Now, my recent endeavor is growing at an alarming rate. We cannot keep the business from not coming at us, and as I have discussed here a couple times in the short history of this blog is that cash flow is king.
Because of the increased business, we are hitting a critical stage where we must increase our working capital to hire, and train employees to continue to provide the service expected of our company.
So out of morbid curiosity, I’ve decided to venture into the unknown of secure capital, either through loans, angels or VC.
In my research and discovery stage for SBA loans I came across an article in from Stacy Perman from BusinessWeek online about how Lloyd Chapman, the founder and president of the American Small Business League (ASBL) has filed tow lawsuits against the SBA for contracting fraud.
Now I know every side has its own position, Lloyd is pretty clear about his position that the SBA, a government taxpayer funded operation is actually very hostile to small businesses, as a matter of fact Lloyd claims he believes the current administration will attempt to close the SBA in 2006.
Those are some pretty strong words. I don’t agree with Lloyd’s position and am actually very interested in hearing form other entrepreneurs that can support or oppose this position.
By the way, I’ll keep you informed of how we fund and approach our business. It should be a decent story to tell and hopefully I’ll get some feedback from each of you about your experiences in the fund raising process.
James
The American Small Business League has won two federal law suits against the SBA under the Freedom Of Information Act. We requested information from the SBA we felt would show a pattern of fraud and abuse in federal small business contracting programs. The information we uncovered has shown that the SBA has infact reported billions of dollars in contracts to some of the largest companies in the US as small business awards. The information we uncovered through our litigation has alwo shown that the SBA has a patten of dismissing protests that have been filed against large businesses. The most damming evidance against the SBA has come from their own Inspector General. During 2005 the SBA IG came out with four separate reports that found fraud and significant abuses in federal small business contracting programs. In report 5-15 released February 25, 2005 the IG said, "One of the most important challenges facing the Small Business Administration and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." In report 5-16 the IG found large businesses were receiving federal small business contractrs by making "false certifications". In report 5-14 the IG found the SBA itself was reporting awards to large busineses as small business awards. The SBA has reported contracts to Oracle, Hewlett-Packard, Raytheon, Northrop-Grumman,Archer-Daniels-Midland and hundreds of other large businesses as small business awards. The SBA currently reports over 100 million dollars a year to Buhrmann NV, a 10 billion dollar Dutch firm as small business awards. Our research shows over 50% of all federal small business contracts actually go to Fortune 1000 firms. Check out our web site at ASBL.com.
Lloyd Chapman
President, American Small Business League
Posted by: Lloyd Chapman | February 3, 2006 11:01 AM | Permalink to Comment