Warning! If CIT Goes Down, Franchising Will Suffer

{ Bill Horton, a prospective franchise owner, freaks out while watching CNBC describe CIT''s $ troubles}

CIT does a lot of franchise loans. Let me repeat;

CIT does a lot of franchise loans. And they may be in trouble.

Many have speculated that a collapse of this overextended lender could affect borrowing for businesses across the nation. At special risk, a Washington trade group said, are franchised businesses, such as restaurants and fitness clubs, for which CIT has been among the largest originators of loans.

So now what? What if CIT hits the fail button?

The International Franchise Association is stepping in to put some heat on lawmakers. According to a story over at Cleveland.com;

"The International Franchise Association this week urged President Barack Obama and U.S. Treasury Secretary Timothy Geithner to keep CIT solvent with bailout money, whatever the cost. As other lenders cut back on small business lending over the past 18 months, owners of franchised businesses have fewer options for operating capital, the group said. Business launches suffer, too, in times of tight credit."

Business launches suffer. Oh yes they do. It's been tough enough to get a small business loan these days to begin with, and if CIT fails, the other lenders will continue their start-up paranoia, and stagnancy will invade the franchise industry. {Again}

The above worst case scenario may not happen, but it may be time for all of us in the franchise industry to put our collective heads together, and help CIT, somehow.

C'mon. You've never heard of a bank stimulus package?

What about this, President Obama?

Update! {Not a good one}

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Comments

[The Franchise King]

Sam,
Thank you for your comment!

YES!

JL

[sam]

enough with bail outs of selected groups, that only help a few - do it for all of small business or none - take the underwriting restraints off the sba, encourage banks to lend to small biz and cut taxes - enough already - we are capitalists not socialists and gov't should have no role in the running of our businesses -