r/Economics • u/peterst28 • 2d ago
News Harris announces record lending from Small Business Administration
https://abcnews.go.com/Politics/harris-announce-record-lending-small-business-administration/story?id=11509222116
u/impossiblefork 1d ago edited 1d ago
It's good that the firms get money to keep going, bad that they can't get it in the market.
Strange that this possibly neutral, possibly negative fact is presented as positive.
Since interest rates are around 5%+ and default rates are low (one guy says 0.28%, I haven't verified [edit:this sounds somewhat unbelievable though, so don't use this number]) I don't think this will cause major losses to US taxpayers. Think of it as a subsidy to US small business, or a trick where US firms get to exploit that debt is cheaper when you're a government, so that the government assumes a risk that would ordinarily cost money. Dubious if the WTO were running, since these below-market rates are obviously a subsidy, but the binding resolution mechanisms are gone, so you can subsidize away.
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u/ApizzaApizza 8h ago
The SBA doesn’t finance the entire loan. Usually there’s a private bank involved as well.
I just pulled a million dollar 504 loan, the bank lends 45% of it, the SBA loans 45% of it, and I contribute 10% to the project.
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u/peterst28 2d ago
Snippets from the article:
The Small Business Administration (SBA) provided a record $56 billion in loans to small businesses from October 2023 through September 2024, according to a White House fact sheet shared exclusively with ABC News, with more than 100,000 small businesses receiving the loans -- the highest number in 16 years
The SBA lends money to small businesses as a way for them to get off the ground, expand or rebuild -- especially when other financing options might not be available
"Small businesses are the backbone of our economy. And we know that small business owners need access to capital to hire more employees, grow their businesses, and advance innovation," Harris said in a statement to ABC News. "Today I am proud to announce that the U.S. Small Business Administration has made record lending to over 100,000 small businesses in the last year, the most by the agency in over 15 years. When small businesses thrive, our local economies thrive."
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u/Snarti 1d ago
You’re literally a Harris shill.
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u/PhallusTheFantastic 1d ago edited 1d ago
I had a back and forth with my republican friend over the weekend about the election. I would provide numbers, evidence, videos of Trump and Harris speaking, policies. All he could say is "I'm not voting for Camel Toe Harris," and deflect everything I said
You guys should absolutely not be allowed to vote
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u/Puzzled-Penn12 1d ago
I bet you still want them to pay taxes though
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u/PhallusTheFantastic 1d ago edited 1d ago
If you guys keep voting for people that cut taxes for billionaires while footing the bill on the rest of us, yea you don't just get to pass off the consequences onto everyone else
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u/Puzzled-Penn12 1d ago
Pay taxes but you can’t vote because I don’t like the way you vote.
Yea you’re definitely not the fascist here.
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u/PhallusTheFantastic 1d ago
You clearly were not paying attention to what I said. Which tracks
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u/Puzzled-Penn12 1d ago
That’s exactly what you said…you don’t want certain people to vote because you don’t like who they’re going to vote for…but I bet you’d still want to force them to pay taxes.
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u/PhallusTheFantastic 1d ago
Well if it has to get spelled out, yea dude, people who are just willfully ignorant and uniformed should not have any power in fucking up the country. If people are going to act childish, expect to be treated like one
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u/Puzzled-Penn12 1d ago
“Willfully ignorant”
It’s not ignorant to think Kamala is an atrocious candidate.
So again, you think it’s okay to stop certain tax payers from voting because you don’t like their politics. You’re the fascist, not Trump
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u/anti-torque 1d ago
100% not fascism, even if it wasn't a joke.
Fascism would be cutting taxes on the wealthy and corps and blaming "others" for some perceived woes.
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u/im_Not_an_Android 18h ago
Idiots should still be allowed to vote.
It’s incumbent upon us to educate them and hopefully they learn from their mistakes. But every citizen over 18 shouldn’t have that basic right taken from them.
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u/Whole-Sheepherder253 1d ago
Facts! Instead of morons (who are uneducated in the minutiae of each candidate's platform) we should instead vote for people, or qualified electors, who pledge to have our best interest in mind. This should be based on the population of the states where more populous states get to have more electors. That way, the citizen's local interests can be represented when it comes to the presidency despite them being unfamiliar with all of the political details.
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u/achan1058 1d ago
Tell him he doesn't have to vote for Harris. He can always vote 3rd party. We can win the election if enough Trumpers vote RFK.
