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.
By Michelle Goodman •
Opinions expressed by Entrepreneur contributors are their own.
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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