The continuing credit crisis will lead to a $3.4 billion shortfall in lending to franchise businesses in 2010 unless the government intervenes, according to new data released Wednesday by the International Franchise Association.
The IFA said that if no steps are taken to increase the flow of capital into the franchising sector next year’s projected shortfall could prevent the creation of 134,000 new jobs and $13.9 billion in economic output.
“Our data show that while there will be sufficient capital for franchise development in 2010, banks’ continued risk aversion is limiting their willingness to lend,†said Matthew Shay, president and chief executive of the Washington, D.C.-based IFA. “Immediately passing enhancements to government lending programs can shore up the $3.4 billion shortfall in lending. New franchise businesses can create much-needed jobs, which will speed the U.S. economic recovery.â€
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