SAN ANTONIO As the U.S. Senate this week debates a series of job-stimulus bills, Karen Mills, head of the federal Small Business Administration, told the franchise community gathered here that the Obama administration’s jobs plan “puts the right resources and incentives into the right hands.”
Mills spoke Monday to the International Franchise Association’s 50th annual convention as senators began debating bills to stimulate job creation. Last week, the government reported that unemployment in January dipped to 9.7 percent, after rising above 10 percent in December. The U.S. House of Representative in December passed its own $155 billion jobs package, and the Senate is coming up with its own version.
“Access to credit for small business is still a problem,” Mills told the IFA’s gathering, which drew about 2,250 attendees.
Click here to view a slide show from the IFA conference.
Among other moves, the administration has proposed taking $30 billion from the Troubled Asset Relief Program to create a lending fund for small businesses. The SBA has also reduced fees in key lending programs.
Jack Earle, incoming IFA chairman and managing partner for Earle Enterprises LP of Marlton, N.J., which owns and operates seven McDonald’s units in the Philadelphia area, said the “softening from the SBA standpoint” was welcome news for franchise restaurateurs.
Matthew R. Shay, president and chief executive of the IFA, said the group is also working with the SBA to raise loan-guarantee limits from $2 million to $5 million to benefit multi-unit restaurant operators and help them achieve “economies of scale and market penetration.”
About 40 percent of the IFA's membership is in the hospitality industry, including restaurants and lodging companies. "It's a very significant segment of the franchise space," Shay said.
Mills, who in her prior investment career owned several restaurant concepts, said President Barack Obama has made jobs creation a top priority.
“I have the honor of working with a president who ‘gets it’ about small businesses and franchises,” she said.
Last week, the administration proposed stimulating small-business credit by expanding an existing SBA program to support refinancing of owner-occupied commercial real estate loans. That plan, the White House estimated, would help refinance up to $18.7 billion in commercial real estate a year that might otherwise be foreclosed and liquidated.
The administration also proposed a temporary increase in the cap from $350,000 to $1 million on SBA Express loans, which provide working capital for small businesses, and floated a plan for a $33 billion tax credit for small businesses that hire new workers or increase payrolls in 2010.
These proposals require congressional approval, and Shay said the IFA would be working to influence their passage.
In a keynote speech Sunday, former President George W. Bush told a standing-room only luncheon that he was optimistic the United States would make it through this recession.
“I believe this economy will come back,” he said in one of first speeches since leaving the White House last year, "because the entrepreneurial spirit is very strong in America.”
Contact Ron Ruggless at [email protected].
