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Small Business Lending 

 

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 are positioned to help spur economic growth. 

  

Franchising thrives when capital flows freely from commercial and SBA government-guaranteed lenders to qualified franchise borrowers. For every $1 million in lending to a franchise, 40 new direct and indirect jobs are created, generating $4.2 million in economic output. IFA supports maintaining current funding levels for the 7(a) and 504 loan programs, given franchises are responsible for 7 percent of total SBA loan dollars and 11 percent of SBA loan volume.  

 

The Small Business Administration's (SBA) 7(a) General Business Loan Guaranty Program is the SBA's largest and most important program, in terms of number of loans and program level supported. The program operates through private-sector lenders that provide loans that are then guaranteed by the SBA, which has no funds for direct lending or grants.  

 

For more information contact Jay Perron, Vice President of Government Relations and Public Policy, at jperron@franchise.org or (202) 662-0797.