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General News    H2'ed 10/15/17

SBA Failure to Reign in Predatory Lending Could Lead to Second Banking Crisis

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Linda McMahon Confirmation hearing as SBA Administrator
Linda McMahon Confirmation hearing as SBA Administrator
(Image by Cory Clark)
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PHILADELPHIA- Imagine you've scraped, saved, sacrificed and worked yourself to the bone to create what would have been by all accounts a successful business. Only to have it all ripped away by the very people meant to help you make that dream a reality.

You've lost over half a million dollars, your business and the building you put your blood, sweat and tears into. Now you have to start over.

You blame yourself, scrutinize every decision. Asking what went wrong, where did I make a mistake. You feel like you're alone in this. The people who were supposed to be helping you are now helping themselves to your hard work.

You don't stop with self-examination. You have outside financial professionals examine everything as well.

What happened, how did you get to this place? Your business was growing, your business model worked.

Right about now you're saying to yourself this is impossible. This small business owner made an error somewhere, even if they don't see it.

And you'd be right but not in the way you think you are.

Their mistake was that they trusted the banking institutions meant to help make their dream come true. They trusted the institutions intended to watch those banking institutions.

"The SBA504 and 7a loan programs are designed to help small businesses whose owners are vulnerable to social and economic conditions but deserving of a helping hand, add to that, that these loans are backed by the American taxpayer and they become easy prey for predatory lenders," said Marie McDonnell, a Certified Fraud Examiner and Forensic Analyst.

Dilia Wood, her husband and partner Scott Roberts both co-owners of Inspirdor, LLC and its Parent company Angabu Productions, LLC had a dream of creating a large-scale corporate event company.

Dilia as the principal stakeholder in the company had more than done her due diligence when crafting her business plan and financial reports, even picking out the perfect building to facilitate their dream.

Wood had dotted every I and crossed every T, had her projections down tight, a strong marketing strategy, a great business model that had the right amount of flexibility built in. She knew what she was doing and ten steps ahead from the word go.

"Wood had done her homework and prepared a top-notch business plan, Inspirador was the poster child for the SBA 504 loan Program," said SBA whistle-blower Kevin Howard.

The owners of Inspiridor, LLC are not the only ones to have missed signs their lending institutions were setting them up for failure.

"In hindsight, there were a lot of things I missed, that I didn't need to if there had been a program in place to educate business owners on the potential threats they expose themselves to when they go for a small business loan," said Wood.

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Cory Clark is a freelance photojournalist and writer focused on civil and human rights issues, social justice and politics. He is a regular contributor with Getty Images, AP and AFP. His work has appeared in, The Guardian, Fortune (more...)
 

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