The Outlook for SBA Franchise Loans
While it's still a challenging environment to secure financing, it's not all doom and gloom. Here are tips for franchisees trying to land a loan.
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Franchisees 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.
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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