According to the study, which was prepared by FRANdata for the International Franchise Association, the demand for franchise funding is up 10.6 percent. The International Franchise Association has made access to capital a priority issue. FRANdata, shows that in 2013, new and existing franchise units will create or maintain over 8 million jobs and generate $106 billion of annual economic output to the American economy.
According to FRANdata, the main factors that shaped the franchise business environment in 2012, will continue to take effect in 2013, including:
- higher demand for franchise transactions, with demand for new franchise unit transactions beginning to surpass the demand for existing units
- unconstrained franchisor capacity for growth
- increased ability of banks to lend to both existing and prospective franchisees
- increased willingness by both the Small Business Administration (SBA) and conventional lenders to finance franchisees
- moderate pace of economic recovery through 2013
|A complete copy of FRANdata’s Small Business Lending Matrix and Analysis is available here.
Banks will increase lending to franchise businesses by 10 percent this year to $24 billion, but that falls $2.6 billion short of what this growing sector of the economy needs.