istockAnalyst.com:
Lending to would-be franchisees is difficult now, leading some franchisers to arrange credit for their franchisees, as reported in the New York Times. This is going to lead some banks to re-think their stance toward franchisees. Banks have become, in many cases, specialty lenders focused on real estate.
The real estate concentration poses three problems for banks:
1. the concentration is inherently risk
2. regulators hate high real estate concentrations
3. banks have to put something on the asset side of the balance sheet, and there are few decent real estate lending opportunities
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