IFA Presses SBA on Proposed Changes to Loan Programs
Highlights ways SBA loans are essential to providing capital for first-time entrepreneurs, especially underrepresented groups
WASHINGTON, Dec. 22 – The International Franchise Association today submitted comments on the Small Business Administration (SBA)’s proposed changes to the 7(a) and 504 Loan Programs, focusing on how best to improve and streamline the SBA loan process to pave the way for increased access to credit for franchisees. Within the last year, franchises received 7,000 SBA loans through the 7(a) and 504 Loan Programs, supporting more than 100,000 jobs.
In the comments, Michael Layman, senior vice president of government relations and public affairs for the International Franchise Association, writes:
“SBA loans are a vital source of funding for first-time entrepreneurs in franchising, they provide the financial resources necessary to establish and grow their businesses. With 20% of SBA lending going to franchising, the SBA’s lending programs are a big part of the success story for many small business franchise owners.
“Access to capital and the ability to grow are essential in the budding stages of franchise small businesses. The well-established SBA 7 (a) and 504 loan programs are paramount in ensuring that qualified small business, especially franchise businesses, are able to survive and increase their production in a fragile economy.”
IFA addresses three proposed changes that would impact franchising: concerns about the eligibility determinations for franchise loans from SBA to lenders, the SBA’s ability to report on franchise loan performance, and the elimination of paragraph (f)(5) which relates to affiliation criteria.
The full comments are available here.
Franchising is a proven vital engine of economic expansion in the United States, uniquely providing entrepreneurial opportunities to underrepresented communities. According to Oxford Economics, nearly one-third of survey respondents (32%) said they would not own a business without franchising, especially true for women, first-time owners, minorities, and veterans. More of those findings are available here.
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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 775,000 franchise establishments that support nearly 8.2 million direct jobs, $787.7 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.