President Barack Obama’s FY 2010 Budget Overview offers full support for the U.S. Small Business Administration’s credit programs, authorizing SBA to support loan guarantees of $28 billion to small businesses.
The FY 2010 Budget Overview provides a broad outline of the President’s budget priorities -- including an appropriation for SBA of approximately $700 million. The full budget proposal with account level appropriation details is scheduled for release in April.
The spending cited in the broad proposal would be in addition to the $730 million funding provided for SBA credit programs in the recently enacted Recovery Act. That Act -- for which most spending is targeted for use in 2009 and 2010 -- authorizes SBA to raise guarantee percentages on some SBA loans to 90 percent, temporarily reduce fees on SBA-backed loans, expand funding for Microloans, and raise the maximum size of SBA-guaranteed surety bonds.
The bill outlines maximum authorization levels for SBA credit programs well above current demand for those programs. It sets a maximum of $17.5 billion for SBA’s 7[a] General Business Loan Guarantee program; $7.5 billion for the 504 Certified Development Company Loan program; $3 billion for the Small Business Investment Company [SBIC] debenture program; and $25 million for the Microloan program.
The bill also provides for $1.1 billion in direct disaster loans, and provides for the launch of a pilot program to test the use of SBA-guaranteed loans as part of the agency’s response to disaster declarations.
Aside from those credit provisions, the proposal:
* Sustains funding for the agency’s technical assistance and training programs
* Improves federal contracting data
* Continues reviews of small-business size standards to help improve targeting of federal contracting opportunities for small businesses
* Modernizes core agency information systems
* Streamlines loan processes
* Enhances human capital resources
The Budget Overview also includes the Obama Administration’s Small Business and Community Bank Lending Initiative, to expand small-business credit availability and affordability by unfreezing secondary markets for small-business loans as part of the larger plan to revive the flow of credit in the economy.
United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu [D-La.] and Ranking Member Olympia J. Snowe [R-Maine] today commented on the SBA components of President Barack Obama’s budget. They're hopeful the additional funding will be spent on the most vital SBA programs after the agency’s funding was cut by 28 percent over the last eight years -- the biggest cut of any federal agency.
“President Obama’s budget demonstrates that he will continue to make small-business recovery a top priority,” Sen. Landrieu said. “Increasing the SBA’s budget, coupled with $730 million for the agency included in the American Recovery and Reinvestment Act passed earlier this year, will put the SBA in a much better position over the next two years as it works to assist the nation’s small businesses and entrepreneurs. We have a long way to go to recover from the deep cuts of the last Administration, but this is an important step in the right direction.
“While we are still awaiting details on where the additional funding will be spent, I am hopeful that it will go to important programs, such as small-business lending, Women’s Business Centers, Small Business Development Centers, business assistance for veterans looking to start their own business, technical assistance for microbusinesses, and assistance to help small businesses -- many of them owned by women, minorities and veterans -- compete for and win federal contracts.”
“While I am disappointed that the President’s proposed budget for the SBA does not fully restore the funding cuts of the last eight years, it is a welcome and refreshing change from the previous administration’s SBA budget requests,” said Sen. Snowe.
“As former chair and now ranking member of the Senate Committee on Small Business and Entrepreneurship, I have seen the devastating effects of the SBA’s budget cuts on our nation’s small businesses,” Snowe added. “While I am withholding full judgment until I am able to review the complete Fiscal Year 2010 budget -- in order to see how President Obama recommends allocating additional funding -- I am pleased that a new emphasis has been placed on helping our nation’s true job generators succeed. It is critical that the additional funds be allocated in a manner that will bolster the SBA’s core non-credit programs.
“I will continue to review the overall budget with a particular emphasis on its potential effects on small businesses, to better determine its overall potential impacts on small businesses -- including addressing the small-business health insurance crisis, a top concern for small businesses across our nation.”
GoodBiz113's take: It's going to take awhile to recover from the Bush administration's virtual eight-year negligence of America's small-business needs. President Obama's FY 2010 budget marks a major leap for America's small-business owners and entrepreneurs -- the ever-growing backbone of our nation's economy. It delivers on his campaign's multifaceted plan to support small business and, from all indications, is just the beginning of good things to come. Thank you, Mr. President, for helping us to finally move forward.
SOURCES: Barack Obama and Joe Biden's Plan for Small Business, FinancialStability.gov, Recovery.gov, U.S. Senate Committee on Small Business & Entrepreneurship, U.S. Small Business Administration, WhiteHouse.gov
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