President Bush has announced a proposed increase in the 2008 budget for the U.S. Small Business Administration. It would increase the SBA's financing capacity by 40 percent over lending in 2006, reduce fees on loans, and provide increased funding and staff for the administration's ongoing operational platforms.
The proposal sets overall spending for 2008 at $814 million. This includes $464 million in new budget authority, $329 million in carryover funds for disaster loans, and $21 million in reimbursable revenues. It represents a five percent increase over total 2006 appropriations, excluding disaster and Congressional initiatives. It also represents a 12 percent increase in the SBA's core operating budget.
The budget calls for the authorization of $17.5 billion for the SBA's 7(a) guaranteed loan program; $7.5 billion for the 504 certified development company loan program, and $3 billion for venture capital support under the Small Business Investment company program. It also calls for reducing fees in the 7(a) and 504 loan programs, which would allow them to continue on the self funding basis that has enabled record numbers of loans without interruption for more than two years.
The proposal also requests continuation of SBA's microloan program on a zero subsidy basis, which allows the agency to significantly expand its support of microlenders across the country, without seeking a new appropriation for the program.
SBA would discontinue technical assistance funding for microlenders. Instead, it would work with existing technical assistance providers, which include the agency's Small Business Development Centers, SCORE Counselors, and Women's Business Centers, in order to arrange technical help for microloan clients.
On the technical side, the budget requests more than $87 million for Small Business Development Centers. It also calls for nearly $12 million for grants to Women's Business Centers and almost $5 million for SCORE.
This SBA budget proposal would provide funding for more than $1 billion in loans in the agency's revamped disaster assistance program, which has undergone major changes since the 2005 hurricanes along the Gulf Coast. As a result of those changes, more than 98 percent of the 160,000 approved disaster loan recipients have received all or some of their loans, or chosen not to borrow.
Steven C. Preston, SBA administrator, says he is committed to similar review of SBA's other programs. "This proposal represents a solid budget for the SBA and for small business," he says. "In addition to improving our operations, we will be able to build on the loan volume records set in the past few years, and provide more financing to more small businesses.
"Beyond that, this budget provides for initiatives to improve outreach to underserved, economically distressed urban and rural markets, and to veterans. It gives us more procurement center representatives to help small businesses compete for federal contracts.
"It gives us more people and resources to boost our impact on job creation, business ownership and economic vitality where they are most needed," he adds. Preston promises to work with the SBA oversight committees in Congress, as the budget process progresses, "To make sure the SBA continues to be America's small business resource."
For more information on Small Business Administration resources, visit www.sba.gov.
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