Unlocking Credit Markets for Franchise Business Development
Background
In the wake of the severe economic downturn, the IFA began calling on the federal government to take action that would ease frozen credit markets. At every opportunity, the IFA has delivered a fundamental message that in times of economic stress, franchising gives small businesses an extra margin of help through access to training, business methods and marketing support provided by the franchisor. Franchising offers the U.S. economy a strong foundation from which to encourage job growth and recovery. Providing franchised businesses access to capital by improving operation of secondary markets will ensure that small business entrepreneurs will be positioned to help lead us out of recession.
Over the past several months, small business entrepreneurs have experienced difficulty in accessing capital. While Congress and the Administration have taken important steps to address these challenges to improve the availability of credit, franchised businesses and prospective franchise investors with strong credit histories have had loan applications denied. Normally, the Small Business Administration (SBA) typically guarantees approximately $20 billion in loans annually; however, new lending in 2009 is predicted to be less than $10 billion.
Over the past decade, small businesses have accounted for 60-80 percent of annual job creation, and currently account for almost 50 percent of total jobs in the private sector. A recent report by the International Franchise Association (IFA) Educational Foundation determined that for every $1 million of lending obtained by franchised businesses, 34.1 jobs are created and $3.6 million in annual total economic output is realized. Congress should be devoting more resources and tools to the small business sector. Without this critical support, more and more individuals will find it increasingly difficult to get into business and start creating jobs to help the economy grow.
Take Action!
Please take a moment to contact your lawmakers and deliver the message that franchise business leaders and aspiring franchise business owners are frustrated with the lack of assistance on Main Street. The franchise business community was patient as federal lawmakers worked quickly to “right the ship” on Wall Street. Now is the time for these policymakers to back up their words about the power of small businesses and entrepreneurship with action.
You can either follow these helpful links to send an email to your lawmakers today or use the sample letters below to craft your own message you can send to Senators, Representatives, local officials or your newspaper.
- Click HERE to send an email NOW to your Senators and Representative
- Click HERE to look up more information on your Members of Congress
Resources
Testimony of IFA Credit Access Chairman Bill Hall to the House Small Business Committee - June 1, 2011
Senate Substitute Amendment to Small Business Jobs Act - July 28, 2010
Summary of Senate Substitute Amendment to Small Business Jobs Act - July 28, 2010
IFA Key Vote Letter Supporting SBA Loan Provisions in Small Business Jobs Act - July 22, 2010
IFA Letter to House Financial Services Committee - May 18, 2010
Small Business Access to Credit Issue Brief - April 7, 2010
Small Business Access to Credit Coalition Letter to All Senators - February 17, 2010
IFA Letter Supporting S. 2869, the Small Business Job Creation and Access to Capital Act - Dec. 17, 2009
S. 2869, the Small Business Job Creation and Access to Capital Act - Dec. 15. 2009
S. 2869 Section by Section Summary - Dec. 15, 2009
Small Business Access to Credit Coalition Letter - Dec. 10, 2009
Updated Small Business Lending Matrix and Analysis - Dec. 2, 2009
Download Sample Letters to Congress
Please feel free to contact Jay Perron, IFA’s Vice President of Government Relations and Public Policy, with any questions or comments you may have. He can be reached at jperron@franchise.org or (202) 662-0797.