SBA's Certified Lenders Program Falls Short of Expectations

Gao ID: RCED-83-99 June 7, 1983

GAO evaluated the effectiveness of the Small Business Administration's (SBA) efforts to streamline its loan delivery system by involving private lenders in the credit check process through the Certified Lenders Program (CLP). GAO also commented on whether SBA experience under the CLP warranted further delegation of authority to lenders under the Preferred Lenders Program (PLP).

GAO stated that SBA is not achieving CLP goals to speed up the credit decision process. GAO found that: (1) lenders often submitted incomplete loan application packages that contributed to substantial processing delays; (2) lenders frequently prepared inaccurate or unreliable credit analyses, forcing SBA to perform its own analyses; (3) when SBA made faster decisions on CLP applications, it was primarily due to priority processing rather than a reduced involvement on its part or better use of lender expertise; and (4) SBA had not realized any material resource savings as a result of the CLP. GAO concluded that, unless CLP achievements are significantly increased and become more effective, further consideration of the PLP would be wasteful.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John H. Luke Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 275-5091


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