According to a recent report by the United States Government Accountability Office (GAO), blockchain technology has the potential to enhance oversight of the Small Business Administration’s (SBA) programs.
The GAO explored various applications of blockchain within SBA programs, which aim to support entrepreneurs and small businesses.
The report emphasized several benefits of blockchain, including streamlined annual reporting, secure loan processes, and enhanced monitoring of business development progress.
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While the SBA has not yet considered implementing blockchain technology, experts cited in the GAO study believe that it could help the agency overcome numerous challenges it currently faces.
These challenges include expediting reporting to Congress by utilizing a blockchain-based ledger, collecting real-time data for determining program participants’ eligibility, and facilitating program oversight.
To assess the potential use and limitations of blockchain adoption, the study focused on four SBA programs.
The report revealed that blockchain could effectively mitigate fraud risks associated with the SBA’s 7(a) Loan Program, the agency’s primary loan guarantee initiative for assisting small businesses.
By storing information about 7(a) loans on a blockchain-based ledger, the characteristics of the loans and borrowers could be verified by trusted sources, thereby enhancing SBA oversight.
However, it should be noted that blockchain technology alone cannot prevent fraud committed by lender service providers.
In addition, the GAO highlighted the 8(a) Business Development Program, which supports small businesses owned and controlled by socially and economically disadvantaged individuals.
Blockchain technology could be utilized in this program to collect real-time data, ensuring the ongoing eligibility of program participants.
The report also identified other potential use cases for blockchain within SBA programs.
For instance, the Disaster Loan Program could leverage blockchain to expedite the application process, while the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs could benefit from improved timeliness in agency reporting.
Overall, the GAO’s findings indicate that blockchain technology has significant potential in enhancing the efficiency, security, and oversight of various SBA programs.
By adopting blockchain solutions, the SBA could address critical challenges and better support entrepreneurs and small business owners across the United States.
