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The House of Representatives passed the Small Business Financing and Investment Act – or the small business recovery plan - by an overwhelming majority of 389 yes votes to 32 no votes last night.

This is big news across the news wires today. This legislation will increase the amount of money the SBA can lend by $44billion. It also increases the guarantee rate on SBA-backed loans from 75% to 90%.

“This bill is about choices. It’s about better options for the small businesses that didn’t get a bailout,” said Nydia M. Velázquez, the chairman of the House Small Business Committee.

“Small businesses with tight profit margins don’t have the luxury of simply ‘tightening the belt.’ When money is short, they’re often forced to lay off workers. But with unemployment at 9.8 percent, we just can’t afford more losses. That’s why this bill delivers critical capital to new ventures.”

It’s unclear when the funding will be transferred to the SBA and the bill must also pass through the Senate.

The IFA has come in to support the measure. Let’s hope now that this bill breezes through the Senate and the funding gets into the hands of the people that need it most: those franchisees and entrepreneurs up and down America.

So, about 10 days later, exactly what effect has President Obama’s statements on the small business sector had on stabilizing confidence among entrepreneurs?

The answer seems to be mixed. If you’ve been following developments over on the You’re The Boss blog run by the New York Times, you’ll know that success in passing the new small business laws are not guaranteed. Initially, it seemed that the President might have to struggle to get his plan through the House and Senate after disquiet from members of both parties.

Now much of the debate has turned to the perspective of Rep. Sam Graves, who is the ranking member on the House Small Business Committee. He had initially announced his disdain for President Obama’s plan. But in an interview with the NY Times, Karen Mills, the head of the SBA, described Graves as “extremely supportive”. Now Rep. Graves’s office has taken exception to this statement, but it is unclear exactly where he stands on the President’s plans. Rep. Graves has declared himself to be an ardent supporter of small business, so it will be interesting to see where he comes down on this legislation.

All of that said, no matter what roadblocks the Republicans throw up, the Democrats will have the votes to pass the bill and it seems that now that support is there for the plan. This is important because there are a number of lingering political issues that are eating into the confidence of small business owners.

The Wall Street Journal recently issued another report on the difficulties facing small business owners. It framed the story around three big political concerns of small business owners: the impending health care legislation, the looming expiration of Bush-era tax cuts and the possibility of green taxes.

With all of these issues looming, it is really time for consensus. The President’s small business plans have to come into effect, and they should only the beginning. For those who doubt the President’s commitment to franchising and small business, here he is again, talking up the importance of entrepreneurship to the American economy:

Following on from posts last week about both Dina Dwyer-Owens on Capitol Hill and Barack Obama’s small business initiatives, we thought we’d stay inside the Beltway for one more post.

Matthew Shay, head of the IFA, was recently in Washington himself, discussing the state of the Small Business sector with members of the House Small Business Committee.

There’s a lot of information to mull over in this video and we recommend you take a look at it.

EDIT: After posting yesterday, we found this interesting article on the Blue MauMau site, which details the various lobbying of the IFA in Washington over the last 12 months.  It’s quite extensive:

• Oct 14, 2009: IFA’s CEO and President Matt Shay gives testimony to the U.S. House of Representatives, Small Business Committee on the need to free up capital for franchising systems
• Sep 30, 2009: Dina Dwyer Owens, CEO of franchising firm The Dwyer Group and this year’s chairwoman of the IFA, gives testimony (see video) to the U.S. House of Representatives, Small Business Committee asking for the perpetual extension of expiring tax reductions such as the death tax. She also asked for a tax credit for veterans buying franchises.
• Sep 10, 2009: IFA advertises on the impact of the credit crunch. The ad was placed during public affairs conference
• Jul 23, 2009: IFA leaders meet with the Treasury, Federal Bank and Small Business Administration
• July 16, 2009: Matt Shay appears on Fox Business News
• A leader of the Great American Cookie Independent Franchisee Association and a franchisee, Lawrence “Doc” Cohen testified before the U.S. House of Representatives Small Business Committee that the SBA needed to improve its small business financing programs
• Jan 28, 2009: IFA sends a letter to the SBA on the need to not cap lenders ability to finance “goodwill” at $250,000
• Jan 22, 2009: IFA attends the U.S. Conference of Mayors and pitches the importance of franchising to the economic development of their municipalities
• Jan 14, 2009: IFA urges Congress to take steps to increase small business access to credit
• Dec 23, 2008: The IFA urges Treasury Secretary Hank Paulson to use the Troubled Assets Relief Program to improve small business loans

It’s clear that those in the corridors of power are beginning to take notice of concerns of small business owners.  The IFA are partly to thank for this shift. Thanks to Blue MauMau for their top reporting here.

We blogged this week about IFA chaimwoman Dina Dwyer-Owens’ recent visit to Capital Hill and hoped that the Government would seriously take on board the needs of the small business community. Well, it looks like President Obama has taken notice.

The President yesterday told the small business community that “America is standing behind small business”, as he announced a range of measures aimed to help small businesses and franchises. Joined by SBA administrator Karen Mills and Treasury boss Tim Geithner at the home base of Metropolitan Archives, President Obama announced a number of initiatives aimed to spur lending and revive the small business sector. Watch his speech here:

President Obama’s plans include:

• Letting community-based banks (ie those with assets under a $1billion borrow money at a lower rates via the TARP program)
• A rise in the SBA loan caps from $2million to $5million.
• Community groups that issue loans in poorer areas can borrow relief loans at 2 per cent for 8 years.

IFA president Matthew Shay yesterday welcomed the President’s plan, saying that Mr Obama directly taken on board an IFA proposal.

“We thank President Obama for his support to enhance the SBA’s loan program,” said IFA President & CEO Matthew Shay. “We urge Congress to take the next step and pass legislation to increase the loan limits and make other important changes to the SBA loan program.”

It’s exciting to see the Government finally responding to needs to small business owners, but we hope this will not be the end of its support. What more do you think the Government can do to help franchisees and small business owners?

It’s been a busy year at Franchise Direct. When we weren’t matching entrepreneurs with top franchise opportunities or compiling a list of the Top 100 Global Franchises, we were putting together insightful reports on pizza franchises, ice cream franchises, home-based franchises, automotive franchises and more.

Just because some of these reports were published a few months ago doesn’t make them any less relevant today. Take our automotive franchise report. Earlier in the year, we wrote how an automotive franchise, despite, or maybe because of, all of the trouble in Detroit, constituted a solid financial investment. That’s still the case now, which Entrepreneur magazine blogger Jeff Elgin highlighted in a recent post.

We liked Jeff’s blog post because he provided an area-by-area autopsy of the automobile and reveals all of the various areas an automotive franchise can specialize in. The body, window, wheels, interior and under the hood are all places where a car routinely needs servicing. And all places to launch your franchising career.

As Jeff writes: “Franchise opportunities are available for almost any automotive product or service you can imagine. No matter what a person needs, a franchise probably exists to help them deal with it.”

If you don’t believe him, just have a browse through our list of automotive franchises. There’s an array of opportunities. Do your research and you’re likely to find the blue-chip automotive franchise of the future.