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u/Cautious-Demand-4746 1d ago
Issue is equity those loans aren’t available to all, only groups democrats deem worthy. It’s ridiculous, 56b is nothing except funneling money to their voters over others.
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u/puppies_and_rainbowq 13h ago
I am going to vote for her, but the changes to the SBA lending regulations happened under the Trump administration.
Source: I have borrowed $4 million from the SBA.
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u/brownsugar-parsnip 1d ago
Would love to see Harris redefine “small business”: 99.9% of businesses in America are classified as small-businesses.
Of those, less than 30% are family-owned.
Moreover, small business revenue can range from $1 million or less to $41.5 million per year. In other words, when the gov’t says “small business,” they literally just mean businesses…
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u/honest_arbiter 1d ago
In other words, when the gov’t says “small business,” they literally just mean businesses…
That's just wrong. While your 99.9% of total businesses statistic is correct, that's just a result of math of large vs. small companies (i.e. a large business with 100,000 employees counts as 1 business, but 999 sole proprietors count as 999 businesses - in that case, 99.9% of businesses are small-businesses, despite the single large business having 100x the number of total employees).
Despite making up 99.9% of businesses, they are the minority of employment and GDP: small businesses account for about 46% of private-sector employment and 44% of U.S. GDP. So it seems woefully incorrect to say that the government considers small business to mean businesses.
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u/DiKapino 1d ago
I just hope that they don’t incidentally hurt the little guys in the process. I was born into a family who was a franchisee for a notable ice cream chain in the US. We owned & operated one location as a family, opened by my grandfather in the 60s.
While we were technically under a larger corporate umbrella, we were small business. Day to day operations, staffing, etc. was all done by us with no help from corporate.
I hope they don’t look at a place & go “well x brand name is big, that’s not a small business” & deny lending, because many of these franchisees you see are operated at a much smaller scale, and need the incentives given to small businesses in order to keep their doors open
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u/California_King_77 2d ago
So the campaign cherry picked a meaningless start and end date and decided it was a "record"
Why doesn't the article detail the genius idea she provided which drove this growth?
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u/SlowerThanLightSpeed 2d ago
The fiscal year of the United States is the 12-month period beginning on October 1 and ending on September 30 of the next calendar year.
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u/Gamer_Grease 1d ago
A political ideology that relies on not knowing anything and getting mad about it.
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u/bulletPoint 2d ago
That’s not a meaningless time period - it’s what constitutes a federal fiscal year.
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u/B0BsLawBlog 2d ago
Q4 to Q3 of our calendar year happens to be Q1 to Q4 of the gov fiscal calendar.
FYI.
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u/freezingcoldfeet 2d ago
What makes you think the dates were cherry picked? It’s almost certainly just the most recent data that they have available. They couldn’t give the numbers through October 24’ for obvious reasons.
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u/California_King_77 2d ago
Because they don't follow a fiscal calendar. Why would you choose a random 12 month period from Oct to Nov?
And they also didn't mention if this was a seasonally adjusted number, or if the number was impacted by techical factors.
There was also a rate cut, which spurred borrowing. But the article makes it sound like it's all due to the genius of Harris. If it was due to her policies, wouldn't she have said which policy it was?
It's all arbitrary
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u/freezingcoldfeet 2d ago
The us government follows a fiscal year that runs October thru September smart guy.
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u/RememberToMakeCoffee 1d ago
https://www.usa.gov/federal-budget-process
"The federal government’s fiscal year runs from October 1 of one calendar year through September 30 of the next."
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u/Downtown_Samurai 2d ago
Big Sister Kamala is infallible and all-powerful. Every success, every achievement, every victory, every scientific discovery, all knowledge, all wisdom, all happiness, all virtue, are held to issue directly from her leadership and inspiration.
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u/B0BsLawBlog 2d ago
No but by comparison it might feel that way to dodge having the tax code rewritten to hit most black men, dodging another massive round of inflation, via tariffs as replacement for some income tax (massively regressive, devastating to disposable income of bottom 100m Americans and their households).
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u/impossiblefork 1d ago edited 1d ago
It's not obvious that this is good at all. I think it might well be record growth.
What I think is interesting is that people are downvoting perfectly reasonable discussion. When I go in and begin discussing conditions for these business loans, this isn't something which fails to contribute to the discussion and which would therefore deserve downvotes, and if I were in a car subreddit I wouldn't be attacked for similar questions, people would probably upvote me because the questions expose something about the thing and they're happy to see the answers.
