C. Small Business Administration Lending Programs

SBA is a cabinet-level agency that serves small businesses by providing federal contracts, counseling, and credit.¹⁰⁵ SBA’s main credit program is the 7(a) Loan Program, which guarantees loan amounts of up to $5 million to entities that meet its small business size standards.¹⁰⁶ The requirements differ depending on the type of business: cattle feedlots with less than $8 million in annual receipts are eligible for 7(a) loans, for example, while eligible poultry producers cannot have more than $1 million in annual receipts.¹⁰⁷ However, a 2018 investigation by the SBA Office of Inspector General (OIG) found that poultry producers regularly received SBA guaranteed loans even when they did not meet SBA size standards or other requirements for eligibility.¹⁰⁸ In part due to these lax standards, the agency guaranteed more than 1,500 7(a) loans for poultry producers between FY 2012 and FY 2016, providing them with approximately $1.8 billion in financing.¹⁰⁹ In addition to poultry operations, SBA also guarantees large loans to other highly polluting agricultural operations, such as hog and dairy CAFOs.¹¹⁰ The value of SBA-guaranteed loans to CAFOs doubled overall during President Obama’s second term, increasing from $224 million in FY 2012 to more than $652 million in FY 2015.¹¹¹

CAFOs are highly polluting operations—often with high greenhouse gas emissions—that depress land values, while only providing a small number of low-wage jobs.¹¹² Subsidizing their production is contrary to SBA’s mission to invest in communities and create jobs. The agency should immediately ensure that it is enforcing its own regulations when providing loans or loan guarantees to CAFOs.

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impose strong environmental conditions for eligibility (such as lower methane emissions).