Sometimes, I Think It Would Be Better To Just Give Everyone In The State $1000

Seriously. Another state program masked as a brilliant idea: The Minnesota State Small Business Credit Initiative. Leave it to government to screw up a good thing.

Have you ever spoken to small business people and asked them if the Small Business Administration was a good source of assistance (financial, technical, consulting)? The answer is always no. Your last option should be the small business administration. Dammit that pisses me off! It’s the opposite of what it should be. The SBA should be here for us. It should be a good resource.

But it’s not. Why? Because the SBA is so difficult to work with. Every time you turn around you have to turn your underwear inside out. It’s not worth the effort. It’s been destroyed by bureaucrats and as a result has become the resource of last resort for small business. Ridiculous.

Here we go again: The Minnesota State Small Business Credit Initiative.  $15.4 million into four state programs: the Capital Access Program, Emerging Entrepreneurs Fund, Small Business Loan Guarantees and the Angel Loan Fund. I think the intention of supporting startup companies is the right idea. The trouble with the government programs like this one is they are so complex and contain so many stifling requirements it doesn’t make sense for legitimate businesses to pursue the help. This is the same story as the SBA.

This particular program provides only 10% for every dollar of investment the business owners put in. Additionally, you need to be certified by their program and an accredited investor among other myriad requirements. Guess what government? If I’ve got $1 million to invest I’m damn well going to avoid your quagmire of bureaucracy to get $100,000 of supplemental capital. I can get that a lot easier a lot of other places. You can have your 0% interest rate.

So, I suspect marginal businesses will be attracted to this opportunity and the results will be marginal. Significant resources will be lost to bureaucracy and administration. Wastefulness will abound. Another large economic development program bites the dust.

The elected officials have it right. The idea is good. The execution is terrible once the idea gets in the hands of the bureaucrats. They craft a policy in such a way that it can’t be successful.

Sometimes, I think we should just give everyone $1000 and see what happens.

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