Financing a Subway with an SBA loan
Since FY2020, 131 Subway locations changed hands on an SBA 7(a) loan. Here is what those deals looked like, what the brand costs to open, which lenders wrote the loans, and where the brand stands with the SBA.
Subway franchising: subwayfranchise.com
What a Subway deal looks like
Subway is an established brand in the SBA loan file: 131 acquisitions cleared underwriting in the last five years. The median loan was $263,900 at 9.38 percent. Amortized over 10 years, that is about $3,397 a month, or $40,770 a year in debt service. SBA's 10 percent minimum equity injection on a deal that size is roughly $29,322 of buyer cash, some of which a seller note on standby can sometimes cover.
Illustrative only: the median loan is not a purchase price, and every deal differs. Model your own in the deal analyzer or the DSCR calculator.
7(a) or 504 for a Subway?
Subway is typically a leasehold business: the value is goodwill, equipment, and the brand, not real estate. That points to an SBA 7(a) loan, usually amortized over 10 years. The 504 program, which finances owner-occupied real estate, is rarely the fit here unless the deal happens to include a building. Model the payment in the 7(a) calculator and check coverage in the DSCR calculator.
What it costs to open a Subway
These are Subway's own franchise terms, set by the franchisor and separate from the SBA loan. They matter to a buyer because the franchise fee and the build-out are part of the project the loan has to cover, and lenders weigh the net-worth and liquidity minimums when they size a deal.
- Total initial investment
- $263,000 to $630,000
- Initial franchise fee
- $15,000
- Ongoing royalty
- 8% of gross sales
- Net worth required
- $150,000
- Liquid capital required
- $100,000
Quick-service restaurant, figures from the 2025 FDD. Sources: 1851 Franchise — Subway deep dive (costs, fees, FDD data), FDD Exchange — Subway 2025 FDD summary, VettedBiz — Subway Franchise Cost, Earnings & FDD Review. Franchise economics are drawn from each brand's public Franchise Disclosure Document (FDD Items 5 and 7) and reputable third-party franchise databases, compiled for independent editorial reference. The Closing Binder is not affiliated with, endorsed by, or sponsored by any franchisor listed. Franchise fee, investment, royalty, and net-worth figures are set by the franchisor and change with each FDD; confirm current terms in the brand's latest FDD before relying on them.
Lenders that actually write these
The banks below approved the most Subway acquisitions in the file. A lender that has funded this brand before is the fastest path through underwriting.
- Stearns Bank National Association9 Subway loans
- Huntington National Bank6 Subway loans
- Merchants Bank of Indiana6 Subway loans
- Manufacturers and Traders Trust Company5 Subway loans
- Peoples Bank4 Subway loans
SBA conditions on this brand
Subway has recently changed its business model and will no longer require a franchisee to lease the real estate back to the franchisor. Franchisees are now permitted to sign leases directly with the landlord. However, if you have an existing franchise location where the franchisor has required the owner of the real estate to lease the premises to the Franchisor, who has then leased the premises back to the franchisee (individual[s] or entity), approval for SBA loans will only be considered for Approved Applicants which include individual(s) named as franchisee, an operating entity controlled by individual(s) named as franchisee, or an entity named as franchisee
Every franchise the SBA will finance carries an entry in its directory, and some carry conditions like this one about how the real estate and the lease may be held. A lender has to clear these before funding, so they are worth reading before you make an offer.
Frequently asked questions
How much does it cost to buy a Subway franchise?
Opening a Subway takes a total initial investment of about $263,000 to $630,000, including a $15,000 initial franchise fee, per the brand's FDD. Buying an existing location is priced differently: the median SBA 7(a) acquisition loan for Subway was $263,900 in the federal loan file.
Can you buy a Subway with an SBA loan?
Yes. 131 Subway locations were acquired with SBA 7(a) financing since FY2020, and the brand is listed in the SBA Franchise Directory. The directory attaches a lender condition to this brand, so a lender clears that before funding.
How much do you need for a down payment on a Subway?
SBA requires a minimum 10 percent equity injection. On the median Subway loan of $263,900, that is roughly $29,322 of buyer cash, though a seller note kept on full standby can cover part of it. The rest is financed over about 10 years, around $3,397 a month at the median rate.
Which lenders finance Subway acquisitions?
Stearns Bank National Association, Huntington National Bank and Merchants Bank of Indiana wrote the most Subway acquisition loans in the federal file. A lender that has funded the brand before knows its franchise agreement and tends to move faster. See the full lender detail above.
Other restaurant brands buyers finance
Loan counts, median size, median rate, and lender ranking are computed from the SBA 7(a) FOIA file, change of ownership approvals, FY2025 to FY2026 Q3, as of June 30, 2026. Eligibility, the identifier code, and any conditions are from the SBA Franchise Directory, effective August 11, 2026. Franchise cost figures are from Subway's public FDD and third-party franchise databases. We are not affiliated with, endorsed by, or sponsored by Subway or its franchisor, and directory listing is not an endorsement of any individual deal. Methodology.