FOR IMMEDIATE RELEASE
Contact:
Matthew Haller, 202-460-8356
Jenna Weisbord, 310-995-0839
mhaller@franchise.org
jweisbord@franchise.org
IFA SUBMITS RECOMMENDATIONS TO IMPROVE THE SBA LOAN PROGRAM
WASHINGTON, D.C., April 7, 2015 – The International Franchise Association, the world’s largest organization representing franchise owners across 300 different business formats, has submitted written comments to the U.S. Small Business Administration (SBA) in an effort to help franchised businesses obtain SBA loans and to advise the agency on ways to improve how its loan programs can be used more efficiently.
“Franchise businesses are small businesses that provide $890 billion in economic activity in communities across the country,” said IFA President & CEO Steve Caldeira, CFE. “Existing and prospective franchisees deserve equal access to the SBA resources available to other small business owners, particularly as the franchise industry has continued to grow at a higher rate than non-franchised businesses each of the last five years following the recession.”
The SBA issued a Request for Comment Dec. 8, 2014 on several issues relating to SBA’s procedures and considerations for assessing the franchise relationship. The SBA is reviewing their procedures used to determine if franchisees are eligible or ineligible for financial assistance through the SBA’s various loan programs.
In 2014 alone, SBA lending programs were used in the financing of nearly 30,000 new franchise units and guaranteed an estimated $6 billion in loans to franchisees. As IFA stated in its comments, for every $1 million in lending to a franchise, an estimated 40 new direct and indirect jobs are created.
IFA’s comments to the SBA seek to clarify the nature of the franchisor/franchisee relationship for the purposes of determining loan eligibility for franchise small businesses. IFA stated that franchisors and franchisees should not be considered “affiliated” simply by virtue of the contractual rights and obligations to which they agree to in their franchise contracts – essentially, a continuation of existing regulations. IFA encouraged the SBA to develop reasonable standards in order to alleviate any confusion or uncertainty for existing or prospective franchisees seeking SBA loans.
“IFA hopes to continue our collaborative and successful relationship with the SBA to help America’s small businesses flourish,” added Caldeira. “SBA loan programs provide significant and crucial capital to franchise businesses and more capital could clearly be utilized. We respectfully thank SBA Administrator Maria Contreras-Sweet and the agency for the opportunity to share our views on this important topic and we look forward to continuing the dialogue to ensure loans are available for the qualified, hard- working business owners and aspiring entrepreneurs across America.”
IFA’s comments to the SBA can be found [here].
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About the International Franchise Association
Celebrating 55 years of excellence, education and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 780,000 franchise establishments that support nearly 8.9 million direct jobs, $890 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.
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