The United States Government Accountability Office (GAO) has highlighted the potential of blockchain technology to improve the effectiveness and efficiency of different programs run by the Small Business Administration (SBA). The GAO’s study explored the application of blockchain within SBA programs, for supporting entrepreneurs and small businesses. It specifically highlighted blockchain’s use in streamlining annual reporting, facilitating secure loans, and monitoring progress in business development initiatives.
While the SBA has not yet considered adopting blockchain technology, experts consulted during the study believe that its implementation could help the agency overcome several existing challenges. The challenges vary from speedy reporting to Congress, real-time data collection for determining program eligibility to improved program oversight.
In order to evaluate the possible advantages and restrictions of blockchain implementation, the study concentrated on four SBA initiatives. It highlighted blockchain as a potentially useful instrument for reducing the risks of fraud related with the 7(a) Loan Program. This program serves as the SBA’s primary loan guarantee initiative, offering financial assistance to small businesses. By storing loan information on a blockchain-based ledger, SBA oversight could be strengthened, allowing the verification of loan and borrower characteristics through trusted sources.
However, the report also acknowledged that blockchain technology alone cannot prevent lender service providers from engaging in fraudulent activities. It should be considered as part of a comprehensive fraud prevention strategy.
The GAO’s study also referenced the 8(a) Business Development Program, which supports small businesses owned by socially and economically disadvantaged individuals. Blockchain was recognized as a potential instrument for gathering real-time data to assess program members’ ongoing eligibility, expediting the monitoring procedure.
Additionally, the report identified other potential use cases for blockchain technology within the SBA. These include expediting the application process for the Disaster Loan Program and improving the timeliness of agency reporting for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
The adoption of cutting-edge technologies like blockchain might play a crucial role in helping and enabling small businesses across the United States as the small company landscape continues to change.
Read also:
S Bankruptcy Court Sets Deadlines for Filing Claims in FTX
Bank of England Governor: Digital money is the future, but banknotes still useful
