IFA Asks Congress to Prevent Shutdown of SBA 7(a) Loan Program to Continue Critical Funding for Small Businesses

FOR IMMEDIATE RELEASE

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Jenna Weisbord, 310-995-0839

jweisbord@franchise.org

@franchising411

IFA ASKS CONGRESS TO PREVENT SHUTDOWN OF SBA 7(A) LOAN PROGRAM TO CONTINUE CRITICAL FUNDING FOR SMALL BUSINESSES

WASHINGTON, July 21, 2015—International Franchise Association, the world’s largest organization representing franchise owners, today sent a formal letter to Members of the House of Representatives’ Committee on Appropriations, urging them to increase the Fiscal Year 2015 lending authority for the Small Business Administration’s 7(a) loan guarantee program, which provides critical funding to small businesses, including franchise small businesses.

“I am very concerned by reports indicating the authorization limit on the SBA 7(a) loan program may be reached as early as the end of July, thereby halting these guaranteed loans for the remainder of the fiscal year,” stated IFA President & CEO Steve Caldeira, CFE, in the letter. “In 2014 alone, new franchise businesses utilized approximately $6 billion in loan guarantees resulting in the financing of nearly 30,000 new franchised units. The SBA 7(a) loan program currently operates at zero subsidy; therefore, no tax dollars are needed to support the program.”

According to a survey conducted for IFA in 2014, 43 percent of first-time franchisees who borrowed funds from commercial lenders and 23 percent of franchisees acquiring additional franchises used SBA loan program guarantees. Of the $6 billion in loan guarantees used by franchise small businesses, 83 percent is attributable to the 7(a) program.

“When the SBA 7(a) program reached its authorization cap last year, Congress passed a supplemental increase to avoid a shutdown of the program. Congress must act now to keep small business lending landscape from turning into a wasteland. We will continue to work to ensure the voice of the small business community is heard within Congress and the administration and to ensure credit access and lending remain strong,” added Caldeira.

To read the full letter, please click 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. 1900 K St., N.W., Suite 700 Washington, DC 20006 USA Phone: +1 202/628-8000 Fax: +1 202/628-0812 www.franchise.org