Review of Alleged Racial Discrimination by the SBA St. Louis District Office

CED-78-115: Published: May 22, 1978. Publicly Released: May 22, 1978.

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The Small Business Administration (SBA) investigated alleged racial discrimination against black small businessmen by the SBA St. Louis district office. The investigation was conducted to determine whether 18 individuals had been discriminated against by the St. Louis district office in such areas as loan processing, loan servicing, and management assistance. The investigators interviewed 14 of the 18 individuals and reviewed loan files for 17 individuals. They could not locate three of the four individuals not interviewed, and the fourth failed to keep the appointment with the investigators. Four of those interviewed mentioned racial discrimination in their dealings with SBA; however, one person later admitted using this charge as a means of getting a loan, and the investigators believed that another charge was also a means of obtaining a loan. Two others mentioned racial discrimination, but their allegations were against other agencies. One person complained about the size of 8(a) contracts. Eight individuals encountered specific difficulties with SBA and other governmental organizations in their attempts to obtain financing. An analysis of 66 loan files showed that there was no significant difference in the time it took minorities and nonminorities to apply for and receive loans. The SBA investigators made a conscientious effort to contact all individuals and to give them the opportunity to discuss complaints. The conclusions drawn by SBA were reasonable.

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