WASHINGTON – A Small Business Administration loan program designed to help small businesses hurt by the Sept. 11 terrorist attacks continues to be criticized for its lack of documentation proving that beneficiaries were actually entitled to funding.

Congress appropriated $75 million for the Supplement Terrorist Activity Relief or STAR loan program, which allowed SBA to guaranty up to $4.5 billion with funds available from Jan. 11, 2002 through Jan. 10, 2003. Ultimately, there were 8,201 STAR loans approved totaling approximately $3.7 billion, but only 7,058 were disbursed. Credit Union Times reported earlier this year that of lenders that participated, only four credit unions were involved and all of their loans had either been paid off or remained active, SBA said at the time. In testimony before a House Homeland Security subcommittee July 13, Eric Thorsen, SBA inspector general, said an audit of the program revealed 50 of 59 borrowers examined could not demonstrate that their businesses were hurt by the attacks or the subsequent economic downturn. Only two of 42 borrowers said they knew they were getting a loan intended for small businesses hurt by the 9/11 attacks.

"This was really a program that had potential for disaster," Thorsen told the committee.