The Small Business Administration (SBA), created in 1953, supports entrepreneurs and small businesses through a variety of services. It provides loans and loan guarantees to small businesses that may not qualify for traditional financing, with programs that help businesses with working capital, equipment, and real estate. 

The SBA also offers free or low-cost business counseling, mentorship, and training through partners such as Small Business Development Centers (SBDCs) and others. Additionally, it helps small businesses secure federal contracts by ensuring a portion of government spending is directed toward small and disadvantaged businesses through initiatives like the 8(a) Business Development Program and HUBZone Program.

The SBA also plays a critical role in disaster recovery by offering low-interest loans to businesses and homeowners affected by natural disasters. Overall, the SBA aims to promote the growth and development of small businesses and ensure their participation in the U.S. economy.

Kerrigan begins by lining out what the SBA does and should do, and points out that fraud, waste, and mismanagement were a problem during pandemic relief:

“Although PPP worked through private lenders and as a result experienced relatively less fraud than EIDL experienced, it is estimated “that at least 70,000 [PPP] loans were potentially fraudulent.”” (Project 2025, Section 4.5: Small Business Administration, Karen Kerrigan, page 778, paragraph 3.)

Is that true? Evidence is mixed on that and still being collected, but there was definitely a ton of fraud.

PPP Stands for Paycheck Protection Program, and was credited for saving millions of jobs during COVID.

“Government officials acknowledge that the program was rife with fraud and did not weed out undeserving applicants. But there was a way to remedy those early errors: Deny forgiveness. That could have thwarted scam artists and forced businesses that prospered to repay the money. Yet nearly three years after the rollout of PPP, the vast majority of loans have been forgiven. [Source]¹

That 70,000 figure comes from the SBA’s own Inspector General. Not that 70K loans WERE fraudulent, but “potentially” fraudulent. This would have amounted to around 17% of all of the loans at the time being fraudulent, to the tune of about $200 billion. [Source]²

Congress made PPP forgiveness rules increasingly lax because that’s what businesses lobbied their elected representatives for.

At a Senate Small Business Committee hearing in June 2020, Utah Sen. Mitt Romney said some of his constituents were “beginning to be concerned about whether or not they’re going to be qualified for forgiveness” and expressed hope “that we’re not sticklers, that we instead are looking to help people get forgiveness.”

At the same hearing, Louisiana Sen. John N. Kennedy told then-Treasury Secretary Steven Mnuchin that “small businesswomen and small businessmen think that the federal government is going to double-cross them on the forgiveness of these loans. You need to be mindful of that.”

In response, Mnuchin offered assurances that “the majority of this money is going to be forgiven in the next few months, and that’s our intent,” adding that “I’d like to make this as easy as possible.”

The article continues, “Kelley, the SBA official, said it frustrates him when the SBA is criticized for its handling of the program because the agency took its guidance from Congress, which voted repeatedly to issue more loans and make them easier to forgive — even when it became obvious there was widespread fraud.”

The FBI has been prosecuting PPP fraud, however. Here’s one example of that.³ The CARES Act Fraud Tracker⁴ lists them all. Here’s more from the FBI on how they’re holding these frauds accountable⁵.

Kerrigan does not detail here what could or should have been done differently, only points out that there was fraud in the COVID-related PPP Program. The SBA routinely provides disaster relief to small businesses.

Kerrigan goes on to detail what the scope of the SBA is, and how it has expanded over the years, and how it should be dialed back / deregulated.

“Today, initiatives aimed at “inclusivity” are in fact creating exclusivity and stringent selectivity in deciding what types of small businesses and entities can use SBA programs. For example, even though the SBA under President Donald Trump proposed a rule to remove all of the unconstitutional religious exclusions from its regulations to conform with Supreme Court decisions that have made their unconstitutionality clear, the SBA has not acted on the proposed rule and still uses religious exclusions in determining eligibility for business loans.” (Project 2025, Section 4.5: Small Business Administration, Karen Kerrigan, page 781, paragraph 5.)

In context, Kerrigan is arguing that the rules that prevent certain religious organizations or businesses with religious affiliations from benefiting from SBA programs, are exclusionary and unconstitutional. I’d argue that since the SBA is a government program and we have separation of church and state, such restrictions are precisely Constitutional.

