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On SBA-Guaranteed Lending and Economic Growth

Increasingly, policymakers are looking to the small business sector as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs. Encouraging lending to small business is the primary policy objective of the Small Business Administration (SBA) loan-guarantee program. Using a panel data set of SBA-guaranteed loans we assess whether SBA-guaranteed lending has an observable impact on local and regional economic performance.

JEL Classification: G38, H81, O16

Key Words: small business, economic growth, loan guarantees, credit rationing, relationship lending

Suggested citation: Thomson, James, Ben R. Craig, and William E. Jackson III, 2004. "On SBA-Guaranteed Lending and Economic Growth," Federal Reserve Bank of Cleveland, Working Paper no. 04-03.

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