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IFA Says Lending Shortfall Is Costing America 69,000 Jobs

What exactly is the country losing when the small business funding fails to get into the hand of America's entrepreneurs? People stay out of work, to the tune of 69,000 jobs according to the latest figures from IFA.


A new report form the IFA states that while franchising is making clear strides, there is still a notable lack of lending that is stalling the regrowth of the US economy. This lack of lending means that 69,000 jobs are not being created and $12.9 billion is not going into the domestic economy. This report, which can be read here, is a fascinating document on the state of franchising right now.


The report points its fingers at a noticeable, incredible gap: franchises will require $11.2 billion in lending this year, but banks will only make $9.5 billion available. That creates a shortfall of 18.6%. If banks and other third-party lending institutions cannot fill that void, America as a whole suffers.


"In the competition for limited credit, franchise businesses must prove credit worthiness by showing strong unit economics and system performance," saidIFA President Steven A/ Caldeira. "With a still slow, uneven and sluggish economic recovery, coupled with a stricter regulatory environment as a result of Dodd-Frank, the pressure to maintain and create jobs has never been greater for franchisees, franchisors and the overall small business community."


There are good signs for franchising. According to FRANData: 425,000 jobs and generating $56.7 billion of economic output will be created this year via franchising. That's great, but it could be so much better with added lending.

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