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GGD-76-24 1 (1976-02-23)

handle is hein.gao/gaobaaanf0001 and id is 1 raw text is: 

                                                             2-2 -


              REPORT TO THE CON1GRESS                                      A





C)             BY THE COMPTROLLER GENERAL

   cc : 2      OF THE UNITED STATES








              The Small Business

              Administration

              Needs to Improve Its

              7(a) Loan Program




              Problems exist in the Small Business Adminis-
              tration's 7(a) loan program which need cor-
              rection. Management, in line with GAO's
              recommendations, has initiated or plans to
              take appropriate actions to correct them.

              The problems were that the agency

                  --has approved loans for questionable
                  purposes, such as tranferring risk of
                  loan repayment from banks and other
                  creditors to the agency itself.

                  --did not, in certain cases, analyze the
                  prospective borrowers' financial condi-
                  tion adequately or verify the adequacy
                  of collateral pledged.
                  --has not acted effectively after loans
                  were made to increase the chances of
                  borrower success and loan repayment.



              GGD-76-24                 Q n_ __#     FrE B. 23, 19 7 6

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