Blockchain Technology Enhances Oversight in SBA Programs

The United States Government Accountability Office (GAO) determined that blockchain technology can facilitate oversight of the Small Business Administration’s (SBA) numerous programs.

The GAO investigated the potential application of blockchain technology in SBA programs, which assist entrepreneurs and small enterprises.

In its report, the GAO highlighted blockchain’s capacity to streamline and enhance annual reporting, facilitate secure financing, and track business development progress, among other applications.

While the SBA has not considered implementing blockchain technology, experts cited in the GAO report believe that the technology could help the federal agency overcome several obstacles it confronts today.

“These include using a blockchain-based ledger to expedite SBA’s reporting to Congress, assist in real-time data collection for determining program participants’ eligibility, and facilitate program oversight.”

Four SBA programs participated in the study to investigate the potential applications and limitations of blockchain adoption.

It was determined that blockchain could assist in mitigating fraud risk in the 7(a) Loan Program, the SBA’s primary loan guarantee program that provides financial assistance to small businesses.

“Blockchain could facilitate SBA oversight if information about the 7(a) loans were stored on a blockchain-based ledger. In this case, the characteristics of the loans and borrowers could be verified by trusted sources.”

The 8(a) Business Development Program, which assists small businesses owned and controlled by socially and economically disadvantaged individuals, could use blockchain technology to capture real-time data for determining the participants’ continued eligibility.

Other potential blockchain applications emphasized by the GAO include accelerating the Disaster Loan Program application process and improving the timeliness of agency reporting for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.”