Tag Archives: Loans

Government Hands Out Billions In Corporate Welfare and Then Gives Loans to Small Business

I always think it is funny when our politicians tell us that they are working to help small businesses. Whenever I hear a politician in one of the districts where I am tell me such things, I challenge them right away and ask; “exactly what have you done to help small businesses in this district.” They talk about such things as putting together small business loans, about collaboration projects with businesses to create jobs. I just shake my head and laugh – it’s as if they don’t get it.

You see, funneling taxpayer money into special pet projects with small business owners who happen to be friends with politicians and also duly support their campaign war chest for reelection does not appear to me to be helping local entrepreneurs much, rather it is helping the politician himself or herself feed at the trough. Secondly, offering more business loans to little companies at the bottom or top of the business cycle only puts local business people in debt. All the while our politicians are giving out lucrative contracts to large companies and corporations; corporate welfare.

There was an interesting article in the Wall Street Journal on March 20, 2014 titled; Loans Are Flowing Again, But Not In All Sectors,” by Julie Bennett which was featured in the Focus on Franchising section. One franchisor was said to have stated; “You can’t grow a franchise company without the SBA,” and whereas, this may be somewhat reality based it begs the question of why?

Now then, as a former franchisor or I’d like to say; “the hell you can’t.” You see, I have franchised my company and I can remember only a few SBA loans of all the franchises we ever sold. Those SBA loans were difficult to get, they were time consuming, they had too many stipulations, and the paperwork was a nightmare. When I went into new territory or region I wanted to sell the franchises quickly to dominate the area and increase our market share as rapidly as possible and get our brand name out there. I didn’t have time to wait to do the paperwork or help a franchise buyer get SBA secured financing which might take 60 to 90 days.

I wanted those businesses up and running within 60 to 90 days, but we could not even sign the franchise agreement until they had the money in hand but the SBA made that process come to a complete halt. Worse, the small business administration wanted all sorts of paperwork, business plans, and other information which I was not willing to divulge to a new franchise buyer until I was sure he was qualified, but they aren’t qualified until they have the money, but they can’t get the money unless I divulge information to the SBA.

To add insult to injury, if I did divulge the information to the SBA, they wanted to put those business plans online, on their website for other future franchise buyers, unfortunately that information would also be available for my competition.

Therefore, I conclude that the SBA never helped me in my business, and yes, “I did build my business, and I didn’t get much help from the government thank you very much.” Please consider all this and think on it.