Jan 12 -- The U.S. Small Business Administration (SBA) invites the public to submit comments on its request to OMB to approve the evaluation of the microloan program. Comments should be submitted by February 11, 2021.
The SBA Microloan Program surveys and interviews will be completed by borrowers and intermediary lenders that participated in the program. Data collected on lending and technical assistance activities, business growth, revenue, job creation, and survival will be used to develop recommendations to improve the program. These data also provide an understanding of the specific ways in which SBA's micro-financing activities contribute to the growth and sustainability of small businesses.
The purpose of the Microloan Program is to assist women, low income, veteran, and minority entrepreneurs, and other small businesses in need of small amounts of financial assistance. Under the Microloan Program, the SBA makes direct loans to Intermediaries (lenders) that, in turn, use the proceeds to make microloans and provide training and technical assistance to eligible Micro-borrowers in their SBA approved geographic service areas. The program’s mission is to integrate micro-level financing with training and technical assistance for start-up, newly established, and growing small businesses. By offering financing and technical assistance support to these businesses, the Microloan Program aims to support job creation and retention for small businesses that would have difficulty securing funding from conventional channels.
Currently, the SBA collects some administrative data for the job creation/retention, revenue, and business tenure of the Microloan Program borrowers, as well as for the technical assistance provided to Microloan Program borrowers. However, there is no process in place to systematically collect and track participant business outcomes over time or to measure participant experiences with the technical assistance received. A comprehensive effort to collect the administrative, survey, and secondary data is required to determine how the Microloan Program operates and to what extent it reaches its intended outcomes to grow participant businesses.
The objective of this evaluation is to examine the relationship of the Microloan Program activities of lending and technical assistance to program outcomes of business revenue, job creation, and business survival. The evaluation will describe the population of micro-borrowers, their businesses and experiences with the program, as well as intermediary lender characteristics, and training and technical assistance provided to micro-borrowers. The results of the analyses of administrative, secondary, and survey quantitative data will be integrated to address the research questions and to identify suggestions for program improvement in providing loans, training and technical assistance, and promoting business growth and survival outcomes. The qualitative findings will provide explanatory insights into the findings produced by the quantitative analysis. The results will provide an in-depth understanding of the program processes, outcomes, and contexts, and inform future policy and program implementation changes to improve program participation, operations, and outcomes.
The methodological design for the evaluation involves the pre-post program assessment of business performance outcomes for a borrower’s business, including 1) number of employees, 2) revenue, 3) formation of new businesses that did not operate before the loan, and 4) existing business survival. Additionally, the impact of Microloan Program lending and technical assistance activities on program outcomes is also examined. This will involve the multivariate analyses to determine the magnitude and significance of the relationship of the training and technical assistance to the business growth outcomes. The evaluation will focus on borrowers who received Microloans during Fiscal Years (FY) 2010-2019 period. The change in business performance and tenure outcomes will be examined from the baseline, pre-program participation period (i.e., at obtaining the loan) to the two follow-up years (2019 and 2020). The change in business outcomes from the baseline to 2019 will determine Microloan borrowers’ business growth. The change in business outcomes from 2019 to 2020 will gauge the effect of the COVID-19 pandemic-induced economic crisis on business performance and survival and to identify characteristics of resilient small businesses that are more likely to survive the current economic crisis. All results will be presented in aggregate form in the final report and made publicly available on the SBA Program Evaluation & Evidence Registry (PEER) web page.
CRS report on SBA Microloan Program:
https://fas.org/sgp/crs/misc/R41057.pdf
SBA submission to OMB:
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202101-3245-006 Click on IC List for data collection instrument, View Supporting Statement for narrative on purpose, methods, plans, schedule.
FR notice inviting comment:
https://www.federalregister.gov/documents/2021/01/12/2021-00320/reporting-and-recordkeeping-requirements-under-omb-review
Point of contact: Shay Meinzer, Lead Program Evaluator shay.meinzer@sba.gov 202-539-1429
For AEA members wishing to submit comments, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at
https://www.aeaweb.org/content/file?id=5806