Buying a Subway franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 217 7(a) loans to buy an existing Subway (classified mostly as Limited-Service Restaurants), totaling $78M. The median loan was $228,200, 65% lower than the $645,250 median for all SBA-financed acquisitions. Volume rose 60% from FY2024 to FY2026. 27 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Subway resale loans landed between $150,000 and $355,000.
- Lender experience exists. Stearns Bank National Association alone has financed 36 Subway resales.
- Guaranty. The SBA guaranteed 76% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Subway resale
The median SBA 7(a) loan for a Subway resale was $228,200 across 217 loans (FY2018 to FY2026). Stearns Bank National Association, Manufacturers and Traders Trust Company and The Huntington National Bank have financed the most Subway resales. Of 144 seasoned loans (FY2018 to FY2021), 5.6% were charged off, 58% higher than the 3.5% average for all SBA acquisition loans.
Subway acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 49 | $13.6M | $175,100 | |
| FY2019 | 51 | $12.7M | $211,000 | |
| FY2020 | 24 | $6.4M | $207,150 | |
| FY2021 | 20 | $7.6M | $237,800 | |
| FY2022 | 23 | $13.6M | $391,500 | |
| FY2023 | 13 | $7M | $299,000 | |
| FY2024 | 10 | $3.5M | $216,550 | |
| FY2025 | 11 | $6.5M | $355,000 | |
| FY2026 | 16 | $7.1M | $263,900 |
How often do these acquisition loans fail?
Of the 144 Subway acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 8 have been charged off by the SBA, a rate of 5.6% by loan count and 3.8% by dollars. 98 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so Subway is 58% higher than the acquisition-loan average. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing Subway resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Stearns Bank National Association | 36 | 16.6% | $6.3M | |
| 2 | Manufacturers and Traders Trust Company | 10 | 4.6% | $2M | |
| 3 | The Huntington National Bank | 8 | 3.7% | $3.4M | |
| 4 | Celtic Bank Corporation | 6 | 2.8% | $2.6M | |
| 5 | Wells Fargo Bank National Association | 6 | 2.8% | $1.6M | |
| 6 | Northwest Bank | 6 | 2.8% | $1.6M | |
| 7 | Merchants Bank of Indiana | 5 | 2.3% | $3.4M | |
| 8 | Peoples Bank | 4 | 1.8% | $2.5M | |
| 9 | Centerstone SBA Lending, Inc. | 4 | 1.8% | $1.9M | |
| 10 | BMO Bank National Association | 4 | 1.8% | $1.6M |
States where Subway units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | California | 26 | 12.0% | $8M | |
| 2 | Ohio | 19 | 8.8% | $7.9M | |
| 3 | Indiana | 16 | 7.4% | $6.2M | |
| 4 | Georgia | 15 | 6.9% | $3.5M | |
| 5 | Pennsylvania | 12 | 5.5% | $2.8M | |
| 6 | Illinois | 10 | 4.6% | $2.9M | |
| 7 | Kentucky | 8 | 3.7% | $4.6M | |
| 8 | New York | 8 | 3.7% | $1.6M | |
| 9 | Maryland | 8 | 3.7% | $1.6M | |
| 10 | Michigan | 7 | 3.2% | $2.9M |
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How lenders classify Subway
Lenders code each loan to a NAICS industry. For Subway the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Limited-Service Restaurants | 190 | 87.6% | $70.3M | |
| 2 | Full-Service Restaurants | 21 | 9.7% | $4.8M | |
| 3 | All Other Specialty Food Retailers | 2 | 0.9% | $326K | |
| 4 | Gasoline Stations with Convenience Stores | 1 | 0.5% | $1.8M | |
| 5 | General Freight Trucking, Local | 1 | 0.5% | $410K |
Questions buyers ask
How much do buyers borrow to buy a Subway franchise?
The median SBA 7(a) loan for a Subway resale was $228,200 across 217 loans (FY2018 to FY2026). The middle half of loans ran from $150,000 to $355,000. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Subway acquisitions?
Stearns Bank National Association has made the most SBA acquisition loans for Subway (36, 17% of the total). Manufacturers and Traders Trust Company, The Huntington National Bank, Celtic Bank Corporation follow.
What interest rate and term do Subway acquisition loans carry?
The average initial rate at approval was 7.25% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a Subway resale riskier than other SBA-financed acquisitions?
In the seasoned cohort (FY2018 to FY2021), 5.6% charged off, 58% higher than the 3.5% average for all SBA acquisition loans.
Where are Subway units being bought with SBA loans?
California (26), Ohio (19), Indiana (16), Georgia (15), Pennsylvania (12). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Limited-Service Restaurants acquisitions
- California acquisitions
- Ohio acquisitions
- Indiana acquisitions
- Stearns Bank National Association
- Manufacturers and Traders Trust Company
- The Huntington National Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Subway" (franchise code S1639). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.