The mission of the U.S. Small Business Administration (SBA) is to provide lending to “Mom and Pop” businesses on Main Street.
The recipients are supposed to be entrepreneurs with great ideas who just can’t find financing in the private marketplace. The public image is one of apple pie, baseball and the American Dream.
But the reality is that the SBA is economically costly for taxpayers, and it creates a painful human cost for the workers it dislocates.
In 2014, we documented at Forbes, SBA lending to the wealthy lifestyle: Lamborghini auto dealerships, Rolex jewelers, world-class golf courses, private country clubs and even $142 million lent to businesses in ZIP code 90210, Beverly Hills, CA.
Now, we’ve published our OpenTheBooks Snapshot Oversight Report – Truth in Lending: The U.S. Small Business Administration’s $24.2 Billion Bad Loan Portfolio. Analyzing the SBA portfolio since 2000, we discovered 160,000 failed loans were charged-off to the tune of $17.5 billion. In other words, taxpayers absorbed those costs. Meanwhile, 1.4 million workers were dislocated when they lost their jobs within these failed companies.