available liquidity.
Tougher Underwriting: Loans between $250,000 and $500,000 will be subject to more detailed credit reviews.
New Definition for "Small Loans": The SBA plans to reduce the threshold for what qualifies as a "small loan" from $500,000 to $350,000 or less.

These changes reflect a broader tightening of credit standards, marking a shift away from the more lenient approach taken in recent years. While they may be necessary for program sustainability, they could introduce real uncertainty and delays for franchisees depending on SBA financing.

What This Means for You

If you were planning to pursue an SBA loan, it’s important to know that:

Costs may be higher due to reintroduced fees
Processing times could be longer, even with preferred lenders
New eligibility rules may impact your ability to qualify

This doesn’t mean your growth plans have to pause. It just means you may want to consider alternative financing options designed specifically for franchisees.

How ApplePie Capital Can Help

At ApplePie, our mission is to empower franchise entrepreneurs with smarter, more accessible financing. That’s why we’ve created the ApplePie Core Loan, a conventional loan product tailored to the needs of franchise brands and their operators.

The ApplePie Core Loan Offers:

Fixed Rates
10-Year Terms
No Personal Collateral Requirements
Simple, Online Application Process

For qualified brands and franchisees, the Core Loan can be a strong alternative to SBA financing—offering predictability, speed, and a streamlined borrower experience.

"With SBA lenders facing growing uncertainty, the ApplePie Core Loan offers a stable, franchise-friendly lending solution designed to move at your pace." says Randy Jones, Chief Revenue Officer and Lending Solutions at ApplePie.

What Should You Do Next?

If you’re currently pursuing SBA financing to save on fees, or if you’re unsure how these changes will affect your plans, the best next step is to speak with a trusted franchise lender or advisor. ApplePie is here to help with:

No-cost consultations to assess your financing options
Guidance for first-time and multi-unit franchisees
Tailored recommendations based on your brand and growth goals

To explore whether ApplePie is a fit for your next acquisition or expansion, schedule a call with us, or browse eligible brands to get started.

We’re committed to helping franchisees grow—even in changing times.

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This content is provided for educational purposes only and does not constitute financial or lending advice. Eligibility requirements apply.

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_{The ApplePie Core loan, available through our affiliate ApplePie Capital, Inc. is made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. This is not deposit product. Actual loan terms depend on credit, income, loan maturity, and other factors.}