In conjunction with its sponsorship of the U.S. Small Business Administration’s National Small Business Week May 16-20, the IFA announced an expanded Credit Access Campaign to unleash much-needed credit flow from lenders to create more than 333,000 new franchise industry jobs and 41,000 new franchise business establishments in 2011.
A newly-produced IFA video highlights the economic impact of franchising and the challenges posed to the industry and the lending community as the nation pursues economic recovery.
There are over 825,000 franchise businesses across 300 different industries creating nearly 18 million jobs and generating over $2.1 trillion to the U.S. economy, according to data prepared for the IFA by PwC. Yet a 20 percent lending shortfall to franchise businesses in 2011 is significantly impacting the ability of franchising to create jobs, according to the latest IFA Small Business Lending Matrix & Analysis.
“Franchise businesses can accelerate job creation faster than other businesses. As evidenced by the industry’s 40 percent economic output growth rate over the past decade, if given adequate financing and a strong pro-growth legislative and regulatory environment,” said IFA President & CEO Steve Caldeira. “Due to its structured, scalable and proven business model, we believe franchising offers exactly what lenders are looking for- a lower risk way to generate revenue in a still uneven economic recovery.”
The Credit Access Campaign will build on the strong momentum of the Lending Summit with a combination of educational, technical assistance and policy initiatives with partner organizations in the business and lending communities, such as the event IFA participated in with the nation’s top small business lenders earlier this month in conjunction with NAGGL.
IFA leaders will be speaking at franchise and lending-related events throughout the country on the advantages of franchise lending, and to better educate and develop stronger relationships between franchisors, franchisees and lenders. For a full list of events, visit the IFA Credit Access Portal.
The campaign will allow partners to collaborate on private-sector solutions that will enable long-term job creation and economic growth. Additionally, a Joint Working Group will also advocate for pro-business, pro-lending legislative and regulatory efforts, including meetings with the Federal Deposit Insurance Commission in June, and with federal lawmakers during the IFA Public Affairs Conference this September in Washington, DC.
The Credit Access Campaign will also feature discovery days for lenders to learn more about franchise brands and the wide-spread support they offer to franchisees to enable their ongoing success. IFA and its campaign partners will develop webinars to help franchisors and franchisees to be better prepared in their quest to receive bank loans, while also working with lenders to assist them in becoming more knowledgeable and comfortable with lower risk, franchise lending.
IFA will develop a Web-based Franchise Lending Portal for franchisors and franchisees to include step-by-step instructions and an online platform to connect lender-ready franchise borrowers. A task force including CBA, NAGGL, CIT, NRA, and IFA is developing a standardized loan profile to provide the information lenders want to see when evaluating a franchise loan applicant.
As part of this effort, a National Franchise Premier Loan Network will be established for franchisors and lenders who agree to meet pre-determined standards to be part of a “best-in-class” group of lenders, franchisors and franchisees-to facilitate deal flow among the participants.