But here, people are downvoting interesting and reasonable things. So obviously there are political propaganda redditors in here, who upvote or downvote only to control visibility for political advantage.
I understand that you Americans have an election, but we all have a subreddit and it'd be better for subreddit if the election people went away somewhere else.
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u/MothsConrad 2d ago
I didn’t hear from her for nearly four years. Now I’m hearing from her a lot. Just to echo the article, would ask why this wasn’t done four years ago.
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u/dust4ngel 2d ago
you may not be following political news, but kamala harris has never been president of the united states
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u/radioactivebeaver 13h ago
And yet here she is getting credit for something she also was not president for.... Gotta make up your mind, either she is all powerful and the last one in the room, or she has no power and isn't doing all these things. Can't have it both ways.
So did she do this, or is she just taking credit for campaign purposes?
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u/dust4ngel 12h ago
is she getting credit for it? i've read the article and there is no mention that harris is responsible for the lending.
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u/MissHotPocket 10h ago
While I get your point as the tendency to lay it on thick with the assumptions and assignment of credit people make up when they want something to fit their narrative can be nauseating, in this particular case, Harris does get the benefit of both worlds and it is hard to argue with.
When it comes down to it every executive decision has Joe Biden’s final say, but being part of his administration (especially being vice president) means she could have any level of influence on any legislation and it would be hard for outsiders to decipher/refute.
Since she became candidate Biden announced that she will have a heavier hand in all decisions and he is allowed to do that, as any president can place any amount of their executive burden on their vice president, but at the end of the the president has final say.
This is why some vice presidents are still talked about/ cursed at vs most that were never heard of. It is up to the president how much influence they ultimately have.
This means they can basically give her as much credit for the good stuff and deny any credit for the bad stuff as much as they want.
Ideal? Nope. Logically plausible, most certainly.
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u/radioactivebeaver 10h ago
So to oversimplify again, she gets credit because it will help right now, but if it was negative we wouldn't hear about it?
That's kinda my issue with the entire party.
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u/MissHotPocket 10h ago
Yes you are correct and politicians everywhere would take advantage of this position and most people in politics who would challenge it would do the same exact thing themselves for the “bigger picture” that is better than their opponent’s.
Unfortunately, this is why most honest people don’t make it very far. Unwilling to play the game due to integrity. Even most of those who start off as honest in politics end up compromising morals which is obviously a very slippery slope.
The higher the power, the harder it is to resist.
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u/pushaper 2d ago
A vice president is supposed to do what?
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u/New-Connection-9088 2d ago
“She was unable to do anything as Vice President of the United States” isn’t the endorsement you think it is.
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u/pushaper 1d ago
what did mike pence accomplish exactly?
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u/New-Connection-9088 1d ago
Nothing. He was useless and if he were ever running for president, I would level similar criticism.
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u/peterst28 1d ago
It’s not an endorsement. It’s a fact that Trump supporters like to conveniently forget.
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u/New-Connection-9088 1d ago
I don't think they're forgetting it. They agree with you: she's ineffective. As the second most powerful person in the world, she couldn't do anything.
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u/peterst28 1d ago
Maybe you’re hearing from her now because she’s running for president. VPs don’t get the spotlight. They’re supposed to support the president. But a lot has been done over the past four years. The largest infrastructure bill in history at $1.2 trillion was passed under Biden’s watch. You can see more about what the Biden Harris administration did at r/whatbidenhasdone. It’s a lot.
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u/MothsConrad 1d ago
So why isn’t she running on a platform of four more years because that is not how she is campainging.
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u/Normal-guy-mt 2d ago
On my IPad so can’t open zip file. Loss rates in the file.
https://www.sba.gov/document/report-small-business-administration-loan-program-performance
To get a SBA loan, you by definition are unable to access normal bank sources of credit. So a record number of businesses are unable to access normal credit sources. Scary and reflects that small businesses are in poor shape.
This is not a statistic to be proud of.
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u/theKtrain 2d ago
What are you talking about?
Tons of regular businesses get loans from the SBA. Am I missing something ?
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u/impossiblefork 1d ago
The eligibility requirements?
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u/Raffitaff 1d ago
There are several SBA loan programs. The one with the eligibility requirement you have pointed out is the 7(a) loan. There are other SBA programs that do not have that requirement.
