OAK HILL, WV (WOAY) – Small business advocates are expressing concern about proposed changes to the Small Business Administration.
As part of sweeping changes within the federal government, the Trump administration has cut the SBA’s workforce by 43 percent. President Trump also plans to roll the administration of the United States student loan program into the Small Business Administration.
The move is getting pushback by small business advocacy organizations.
One of them, the American Small Business League, believes the strategy is flawed.
Communications Director Bruce de Torres told us that while the SBA has problems, the planned cuts will create new issues and will solve nothing.
“The SBA should have the biggest budget of all federal agencies because it supports 34.7 million businesses that are 99.9% of all businesses in America. But lately, the SBA has been criticized for mishandling $600 million or so in loans,” Torres said. “Now, the staff is getting cut in half, The budgets are getting cut in half, and yet it’s being given the $1.6 trillion student loan portfolio. It can’t manage 600 million in loans, but it’s going to well manage 1.6 trillion. We think it’s being set up to fail.”
The ASBL does have issues with the Small Business Administration. The organization says large corporations are abusing the system and receiving federal contracts meant for small businesses.
The federal government says it wants to award 23% of all federal contracts to small businesses. According to Torres, that goal has not been met. He said the issue has been the subject of investigations.
“For the last 35 years or so, congressional investigations have found, and the inspector general’s office at the SBA has found that the SBA is not complying with the 23% goal. In reality, legitimate small businesses are getting about 3% of federal contracts,” he said.
The ASBL also wants to increase the federal government’s target ratio for small businesses receiving federal contracts to increase from the current goal of 23%, reducing the government’s reliance on massive corporations.
According to Torres, 50% of the United State’s GDP is created by small businesses. He said the American economy is strong when small businesses are strong.
“Unfortunately, for many decades now, the SBA has been captured by corporate interests. And this has been allowed to accrue as federal government-wide collusion, cooperation, and corruption that is really ripping us off. It’s suppressing our standard of living. It’s just very detrimental to our economy every way you look at it,” he said.
