National Small Business Credit Initiative: Improved planning could help Treasury limit additional delays

What GAO found

The State Small Business Credit Initiative (SSBCI) provides funding to eligible jurisdictions (states, territories, District of Columbia and tribal governments) to support small business loan and investment programs through their capital programs. Eligible jurisdictions may also apply for technical assistance funding (such as legal, accounting and financial advisory services) to support certain businesses applying to the SSBCI program or other government small business programs.

The Ministry of Finance, which administers SSBCI, has repeatedly extended the application deadlines for capital and technical assistance programs (see chart). All 50 states, five territories, and the District of Columbia have submitted applications for capital plan funding, and as of September 30, 2022, Treasury has approved 31 applications and disbursed $1.3 billion.

State Small Business Credit Program Application Deadlines Extended, March 2021 to March 2023


Due in part to the extension of these deadlines and the time it takes to review and approve the large number of applications, the Department of Finance has taken longer than expected to disburse SSBCI funds. Important SSBCI implementation steps remain, such as reviewing remaining applications and implementing a compliance monitoring and performance measurement plan. However, Treasury’s planning efforts did not fully incorporate some of the best practices GAO had previously developed for sound program scheduling. For example, the Treasury’s work plan does not identify which employees or contractors will be responsible for each activity. Adequately incorporating these best practices can help limit the potential for delays and help ensure timely disbursement and monitoring of project funds.

Treasury has been developing a framework to support and monitor jurisdictional compliance with the SSBCI guidance. In November 2022, Treasury published compliance and monitoring standards for jurisdictions to use in their schemes. Officials said they have been establishing the procedures used in the original SSBCI and plan to have a compliance monitoring procedure in place (for use by the Treasury Department) by Dec. 31, 2022. Treasury has also issued data collection and reporting requirements for the SSBCI and has been developing key indicators to measure program performance.

Why GAO is doing this study

SSBCI was reauthorized by the American Rescue Program Act of 2021 (ARPA) to support small businesses recovering from the economic impact of the COVID-19 pandemic. Congress appropriated $10 billion for the program.

The CARES Act and ARPA include provisions for GAO to oversee the federal government’s response to COVID-19. Among its objectives, this report examines Treasury’s efforts to complete SSBCI’s key implementation steps, as well as manage program risk and measure program performance.

GAO reviewed relevant legislation and SSBCI documents, and analyzed Treasury Department data on allocations and disbursements. GAO also interviewed Treasury Department officials, representatives of four territories, and representatives of a non-generalizable sample of 12 states and three tribal governments—a sample chosen to represent a range of geographic regions and other characteristics.

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