Magazine

Where The SBA Falls Short


Jeremy Quittner's article about the Small Business Administration fee increases ("Fees Get Fatter," Summer, 2005) hit close to home. Representative Donald A. Manzullo (R-Ill.) says he hasn't heard "one businessman complain." Perhaps he' s not listening to the right people.

Ours is a seasonal business, and I talked to my bank about extending our business line of credit to help us bulk up inventories for Christmas 2005. The bank came back with an SBA-backed offer with such high up-front fees that I decided to self-fund the inventory.

As a retail company that doesn't seek government contracts and doesn't manufacture a product, I have found that neither the SBA nor the local economic development agencies have much to offer my company. The good news is that so far we have managed to be relatively successful without their help. Still, it would be nice to see some benefit from the hundreds of thousands in taxes we pay every year.

At least I know local and state governments will always be there to give assistance to large companies in the form of eminent domain rulings and tax incentives.

Kevin Stecko

Owner, 80sTees.com

North Huntingdon, Pa.

"Fees get fatter" (Summer, 2005) confirmed the counterintuitive methods of the Small Business Administration. The purpose of the SBA is to aid small businesses, but I think the agency, after 50 years in existence, has lost its compass. Congress' efforts to make the 7(a) Loan Program self-funding demonstrate the insensitivity of legislators to the capital-formation hurdles faced by small business. The federal budget should provide funding for this critical program. As it is, the up-front fees for a $40,000 loan are a deterrent to borrowers.

The private sector needs to organize and become a more effective advocate for the SBA guarantee program. Otherwise, it's just window dressing on the part of Congress to say the SBA is helpful to small business.

Steven A. Ludsin

East Hampton, N.Y.


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