Department of Veterans Affairs: Credit Costs and Risks of Proposed VA Small Business Loan Guarantee Program
GGD-00-158
Published: Jun 30, 2000. Publicly Released: Jun 30, 2000.
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Highlights
Pursuant to a legislative requirement, GAO provided information on the federal costs and risks of a proposed program for the Department of Veterans Affairs (VA) to guarantee small business loans to veterans, focusing on: (1) the federal credit costs and risks of the proposed program; (2) the cost impact of alternative borrower requirements in the implementation of the proposed program; and (3) the administrative issues resulting from VA's implementation of the proposed program.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| This coordination initiative when fully implemented has the potential to achieve many of the objectives of the proposed VA business loan program by expanding veteran participation in SBA guaranteed loan programs. Given the administrative challenges and costs VA would face in establishing a new program and the initiatives currently under way between VA and SBA, it may be prudent to defer consideration of a new VA loan program. In addition, congressional committees with oversight of veterans' affairs and small business matters may want to encourage even greater expertise sharing between VA and SBA that would take further advantage of the small business loan opportunities offered by SBA to provide business training and funding options for veteran-owned small business. Furthermore, the committees may want to monitor closely SBA's outreach efforts aimed at veterans. |
Closed – Not Implemented
|
In their comments on the draft report, the Department of Veterans Affairs (VA) and Small Business Administration (SBA) agreed with this Matter for Congressional Consideration. Consistent with this Matter for Congressional Consideration, Congress is not considering the establishment of a small business loan guarantee program within VA. To date, it appears that Congress has not taken action on the other items contained in the Matter for Congressional Consideration, such as encouraging expertise sharing between VA and SBA through the hearings' process and monitoring SBA's outreach efforts aimed at veterans. SBA has moved the Veterans Business Program from the Entrepreneurial Department to the Administrator's Office. |
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Topics
Government guaranteed loansLoan accounting systemsRisk managementSmall business loansVeteransSmall businessGovernment subsidiesLoan guaranteesInterest ratesMortgage loans