Substantial Losses Projected for the Small Business Administration's Lease Guarantee Program: Report to the Congress

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U.S. General Accounting Office, 1975 - Commercial leases - 38 pages
 

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Page 23 - Small businesses which are unable to lease desirable space at a reasonable cost without assistance by nature represent higher-than-average risks. However, when a business does not have a reasonable chance of success, assistance by SBA benefits neither the small businessman nor the Government.
Page 1 - SBA considers the lease guarantee program to be an insurance program and refers to fees charged for lease guarantees as "premiums.
Page 1 - SBA to fix a uniform premium using sound actuarial practices. The portion charged to cover default payments cannot exceed 2.5 percent of the total rent guaranteed over the life of the lease.
Page 4 - SBA has not monitored the program's financial condition to see if it is self-sustaining. Further, the actuarial studies that premium rates are based on have not been updated since January l97l, even though some assumptions used in the studies have proven incorrect.
Page 11 - SBA told the Subcommittee on SBA Oversight and Minority Enterprise, House Committee on Small Business, that: — Most SBA lease guarantees are for special-purpose properties, instead of the general-purpose properties envisioned by the Congress.
Page 14 - SBA officials apparently ignored available information, failed to obtain sufficient information to support their evaluations, or accepted as fact highly questionable...

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