supplier diversity
IFA Urges Government to Improve
Marketplace for Small Business Loans
T
he International Franchise Asso-
ciation in December urged Trea-
sury Secretary Paulson to con-
sider the critical role franchised-small
businesses can play in driving eco-
nomic recovery and to take action
under the Troubled Assets Relief Pro-
gram (TARP) to improve the market-
place for small-business loans.
“There are more than 900,000 fran-
chised establishments in the U.S. that
are responsible for creating 21 million
American jobs and generating $2.3 tril-
lion in economic output,” said IFA
President & CEO Matthew Shay. “A
healthy franchise industry will signifi- to slower recovery and continued job “Franchising offers a strong founda-
cantly assist economic recovery in this loss. tion from which to encourage job
country and taking action under TARP Shay added that the secondary mar- growth and recovery,” Shay said. “By
to make capital available and afford- ket for healthy SBA guaranteed loans providing franchised businesses the
able is a critical step toward that goal.” remains dysfunctional. capital necessary through a fully-func-
The IFA developed a five-point plan “Investors who normally flock to tioning secondary market, these entre-
that calls for increasing the amount of the security of federally-guaranteed preneurs will help lead us out of reces-
credit available to franchised-small loans are currently seeking investments sion.”
businesses by strengthening secondary with higher interest rates,” Shay added.
markets, increasing access to capital by “This forces lenders to keep SBA loans About The International
changes in Small Business Administra- on their balance sheets instead of offer- Franchise Association
tion loan programs, reducing tax bur- ing them in the secondary market. The International Franchise Associ-
dens and uncertainties in the tax code Without a market, lenders are losing a ation, the world’s oldest and largest
that restrain business investment, mak- critical source of additional funding to organization representing franchising,
ing small-business health insurance authorize new loans.” is the preeminent voice and acknowl-
more affordable and increasing support The increased costs of available edged leader for the industry world-
for veterans as small-business owners. SBA loans make them unaffordable to wide. Approaching a half-century of
In a letter to Secretary Paulson, small businesses. “In order to free up service with a growing membership of
Shay stated that franchised-small busi- the market for new SBA loans, we urge more than 1,250 franchise systems,
nesses rely on programs such as the you to deploy TARP funds to purchase 10,000-plus franchisees and more than
Small Business Administration’s a significant portion of existing healthy 500 firms that supply goods and serv-
(SBA) 7(a) and 504 loan guarantees to SBA loans pooled from the secondary ices to the industry, IFA protects,
ensure that affordable financing is market,” Shay said in the letter. enhances and promotes franchising by
available, as many franchisees pur- The IFA supported enactment of the advancing the values of integrity,
chase their businesses using a combi- TARP program. Even though many respect, trust, commitment to excel-
nation of personal savings, invest- financial institutions received neces- lence, honesty and diversity. For more
ments, and borrowing. Further delay sary support, these efforts are not mak- information, visit the IFA Web site at
in addressing the financing needs of ing their way to franchised-small busi-
www.franchise.org. HNM
small businesses in the U.S. will lead nesses.
14 Celebrating over 15 Years of Embracing Diversity WWW.HNMAGAZINE.COM
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