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.

Full contextual analysis of Section 4.5: Small Business Administration here.