Still a long way to go
Much of this is due to the regulatory pendulum swinging too far toward entrepreneurs who have strong credit histories and proven track records of owning and operating a successful franchise business, but now are unable to obtain loans.
Even SBA Administrator Karen Mills said in congressional testimony last month that the guidance coming out of Washington has been interpreted more tightly at the regional level by regulators, thereby slowing small business loans.
To be sure, borrowers are faced with less collateral than before the recession. But with all due respect to the NFIB survey of independent businesses showing credit access as not a top concern, IFA’s latest Business Leader Survey shows nearly two-thirds of franchise business owners see access to capital as a major challenge to growth in the coming months.
For this reason, IFA has been working closely with the Financial Services Roundtable, the Consumer Bankers Association and the National Association of Government Guaranteed Lenders, to identify private sector solutions that spur small business lending and create jobs.
This group recently sent a letter to all members of Congress to act to boost lending to small businesses now. Small business lending may be trending up according to my colleagues, but they know there is still a long way to go before all qualified borrowers have the access to credit needed to get our economy back to full strength again, and with their ongoing support and that of their members, I know we’ll get there.
By Steve Caldeira, President & CEO of the International Franchise Association.