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IFA/BoeFly Franchise Lending Index Shows Rise in Credit Access from May to June and Year Over Year

Lending to franchises increased by close to six percent from May to June of this year and by over 4.5 percent from June 2011 to June 2012, which BoeFly partly credits to rising premiums on SBA loans and active franchisor support

FOR IMMEDIATE RELEASE

 
PRLog (Press Release) - Jul. 13, 2012 - New York, NY – Lending to franchise businesses increased by 5.73 percent from May to June, according to the Franchise Lending Index from the International Franchise Association (IFA) and BoeFly, the premier online marketplace connecting small business borrowers with lenders and a strategic ally of IFA to expand credit access within the franchise community. This upswing follows a 0.5-percent decrease in lending from April to May of this year. Year-over-year performance also increased this year, with a 4.58-percent jump from June 2011 to June 2012.

The IFA/BoeFly Franchise Lending Index (http://www.boefly.com/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 efficiently source franchise borrowers. The SBA data used in the analysis dates back to 2002 and covers more than $20 billion in franchise loans.

"It is encouraging to see sustained growth in franchise lending as franchisee access to financing has reached heights not seen since the government stimulus initiated in response to the financial crisis,” said Mike Rozman, co-president of BoeFly. “From my perspective, much of the gains are a result of franchisors taking a more active role in supporting franchisees with financing, whether by leveraging IFA best practices, adding full-time employees dedicated to financial support or using web-based marketplaces like BoeFly. In any case, the positive results demonstrate franchisors’ active support of current and future franchisees."

To further understand the rise in franchisee access to financing, BoeFly analyzed the premiums investors paid to lenders to purchase SBA loan on BoeFly. When premiums on SBA loans rise, lenders are incentivized to originate new loans. During the second quarter of 2012, investors paid an average 14.6-percent premium, in contrast to only an 11.5-percent premium in Q2 2011.

“To put this increase into perspective, on a $1,000,000 SBA guarantee, an investor paid an extra $30,000 for a loan purchased in Q2 2012 over Q2 2011, which is a likely driver for loan growth,” Rozman said.

"It’s good to see this modest improvement, but we are not out of the woods yet on credit access for our members,” said Steve Caldeira, president and CEO of the IFA. “The franchise industry's ability to create jobs depends on access to capital, and therefore, the BoeFly/IFA Franchise Lending Index continues to help us keep our focus on this critically important issue."

About the IFA/BoeFly Franchise Lending Index

The IFA/BoeFly Franchise Lending Index (http://www.boefly.com/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 efficiently source franchise borrowers. The SBA data used in the analysis dates back to 2002 and covers more than $20 billion in franchise loans. The Index, a time series index set to a value of 100 in January 2002, creates an insightful, standard measure of franchise credit access. The Index is an initiative of the strategic alliance between the IFA and BoeFly announced in 2012.

About BoeFly

BoeFly makes it easier to obtain small business loans by reducing the time, cost, complexity, inefficiency and frustration associated with small business lending.  Its online proprietary matching technology connects small business borrowers with multiple lenders from among its over 2,200 participating banks, based on the lending profiles provided by the banks and the information provided in the borrower’s loan request.

Borrowers build a complete decision-ready loan request online using BoeFly’s exclusive “SmartForm” technology. When completed, this provides the information that over 2,200 lenders nationwide indicated to BoeFly they want to see before moving forward with a loan request. The SmartForm is easy to use and guides borrowers through the process. Once BoeFly’s matching technology identifies compatible lenders, borrowers then have complete control over which lenders can instantly access their loan request. Using BoeFly, borrowers can connect with multiple lenders quickly and easily, providing a greater probability of obtaining a loan, as well as more favorable loan terms resulting from the creation of a competitive marketplace.   Lenders benefit by being presented with only those loan requests that fit their lending profile, dramatically lowering their cost and time of origination. BoeFly is not a broker. Borrowers pay a small one-time fee and lenders pay an ongoing subscription fee; BoeFly never charges transaction or referral fees.

BoeFly, now in a Strategic Alliance with the International Franchise Association to expand credit access to franchisees, offers a Franchise Solution that brings these benefits to the large and growing small business franchisee community and is the choice of over 100 brands, including Dunkin’ Donuts, Carl’s Jr., Express Personnel and Kiddie Academy, among many others.

BoeFly’s Affiliate Solution is the financing exchange chosen by the Association of Small Business Development Centers, representing approximately 1,000 centers nationwide, which are funded in part by the U.S. Small Business Administration, to serve small businesses, and Franchise Gator, the leading site for information on franchise opportunities.

BoeFly was founded by small business owners and small business lending experts with extensive small business lending experience. The company is privately-held and is based in New York City. http://www.boefly.com.

About the International Franchise Association

The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

Media inquiries:
Bill Fallon | keating/co. | 212.925.6900 | bfallon@keatingco.com

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Source:BoeFly, LLC
Country:United States
Industry:Banking, Finance
Tags:BoeFly, international franchise association, Franchise Lending Index, sba, banking
Shortcut:prlog.org/11923144
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