Nickname: DaveMcClure

Review: I think the above arguments may overlook the issue that perhaps the SBA is not the best entity to fill the gap for small-business credit lending. While its goals may be admirable and the audience may be [currently] ill-served by available capital, I wonder if a public institution (or even public-private guarantor partnerships with banks) is the best way to go. New sources of capital for small business might be best provided by the private sector. Although I agree existing financial lending models for small business are likely a bit too conservative/short-sighted. New financial capital service providers like Prosper.com and others may point towards a new model for unsecured capital lending and domestic microfinance/microlending market opportunities. Anyway, perhaps there is a role for public institutions and/or the SBA to play. However, I don't think we should immediately dismiss the notion that perhaps the SBA isn't the only answer to expanding the market for small-business capital.

Date reviewed: May 17, 2006 11:17 PM

Nickname: ofcoursities

Review: Derugy (Dagny Taggart) is saying not only that small businesses don't create as many jobs as prevailing myth suggests, but also that small businesses live and die within five years -- negating the labor gains and resulting in skewed job- creation statistics. She is also saying in what I sense is thinly veiled economic jargon, that anyone who qualifies for an SBA loan is someone who, almost by definition, should not get the money, because they fall below market standards for lending. Tough, but logical. The most salient point she makes, to my mind, is the pure impossibility of accomplishing, via the blunt instruments of incentives and subsidies, the stated goal of identifying the gazelles and cultivating them... because they cannot be identified until they've become Google and have listed and are trading at $400 a share. Taken all together, she is saying that this agency and this money creates losers for the purpose of inflating job stats. Painful, I know.

Date reviewed: Jan 17, 2006 4:24 PM

Nickname: clh

Review: Check her background. The Cato Institute has been on record recommending the abolition of the Small Business Administration for over 20 years. She is recycling the same misinformation. As a small business lender for over 25 years I can state that bankers are in the business of making as many loans as possible to creditworthy individuals. It is ludricous to suggest any lender would make SBA loans at the expense of more deserving borrowers. We make as many loans as possible to both groups. Making loans to new businesses is too risky for most banks, including mine. We started using SBA loans for these borrowers 10 years ago and have helped in the creation of hundreds of jobs. At the same time my loan currency rate is over 98%, with loan losses of way below 1%.

Date reviewed: Jan 9, 2006 5:03 PM

Nickname: jrb

Review: These statements are a joke and worse than that they are unfounded. I have personally seen how the benefits of this loan program have help small business over the last 30 years. The reality is that many small businesses need long-term capital. Financial institutions do not provide long-term capital to small business under their lending policies without the SBA guarantee. Small business concerns need a lending program that will finance their growth over time. Credit cards are not the answer. This writer should take it upon herself to test the waters. Have her shop financial institutions for a start-up business loan or a long-term business loan.

Date reviewed: Jan 4, 2006 11:12 PM

Nickname: Swimmer

Review: Ridiculous. Pontificating people having no experience with the SBA program. I have witnessed hundreds of loans banks would not finance. Strong debt service ability, strong owners, but a lack of collateral. The SBA provides a limited (75%) loan guarantee, which is funded entirely by a lender. More importantly, the taxpayers provide no funding as the program is entirely self-funded by fees. EG, a small-business desires to purchase a building to expand is required by conventional bank lending to make a 25% down payment & fund closing costs, moving expense, renovations themselves. Most small businesses do not have this kind of capital. Hence, the SBA program allows this business to purchase the building for 10% down. Also, banks are not interested in financing startup situations without the assistance of the SBA guaranteed loan program. It is obvious that jobs are being created and that small businesses are benefited by this program. I hope this sheds some light on the situation.

Date reviewed: Jan 3, 2006 5:32 PM

Nickname: JJ

Review: As a former employee of SBA for over 30 years I have witnessed the games SBA plays to justify its existence. It definitely is a "billion dollar rat hole," but a perk for their districts. SBA is well past its usefulness so why doesn't Congress realize it?

Date reviewed: Jan 3, 2006 1:09 PM

Nickname: Zam

Review: I am interested in du Rugy's findings. Where can I get the report?

Date reviewed: Dec 29, 2005 1:33 AM

Nickname: Ron

Review: In advising companies over the past two decades I have never had occasion to draw the SBA into a client situation. While the SBA purports to advocate smaller company establishment and growth, I've never found the SBA to be of benefit beyond limited information input. The SBA has become, in my opinion, a sideshow benefiting only a very small group.

Date reviewed: Dec 28, 2005 8:57 PM

Nickname: Dw

Review: I always wondered how small business could be the largest source of employees. Most small business don't have any unless you count the owner -- which you shouldn't.

Date reviewed: Dec 22, 2005 4:11 PM

Nickname: Bob

Review: Ms. du Rugy should apply to the Small Business Administration. She'll find she'll need a solid business plan and must meet a lender's requirements. She'll have access to the SBA knowledge base, as well as SBDC and SCORE for free and low-cost consulting and education from both professionals and volunteers. She'll find the process will force a planning mindset that helps economic efficiency. It drives people to profitability faster, adding to the tax base sooner, with fewer flame-outs. Small businesses make up the back bone of local economies and have a ripple effect. Big business often have great in- house inefficiencies that can be masked by the sheer volume of cash flow. In small business there is a need for discipline. There is a bias supporting big business that small business lacks. Mr. Trump pointed out that if you owe the banks enough money they'll do anything to keep you going but if you are small they'll shut you down.

Date reviewed: Dec 21, 2005 3:16 AM