**GAO-09-228**                      Published: Feb 12, 2009. Publicly Released: Mar 16, 2009.                  

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## Highlights

The Small Business Administration's (SBA) 7(a) program is intended to provide loan guarantees to small business borrowers who cannot obtain conventional credit at reasonable terms and do not have the personal resources to provide financing themselves. In fiscal year 2008, SBA guaranteed over 69,000 loans valued at about $13 billion. To assist in oversight of the 7(a) program, GAO was asked to (1) describe SBA's criteria and lenders' practices for determining that borrowers cannot obtain credit elsewhere and (2) examine SBA's efforts to ensure that lenders are complying with the credit elsewhere provision. To meet these objectives, GAO reviewed applicable statutes and guidance, visited 18 lenders and reviewed 238 of their loan files, reviewed 97 on-site lender review reports, and interviewed SBA officials. GAO's samples of lenders and loan files were not generalizable.

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## Topics

Business Regulation and Consumer Protection

Borrowing authorityCreditDebtDebt subject to statutory limitationDocumentationEvaluation criteriaFederal fundsFederal regulationsGovernment guaranteed loansInternal controlsLending institutionsLoansProgram evaluationProgram managementRequirements definitionSmall businessSmall business assistanceSmall business loansStandardsStatutory limitation