Reimbursement of Loan Loss to Small Business

The Small Business Administration (SBA) asked whether it could reimburse a bank for its loss suffered on loan extended to a small business contractor. GAO found that the bank is not entitled to reimbursement from SBA for the $10,000 loss on the loan allegedly based on representations from an SBA employee that the loan would be guaranteed, because the loan was never approved in writing and, therefore, never guaranteed.