The U.S. Small Business Administration approved a record-setting $19.6 billion in 7(a) loans over the course of the 2011 fiscal year, Entrepreneur magazine reports. While the franchise loan marketplace has been difficult for franchisees seeking funding over the previous few years, the new high set by the SBA suggests prospects may be turning around.
More than $1.5 billion of those 7(a) loans were offered to franchise businesses, nearly double from the $826 million granted during the 2010 fiscal year. With the new year on the horizon, Steve Smits – associate administrator for the Office of Capital Access at the SBA – expects this trend to continue for the foreseeable future.
"I talk to banks every single day. They're talking about their plans to grow and to expand. They see opportunities as we look forward into 2012, and that only means there are going to be increased opportunities for small businesses to find the capital they need," Smits told the news source.
Franchisees now have more options, so it's crucial they carefully weigh their options – they don't always have to go with the first institution that offers them a loan.