United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Resources, Community, and Economic Development Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1996-09-20 monographic deposited born digital 64 p. GA 1.13:RCED-96-222 https://www.govinfo.gov/app/details/GAOREPORTS-RCED-96-222 P0b002ee18037dd52 f:rc96222 DGPO 2010-08-12 2011-03-23 GAOREPORTS-RCED-96-222 machine generated eng fdlp REPORT GAOREPORTS-RCED-96-222 RCED-96-222 Small business loans Interest rates Lending institutions Government guaranteed loans Business development loans Women-owned businesses Minority businesses Loan defaults SBA General Business Loan Program; SBA 7(a) Loan Program Letter Report RCED

Pursuant to a congressional request, GAO reviewed the role that the Small Business Administration's (SBA) 7(a) Program plays in small business financing, focusing on: (1) the characteristics of 7(a) loans compared to small business loans in general; (2) how the characteristics of 7(a) borrowers compare with small business borrowers that did not obtain 7(a) loans; and (3) the reasons underlying private lending institutions' decisions to participate or not participate in the 7(a) program.<p/>GAO found that: (1) as of June 1995, about 60 percent of SBA outstanding 7(a) loans were for amounts exceeding $100,000, compared to 18 percent of small business loans in general; (2) 7(a) loans had longer maturities and higher interest rates than non-7(a) loans; (3) 7(a) and non-7(a) businesses tended to be organized as corporations, have the same average number of employees, and focus on the services and retail trade; (4) the majority of both 7(a) and non-7(a) borrowers tended to be nonminority males; (5) the number of female-owned 7(a) businesses increased from about 13.2 percent in fiscal year (FY) 1991 to 24.3 percent in FY 1995; (6) 13.5 percent of 7(a) businesses were owned by minorities, compared to 8.2 percent of non-7(a) businesses; (7) lenders who participated in the 7(a) program believed that the program enabled them to offer loans to new businesses, make longer-maturity loans, and offer loans to businesses with less equity; and (8) the reasons cited by lenders who did not participate in the 7(a) program included their company's limited focus on small businesses, SBA time-consuming loan requirements, and the lack of demand for 7(a) loans. https://www.govinfo.gov/content/pkg/GAOREPORTS-RCED-96-222/html/GAOREPORTS-RCED-96-222.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-RCED-96-222/pdf/GAOREPORTS-RCED-96-222.pdf GAO/RCED-96-222 https://www.govinfo.gov/app/details/GAOREPORTS-RCED-96-222 Letter Report GAO/RCED-96-222; Small Business: A Comparison of SBA's 7(a) Loans and Borrowers With Other Loans and Borrowers; Small business loans Interest rates Lending institutions Government guaranteed loans Business development loans Women-owned businesses Minority businesses Loan defaults SBA General Business Loan Program; SBA 7(a) Loan Program Title 15 Section 636(a) 15 U.S.C. 636(a) Public Law 103-403