Big news is afoot in Washington as it seems that the US Treasury is about to step in and launch a $15billion bailout of the Small Business Administration. The plan is to use federal bailout money to buy out SBA loans. There is also talk that President Obama is to raise the cap on SBA loans.
The Washington Post has all of the information. Interestingly, it was only a week ago that we wrote that CIT must be saved and criticized the federal government’s failure to bail out CIT. Well, CIT seems like it will keep its head above water and survive. The SBA bailout is probably the best news to come out of Washington in months, and its worth noting that IFA First Vice Chairman Kenneth Walker (Driven Brands CEO), IFA Secretary Jon Luther (Dunkin' Brands Exec. Chairman) and IFA President and CEO Matthew Shay have been holding meeting with Treasury representatives this week.
Here’s a brief run-down of the reaction to the decision.
Over on the Huffington Post, business columnist Jerry Chautin provides a run-down of all the chatter on Twitter to the move. He quotes Stacy Kildal, owner of Advanced QB ProAdvisor, who wrote “Even if a loan/line of credit isn't needed right now, who knows what may happen down the road? Form the relationship now." A window as opened, Kildal and Chautin urge entrepreneurs and prospective franchisees to get out there and talk to your loan officer.
“Get an introduction to the chief loan-officer and find out how the loan committee makes its decisions. Ask how business loans are underwritten, what collateral is required and learn about the credit qualifications you need to pass muster,” Chautin writes.
Meanwhile, over on the always interesting New York Times’s You’re The Boss blog, Scott A Shane provides some charts on the decline of small-businesses in the US. One can only hope that this bailout by the federal government can reverse this trend.
Finally, the Wall-Street Journal offers small-business people tips on other routes to secure funding, beside the big loan providers. For franchisees, Advice on pursuing funding via microloans and peer-to-peer networks seems especially worth considering.