House Small Business Committee Hearing Examines Access to Credit Challenges
October 28, 2011 // Franchising.com // WASHINGTON - The International Franchise Association, following yesterday's House Small Business Committee hearing entitled "Oversight of the Small Business Administration's (SBA) Financing Programs", applauded the SBA's 2011 performance and thanked Chairman Graves for his Committee's focus on boosting access to credit for small businesses and ensuring government regulations are not holding back lending and job creation.
"Administrator Mills correctly highlighted the critical role that SBA has played in 2011 in providing a lifeline to small businesses desperate for access to capital, as a result of the increased loan limits and guarantees in the successful 7(a) lending program," said IFA President & CEO Steve Caldeira. "However, we continue to hear from franchise small businesses and small business lenders on Main Streets across the country that the pendulum has swung too far and regulators are inconsistently evaluating small business loans, thereby holding back credit and stifling job creation."
Mills echoed these concerns at the hearing yesterday, citing concerns IFA member Bill Hall, a Dairy Queen multi-unit franchisee and chair of IFA's Credit Access Task Force raised in a hearing in June.
"We hear the guidance coming out of Washington has been interpreted more tightly at the regional level by regulators," said Mills, responding to a line of questioning from Rep. Joe Walsh (R-Ill.), who chairs the House Small Business Committee's Subcommittee on Economic Growth, Tax and Capital Access. "We want to make sure the pendulum is in the right place."
Chairman Graves pledged to continue to work on a solution to the small business lending shortfall, which according to IFA's Small Business Lending Matrix & Analysis, will result in 82,000 jobs not created in franchising in 2011 due to regulatory challenges and uncertainty.
"Access to capital is one of the most important resources for small businesses to grow and hire more workers," said Graves. "But our Committee continues to hear from small business owners who say they cannot get the funds necessary to run their business- and at the same time we hear from banks who say they have the capital available to lend but are trying to limit risk and manage increasing regulatory requirements. We must find a way to bridge this gap."
IFA continues to focus on ways to spur lending in the private sector through its ongoing Credit Access Campaign. IFA leaders joined nearly 700 SBA lenders this week at the National Association of Government Guaranteed Lenders Annual Conference in Huntington Beach, Calif. to advance small business lending, franchise business ownership and job creation. For every $1 million in lending to franchises, 40 new jobs are created.
"Franchising offers an excellent opportunity for SBA lenders to create the jobs America needs," said NAGGL President & CEO Tony Wilkinson. "With strong SBA lending programs, our member lenders will be able to continue making loans to help small businesses create jobs.
About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the franchise industry, which supports nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.