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The Outlook for SBA Franchise Loans

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This story appears in the June 2012 issue of Start Up.

A Brighter Financing FutureFranchisees in search of financing have had it rough the past few years. But it's not all doom and gloom on the lending front. Recent numbers for SBA franchise loans--issued by banks but guaranteed up to 85 percent by Uncle Sam--are encouraging. In the 2011 fiscal year, the agency approved a record-setting $19.6 billion in 7(a) loans, the most common type of loan it offers. More than $1.5 billion went to franchise businesses, up from approximately $826 million the previous fiscal year.

In the 2011 fiscal year, the SBA approved a record-setting $19.6 billion in 7(a) loans. More than $1.5 billion went to franchise businesses.

For a closer look at the franchise loan landscape, we spoke to Steve Smits, former associate administrator for the Office of Capital Access at the SBA. Smits oversaw the agency's loan programs.

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