Overview:

Chapter 25 outlines a plan to shrink the Small Business Administration (SBA), end direct lending, and prioritize a market-based approach to supporting small businesses, potentially harming those who rely on the SBA for access to capital and resources.

Key Takeaways:

  • Shrinking the SBA: The chapter argues that the SBA has become too large, bureaucratic, and wasteful, advocating for a smaller, more focused agency with a reduced budget and fewer programs.
  • Ending Direct Lending: It calls for eliminating the SBA’s direct lending programs, arguing that they are inefficient, susceptible to fraud, and crowd out private investment.
  • Empowering the Office of Advocacy: It supports strengthening the Office of Advocacy, which represents small businesses in the regulatory process, potentially giving it more power to weaken regulations that protect consumers, workers, and the environment.
  • Criticism of “Inclusivity” Initiatives: It criticizes the SBA’s focus on “inclusivity” initiatives, arguing that they create “exclusivity” and are not reaching all eligible small businesses, suggesting a disregard for the importance of promoting diversity and inclusion in entrepreneurship.

Critical Quote:

“A restructured and reformed SBA would end the long-term deficiencies, practices, and problems that have prolonged the decades-long cycle of waste, fraud, and mismanagement.”

Why It Matters:

This chapter reveals a plan to reduce government support for small businesses, potentially harming those who rely on the SBA for access to capital, particularly those in underserved communities or owned by women and minorities.

Red Flags:

  • Reduced Access to Capital: Shrinking the SBA and ending direct lending could make it more difficult for small businesses to access capital, particularly those that face discrimination from traditional lenders.
  • Weakening of Regulations: A more powerful Office of Advocacy could be used to weaken regulations that protect consumers, workers, and the environment, benefiting corporations at the expense of the public interest.
  • Decreased Focus on Equity: The criticism of “inclusivity” initiatives suggests a disregard for the importance of promoting diversity and inclusion in entrepreneurship, potentially exacerbating existing inequalities.

Bottom Line:

Chapter 25 outlines a short-sighted agenda that prioritizes a free-market ideology over the needs of small businesses, potentially harming those who rely on the SBA for support and undermining the vital role that small businesses play in the U.S. economy.