End The Small Business Handout Administration
Smart piece by Veronique de Rugy and Tad DeHaven at DownsizingGovernment.org. Their conclusion sums up their thoughts:

The SBA retains political support because it is a tool for policymakers to signal their support of small businesses. At the same time, SBA supporters have cultivated a myth that being against the agency is equivalent to being against small businesses. In reality, the great majority of American small businesses have thrived without government subsidies. The SBA's lending programs benefit a relatively tiny number of businesses at the expense of taxpayers and the vast majority of businesses that do not receive government support.

Even though there are no substantial economic benefits of the SBA, the agency has remained politically entrenched. It gains particularly powerful support from the banking industry. However, with today's huge federal deficits, policymakers should begin eliminating unneeded business subsidies in the budget, including SBA spending.

The United States became the most prosperous country in the world by leaving business development to the private sector. America's amazing entrepreneurial history did not come about as a result of small business subsidies from Washington. The SBA is an unneeded agency that should be terminated to reduce the deficit and end business favoritism. Federal policymakers should instead focus on reducing tax and regulatory barriers to small business growth and providing a level playing field to all businesses of all size.

More at Cato, from a blog post by DeHaven, quoting an email from a reader -- a credit analyst with a commercial bank:

I commend you for your excellent piece on "terminating the SBA." As a credit analyst for a commercial bank based in DC, I'm in a special position to see the tragedy of it.

In addition to everything you cited, it's also worth noting that the SBA will not sign on to loans if the guarantor is too strong (on the theory that such a guarantor already has access to credit). This policy necessarily means that the SBA only guarantees high-risk loans. Next, the SBA mandates low interest-rate ceilings (in the name of aiding its Borrowers), meaning that the loans are low-reward from an SBA income standpoint. You put that together and what you have is the SBA is putting the taxpayer's money into a portfolio that is high-risk, low-reward by design, and further burdens us with a massive overhead of nationwide offices and 2,000+ employees. (One also might wonder about the opportunity cost we pay when 2,000 people who could presumably be producing bona fide goods and services are instead taking from our limited resources and redirecting them into operations with an unusually high failure rate).

I'm convinced that nearly all of the good loans made with the SBA's guarantee would have been made anyway, and we would have been spared most of the bad ones and a whole lot of headache.