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The United States Government Accountability Office (GAO) found that blockchain technology could help oversee various programs run by the Small Business Administration (SBA).
The GAO explores the potential use of blockchain in SBA programs that provide assistance to entrepreneurs and small businesses. In its reportsThe GAO highlighted blockchain’s potential to streamline and improve annual reporting, facilitate secured loans, and monitor business development progress.
Small Business Administration: Exploring the Potential Uses of Blockchain https://t.co/rJ4e8OTsc8
— US GAO (@USGAO) 11 July 2023
While the SBA hasn’t considered using blockchain, experts cited in the GAO study believe blockchain could help address several challenges the federal agency faces today:
“These include using a blockchain-based ledger to expedite SBA reporting to Congress, aiding in real-time data collection to determine program participant eligibility, and facilitating program oversight.”
Four SBA programs were included in the study to examine the potential uses and limitations of blockchain adoption. It found that blockchain could help reduce the risk of fraud in the 7(a) loan program, the SBA’s primary loan guarantee program to provide financial assistance to small businesses:
“If information about 7(a) loans is stored on a blockchain-based ledger, blockchain could facilitate SBA oversight. In this case, the characteristics of loans and borrowers can be verified by reliable sources.
However, technology cannot stop lender service providers from committing fraud.
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The 8(a) Business Development Program – which helps small businesses owned and controlled by socially and economically disadvantaged people – could use blockchain to collect real-time data to determine the ongoing eligibility of participants.
Other potential blockchain use cases highlighted by the GAO include speeding up 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.
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