There is no denying that funds used by the Small Business Administration could instead go to larger, less risky businesses. The whole point of the program is to support businesses that haven't reached the point where private banks are willing to offer loans at affordable rates. Larger businesses likely have enough history and assets to obtain loans from banks.
Why should the government, funded by the tax dollars of credit worthy businesses and individuals who want to grow profitable businesses, give subsidized loans to those not deemed credit worthy? There are banks that only take low-risk loans. There are peer-to-peer lenders, credit unions, and angel investors who will loan to higher risk projects. There is also the matter of loans from friends and family. If someone's idea is too risky for their friends and their local lenders to reject, it is not good enough to take money from a government that has trouble paying for health care and unemployment benefits, to throw away money on a subsidized loan to a business idea likely to fail.
The SBA should continue to provide loans to small business, especially during these tough economic times. Looking back at some of the most successful computer names today, we can see that they started off as small garage-type businesses. Dell, Hewlett Packard, Apple and Microsoft started off as small outfits that have grown, and have changed technology and the way the world works and plays today. Without funding from a source like the SBA, small businesses just starting out would have less resources to turn to, and thus a new emerging idea or product would not have a chance to grow and possibly change society for the better. While larger firms also deserve support, most of them already have established customers, and have already received funding to get themselves to where they are today. The SBA needs to be there to support and help the new and smaller firms, because they are our hope for the future.
By definition, a small business is very likely to have no credit or low credit. That is the point of the Administration: to give those people and companies a chance to grow. Larger enterprises with high credit are, therefore, less worthy, as they are not struggling to get a small business "off the ground", so-to-speak.
The Small Business Administration is meant to help out small businesses and therefore, they have no affiliation and are not responsible for/with what happens to larger enterprises in need of credit. Larger businesses in need of credit have different means of getting it, and borrow on a completely different level than small businesses. You can't compare the two when dealing with a credit company that provides solely to small businesses. They are not equipped to lend to larger enterprises, nor should they be held accountable for lack of available credit for larger enterprises.
The Small Business Association was created to protect small business rights and to help small businesses start up and grow. The SBA is an independent part of the U.S. Federal Government, and tries to help small businesses as a way to increase America's economic strength, and to keep the US competitive in the world marketplace.
While a larger business may be more credit worthy, they also tend to be more self sustainable than a smaller business and as such tend to need less assistance from the Small Business Administration and other agencies. Smaller businesses may not have the capital or the "credit-worthiness" of a larger business, but part of the American dream is entrepreneurship, and everyone with a good business plan and good ideas should be able to follow that dream. If we reserve assistance such as the Small Business Administration for only larger companies that have already proven themselves in the market, then we undermine the purpose of the agency and cut off far too many small companies from the support they need to thrive.
Small businesses face start-up costs and hurdles that larger, more established businesses do not. SBA helps those small businesses that would not qualify for traditional loans. Just because a business is small to start, with fewer assets than a large corporation, it doesn't mean that their business plan is unworthy. It just needs help from organizations, like the SBA, to get a running start.
I believe that the U.S. government is trustworthy enough to deem whether a business is credit-worthy for a loan, or not. Additionally, the Small Business Administration's purpose is to aid smaller businesses, not larger enterprises.
It is well known that it is very difficult to get a loan these days, even from secular sources, and the SBA is no acceptation.
I believe that the Small Business Administration does give loans with the intent of getting their money back, obviously, at a profit. Every business wants to turn a profit, so why would the Small Business Administration grant funds to non-credit worthy businesses and risk losing some money? I do not think that funds are taken away from larger enterprises. After all, even larger enterprises fail, and the loss there is far greater than a small business.
I think that we have weighted our economical well being too far in the direction of large institutions that do not necessarily have the peoples needs in their minds. I also think that distributed systems are more robust than centralized systems. One of the problems with a our current system is that one bad actor can take down the whole system. If we concentrate on smaller more nimble institutions we would weather bad economic times better.
Many small businesses need to find proper funding through the Small Business Association in order to operate creating jobs. Large businesses have more revenue and have generally been in operation for some time their need for funding is still there but with proper budgeting can be easier met than small businesses with less revenue.
Under normal circumstances, I would disagree with giving loans to non-credit worthy small businesses. However, due to the current economic conditions facing the country, I feel that many small businesses need special consideration in order to rebuild and get back on their feet. In addition, if the non-credit worth auto industry could get bailed out, then why not the small business person?