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RCED-83-96 1 (1983-04-25)

handle is hein.gao/gaobabdzr0001 and id is 1 raw text is: 


                -7

 BY THE COMPTROLLER GENERAL



 Report To The Congress


 OF THE UNITED STATES




 SBA's 7(a) Loan Guarantee Program:

 An Assessment Of Its Role In The

 Financial Market


 The Small Business Administration's 7(a) Loan Guarantee
 Program, which enables commercial lenders to provide
 long-term loans to new and expanding small businesses, is
 one of the Federal credit programs proposed for budget
 cuts. GAO looked at the 7(a) program's role in assisting
 small businesses.

 This report

   --discusses factors that limit long-term lending by
   commercial banks to small businesses and how the
   7(a) program helps lenders fill this credit gap;

   --explains how the secondary market process, wherein
   lenders sell the guaranteed portion of 7(a) loans to
   private investors, helps provide additional capital for
   other small business borrowers; and
   --presents a detailed analysis of SBA's interest rate
   policy for 7(a) guaranteed loans.

Recommendations and alternatives are presented to the
SBA Administrator and the Congress to improve the 7(a)
Loan Guarantee Program's responsiveness to small busi-
nesses' financial needs.


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Z                                                            GAO/RCED-83-96

                                                              APRIL 25, 1983
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