IFA Applauds Republican House Leaders Efforts to Cut Taxes, Boost Access to Capital for Small Businesses
WASHINGTON, March 2-The International Franchise Association, representing the nation's 825,000 franchise small businesses which support nearly 18 million workers, today applauded newly-introduced legislation, the Jumpstart Our Business Startups (JOBS) Act, introduced by House Majority Leader Eric Cantor (R-Va.) that includes important provisions to boost access to capital for small businesses.
While maintaining that comprehensive tax reform is the best long-term approach for the franchise industry and the small business community as a whole, IFA also praised the announcement that House leaders plan to introduce a bill that would provide a 20 percent tax cut to small businesses before Tax Day next month. Given that 80 percent of franchised businesses are S-corps, LLCs or partnerships and are taxed at the individual level, IFA believes tax cuts must apply across the board, rather than only for C-corps as President Obama's tax reform plan has proposed. The JOBS bill includes several provisions that would boost access to capital for the franchise industry, which while poised for modest 2% growth in terms of jobs (168,000) and new establishments (14,000) in 2012, is still facing challenges accessing the credit necessary to meet the forecasted demand which would further enable job creation.
"We applaud Majority Leader Cantor, Majority Whip McCarthy and the co-sponsors of the provisions in the JOBS Act for recognizing the importance of boosting access to capital for franchise businesses, particularly given its direct correlation to job creation. For every $1 million in lending to franchise businesses, 34 new jobs are created," said IFA President & CEO Steve Caldeira. "Franchise businesses faced a 20 percent lending shortfall in 2011, which amounted to 82,000 direct jobs and 10,000 franchise establishments not created due to prospective and existing franchisees' inability to access capital. Any steps that can be taken to open the credit spigot to small businesses will help the economy as a whole, and we urge the House to move swiftly to pass this important and sensible piece of legislation."
One of the components of the JOBS Act is H.R. 2940, the Access to Capital for Job Creators Act sponsored by House Majority Whip Kevin McCarthy (R-Calif.). The bill would give small businesses another way to access private capital by allowing them to seek funds without requiring them to go through the full SEC registration process. The bill was approved by the House Financial Services Committee and passed the House by a bipartisan vote last November.
The JOBS Act includes several additional pieces of previously-passed legislation that would boost access to capital and make it easier to start a business. They include:
H.R. 3606, the Reopening American Capital Markets to Emerging Growth Companies Act sponsored by Rep. Stephen Fincher (R-Tenn.)
H.R. 2930, the Entrepreneur Access to Capital Act, sponsored by Rep. Patrick McHenry (R-NC)
H.R. 1070, The Small Company Capital Formation Act and H.R. 2167, The Private Company Flexibility & Growth Act, sponsored by Rep. Dave Schweikert (R-Ariz.)
H.R. 4088, The Capital Expansion Act, introduced by Rep. Ben Quayle (R-Ariz.)
The JOBS Act also includes recommendations from the President's Council on Jobs and Competitiveness, which will help provide access to more financing for small businesses and address some of the regulatory burdens that are stifling small business growth.
About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.