More Credit For FInancing Small Businesses
Most potential franchisees face a common impediment: money. The start-up fees and capital costs of a new venture can be extremely onerous and may even prevent many small businesses from launching. One solution to these costs is to finance with a Small Business Administration loan. Lately, however, potential franchisees are finding it increasingly difficult to obtain credit. To answer this obstacle, the International Franchise Association recently began campaigning to increase available credit for small business start-ups.
In this lagging economy the credit market has become rigid. As a result, SBA guaranteed loans decreased substantially in the last year. The IFA continues to champion small businesses and franchises as the cure to the recession. In support, the IFA reports that such entities are responsible for 60 – 80 percent of jobs created each year. Further, every $ 1 million invested or loaned to franchises and small business creates 34 jobs and over $3.5 million in total returns. The IFA has presented a two prong proposal for Congress. First, Congress should encourage banks to generate loans by reducing SBA lender fees. Second, Congress should eliminate the current SBA loan limits and allow the market to govern loan prices. This is will further encourage banks to issue loans for small businesses and franchises.
The IFA provides a template email and urges small business owners to take action to see these proposals through by contacting their Representative or Senator.
