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ExpectMore.govExpectMore.gov home pageEXPECT FEDERAL PROGRAMS TO PERFORM WELL, AND BETTER EVERY YEAR.
 
Program Assessment

Program

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Section 7(a) Guaranteed Loan Program

The 7(a) General Business loan program provides guarantees financing to small businesses that cannot obtain credit on reasonable terms from other sources. In 2006, the program guaranteed $13.4 billion in loans to approximately 90,000 borrowers.

Rating

What This Rating Means

PERFORMING
Moderately Effective

In general, a program rated Moderately Effective has set ambitious goals and is well-managed. Moderately Effective programs likely need to improve their efficiency or address other problems in the programs' design or management in order to achieve better results.
  • The program is generally successful in extending financial assistance to small businesses that would ordinarily not be eligible for traditional loans. SBA's portfolio is made up of borrowers that are more risky (evidenced by lower credit scores) than comparable private sector lending small business portfolios.
  • The program has increased its loan volume and has contributed significantly to the Agency's goal of meeting the needs of small businesses that ordinarily cannot gain access to capital. However, while the program tracks and reports on its long-term measures, the program does not have performance targets.
  • Cost efficiencies have been realized through relying on lenders to originate, service, and liquate loans, along with the elimination of credit subsidy and administrative improvements. From 2003 to 2006, unit cost per loan decreased from $2,778 to $461.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Collecting data and setting targets for new outcome performance measures.
  • Revising the Standard Operating Procedure (SOP) for loan processing and approval.
  • Updating rules and regulations for the SBA Express program to replace the existing program guide.

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