Despite the tight credit market, some quick-service restaurant franchisees are obtaining the commercial lending they need to add more stores. Last month, GE Capital, Franchise Finance, announced it had approved a $4 million credit facility to enable franchise group RDSL to acquire and develop seven Jack in the Box franchise restaurants in greater Dallas.
Now, GE Capital, Franchise Finance, has closed a $9.35 million deal with Legacy Restaurants Group LLC, owners of multiple Wendy's franchise units in Kansas and Missouri. The loan will help Legacy acquire five new units from another franchisee located in Joplin, Mo., and refinance existing debt.
Legacy now owns and operates 17 Wendy's franchise units in the Topeka, Kan., and Kansas City, Mo., areas. While GE Capital, Franchise Finance, and Wendy's have a long-standing relationship, this is the first GE Capital deal with Legacy.
IFA lobbies for more SBA credit
Meanwhile, the International Franchise Association continues its work for important improvements to small business programs to increase access to credit for franchise businesses. The IFA has announced it is lending support to H.R. 3854 introduced by Rep. Kurt Schrader (R-OR) that would make credit more available.
"This legislation will go a long way toward updating and improving Small Business Administration loan programs so that more prospective franchise business owners can obtain the necessary capital to help lead our economy on a road to recovery," IFA vice president of government relations David French said in a letter to House Small Business Committee Chair Nydia Velázquez and Ranking Member Sam Graves.
French said that H.R. 3854 streamlines the bureaucratic process of obtaining an SBA backed loan, provides lenders greater certainty of the guarantee, makes the Secondary Market Lending Authority permanent and prohibits alternative approval standards for loans used to finance goodwill. The legislation also will increase the size of business stabilization loans to $50,000, which will assist many existing small firms who are struggling to make payroll, pay off debt or finance inventory.
The introduction of the bill comes less than a week after President Barack Obama and SBA administrator Karen Mills expressed support for changes in small business programs, including an increase in the SBA loan limit from $2 million to $5 million. While H.R. 3854 proposed to increase the maximum loan to $3 million, IFA urged the committee to consider further increasing the limits as proposed by the Obama Administration.
