Key Findings from the Evaluation of the Small Business Administration's Loan and Investment Programs

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Abstract

This report highlights the findings, conclusions, and policy recommendations derived from six studies conducted during our evaluation of SBA’s 7(a) Loan Guaranty, CDC 504 Loan, MicroLoan, and SBIC programs. A Performance Analysis of SBA’s Loan and Investment Programs and An Assessment of Small Business Administration Loanand Investment Performance: Survey of Assisted Businesses address the first question: Does SBA assistance help the firms that receive it? An Analysis of the Factors Lenders Use to Ensure Their SBA Borrowers Meet the Credit Elsewhere Requirement, Competitive and Special Competitive Opportunity Gap Analysis of the 7(A) and 504 Programs, and The Debenture Small Business Investment Company Program: A Comparative Analysis of Investment Patterns with Private Venture Capital Equity focus on the second question: To what extent does SBA assistance serve its market? Lastly, Public Sector Duplication of Small Business Administration Loan and Investment Programs: An Analysis of Overlap Between Federal, State, and Local Programs Providing Assistance to Small Businesses examines the third question: Do SBA programs duplicate or overlap with other public sector programs?

Introduction

The Small Business Administration (SBA) recently commissioned the Urban Institute (UI) to evaluate four programs, including the 7(a) Loan Guaranty Program, the Certified Development Company (CDC) 504 Loan Program, the Small Business Investment Company (SBIC) Debentures Program, and the MicroLoan Program. This effort was intended to help SBA assess past performance of the designated programs, as well as to test methodologies that can assist the agency in setting meaningful goals/targets as benchmarks for future accomplishments.

Policy and Research Questions

The project was designed to address the following questions:

1. Does SBA assistance help the firms that receive it? SBA’s strategic plan couches such help in terms of at least two long-term objectives: (1) increasing the “positive impact” of SBA assistance on the number and success of small-business start-ups, and (2) maximizing the sustainability and growth of existing SBA-assisted small businesses. In the UI project, we measured the performance of assisted businesses and estimated the impact of SBA’s assistance on their performance, using agency records, Dun & Bradstreet (D&B) records, and self report of business principals.
2. To what extent does SBA assistance serve its market? SBA circumscribes its market by stipulating the long-term objectives of increasing small business success by bridging competitive opportunity gaps (COGs), and special competitive opportunity gaps (SCOGs) facing entrepreneurs.The research estimated the size of the market of firms facing COGs and SCOGs, as well as the extent to which SBA has been meeting this market.
3. Do SBA programs duplicate or overlap with other public sector programs? Although this policy question is not explicitly addressed as part of the agency’s Strategic Plan or Performance and Accountability Report (PAR), SBA wanted to determine whether overlap exists, and, if so, the nature of the duplication. The UI study examined whether (and how) selected SBA programs overlap both within the agency and with assistance offered by other public sector programs.

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