2010 Franchise SBA Loan Default and Charge-Off Data
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The data includes:
SBA Loans disbursed in 2009
Loan Dollar Amount disbursed in 2009
Number of loan failures in 2009
Loss Rate/Charge-Off Rate in 2009
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This year's Coleman Franchise Report reveals what we already know -- the Great Recession has been brutal for Main Street.

Nearly five percent of all franchise systems backed by an SBA loan failed in 2009. Since 2001, a whopping 17% have closed their doors.

And the other side of the equation is no better. Despite the federal government's stimulus efforts, franchise SBA ending was down 30% in 2009.

The most alarming statistic is SBA lenders made 2,464 franchise SBA loans last year, while having 1,467 loans fail.

How the Report is Prepared

We obtain the raw summary information from SBA. Next, we compare it with the previous year's report to calculate one year statistics.

We know the numbers don't tell the whole picture. SBA redacts the report to release data for franchises with at least ten loan approvals. Also, the lender must input the franchise code in its loan application -- obviously some of these loans fall through the cracks when the lender fails to provide that information.

However, despite these limitations, the report is an excellent tool for small business loan underwriters to use to evaluate the financial health of the franchisor.

The Coleman Report: 2010 Franchise SBA Loan Default and Charge-Off Data is the industry standard for evaluating franchise SBA loan performance. Published since 2003, the report is a critical tool for small business lenders in franchisee underwriting. This year's report analyzing the loan performance of nearly 500 franchisors.

The data includes:
SBA Loans disbursed in 2009
Loan Dollar Amount disbursed in 2009
Number of loan failures in 2009
Loss Rate, Charge-Off Rate in 2009

Additionally the franchisors 2001-2009 SBA loan experience is included. This must read report is a critical tool to determine if the franchisor will be able to obtain financing in today's constricted credit market. The report also includes loan statistics for NAICS Standards for over 2,000 industries. Finally the report includes an overview of the franchise small business credit market in 2010. This report has become the industry bible for small business lenders WSJ, CNN, Kiplinger, NPR, Fox Business News, and many other financial publications. This 50 page report is edited by Bob Coleman, Founder, Coleman Publishing. The Coleman Report has become the industry standard for evaluating franchisor loan performance.

Coleman's SBA 7(a) and 504 Loan Franchise Failure and Charge-Off Data
500 Franchises Measured through FY 2009.

Data consists of SBA 7(a) and 504 loans approved from October 1, 2000 through September 30, 2009.
*Franchises with less than 10 approved and disbursed SBA loans are omitted.
*Disbursed # --- Total number of loans disbursed for approvals from October 1, 2000 through September 30, 2009.
*Disbursed $ --- Actual dollars disbursed, not loan approvals.
*Failure # --- Actual number of failures since October, 2000.
*Charge-Off $ --- Actual SBA loss since October, 2000.
*Failure % --- The number of loans where lender's requested guaranty payment divided by the number of loans disbursed.
*Charge-Off % --- The amount of dollars charged-off divided by the amount of dollars disbursed.
*Dollar Figures omit (000s).

SBA 7(a) and 504 Loan NAICS Loan Portfolio Data
Failure and Charge-Off Percentages by Industry through FY 2009
*SBA 7(a) and 504 loans approved from October 1, 2000 through September 30, 2009.
*Loans are classified by industry according to the North American Industry Classification System.
*Industries with less than ten disbursed loans are omitted by SBA.
*Disbursed # --- Total number of loans disbursed for approvals from October 1, 2000 through September 30, 2009. The report consists of 566,000 loans.
*Disbursed $ --- SBA's guaranty exposure of actual dollars disbursed (000s omitted), not loan approvals --- $116 billion total for the report.
*Failure % --- The number of loans in liquidation as classified by the lender added to charged-off loans. Then divide by the number of loans disbursed.
*Charge-off % --- The actual cash paid by SBA to honor its guaranty. This number represents SBA's loss, not the lender's loss. Divide by the amount of dollars disbursed.

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