NEW BILL WOULD INCREASE CAPITAL ACCESS FOR SMALL BUSINESSES
S. 1615 Would Increase SBA Loan Program Level
WASHINGTON, Aug. 19, 2009—The International Franchise Association today applauded Senator Olympia Snowe for introducing S. 1615, the Next Step for Main Street Credit Availability Act of 2009, because it provides important tools to help small businesses lead the economy out of the recession.
“Small businesses hold the key to economic recovery,” said David French, IFA vice president of government relations. “However, the credit crisis is preventing the small business community, including franchise businesses, from growing and keeping prospective entrepreneurs from realizing the American dream of business ownership. This bill, if passed, will move us closer to economic recovery.”
S. 1615 makes improvements to the Small Business Act and includes a key provision outlined in a Five Point Plan for Economic Recovery released in January by IFA. Several of these recommendations were part of the American Recovery and Reinvestment Act; however, two key recommendations were left out—an increase in the loan guarantee limits and repeal of the SBA’s policy on goodwill financing. S. 1615 would increase the maximum loan guarantees for the SBA 7(a) and 504 programs to $5 million.
French cited a recent report that demonstrates the importance that access to credit by franchise businesses has on the overall economy. The report shows that for every $1 million of lending obtained by franchise small businesses, 34 jobs are created and $3.6 million in annual economic output is realized. Because of current conditions, the study predicts a 40 percent reduction in franchise lending in 2009. This reduction will result in the loss of nearly 50,000 jobs and over $5 billion in economic activity.
“Franchise businesses provide over 21 million jobs a year,” French said. “These are sustainable jobs that on many fronts provide extended training and benefits to employees. By putting in place policies that promote more lending and less government spending, franchise businesses can provide better jobs that help the economy recover at a faster pace.”
Access to credit, along with other issues including healthcare reform, will be key topics for IFA’s 10th Annual Public Affairs Conference, Sept. 14-15 in Washington, D.C. Hundreds of franchise owners are attending the conference to meet with members of Congress about issues critical to the industry.
About the International Franchise Association
The International Franchise Association, the world’s oldest and largest organization representing franchising, is the preeminent voice and acknowledged leader for the industry worldwide. Approaching a half-century of service with a growing membership of nearly 1,300 franchise systems, 10,000-plus franchisees and more than 500 firms that supply goods and services to the industry, IFA protects, enhances and promotes franchising by advancing the values of integrity, respect, trust, commitment to excellence, honesty and diversity. For more information, visit the IFA Web site at www.franchise.org.