Statement By Stephen J. Caldeira IFA President & CEO In Response to the Call for the Elimination of the Small Business Administration

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For immediate release





Contact:
Alisa Harrison, 202-628-8000
Matthew Haller, 202-662-0770



aharrison@franchise.org


mhaller@franchise.org


twitter.com/franchising411

 

June 16, 2011  



“The International Franchise Association agrees that all government agencies should work to ensure that programs are being implemented effectively and efficiently. However, eliminating the Small Business Administration would do great harm to small businesses, including franchise businesses, that provide the overwhelming number of jobs in the United States.   
 



“The SBA has at times been viewed as a lender of last resort for entrepreneurs who want to get into business for themselves. However, because of the lack of credit access during the recession, the SBA 7(a) loan program has become a lifeline for businesses wanting to grow and expand. Some 10 percent of SBA loans by revenue and seven percent of the number of loans have gone to franchise businesses, providing the franchise community an important credit source to continue growth. For small businesses in the current credit environment, the SBA has become a lender of first resort. 
 



“This is especially important as the country works to creates jobs and to the franchise industry, a leading job creator in the United States outperforming other business sectors. From 2001 to 2005, the direct economic output of franchise businesses expanded by more than 40 percent versus only 26 percent for other businesses. In those years, the franchising industry created jobs at more than three times the rate of other non-franchised business segments. All told, today more than 825,000 franchise small businesses create nearly 18 million jobs across 300 different sectors and yield $2.1 trillion in direct and indirect economic output.   
 



“We appreciate the efforts by bi-partisan members of Congress, the Obama Administration and Small Business Administration chief Karen Mills to raise federal guarantees on SBA loans to 90 percent. The SBA also reduced or eliminated fees on such loans and permanently lifted the maximum amount that a business may borrow from $2 million to $5 million. These efforts have proven effective in helping the franchise industry continue to grow and create jobs. 
 



“But more is needed. IFA, in cooperation with the National Association of Government Guaranteed Lenders, the Consumer Bankers Association and the National Restaurant Association, as well as other leaders from the financial and small business communities, is in the midst of an ongoing Small Business Campaign for Credit Access, which kicked off with an unprecedented Small Business Lending Summit in April, to find private sector solutions to get credit flowing again to small businesses. With both private and public sector partnerships and solutions, we can help get the economy back on track and increase the number of jobs created.” 
 


The campaign will advocate for improvements in regulatory oversight by government agencies, such as more understanding of the positive aspects of franchising and how regulators can help examiners move loans through more quickly. An ongoing effort is also underway by the franchise industry to forge partnerships with the lending community, including bank underwriters and regulators at the local level to further educate them about the proven strength of franchise businesses as sound and proven investments. For more on IFA’s Credit Access Campaign,

click here

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About the International Franchise Association

The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating 50 years of excellence, education and advocacy, IFA protects, enhances and promotes franchising through government relations, public relations and educational programs. Through its awareness campaign highlighting the theme,
Franchising: Building Local Businesses, One Opportunity at a Time,IFA promotes the nearly 18 million jobs and $2.1 trillion of economic activity generated by franchising. IFA members include franchise companies in over 90 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

 

  

 

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