By George Ward
The Government Accountability Office (GAO) of the United States is about to utilize the remarkable potential of blockchain technology to transform its oversight of several programs under the purview of the Small Business Administration (SBA). Accordingly, the GAO’s in-depth investigation revealed that blockchain technology can transform the landscape of government accountability and transparency.
US GAO To Explore Blockchain Use Cases
It is the first time the GAO will explore the potential use cases of blockchain technology for SBA programs. In its latest report, the GAO highlighted several ways blockchain could revolutionize and enhance the support provided to budding entrepreneurs and small businesses within the US.
One key area mentioned by GAO where blockchain could make a significant impact is in annual reporting. Traditionally, this process has often been demanding and time-consuming, burdening businesses with complex paperwork and bureaucratic hurdles.
However, GAO discovered that it could utilize blockchain technology to streamline this process, thus, simplifying data collection, verification, and reporting. The SBA could quickly accelerate its annual reporting process by harnessing blockchain’s transparency and immutable nature.
Thus, entrepreneurs and small businesses can focus more on their core operations and growth strategy. Furthermore, GAO has been enticed by the possibility of using blockchain technology to facilitate secure loans.
Hence, entrepreneurs and small businesses have a more straightforward process to access funding, which fulfills one of the SBA’s core visions. The GAO’s report also emphasized how blockchain and its security features could enhance loan application and approval processes.
The SBA could establish a trusted and tamper-proof system for loan applications by leveraging blockchain’s immutable feature and smart contracts. Thus, it ensures secure and efficient financing for aspiring entrepreneurs.
However, the SBA has not indicated that it is open to adopting blockchain technology. Still, GAO research experts believe blockchain can help the US federal agency address its current challenges.
Possible Limitations
One attractive aspect of the research is that it covered four SBA programs as it aimed to unravel the vast potential and inherent limitations of blockchain technology adoption. The findings shed more light on blockchain’s immense benefits, particularly in mitigating fraud risks within the SBA’s primary loan guarantee program.
One crucial fact many do not know about the 7(a) Loan Program is that it is a lifeline for small businesses needing financial assistance in the United States. Nonetheless, it is essential to understand that while blockchain offers exceptional security measures, it must be combined with other measures to deter fraud committed by some unscrupulous lender service providers.
Such measures include stringent regulatory oversight and thorough due diligence processes, which are indispensable to ensure the program’s integrity and protect small businesses from crooked practices. Hence, this study uncovers a significant limitation in applying blockchain technology within the 7(a) Loan Program.
Meanwhile, other potential blockchain use cases that attracted the attention of the US federal agency include accelerating the application guidelines of the Disaster Loan Programs. The GAO also cited the use of blockchain technology to improve the reporting practices by government agencies for other business-related programs.
With the rise in blockchain technology adoption, industries are discovering that this innovation can enhance the efficiency of their operations.