Small business lending has been one of the most common topics in financial news for the past year or so, affecting both independent owners and franchise opportunity investors. However, even as the economy has begun to recover, the issue has not disappeared.

In a recent article for AllBusiness.com, International Franchise Association President and CEO Steve Caldeira writes that access to capital still remains the industry's No. 1 challenge. If unable to obtain funding, franchisees can't hire more employees, update their existing operations or secure even more credit.

To draw attention to the issue, the organization held its first Small Business Lending Summit in April and, in May, rolled out the Credit Access Roadshow with its partners, the Consumer Bankers Association and the National Association of Government Guaranteed Lenders, Caldeira explains.

Now, he believes, the media, lawmakers and the federal government are beginning to take notice. A recent article by Politico takes a closer look at the $30-billion lending fund that was signed into law by President Barack Obama last fall but has yet to release any money. However, earlier this week, the secretary did acknowledge that the Small Business Lending Fund would soon begin issuing capital.

"It's been slow, but we expect funds to start going out this month," a Treasury official told Politico. Currently, 844 financial institutions have applied for $11.6 billion from the fund.


Congress' Small Business Committee, chaired by Republican Representative Sam Graves, is looking for answers. Earlier this week, they held a committee hearing in hopes of finding some answers as to why the fund has stalled.

Yet Caldeira pointed out to Politico that record-level lending from Small Business Administration, which plans to lend its entire $17.5 billion from the program by the end of September, still may not be enough. He explained that while franchisees have access to approximately $8.4 billion in capital, this represents a shortfall of about $2 billion, which could create an additional 82,334 jobs.

In addition to lending, Caldeira told Politico that the IFA is continuing to lobby Congress against recent regulations that they believe have hurt small businesses and franchisees.

"If we could eliminate some of the regulatory hurdles, there would be more capital to lend," Caldeira said. 

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