HispanicBusiness

decade that a taxpayer subsidy for defaults was not needed, according to SBA records. The 2012 default rate was 2.38 percent according to SBA data.

Over time, the percentage of loans that go bad is comparable to conventional lenders, said Jeanne Hulit, associate administrator for the SBA Office of Capital Access. "I compare SBA to a large bank in which inherently there is some measure of risk involved with lending but, overall, the agency provides a good bang for the taxpayers buck," Hulit said.

The increased default rates that followed the 2008 financial collapse cost the government billions of dollars. Between fiscal year 2009 and fiscal year 2012, the SBA purchased $14.9 billion of guaranteed defaulted loans from lenders, according to SBA annual financial reports. By comparison, the SBA purchased about $2.5 billion in guaranteed loans in the four years between 2004 and 2007.

Newcomb, who works with entrepreneurs on their development plans, said lenders and the SBA did no one any favors by making loans to people who were not prepared to run a business. "The most heart-breaking thing I see is when someone comes to me having put $50,000 worth of life savings and retirement into an enterprise and without any forethought," she said. "And now they want me to bail them out. They've made so many mistakes, there is such a deficit now that I can't fix it."

Cold Stone

Lenders say loans go bad for a variety of reasons, both financial and personal. At the Cold Stone Creamery at The Greene in Beavercreek, it was a combination of the economy and high rent, said co-owner Peter Samborsky.

He and two partners in BKP Enterprise LLC opened the ice cream shop in 2006 using two SBA 7(a) loans totaling $401,500 from Banco Popular North America of New York. By 2011, $277,661 of the loans were in default and the SBA purchased the bad loans from the bank under the federal guarantee.

The SBA eventually discharged $176,538 to the Treasury for collection.

"It was a decision of looking at expenses, and if we wanted to continue operating we had to reduce the expenses," said Samborsky. "The landlord wasn't willing to reduce rent. And if we didn't pay rent we'd get kicked out. So the bank is the one that unfortunately takes the hit."

Subway and Quiznos

Franchises are major consumers of SBA loans, according to the Daily News analysis -- and sub sandwich franchises top the list.

Subway and Quiznos franchises dominated the list of businesses borrowing the government guaranteed loans. Subway franchises took out at least 4,649 of the 7(a) loans since the beginning of 1990, the data show, while Quiznos took out 2,586.

But the battle of the sub shops went in drastically different directions, according to the loan data. While Subway borrowed more than 2,000 more loans than Quiznos, its loan failure rate was about one-fifth of Quiznos restaurants. Only 4.8 percent of Subway franchise SBA loans were charged off as of the end of February, while almost a quarter -- 23.4 percent -- of Quiznos franchise loans ended in failure and were discharged to the Treasury.

Quiznos also led all franchises with $43.5 million in defaulted loan guarantees that SBA had to pay the lending banks. Cold Stone Creamery was second with $29.6 million, followed by Days Inn with $16.9 million and Ramada Inn with $14.3