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Franchising grew significantly in the past decade and the Small Business Administration has lent small businesses more than $30 billion this year.  Of this amount, $25 billion went to SBA’s popular 7(a) and 504 programs.  Now that Congress is working on the appropriations, it should prioritize funding to help small businesses create jobs. The following appeared in Politico.com.

During the economic downturn, the Small Business Administration has been a lifeline for the small-business community. Now, as Congress moves forward with the appropriations process, members should consider three top priorities to help small businesses create jobs.

First, the SBA’s funding should be increased for fiscal year 2012 to ensure it has the resources to provide quality service to small businesses and small-business lenders.

Second, Congress should provide funds to extend loan guarantees for SBA’s 7(a) program, which allows private-sector lenders to make loans guaranteed by the SBA and has been a program vital to small-business lending during this economic downturn.

Third, Congress should include funding to extend fee waivers for the 7(a) and 504 programs, which range from 2 percent to 3.75 percent on the portion of the loan that is guaranteed, since they were key to SBA having its strongest year in FY 2011.

Under Administrator Karen Mills, SBA lent small businesses more than $30 billion in 2011, the most ever. This is because of the Small Business Jobs Act and increased loan guarantee levels and fee waivers for SBA’s popular 7(a) and 504 programs, which accounted for $25 billion of the SBA’s record lending.

The Federal Reserve is scheduled to meet this week for discussions with researchers, policymakers and practitioners about small-business capital access. The Fed plays a crucial role ensuring small businesses and entrepreneurs have access to capital necessary to create jobs.

Franchising grew 40 percent over the past decade, compared with 26 percent for other businesses.

But the pace has slowed significantly in recent years because of challenges accessing credit. Since 2008, the financial services industry has gone to great lengths to help small businesses secure credit, given the obstacles they face with reduced cash flow, home values and retirement accounts. These challenges have caused financial companies to revamp their small-business lending programs and ramp up their product offerings to meet the demands of today’s marketplace.

More than 25 large banks and a majority of community banks have increased small-business lending in 2011: They extended more than $671 billion in loans as of the second quarter. In September, the financial services industry committed an additional $20 billion in small-business loans.

These renewed small-business lending efforts have already had a significant effect on the recovery.

Changes are needed to ensure the continued success of SBA’s programs. As Congress reviews proposals to increase lending to small businesses, lawmakers should enhance and facilitate these respected and successful programs operated by the SBA.

Clearly, the time is now for solutions to help boost lending to small businesses — especially given the direct correlation between small-business lending and job creation. U.S. franchises and financial services companies are working together to increase job creation.

Small businesses have historically led job creation during economic recoveries and are likely to play a leading role in helping our country through the still challenging economic climate. But we need Washington’s help to strengthen lending programs, remove obstacles and help small businesses renew the economy — one job at a time.

Photo by hn.