Published On: Tue, Jul 21st, 2015

Sports cars for everyone! The story behind failed SBA ‘luxury loans’

Lamborghini 50th Anniversary - Grande Giro

LUXURY LOANS: The Small Business Administration decided to back loans for not one but two Lamborghini dealerships, possibly leaving taxpayers on the hook.

 

The federal Small Business Administration’s mission statement says the agency was created “to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.”

So it’s disheartening to read Watchdog.org reporter Art Kane’s “Luxury Loan” series.

Kane’s months-long investigation turned up evidence of massive government waste in the SBA.

Working with the government-accountability nonprofit Open the Books, Kane found that the Small Business Administration has guaranteed nearly $8.7 billion in failed loans.

Many of the SBA’s loans, Kane concluded, went to questionable recipients. Over the past six years, for example, while the feds fight alcohol consumption and tobacco with one agency,  SBA sent $140 million in loans to finance bars, liquor stores and cigarette shops. Other loans charged off as uncollectable by SBA lenders included companies catering to the very wealthy: $25 million for country clubs, about $21 million for boat dealers, and $4.5 million for wineries.

My personal favorite from Kane’s Watchdog series: The Small Business Administration recently got into the Lamborghini business not once, but twice –– and failed in both.

National Taxpayer Union president Pete Sepp summarized the loan scandal this way: “These are loans the private sector wouldn’t make, so how is it a good idea to have taxpayers backing them when they don’t have the ability to say no to financing these loans?”… READ MORE

WatchDog Org,  By Erik Telford  

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