SBA Brags About "Cutting Red Tape" While Drowning Borrowers

SBA Brags About "Cutting Red Tape" While Drowning Borrowers in It

Posted: January 14, 2026 – 3:45 PM | NEW

You cannot make this up. On January 7th, the SBA's Chief Counsel for Advocacy, Dr. Casey Mulligan, testified before the House Committee on Small Business about how the SBA is heroically "cutting red tape" for small businesses. Meanwhile, 7,000 Minnesota borrowers are suspended without due process, 4,300 8(a) participants just had to produce three years of financial records under threat of expulsion, and the phone hold times have gotten so long that people are literally dying of old age waiting for customer service.

Let me read you some highlights from the testimony, with my commentary:

The Irony Could Kill a Small Business

Mulligan's claim: The Biden Administration finalized 12,000 rules costing nearly $6 trillion in regulatory burden.

Reality: The SBA's own internal bureaucracy has cost small businesses hundreds of billions in lost time, denied loans, and collections harassment. But sure, blame Biden.

Mulligan's claim: Advocacy has flagged approximately 300 issues for deregulatory action.

Reality: How about flagging the issue where the SBA lost $200 billion to fraud and is now punishing legitimate borrowers? That seems like a pretty big issue to flag.

    The testimony bragged about a 3,000% increase in agency compliance with agenda-sharing requirements. Meanwhile, the SBA's compliance with basic human decency requirements remains at approximately 0%.

    

Mulligan's claim: 65% of major rules from the Biden Administration were "unlawfully certified" as lacking significant impact on small entities.

Reality: 100% of SBA pandemic loan decisions were made with essentially zero fraud controls, zero oversight, and zero accountability. Where's the Congressional testimony about THAT?

The Real Red Tape

You want to talk about red tape? Let's talk about the Minnesota borrowers who are now suspended from ALL federal programs - not just SBA - based on "adequate evidence to suspect" fraud. Not proof. Not conviction. Suspicion. They have 30 days to contest the suspension with "specific factual rebuttals" - general denials are insufficient. Then the suspending official has 45 days to maybe get around to making a decision.

That's not cutting red tape. That's wrapping small business owners in red tape and setting them on fire.

But hey, at least the SBA is working on that Canadian firewood export issue. That'll really help the guy who just lost his 20-year construction business because some algorithm flagged his legitimate EIDL loan as suspicious.