WASHINGTON, April 12, 2023 – The International Franchise Association (IFA) today released the following statement on the Small Business Administration (SBA)’s publication of the final rule changing how affiliation is determined for the purpose of identifying SBA lending program eligibility and the elimination of the Federal Franchise Directory.

“While IFA appreciates the SBA’s efforts to streamline its lending programs and its engagement of the franchise community through this process, we remain concerned that the elimination of the franchise directory will cause some lenders to pull back from franchise lending,” said Michael Layman, IFA senior vice president for government relations and public affairs. “SBA loans are a critical source of startup capital for franchisees, as about 20% of SBA lending goes to franchising. Without the franchise directory, it is imperative that lenders participating in SBA programs understand the change in determining affiliation and do not reduce their lending to franchisees, particularly small and emerging brands. Franchising has been a principal driver of the post-pandemic economic recovery with nearly 800,000 locally owned businesses, employing 8.4 million individuals. IFA will not stop working to ensure prospective entrepreneurs have the access to capital they need, so franchising can continue to generate opportunities in communities around the nation.”

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) 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 approximately 790,492 franchise establishments that support nearly 8.4 million direct jobs, $825.4 billion of economic output for the U.S. economy, and almost 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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Katherine Knight Patterson

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kpatterson@franchise.org

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