ROM 10-19 - Material Deficiencies Identified in Early-Defaulted and Early-Problem Recovery Act Loans

Report on Material Deficiencies Identified in Early-Defaulted and Early-Problem Recovery Act Loans ROM 10-19This report presents the results of our audit of early-defaulted and early-problem 7(a) loans disbursed pursuant to the American Recovery and Reinvestment Act of 2009 (Recovery Act). Early-defaulted loans are those loans that default or are made to businesses that fail within 18 months of final disbursement. Early problem loans are those loans that experience payment problems prior to final disbursement or within the first 18 months after final disbursement. The Recovery Act provided the Small Business Administration (SBA) with $730 million to expand the Agency's lending and investment programs and create new programs to stimulate lending to small businesses. Under the provisions of the Recovery Act, SBA temporarily eliminated the upfront guaranty fees and increased the maximum guaranty percentage to 90 percent for most 7(a) loans.