Local SBA loans are justified
Re Adam Andrzejewski opinion essay Wednesday on justification for local SBA loans:
This essay is completely flawed in its conclusions regarding the SBA financing programs. The SBA is not a direct lender but offers guarantees to financial institutions for loans under its 7(a) program that do not meet their criteria for an acceptable financial risk and 504 (real estate) loan programs.
Each of these loan programs are self-funded by the fees that the SBA charges the small business and the lender or through the sale of debentures, not taxpayer money. Interest rates on 7(a) loans are typically higher than the rates charged by banks on non-SBA-guaranteed loans.
The recipients of these loans have created jobs, making our local economy that much stronger. The SBA has helped startup businesses such as Nike and Ben and Jerry’s Ice Cream get initial funding when all their owners had was an idea and an entrepreneurial spirit. Look at where these companies are today and the number of jobs that they have created.
George Mills, Conway
This story was originally published January 18, 2016 at 8:57 AM with the headline "Local SBA loans are justified."