SBA's Pilot Programs To Improve Guaranty Loan Procedures Need Further Development
Highlights
The 7(a) business loan program is the principal activity of the Small Business Administration (SBA) for providing financial assistance to small businesses. SBA makes loans to small businesses and guarantees loans made by others. In recent years, the program has emphasized guaranty loans whereby SBA guarantees the repayment of loans made to small businesses by private lending institutions. The major cause of dissatisfaction among business owners, lenders, and SBA personnel is that it takes too long to obtain a guaranty loan because of the number and complexity of the documents required to apply for a loan, and the time required for a SBA review of those documents. SBA has been testing two pilot programs to expedite the processes for application and approval of a guaranty loan. The bank certification program aims to shorten the time required for SBA to review and approve guaranty loan applications. The operation effectiveness program is designed to reduce the number and complexity of the application documents.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Small Business Administration | The SBA Administrator should inform banks of SBA efforts to reduce loan processing time and simplify loan application documents. |
Please call 202/512-6100 for additional information.
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| Small Business Administration | The SBA Administrator should monitor the activities of the banks operating under the bank certification program to assure compliance with program rules, regulations, and guidelines. |
Please call 202/512-6100 for additional information.
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| Small Business Administration | The SBA Administrator should require that the simplified loan application forms and processing procedures be adopted agencywide. |
Please call 202/512-6100 for additional information.
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