This book examines the Small Business Lending Fund, with a focus on the supply and demand for small business loans. Congressional interest in small businesses reflects, in part, concerns about economic growth and unemployment. Small businesses, defined as having fewer than 500 employees, have played an important role in net employment growth during previous economic recoveries. However, recent data show that net employment growth at small businesses is not increasing at the same rate as in previous economic recoveries. Some have argued that current economic conditions make it imperative that the federal government provide additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit.

The SSBCI provides funding to states, territories, and eligible municipalities to expand existing or to create new state small business investment programs, including state capital access programs, collateral support programs, loan participation programs, loan guarantee programs, and venture capital programs. This book examines the SSBCI and its implementation, including Treasury's response to initial program audits conducted by the U.S. Government Accountability Office and Treasury's Office of Inspector General. These audits suggested that SSBCI participants were generally complying with the statute's requirements, but that some compliance problems existed, in that, the Treasury's oversight of the program could be improved; and performance measures were needed to assess the program's efficacy.