Small business leader: SBA is 'broken'

The chair of the National Small Business Association is declaring that "the SBA as we know it is broken" when it comes to helping companies gain access to working capital.

Marilyn Landis and others in the small business community are meeting with members of President-elect Obama's transition team this week to discuss their concerns about the credit crunch and other issues they face, according to The Pittsburgh Tribune-Review.

The NSBA chair told a gathering in Pittsburgh that small business owners must "be part of this recovery" and was quoted as accusing the U.S. Small Business Administration of "finding more ways to get out of guaranteeing SBA loans" and of shifting more costs onto banks that do issue these loans.

She was also critical of the government for focusing only on "too big to fail" companies and called on the SBA to focus more on direct loans to small businesses.

Earlier this week, the Washington Post noted that SBA loans had dropped 30 percent and that more than 75 percent of U.S. banks had tightened their small business lending standards in recent months. This has been especially tough on small businesses because they often depend on lines of credit to meet their day to day cash needs.