The Supreme Court ruling she’s likely referring to here is Trinity Lutheran Church of Columbia, Inc. v. Comer (2017), where the SCOTUS ruled that denying public benefits to an organization solely because of its religious character was unconstitutional.

The ruling is interesting. Comer was the director of the Missouri Department of Natural Resources, not part of the SBA, so it’s not directly related. The Constitution that it violated wasn’t the U.S. Constitution, it was the Constitution of Missouri. What happened was, a religious school (Trinity Lutheran) got turned down by a Missouri grant program for money to resurface its playground, while giving similar grants to non-religious schools. Trinity argued that denying them violated their First Amendment right to freedom of religion.

Missouri had declared in their Constitution since 1875 that “no money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect, or denomination of religion.” Sounds fair to me, especially since using taxpayer money to support religious groups violates their (the taxpayer’s) First Amendment right to their own freedom of religion by essentially forcing them to financially support religious groups they may or may not agree with.

Long story short, the case made it to the SCOTUS, even after a Missouri district judge granted the motion to dismiss for failure to state a claim. Trinity appealed, which was denied again by the District court. The U.S. Eighth Circuit Court of Appeals affirmed the District Court’s decision. Trinity then petitioned the Supreme Court of the United States, who ruled 7-2 in favor of the church in 2017. Sotomayor and Ginsburg dissented, citing “our country’s longstanding commitment to a separation of church and state, [which is] beneficial to both. Further, “[t]he Court today profoundly changes that relationship by holding, for the first time, that the Constitution requires the government to provide public funds directly to a church.” [Source]⁶

This was towards the beginning of a growing trend of the SCOTUS entertaining cases which should never have made it as far as they did. This one was a clear-cut separation of church and state case, and a corrupt judiciary chose to elevate religion over the Constitution.

The ACLU writes, “Taken together, the court’s rulings in Carson and Kennedy lead “us to a place where separation of church and state becomes a constitutional violation,” as Justice Sonia Sotomayor recognized in her Carson dissent. These rulings suggest that enforcement of the Establishment Clause is somehow hostile to religion. But the opposite is true: Many people of faith, including Christians and adherents of minority faiths, strongly support the separation of church and state as a core component of religious liberty. They recognize, as did James Madison, Thomas Jefferson, and other of our nation’s founders, that religious freedom thrives best when government officials don’t tip the scales toward their favored religious beliefs.” [Source]⁷

The New York Times writes, “The First Amendment’s establishment clause was once understood to place limits on the government’s involvement with or facilitation of religion, but those limits appear to have been smashed. This legal demolition has been accompanied by the demotion of other important principles like equality, public health and simple fairness in law, resulting in a disorienting imbalance of values in American society.” [Source]⁸

So yes, withholding funding from religious businesses is ENTIRELY Constitutional, if you have any respect for the Establishment Clause.

“An end to SBA direct lending.” (Project 2025, Section 4.5: Small Business Administration, Karen Kerrigan, page 782, fifth bulleted point.)

Without direct SBA loans, small businesses would have to rely solely on private banks and financial institutions for funding. This shift could make it harder for small businesses – especially new, underserved, or high-risk enterprises – to access the capital they need. Banks may view these businesses as too risky without the SBA’s direct involvement.

It would also result in higher interest rates for the businesses that CAN get private funding – SBA offers lower interest rates than businesses can typically get from private lenders. This would reduce access for businesses in marginalized and underserved communities.

Kerrigan goes on to argue that neither should the SBA provide disaster relief funds to small businesses, and that no new direct lending programs be developed at the SBA.

Kerrigan then goes on to argue for making religious entities eligible for SBA loans. This raises a key question: Is the goal to end SBA lending altogether (as explicitly stated), or to expand access to religious organizations? This is a contradictory position. It’s possible that she’s arguing for ending direct SBA loans, which are loans disbursed directly by the SBA, but not other forms of SBA support like loan guarantees or R&D grants. This isn’t explicitly defined, however, so I’m left speculating in order to give Kerrigan the benefit of the doubt.

Kerrigan may also be arguing here to shift the SBA’s focus from direct lending to facilitating private lending, which would allow religious organizations to access capital via guaranteed loans rather than direct SBA funds. But again, this isn’t specified.