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SBA sets franchise database
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March 11, 1998: 4:08 p.m. ET
New retrieval system will streamline process to determine loan eligibility
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NEW YORK (CNNfn) - The Small Business Administration has selected a Washington, D.C., company to develop a new computerized registry of franchise systems and agreements to streamline loan eligibility decisions.
Frandata Corp. began work on the database last week and expects to complete it in about 90 days. When finished, the information will be placed on a special Web site.
Franchise agreements are contracts between large companies that sell franchises and the small-business owners who buy them. When reviewing a loan application from a franchisee, the SBA must determine whether the franchise agreement meets SBA qualifications and protects the agency's interests as a loan guarantor.
Under the new system, Frandata will create and maintain a central registry of franchises that can be consulted by SBA loan officers and attorneys who will determine if the franchisor meets SBA requirements.
The registry will be indexed by company and industry. People interested in applying for a franchise can access the list to see which companies are eligible for SBA-backed loans.
"We are excited about this step in the franchise registry project. The registry is a breakthrough effort to cut red tape, and we believe it will greatly up the approval process on franchise loans," said Aida Alvarez, administrator of the Small Business Administration.
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