Lending to franchise businesses decreased by 3.64 percent from June to July following a 5.73 percent increase in June, according to the Franchise Lending Index from the International Franchise Association (IFA) and BoeFly, an online marketplace connecting small business borrowers with lenders.
Year-over-year performance continued to grow consecutively this year, with a 1.43-percent increase from July 2011 to July 2012.
Despite the modest growth overall for franchisees, the quick-service segment experienced a 28 percent growth in lending year-over-year.
"Despite the drop in credit access this month, it is encouraging to see a seventh consecutive month of year-over-year growth," said Mike Rozman, Co-president of BoeFly. "As credit access continues the slow climb out of the lows of the financial crisis, our data show that lenders are first turning to industries they understand well, such as restaurants."
The IFA/BoeFly Franchise Lending Index is created from a monthly analysis and integration of both proprietary data from BoeFly's marketplace and franchise loan data from the Small Business Administration (SBA). BoeFly's data is collected in real-time based on the activity of more than 2,200 community, regional and national lenders who use BoeFly to most source franchise borrowers. The SBA data used in the analysis dates back to 2002 and covers more than $20 billion in franchise loans.
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