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123558 1 (1984-03-06)

handle is hein.gao/gaobactge0001 and id is 1 raw text is: 



               UNITED STATES GENERAL ACCOUNTING OFFICE
                       WASHINGTON, D.C.   20548

                                         FOR RELEASE ON DELIVERY
                                         EXPECTED AT 10:00 A.M.
                                         TUESDAY, MARCH 6, 1984


                          STATEMENT OF
                  JOHN LUKE, ASSOCIATE  DIRECTOR
     RESOURCES, COMMUNITY AND ECONOMIC DEVELOPMENT  DIVISION

                           BEFORE THE
                   COMMITTEE ON SMALL BUSINESS
                      UNITED STATES SENATE
                               ON
               THE SMALL BUSINESS ADMINISTRATION'S
                    SECONDARY MARKET PROCEq                   123558


     WE WELCOME YOUR INVITATION TO DISCUSS  OUR APRIL 25, 1983,

REPORT (GAO/RCED-83-96) ON THE SMALL  RUSINESS ADMINISTRATION'S

(SBA'S) 7(a) LOAN GUARANTEE PROGRAM AND  ITS ROLE IN THE FINANCIAL

MARKET.  WE ARE PLEASED TO SEE THAT S.  2375 COVERS SEVERAL ISSUES

WHICH WERE ADDRESSED IN OUR REPORT.

     OUR RFVIEW SHOWED THAT A VIABLE SECONDARY  MARKET IN SBA

GUARANTEED LOANS BENEFITS SMALL BUSINESSES  AND HAS ADVANTAGES FOR

LENDERS.  HOWEVER, THE FULL POTENTIAL OF  THE SECONDARY MARKET

PROCESS HAS NOT BEEN REALIZED PARTLY  BECAUSE SOME LENDERS ARE NOT

FAMILIAR WITH THE PROCESS, SOME MAKE  FEW SBA LOANS, AND SOME DO

NOT HAVE LIOUIDITY PROBLEMS.

     WE REPORTED THAT THE SECONDARY  MARKET PROCESS NEEDED IMPROVE-

MENTS IN A NUMBER OF AREAS TO  FURTHER BENEFIT SMALL BUSINESSES.  I

WILL NOW SUMMARIZE THE MAJOR  BENEFITS AFFORDED SMALL BUSINESSES

THROUGH THE SECONDARY MARKET, THOSE  AREAS WHERE WE REPORTED THAT

IMPROVEMENTS COULD BE MADE, OUR  RECOMMENDAFIONS FOR MAKING THESE

IMPROVEMENTS, SBA'S ACrIONS TO  TIPLF'1ENT OUR RECOMMENDATIONS AND

OUR COMMFNTS ON S. 2375.

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