Because now that the Small Business Jobs And Credit Act has been signed into law, small business loan approvals will start to happen at a record-setting pace. (Right!)
The new president of the International Franchise Association witnessed "The Signing." Here's his official statement, which was obviously written up while he was still in the ether;
“The Small Business Jobs and Credit Act contains important provisions that will provide existing small franchise businesses and aspiring entrepreneurs the access to capital they desperately need. Nearly 50 percent of our members cite access to capital as the most pressing issue they currently face. We applaud Congress and the Administration for their efforts in getting this bill passed and signed into law.”
I can already hear it; "Franchise King®, you're so cynical…"
First, about that "ether."
I think that it would be outstanding to be in the same room as a sitting President. Heck, I'd be all "ethered up," too. But, then reality would probably start to set in.
The IFA's president, Stephen J. Caldeira continued with his statement;
“The bill increases the Small Business Administration’s (SBA) loan limit from $2 million to $5 million and extends the 90 percent loan guarantee rate through the end of 2010, which will help to encourage banks to participate in the SBA program. IFA analysis shows that with the loan limit increase, 450,000 to 600,000 new jobs could be created by franchised businesses over the next 12-18 months. This clearly is a critical step in encouraging banks to start lending to small businesses, an important sector for new job creation.”
So, what's changed?
Here's what's changed; The loan limits are higher. Up to $5 million, now. (Which will surely benefit all the folks who are trying to get a measly $200k to open up a local neighborhood pizza franchise, because they can't find a job)
One more change; The SBA will still fund loans up to 90%. The SBA does a great job, for sure. They're working on getting the amount of paperwork needed for an SBA loan cut down, and I feel that Karen Mills, (the SBA chief) understands our frustration with the banks. I want folks that want to take a shot at the American Dream to be able to.
None of this matters
Times now are no different then they were in November of last year. Read
None of this matters, unless the banks decide that it's time for them to step up and loan money to start-up businesses, and small businesses that are already in business, but need money to hire and expand.
My friend, Barry Moltz, wrote yesterday that, "Banks don't want to fail and are trying to fatten their balance sheet by not making loans." I agree, Barry. Read his Chicago Now op-ed.
I'd like to know why (all of a sudden) these banks are going to open their vaults, and make small business loans.That's not being cynical. Why should I apologize for saying what lots of you are muttering under your breath about this?
Contact me BEFORE you buy a franchise
What's changed for them? (The banks)
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