Federal efforts to aid minority businesses began in the 1960

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Federal efforts to aid minority businesses began in the 1960 [#permalink]

27 Sep 2012, 11:06

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Federal efforts to aid minority businesses began in the 1960’s when the Small Business Administration (SBA)
began making federally guaranteed loans and government-sponsored management and technical assistance
available to minority business enterprises. While this program enabled many minority entrepreneurs to form new
businesses, the results were disappointing, since managerial inexperience, unfavorable locations, and capital
shortages led to high failure rates. Even 15 years after the program was implemented, minority business receipts
were not quite two percent of the national economy’s total receipts. Which of the following statements
about the SBA program can be inferred from the passage?

a) The maximum term for loans made to recipient businesses was 15 years.
b) Business loans were considered to be more useful to recipient businesses than was management and
technical assistance.
c) The anticipated failure rate for recipient businesses was significantly lower than the rate that actually
resulted.
d) Recipient businesses were encouraged to relocate to areas more favorable for business development.
e) The capitalization needs of recipient businesses were assessed and then provided for adequately.

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Re: Federal efforts to aid minority businesses [#permalink]

27 Sep 2012, 11:28

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IMO its C.

A) SBA analyses the situation after 15 years but the passage never said 15 years is the limit
B) SBA provides loans but it is not mentioned for which category, importance is given
C) SBA anticipated failure rate to be less because of all facilities provided but ended up disappointing as not even 2% were successful (CORRECT)
D) Passage never talks about encouragement of new locations and also clearly says one of the reason for failure is unfavourable location
E) Not mentioned in the passage.

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Re: Federal efforts to aid minority businesses [#permalink]

27 Sep 2012, 23:47

+1 C

It is an “Inference” type

a) The maximum term for loans made to recipient businesses was 15 years. (We cannot infer this as nothing is given about term loans, eliminate)
b) Business loans were considered to be more useful to recipient businesses than was management and technical assistance. (We cannot be sure as technical assistance was provided too, eliminate)
c) The anticipated failure rate for recipient businesses was significantly lower than the rate that actually resulted. (This is our answer as it is mentioned that managerial inexperience, unfavorable locations, and capital shortages led to high failure rates)
d) Recipient businesses were encouraged to relocate to areas more favorable for business development. (There is no mention is the premise about encouragement provided to relocate)
e) The capitalization needs of recipient businesses were assessed and then provided for adequately. (We cannot say this for sure as there is no mention of the same in the premise)

:-D

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First Attempt 710 - first-attempt-141273.html

Re: Federal efforts to aid minority businesses [#permalink] 27 Sep 2012, 23:47

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Federal efforts to aid minority businesses began in the 1960

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