The Small Business Administration wants the federal banking agencies to expand safety-and-soundness exams to include a review of 7(a) program loans.

The pitch was disclosed in a recent General Accounting Office report that criticized the agency for failing to conduct on-site reviews of lenders involved in the 7(a) program, which guarantees up to 80% of loans to small businesses that otherwise could not qualify for credit. About 6,000 lenders participate in the program, but 450 firms were responsible for half of the $9.5 billion in credit extended in fiscal year 1997.

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