The Small Business Administration (SBA) has been rather scandal-ridden since it’s creation in June 1953. It’s goal was to use taxpayer dollars to fund small businesses that otherwise would not have other means of supporting themselves. Eisenhower’s budget group called it "uncontrollable" and even then understood that this agency was a gamble. In 2011, The CATO Institute found that in 2008 alone 1 in every 4 loans issued by the SBA were improperly processed. This was confirmed by an audit by the Government Accountability Office. In 2009, the SBA was giving over 25 percent of their money to the top ten leading institutions in America, not small businesses. In 2010, 61 of the top 100 small businesses were actually large businesses.
Through the years of 2007 and 2013, 67.23 billion dollars in loans were given to 34,677 accounts, minimum balance of 1 million dollars each. Now who were these lucky businesses receiving all these taxpayer dollars? You’d never guess. Try members-only country clubs, wineries, Lamborghini dealers in California, private investment groups, high-profile plastic surgeons, and resorts for both humans and their furry friends. Some of the more shocking are listed below:
92 million dollars was given to upscale spas in Napa Valley and Lake Tahoe.
48 exclusive clubs received a grand total of $110 million since 2007.
37 million dollars in loans were passed along to upper class shops and boutiques throughout the country.
$1.5 million was awarded to Peqomock Yacht Club,
Wagmore Pet Resort in Boene Texas was loaned 3.9 million dollars.
These loans are definitely on the large side. Sometimes they aren’t repaid. What happens to our taxpayer dollars then? They fall through. The business receives a charge-off on their credit. But they don’t necessarily have to pay it then. Since 2010, these charge-offs have totaled around 11 billion dollars, and since 2005 it comes to 27 billion. The unpaid principal balance is just as bad. These loans aren’t getting paid off, the SBA keeps lending out more money and us, the American people, the taxpayers are feeling the crushing pain of our 18 trillion dollar debt.
The SBA is making money, but not for those who put into it. Taxpayers have received little to nothing in return after paying out around 4 billion dollars since 2000. Where is the revenue going then? Big businesses and big government. As I worked with Turning Point USA on the fall campaign to inform students of the terror we refer to as big government, I learned a lot about big businesses too. They are one and the same. We as a nation need to wake up and realize that we are flushing millions of dollars down the drain, literally giving money away to companies passing themselves along as small businesses in order to get a free check. That’s not what I want from my government.
These large corporations and businesses are so focused on making money, that they will do anything to do so. One company even strategized to take advantage of a Mentorship program in order to keep cash flow open from the SBA. Paralee White, a political insider took similar action. She used a program specifically tailored to Alaskan Natives to create a company that not only benefited herself, but her whole family...and she’s not even an Alaskan Native. If that doesn’t make your blood boil, I’m not sure what will.
Senator Tom Coburn (R-Okla.) said that less than 1 percent of entrepreneurial startups gain loans or financial assistance from from the Small Business Administration. Put simply, that means that a vast majority of businesses are created without the assistance of this failure of an agency, proving that it isn’t serving it’s purpose to begin with. The SBA is toxic to small business, allowing far too much corruption to take place and giving to those who need not. The founder of Open The Books said it best when he said "In America, we should never demonize success, but we do not need to subsidize it either."
Between giving corporate welfare and actually harming small businesses, the SBA’s mission to "aid, counsel, assist and protect" is yet another failure of big government.