William E. Jackson III

Government interventions to alleviate credit constraints on small firms need to be designed to correct the specific market failure resulting in socially suboptimal credit flows.

We empirically examine whether a major government intervention in the small-firm credit market yields significantly better results in markets that are less financially developed.

We empirically test whether the Small Business Administration’s main guaranteed lending program—the 7(a) program—has a greater impact on economic performance in low-income markets than in others.

We empirically test whether SBA-guaranteed lending has a greater impact on economic performance in markets with a high percentage of potential minority small businesses.

SBA guaranteed-lending programs are one of many government-sponsored market interventions aimed at promoting small business.

Increasingly policymakers are looking to the small business sector as a potential engine of economic growth.

Increasingly, policymakers are looking to the small business sector as a potential engine of economic growth.

In the presence of imperfect information, both large and small banks try to find alternative ways to identify creditworthy borrowers.

Over the last 10 years, the Small Business Administration has been responsible for well over $100 billion in small business credit extensions, more than any single private lender.

The guaranteed lending programs of the Small Business Administration (SBA) are large and growing rapidly.