Private country clubs, marinas, ski lodges, Napa/Sonoma Valley wineries, aesthetic enhancement clinics, Hollywood limousine chauffeurs, Rolex Rolex jewelers, luxury pet resorts, Lamborghini auto dealers, venture capital companies, and much more receive billions of dollars in SBA subsidized lending.
The motto of the Small Business Administration (SBA) supports entrepreneurial grit and the little guy: "The SBA helps Americans start, build and grow businesses." Yet, proponents of Small Business Administration (SBA) loan programs will be hard pressed to justify many of the examples cited within our recently released Federal Transfer™ Report- SBA Loans to the Wealthy Lifestyle.
In America, we should never demonize success, but we don’t need to subsidize it either. Loans to luxury limousine companies, private country clubs, Beverly Hills diamond suppliers, and upscale destination resorts in Palm Beach, Cape Cod and Lake Tahoe do little to advance the common good.
SBA lending is supposed to "to aid small businesses which are unable to obtain financing in the private credit marketplace." Yet, since 2007, there have been nearly 35,000 "small business" loans between $1 million and $5 million, many to companies who may have been able to obtain credit elsewhere.
SBA loans and guarantees in excess of $1 million are common across America. In fact, there’s a loan of this amount or greater for every three communities across America.
But the deeper, more systemic, problem with the SBA is that the federal government just isn’t very good at picking winners and losers. When the SBA approves a loan, taxpayer money is used to pit one taxpaying business against another. Who decides? Not the market, but SBA bureaucrats who clearly have refined tastes.
Consider a few of the businesses that have been subsidized since 2007:
Four private country clubs including Horseshoe Bend Country Club, Marietta, GA ($5.0 million); Crystal Falls Golf Club, Dawsonville, GA ($4.3 million); Stafford Hills Club, Tualatin, OR ($4.3 million); and West Hills Country Club, Middletown, NY ($4.2 million). In fact, 48 exclusive clubs received $110 million in SBA lending. Learn More