Should We Get Rid of the SBA?


Today, we will provide some pro and con arguments for whether we should get rid of the SBA. As a quick historical fact, the Small Business Administration was created in 1953 for the purpose of strengthening America’s economy by strengthening American small businesses.

Those in favor of abolishing the SBA cite the fact that private markets already put funding where it is appropriate. They feel that there is no role for the government to get involved in deciding which companies deserve funding. This argument is strengthened by the fact that the credit markets were being extended to companies that were less and less qualified for funding, shortly before the crash.

On the other hand, those in favor of maintaining or even increasing the role of the SBA point to the fact that many small companies and self-employed individuals are not able to get funding for their projects. Although not all these projects pan out, there have been some that have been greatly successful. They simply would not have come into existence were it not for the Small Business Administration.

The criteria for private markets are too stringent. They allow many potentially beneficial services to fall through the cracks. Many self-employed individuals and sole proprietorships do not have the financial history required to get funding by traditional lenders under normal circumstances. However, through these federally protected loans they are able to get funded.

Whether or not you believe we should banish the Small Business Administration is a matter of personal opinion. For now, it remains a fact to be reckoned with.

For more information, go to SBA at

Should We Get Rid of the SBA? was last modified: December 13th, 2011 by Amit Kraidman
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One Response to Should We Get Rid of the SBA?

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