As this year’s presidential race heats up, the intersection of politics and business is once again emerging as a major focus of the national debate.
For the restaurant industry, politics and business intersect at several critical points — tax regulation, health care reform, menu labeling and immigration policies, to name just some.
But financing and lending legislation — or regulation that can spur or stop access to capital — hits home with nearly every business.
“How Washington regulates lending ultimately goes to the lifeline of many, if not most, small businesses, especially franchises,” said Azim Saju, vice president of HDG Hotels, a management company and operator of seven hotels under Quality Inn, Hampton Inn and other brands.
Franchisees typically are small-business operators, he noted, and need supporting capital to open locations, run operations and expand businesses. That support often comes from national lenders, local banks and federal programs like the U.S. Small Business Administration, or SBA.
“Policy makers can move the needle,” said Mike Rozman, co-president of BoeFly, an online marketplace that matches borrowers and lenders, particularly in the franchise market.
BoeFly recently partnered with the International Franchise Association to create the IFA/BoeFly Franchise Lending Index, which tracks franchise lending trends. The index collects data from BoeFly’s marketplace, including the number and sizes of transactions posted and closed, as well as data from the SBA on their lending levels. From March 2010 through March 2012, the latest available data, the index has hovered below its 100-point normalized value — except when Washington got involved through a stimulus package.
Spikes are seen in August, October and December of 2010, the highest of which was the 20.5-percent surge in December, which brought the index to 114.2. Those increases were related directly to the enactment in 2009 of the American Recovery and Reinvestment Act, according to Rozman.
Read the full article at Nation’s Restaurant News