Let’s begin with who may qualify. Small businesses, as defined by SBA are eligible for consideration. The company must be profitable, operate in the USA, have invested equity, and a practical business plan outlining the need for the funds and how they will be used. Before qualifying for an SBA loan other financial resources, including assets, must be utilized and any obligations to the government of the United States, including taxes, may not be delinquent. In other words upright, solid citizens of small businesses in America are those who qualify.
Who Doesn’t Qualify?
• Banks, financial institutes, and insurance providers
• Second party owners, for example landlords who don’t occupy the premises
• Pyramid sales distribution organizations
• Legal Gambling operations
• Private clubs
• Government owned institutions
• Businesses primarily involved in religious training and studies
• Marketing cooperatives
• Businesses primarily engaged in political or lobbying activities
This is an abbreviated list; for a more detailed explanation go to SBA Loan Program Eligibility.
What Does This Tell Us?
This partial list informs us that certain types of institutions are outside of the parameters for financial consideration from the SBA. Are there common themes?
Self-interested – while all companies are self-interested, or they wouldn’t survive, several of the types of organizations listed are primarily self-interested.
Controversial – for example, politics and religion have always been areas of contention, of differences of opinion, and not an arena for government involvement.
Sketchy business plans – before I get hate mail telling me how great some specific pyramid organization is would you agree that most aren’t? Most are schemes to make the upper echelon wads of cash and nothing more.
What’s This have to do with us?
Not every ineligible business listed here is controversial, for example, banks and insurance companies, for the most part are legitimate. But if the SBA excludes self-interested, controversial, and sketchy organizations from eligibility for their assistance…shouldn’t we as business people do the same? As a business, when we support, finance, or promote political, religious, controversial, or sketchy organizations we take the chance of polarizing the public, our prospective customers. We separate our prospects and customers into those who agree with us and those who don’t. And if we do that—we will lose customers; as business people we must ask ourselves—is the business world the place to share our beliefs? How many of us have been “put-off” by unqualified celebrities endorsing political candidates or social movements? Do you think business people who do the same look any different to their clientele? Do you agree or disagree? Is this post—controversial?