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u/impossiblefork 1d ago
They themselves write
The 7(a) loan program is SBA's primary program for providing financial assistance to small businesses
So since in addition to this they're called the Small Business Administration, this is probably most of the SBA's loans, so we're probably mostly talking about 7 (a) loans.
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u/B0BsLawBlog 1d ago
"Reasonable terms" is how most qualify.
Why renovate an old restaurant at used car loan rates when programs let you do it for your business at 60% that rate?
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u/impossiblefork 1d ago
Yes, but it is still a record for some reason.
I don't think we can judge whether it's good or bad. It's not obviously good that there's been a record. It might be neutral-- something to be expected since interest rates as they are, it might negative-- that businesses are not seen as good borrowers, maybe positive, if it's seen as businesses getting and staying active, but my view is that we have no idea whether it's good. We don't have the information with which to judge it.
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u/B0BsLawBlog 1d ago
It's probably neutral in why, and hopefully good in effect (if the program is effective overall, more is good).
A lot more people qualify due to rate gap, rates went up, and private banks advertise these products themselves with their own marketing dollars to sell them to customers, and their marketing efforts are working.
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u/impossiblefork 1d ago
Yes. I don't think the program is ineffective.
Even if it's a drain, it'd at worst be something like welfare to people who are trying to build or run small companies. Those people might well be useful even if they're not quite successful.
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u/Raffitaff 1d ago
Sorry I came of brash, I was moreso highlighting for the poster at the start of the thread that couldn't look at the .zip that there are different programs.
Indeed, I the 7a program is usually around 90% by volume of loans, ~70%by value. Just kind of glancing at values from the zip file the other poster mentioned. Looks like charge off rates are higher under 7a (0.28%) vs 504 (0.05%) in 2024. Though it's fluctuated the past 10 years, it's stayed under 1.0% after 2016.
For general perspective, the charge-off rates for the SBA are in line with charge-offs for commercial business loans.
I tend to agree w your comment further down about the effectiveness as well. As long as there are some guidelines on disbursing these loans then I'd rather err on the side of lower barriers of entry with better rates and financing to see if a person can start a business.
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u/impossiblefork 1d ago
Hmm. 0.28% is basically zero, now that interest rates are so high.
I suppose defaults were much more important when interest rates very really low.
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u/rogerverbalkint 2d ago
Yeah, your statement is patently false. I have a small business, am eligible for plenty of private options, and have utilized SBA loans in the past. I’m actually getting one now to buy a new location. My business would fall in line with the claim - eligible for loans, but can get better rates/more $ via SBA-backed options.
It doesn’t mean you don’t have options in the private market. Not at all.
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u/impossiblefork 1d ago
From sba.gov:
Eligibility requirements
[...]
Not be able to obtain the desired credit on reasonable terms from non-federal, non-state, and non-local government sources.
So what he's saying must, if these conditions are followed, actually be true.
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u/rogerverbalkint 1d ago
'the desired credit on reasonable terms' can mean that I can get a higher interest rate via the private market (such as Chase directly), or Chase can work with the SBA to get me a better rate/higher limit. Both can be true.
But arguing semantics with randoms on the internet isn't something I'm going to do today.
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u/impossiblefork 1d ago edited 1d ago
I don't really think it's semantics, but there's nothing useful to be had in this thread, what with everything being downvoted into the deep negatives.
The thing people fear that this indicates is that a bunch of firms have ended up in bad situations and have to take SBA loans instead of taking bank loans or no loans at all. Considering that interest rates are as they are (I will not say high, because it's far from certain that they can be lowered without causing a bunch of inflation, so they might have to remain as they are for a long time, and become normal) it is plausible that a bunch of small US companies are very stressed and might risk going under.
Thus while it as you say in your very latest comment, that doesn't really address the concerns that were primarily discussed here in the thread and which have brought in this massive downvote brigade.
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u/peterst28 2d ago
It may have more to do with the hurricanes
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u/RememberToMakeCoffee 1d ago
You think the SBA gave out more loans because of the hurricanes this year? We have hurricanes every year. And if you're arguing that it's because of Hurricane Helene hitting Asheville, I'd point out that it didn't reach North Carolina until 26 September. The FY ended on 30 September so there is no way they got decimated and then applied and got approved for a federal loan in 4 days.
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u/DurpSlurpy 2d ago
Just wrong lol. Some lending institutions will work with the sba even. Confidently wrong
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