[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-323999-105":59,"doc-detail-323999-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","are-sba-loan-guarantees-desirable","Are SBA Loan Guarantees Desirable?","","Small business promotion is a central economic policy goal in many industrialized countries, supported by the belief that small firms incubate innovation and drive growth. Yet studies often find limited evidence that small businesses generate substantial employment increases, while political programs increasingly provide tax breaks and subsidies. A key concern is whether small firms have adequate credit when lenders struggle with limited borrower information and the risks of evaluating young, innovative companies, creating credit-market failure that can justify government intervention. This commentary examines whether SBA loan guarantees address these failures without harmful side effects.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/are-sba-loan-guarantees-desirable/323999/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/are-sba-loan-guarantees-desirable/323999.png","ImageObject",300,407,{"name":92,"@type":93},"Violet","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-25","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",11,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"Why do policy-makers focus on government support for small businesses?","Question",{"text":113,"@type":114},"They commonly view small enterprises as incubators of innovation and important sources of employment growth, and they use programs like tax breaks and subsidies to encourage their development.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"What credit-market problem is central to the case for SBA intervention?",{"text":118,"@type":114},"Information problems in credit markets can lead to credit rationing, where credit is allocated using means other than price because lenders cannot obtain sufficient information about small borrowers.",{"name":120,"@type":111,"acceptedAnswer":121},"How do adverse selection and moral hazard relate to credit rationing?",{"text":122,"@type":114},"Imperfect information can cause adverse selection by removing lower-risk borrowers from potential applicants, and moral hazard by changing borrower behavior. Together, these effects make it unlikely that an interest-rate price will “clear” the market.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},323999,1790319043,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},4398048950312,"https://ap-avatar.wpscdn.com/avatar/400002538284de19e3c?_k=1778320343897328908","by Ben R.Craig,William E.Jackson,II,and James B.Thomson  \nIhe promotion of small businesses is acornerstone of economic policy for alarge number of industrialized countriesPublic support for small enterpriseappears to be based on the widely heldperception that the small business sectoris an incubator of economic growth,aplace where innovation takes place andnew ideas become economically viablebusiness enterprises.In addition,policy-makers routinely point to smal busi-nesses as important sources ofemploy-ment growth—even though economicstudies find little evidence to supportthis claim.It is not surprising,then,thatthere is widespread political support forgovernment programs,tax breaks,andother subsidies aimed at encouraging thegrowth and development of small busi-ness in the United States and,increas-ingly,around the world.  \nA particular area of concern for policy-makers is whether small businesses haveaccess to adequate credit.Growing busi-nesses have an acute need for credit,butmany small firms may have a hard timeobtaining it because they are young andhave little or no credit history.Lendersmay also be reluctant to fund small firmswith new and innovative productsbecause of the difficulty associated withevaluating the risk of such products.Ifsmall businesses lack a sufficient supplyof credit,policymakers should be con-cemed,for the next Google,Microsoft,orStarbucks might wither on the vine forwant of funding.To the extent that somemarket failure significantly impairs theaccess small businesses have to credit,arationale exists for supporting these busi-nesses through govermment programsaimed at improving their access.  \nOne specific government interventionaimed at improving smallfirms'access to credit is the Small Business  \n# Are SBALoan Guarantees Desirable?\n\nAdministration(SBA)guaranteedlending program.SBAloan guaranteesare well established,and their volumehas grown over the past decade.Nearly20 million small businesses havereceived direct or indirect help from oneor another of the SBA's programs since1953.The SBA's current business loanportfolio of roughly 219,000 loans isworth more than $45 billion,making itthe largest single financial backer ofsmall businesses in the United States.Over the period 1991 to 2000,the SBAassisted almost 435,000 small busi-nesses in obtaining more than S94.6 bil-lion in loans,more than in the entirehistory of the agency before 1991.Noother lender in this country has beenresponsible for as much small businessfinancing as the SBA has during thattime(SBA,2004).These lending num-bers are remarkable when one considersthat SBA loan guarantees are aimed atthat segment of small business borrow-ers that presumably would not otherwisehave access to credit.  \nIs there a market failure that justifiesintervention of this magnitude?Manyeconomists believe thatcredit marketswhose efficient operation depends soheavily on the ease with which lenderscan gather information on borrowersare indeed prone to failure when thenature ofthe borrowers makes it hard toobtain this information,as is the casewith small businesses.To know howwell the SBA lending program isaddressing that failure(and doing sowith no adverse side effects),we alsohave to be sure we know what themechanics of the failure are and askwhether the program is designed to tar-get only those areas where the break-down in natural market forces arises.  \nOver the last 10 years,the SmallBusiness Administration has beenresponsible for well over S100 billionin small business credit extensions,more than any single private lender.This Commentaryexplores the moti-vations for such a large investment oftaxpayer dollars.  \n## ■ The Economics of CreditMarkets\n\nThe economic justification for anygovernment-sponsored small businesslending program or loan guarantee pro-gram must rest on a generally acknowl-edged failure of the private sector toallocate loans efficiently.Absent such aclearly identified problem with private-sector lending to small businesses,theSBA's acti","cbCaitds8uPQgaEY","https://ap.wps.com/l/cbCaitds8uPQgaEY","pdf",1091509,"English","# The Economics of Credit Markets","[{\"question\":\"Why do policy-makers focus on government support for small businesses?\",\"answer\":\"They commonly view small enterprises as incubators of innovation and important sources of employment growth, and they use programs like tax breaks and subsidies to encourage their development.\"},{\"question\":\"What credit-market problem is central to the case for SBA intervention?\",\"answer\":\"Information problems in credit markets can lead to credit rationing, where credit is allocated using means other than price because lenders cannot obtain sufficient information about small borrowers.\"},{\"question\":\"How do adverse selection and moral hazard relate to credit rationing?\",\"answer\":\"Imperfect information can cause adverse selection by removing lower-risk borrowers from potential applicants, and moral hazard by changing borrower behavior. Together, these effects make it unlikely that an interest-rate price will “clear” the market.\"}]","Are SBA Loan Guarantees Desirable? | PDF",1789966775,13]