As detailed in the Open The Books report on SBA loans, the Small Business Administration is rapidly abandoning small businesses in lieu of big businesses, multi-national corporations and Fortune 100 companies. From 2007-2013, the SBA provided loans and loan guarantees for large $1-million-plus sized loans to 34,677 entities totaling $67.23 billion. Among the recipients of the loans typically between $1 million and $5 million each were venture capital firms, investment pools, and BMW and Lamborghini dealers.

A growing problem

The data also revealed that jumbo SBA loans to the wealthy have been growing rapidly over the past few years. The researchers note there was, ‘a 101% increase in $1 million+ SBA loans and loan guarantees during the last three years of the Obama administration (2011-2013) vs. the period (2008-2010).’

SBA $1 million-plus jumbo loans by year (from OpenTheBooks.com):

2009 – $4.52 billion

2010 – $7.87 billion

2011 – $13.01 billion

2012 – $11.01 billion

2013 – $14.77 billion

Welfare for the wealthy, and their pets

Outraged taxpayers who would like an investigation into the ways taxpayer dollars and loan guarantees are doled out by the Small Business Administration may want to start in north-central Georgia. It’s there that two of the largest SBA loans went to two different neighboring members-only country clubs catering to the rich, famous and powerful. Horseshoe Bend Country Club in Marietta, Georgia received $5 million. While Crystal Falls Golf Club in Dawsonville, Georgia received $4.28 million.

The two members-only country clubs in Georgia weren’t the only ones. In all, 48 private country clubs across America received SBA jumbo loans over $1 million each. Representing the wealthy jewelry companies, M.K. Diamonds and Jewelry in Beverly Hills received $3.89 million in SBA funding. Possibly the most useless use of the $67 billion in SBA loans wasn’t just for luxury resorts for the rich and famous, but believe it or not, luxury resorts for the pets of the rich and famous. $75.95 million in SBA funding flowed to 49 different high-end luxury pet resorts.

Multi-national corporations cashing in

Our friends at OpenTheBooks.com gave us the following examples of SBA loans going to multi-national corporations and Fortune 100 titans of Wall Street:

Chevron/Texaco – $109.53 million

Ford Motor Co.  – $67.61 million

General Motors – $22.08 million

Wal-Mart – $13 million

Sears – $9.24 million

Out-doing the world’s largest multi-national corporations, Wall Street investment geniuses pocketed the real money. A total of $9.22 billion went to varying investment companies including venture capital firms. “In America, we should never demonize success, but we don’t need to subsidize it either,” Open The Books’ founder Adam Andrzejewski was quoted by Forbes, “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.”

He went on to explain, “SBA lending is supposed ‘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.”

Andrzejewski closes his critique of the SBA by suggesting, “The public should be asking some hard questions:  How were these industries and subsidies chosen? What’s the public purpose to ask working and middle class citizens to subsidize these businesses?”