Small Business Administration lending programs suffer chronic oversight problems

Sep 19, 2013 No Comments by

One of the U.S. Small Business Administration’s loan programs for veteran-owned companies lacks oversight and does not necessarily target former members of the military, according to a government watchdog report, echoing failures that appear to be plaguing many of the agency’s lending initiatives.

Started as a pilot in 2007, SBA’s Patriot Express program was meant to hasten the flow of commercial loans to small firms owned by military veterans or their families, allowing the federal government to guarantee loans for as much as $500,000 to business owners that fit the description. In the past few years, it has been part of a push by the agency to spur entrepreneurship among returning soldiers.

Defaults on loans made under the program, however, have cost taxpayers $31 million, according to a new report by the Government Accountability Office, and its default rate has exceeded that of other SBA programs every year since 2007.

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