AmiSight 4/19: Is the SBA Headed Down the Same Path as SVB?
The Small Business Administration’s new rules and program changes should be concerning to everybody.
If we have learned anything from the lessons of SVB Bank in the last few weeks, it's that outliers in the lending system create all kinds of problems that ripple throughout the economy. SVB was not a well-run bank with a sound credit culture. Their lending standards were loose, they didn’t worry about the risk on their balance sheet, and I still don’t know how the regulators let them get away with it. They thought their culture was invincible until one day it wasn’t.
Sadly, unless someone reigns in this SBA administration, I worry that in a few years, commentators will be talking about the SBA and SVB in the same sentence. This would be a horrible outcome for the SBA, a program that has served the interests of small businesses so well for decades without costing the taxpayers money.
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