Small Business Administration: Additional Measures Needed to Assess 7(a) Loan Program's Performance

A letter report issued by the Government Accountability Office with an abstract that begins "The Small Business Administration's (SBA) 7(a) program, initially established in 1953, provides loan guarantees to small businesses that cannot obtain credit in the conventional lending market. In fiscal year 2006, the program assisted more than 80,000 businesses with loan guarantees of nearly $14 billion. This report examines (1) the program's purpose, based on its legislative history, and performance measures; (2) evidence of constraints, if any, affecting small businesses' access to credit; (3) the types of small businesses served by 7(a) and conventional loans; and (4) differences in SBA's estimates and reestimates of the program's credit subsidy costs. GAO analyzed agency documents, studies on the small business lending market, and data on the characteristics of small business borrowers and loans.