Small Business Administration has written-off $16.5 billion of defaulted loans given to non-small businesses during the time period, 2010-18. According to American Transparency report titled, US Small Business Administration – Quantifying Lending Practice Report, the receivers of such big loans were not the small businessmen but actually people living with luxurious lifestyles.
The report highlighted that the loans were given to private country clubs, hotel chains, private investors funds, investment pools, and mezzanine finance firms. In addition to this, it has also been mentioned that during the FY2014 to FY2018, SBA approved 543,081 loans for a total amount of $168.9 billion in taxpayer obligations. Out of this total amount, only 57% of the SBA portfolio, or $94 billion was distributed in total and out of these, not all the amount was awarded to small businesses.
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Adam Andrzejewski, CEO of American Transparency said that the job of the SBA is to supply loans to small businesses with excellent ideas who can’t afford to generate the required money for investment in their businesses. And the highlights of the report indicate that the lending institution misused its rights by granting loans to people with luxurious lifestyle who could easily apply for loans from traditional banks.
