IFA APPLAUDS U.S. CONFERENCE OF MAYORS FOR PRO SMALL-BUSINESS RESOLUTION

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Contact: Alisa Harrison, 202-628-8000

aharrison@franchise.org’

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WASHINGTON, June 15, 2009—The International Franchise Association today applauded the U.S. Conference of Mayors for passage of a resolution supporting IFA’s efforts to improve the lending environment for small businesses.


At its 77th annual meeting in Providence, R.I., the U.S. Conference of Mayors approved a resolution presented by its Franchise and Small Business Task Force chairman and past president of the Conference Trenton, N.J. Mayor Doug Palmer, which recognizes the role of small businesses in the economic health of the country. The resolution supports IFA’s policy agenda to free up credit for small business owners to grow and expand.


“We value our partnership with the U.S. Conference of Mayors,” said IFA President and CEO Matthew Shay. “The passage of this resolution signifies the commitment of mayors across the country to promote franchise business development in their cities as a way to increase economic development and job creation. We applaud them for their efforts. ”


At a House Small Business Committee meeting last week, IFA presented data that demonstrates how the lack of available credit is impacting the franchising industry’s ability to create jobs. IFA urged Congress to promote more lending and less government spending as a way to economic recovery. The mayors’ resolution captures the economic data that IFA presented to Congress. 


The resolution reads:


Calling for Federal Action to Spur Economic Recovery of Small Businesses



WHEREAS, 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; and



WHEREAS, over the past several months, small business entrepreneurs have experienced extraordinary difficulty in accessing capital; and



WHEREAS, 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; and



WHEREAS, a report by the International Franchise Association Educational Foundation determined that for every $1 million of lending obtained by franchised small businesses, 34.1 jobs are created and $3.6 million in annual total economic output is realized; and


WHEREAS, franchised businesses consistently outperform non-franchised businesses, creating more jobs and economic activity in local communities across the country; and



NOW THEREFORE BE IT RESOLVED that further action must be taken to stimulate the economic recovery of America’s small business sector and encourage lenders to resume lending to small franchised businesses; and,


BE IT FURTHER RESOLVED that Congress should increase the standard SBA 7(a) maximum loan limit from $2 million to $3 million, increasing the maximum guarantee dollars from $1.5 million to $2.7 million, so that more small businesses can take advantage of the program; and,


BE IT FURTHER RESOLVED Congress should temporarily eliminate or sharply reduce SBA lender fees to increase the incentive for banks to write loans; and,


BE IT FURTHER RESOLVED Congress should allow market-based loan pricing so that inflexible SBA loan caps are not discouraging banks from making loans; and,



BE IT FURTHER RESOLVED the SBA must reverse its new policy on acquisition financing for “goodwill” that is unnecessarily dragging down the value of established small businesses; and,


BE IT FURTHER RESOVED Congress should examine other regulatory reforms that will stimulate the lending market for small businesses.


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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 1,250 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.


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