The International Franchise Association (IFA) wants Congress to “unfreeze” the credit markets to help Americans start businesses, including franchises. Their reasoning—small businesses create millions of jobs (60-80 percent of all new jobs) and generate billions of dollars (half the GDP).
The IFA argues, and I agree, that providing franchises with access to capital will help lead us out of recession. The case for helping potential franchisees buy a franchise is pretty compelling: According to a recent report from the IFA’s Educational Foundation, “for every $1 million of lending obtained by franchised businesses, 34 jobs are created and $3.6 million in annual total economic output is realized.”
One potential troubling stat is the projected decrease in Small Business Administration (SBA) guaranteed lending, which some think will be less than $10 billion this year, about half of last year’s level.
Here’s some of what the IFA wants Congress to do:
Temporarily eliminate or sharply reduce SBA lender fees to increase the incentive for banks to make loans.
Allow market-based loan pricing so that SBA loan caps don’t discourage banks from making loans.
If you agree that our lawmakers need to devote more tools and resources to small businesses, you should share your views with your Congressional representatives. You can go to this link, provided by the IFA, to easily contact your Senator or Congressperson.