IFA/BoeFly Franchise Lending Index Shows Slight Decrease in Credit Access from April to May

June 15, 2012 - PRLog -- New York, NY – Lending to franchise businesses saw a drop of about 0.5 percent from April to May, according to the monthly 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. Despite the drop from month to month, however, year-over-year performance for lending to franchises has been more positive, with a gain of 6.01 percent from May 2011 to May 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.

“The slight drop in franchise lending over the past couple months speaks to the challenges of the current credit market, but it is positive to see that lending to franchise businesses has shown stable year-over-year growth,” said Mike Rozman, co-president of BoeFly. “Having tools such as this index puts both franchisors and franchisees in a better position to understand and address the challenges associated with credit access so they can identify trends and opportunities for growth over the long term.”

In connection with the Index, BoeFly explored the distribution of loans to new franchise units versus existing locations.  For each of the previous two years, the percentage of loans extended to new franchise units remained steady at 47 percent. However, a closer analysis reveals that several franchise sectors and sub-sectors experienced an uptick in new-unit loan volume over the last twelve months in comparison to the preceding twelve months. For example, within the restaurant sector, which was flat period over period, the sub-sector of chicken/wing concepts jumped from 45 percent to 55 percent in new-unit lending. Another area of growth of new unit financing was seen within the health and salon sector, which jumped from 57 percent to 64 percent.

“This analysis reveals that despite the small drop in lending volume, we see a greater portion of lending making its way to new locations, which is a positive trend for job growth,” said Rozman.

“While credit access for the franchise industry is improving slightly overall, the IFA remains extremely focused on increasing capital flow to both franchisors and franchisees,” said IFA President and CEO Steve Caldeira. “What gets measured gets fixed, and the IFA/BoeFly Franchise Lending Index is an excellent tool to help the industry track its progress, especially as we continue our education and outreach efforts to promote turn-key tools and solutions that will create better bank-ready borrowers."

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 (http://www.boefly.com) 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