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Small Business, Banks and Sba Loan Guarantees (Hardcover: 188 pages)

Small Business, Banks and Sba Loan Guarantees
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Product Details: Small Business, Banks and Sba Loan Guarantees

Author:Elisabeth H. Rhyne
Format:Hardcover: 188 pages.
Publisher:Quorum Books (10/01/1988)
ISBN:0899302564
ISBN13:9780899302560
Reading Level:

Publisher Notes: Small Business, Banks and Sba Loan Guarantees

  • The Small Business Administration (SBA) loan guarantee program--one of the mainstays of small business financing--has been both sharply attacked as wasteful and staunchly defended as essential during recent debates over the Federal budget. This book clarifies the reasons for the often heated debate and offers new insights into whether the program does indeed subsidize the weak or perform a valuable service in bridging the small business credit gap. Rhyne argues persuasively that despite recent program improvements, the SBA allows a hefty subsidy to continue by tolerating frequent, costly defaults. She recommends that the program seek to become financially self-sustaining, thereby adopting a simple market-making function rather than a credit allocation role. The book with a brief history of the SBA program and its predecessor in the Reconstruction Finance Corporation. The author describes the program's political environment and demonstrates the central role of banks in the program. She then moves to a thorough analysis of the program's financial performance and assesses the impact of SBA loans on banks. Subsequent chapters examine the cost of the program to the SBA, the social goals of the program and how well it fulfills them, and the changes made in the program during the 1980s to improve its management efficiency. The final chapter explores policy changes that could improve the program's overall performance and offers recommendations for reform ranging from minor management improvements to major program restructuring. A landmark critique of a major governmental program and its impact on the business community, this book should be read by every banker, small business owner, andlegislator with an interest in the fate of the SBA loan guarantee program, or in the government's role in credit allocation.

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