Watch Obama Video yesterday at Metropolitan Archives in DC

Posted on Oct 23, 2009 in Records Management News

Video Link

http://www.bluemaumau.org/8065/obama_asks_sba_loan_expansion_franchisees_agree

Obama Asks for SBA Loan Expan­sion, Fran­chisees Agree Posted Thu, 2009/10/22 — 07:56 by Don Sniegowski Sec­re­tary of the Trea­sury Tim Gei­th­ner, Pres­i­dent Barack Obama and SBA Admin­is­tra­tor Karen Mills Oct 21, Sec. of Trea­sury Tim Gei­th­ner and SBA Admin­is­tra­tor Karen Mills lis­ten to Pres. Obama dis­cuss small busi­ness relief. Photo/YouTube

WASHINGTON — Pres­i­dent Barack Obama announced plans Wednes­day after­noon to shift some of Wall Street’s bailout funds over to com­mu­nity banks in order to spur lend­ing to small busi­nesses, which has slowed to a trickle. With SBA admin­is­tra­tor Karen Mills and Sec­re­tary of the Trea­sury Tim Gei­th­ner flank­ing him, Pres­i­dent Obama made sev­eral announce­ments to boost small business.

The President’s speech took place at Met­ro­pol­i­tan Archives, a family-operated records stor­age com­pany in Lan­dover, Maryland.

Pres­i­dent Barack Obama, who as a high school stu­dent served ice cream in a Hon­olulu Baskin Rob­bins fran­chise, described how small busi­ness own­ers and their tire­less work ethic form the back­bone of the Amer­i­can econ­omy. “Hewlett-Packard began in a garage. Google began as a research project. McDonald’s started with just one restau­rant,” he said.

The Pres­i­dent went on to say that although small busi­ness cre­ates 65 per­cent of all new jobs, small busi­nesses have been some of the hard­est hit by the reces­sion. “From the mid­dle of 2007 through the end of 2008, small busi­nesses lost 2.4 mil­lion jobs,” said the Pres­i­dent. “And because banks shrunk from lend­ing in the midst of the finan­cial cri­sis, it’s been dif­fi­cult for entre­pre­neurs to take out the loans they need to start a busi­ness. For those who do own a small busi­ness, it’s been dif­fi­cult to finance inven­to­ries and make pay­roll, or expand if things are going well.”

The White House is request­ing that Con­gress increase Small Busi­ness Admin­is­tra­tion 7(a) and 504 loans, used by small busi­ness own­ers to typ­i­cally buy equip­ment, land and build­ings, from the cur­rent cap of $2 mil­lion to $5 million.

“These larger loans will help more small busi­ness own­ers and fran­chisees grow,” Obama declared.

The Admin­is­tra­tion plans to bring together reg­u­la­tors, con­gres­sional lead­ers, lenders and small busi­nesses to dis­cuss what steps are nec­es­sary to get the small busi­ness credit pump flow­ing again.

“I’m con­fi­dent that the steps we announced today will do that for small busi­ness own­ers across the coun­try, men and women we hear from every day,” said the president.

Fran­chisees Want Help

Inter­na­tional Fran­chise Asso­ci­a­tion CEO Matthew Shay thinks the loan cap increase is a good idea. Dur­ing the year, the IFA has lob­bied Con­gress, the Trea­sury, the Small Busi­ness Admin­is­tra­tion and the Fed­eral Reserve to help change the lack of cap­i­tal access for fran­chise chains. Those efforts seem to be bear­ing fruit.

“Admin­is­tra­tion offi­cials noted that the desire to increase the size of the SBA loans was dri­ven in part by meet­ings with large fran­chise cor­po­ra­tions like Dunkin’ Donuts,” reports BusinessWeek.

“There are over 400 dif­fer­ent fran­chise brands in the United States that have an aver­age ini­tial invest­ment require­ment of $750,000 to $2 mil­lion per unit,” observes Shay. “These fran­chised small busi­nesses reach the SBA’s cur­rent loan limit of $2 mil­lion by the time they want to build the sec­ond or third store. By increas­ing the loan limit to $5 mil­lion, at an annual growth rate of 5 per­cent, these busi­nesses could cre­ate 450,000 to 650,000 new direct and indi­rect jobs within the next 12 to 18 months.” Obama announces new lend­ing initiatives

The Inter­na­tional Fran­chise Asso­ci­a­tion, rep­re­sent­ing the needs of some 1,100 fran­chisors, arranged for fran­chisor mem­bers to invite their fran­chisees to attend the meet­ing. Fran­chisee Vinay Patel of JAI hotels, Meineke dealer Chris Schmitz, and other fran­chisees were in atten­dance, many are also mem­bers of inde­pen­dent fran­chisee associations.

Fran­chisee Chris Schmitz, also pres­i­dent of the Meineke Deal­ers Asso­ci­a­tion, an inde­pen­dent fran­chisee asso­ci­a­tion, said, “Ken Walker [CEO of fran­chisor Meineke] asked me to rep­re­sent fran­chisees on behalf of the IFA.” Ken Walker, CEO of Meineke Car Care hold­ing com­pany Dri­ven Brands, Inc., is sched­uled to be the next chair­man of the Inter­na­tional Fran­chise Association.

Schmitz says that Pres­i­dent Obama’s mes­sage was good news for all fran­chisees. “Includ­ing those look­ing for cap­i­tal to make ends meet, expand their cur­rent oper­a­tions, acquire addi­tional units, or even those look­ing to sell or divest,” he elab­o­rates. He adds, “Increas­ing the avail­abil­ity and flow of credit can be an inte­gral part of revi­tal­iz­ing a down econ­omy and stem­ming the tide of ris­ing unem­ploy­ment, pro­vided the Con­gress fol­lows through with the initiative.”

Dunkin’ Donuts fran­chisee Andy Cabral was also in atten­dance, and was pointed out in the President’s speech.

“Andy started his busi­ness on an SBA loan and now runs 10 stores across Mary­land and Vir­ginia that employ 130 peo­ple,” Pres­i­dent Obama states. “And Andy has already seen one loan fall through the cracks because of the finan­cial cri­sis and he’s hit the cap on his SBA loans. But the mea­sure we’re announc­ing today will help Andy and other fran­chisees pur­sue their plans to expand and cre­ate more jobs.”

Pres­i­dent Obama con­cluded the meet­ing, say­ing, “I know that times are tough and I can only imag­ine what many of you are going through, in terms of keep­ing things going in the midst of a very tough eco­nomic cli­mate, but I guar­an­tee you this: This admin­is­tra­tion is going to stand behind small busi­nesses. You are our high­est pri­or­ity because we are con­fi­dent that when you are suc­ceed­ing, Amer­ica succeeds.”