On Dec. 8, the U.S. Small Business Administration published a Notice and Request for Comment on Franchise Agreement Reviews, and Eligibility for Financial Assistance in the Federal Register (79 FR 72753, Docket Number SBA-2014-0014). The SBA, led by Administrator Maria Contreras-Sweet, has been incredibly active in providing loans to prospective franchise small-business owners, with numbers ranging as high as 18 percent of SBA’s total lending, encouraging entrepreneurship and job creation while facilitating the economic recovery. This comment process represents the opportunity to resolve any misconceptions that might exist regarding the independence for franchise small-business owners.
Given that the SBA’s evaluation of “affiliation” between business entities plays a critical role in determining eligibility for loan programs, these misconceptions could have a very real impact on future entrepreneurs looking to start franchise small businesses. By modernizing its rules for establishing “affiliation” to account for the prominence of the franchise business model, the SBA is ensuring that these businesses have the support and consistency they need to grow.
IFA strongly supported the opportunity to comment on this re-examination, sending a letter to Linda Rusche, director of the SBA Office of Financial Assistance, to praise the agency’s efforts to improve the efficiency of the small-business loan process and its willingness to listen to hear the industry’s point of view. The association is currently in the process of developing its official comments and has formally requested a 60-day extension of the deadline by which comments must be submitted, from Feb. 8, 2015 to April 9, 2015. Such an extension would better account for the breadth and diversity of business categories that would be impacted by any changes to franchise small-business loan eligibility.