Small Business Administration

Book excerpt: The Small Bus. Admin. (SBA) 7(a) program provides loan guarantees to small bus. that cannot obtain credit in the conventional lending market. In FY 2006, the program assisted 80,000 bus. with loan guarantees of $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 bus. access to credit; (3) the types of small bus. served by 7(a) and conventional loans; and (4) differences in SBA¿s estimates and re-estimates of the program¿s credit subsidy costs. The author analyzed agency documents, studies on the small bus. lending market, and data on the character. of small bus. borrowers and loans. Includes recommendations. Charts.