Congress returned to work this week after a mini-break and topping their agenda will be the FY 2009 budget. Of particular interest to small businesses is the Senate’s budget bill. It will add $100 million to the fund-starved Small Business Administration (SBA).
Sens. John Kerry, D-Mass., chairman of the Senate small business committee and Kent Conrad, D-N.D., who heads the Senate budget committee, amended the president’s request for the SBA in the administration’s 2009 budget blueprint. As I wrote in my column three weeks ago, SBA Loan Programs Face Cuts as Credit Crunch Looms, the administration, once again, is proposing substantial SBA budget cuts, as it has every year since the president took office. Excluding new funding for disaster loans, the SBA budget would be slashed by 5.5 percent (adjusted for inflation) over FY 2008’s appropriation. The amount may seem small, but the latest round of cuts would amount to a 41 percent reduction since 2001, if the president’s budget is approved as submitted to Congress.
According to Sen. Kerry’s office, the Democratic budget blueprint, which has been approved by the full Senate but still must be approved by the House, would provide the following funding increases:
• $9 million to provide greater oversight of the lending program and $1.4 million to reduce 504 loan fees. The 7(a) and 504 loan programs are the largest source of long-term capital for small businesses, helping create or retain over 824,000 jobs last year.
• $3.6 million (from zero) for microloans to and $20 million for Microloan Technical Assistance. The President’s eliminate funding). Last year, small businesses received more than $31 million in microloans, proportionally helping more women and minorities than other programs.
• $5 million (from zero) for New Markets Venture Capital and $5 million (from zero) for New Markets Technical Assistance. These programs provide equity investments in low-income areas.
• $18 million for Small Business Development Centers (SBDC) increasing the budget to $105 million from $87 million. The 950 SBDC offices around the country provided counseling to 600,665 businesses last year.
• $5 million for Women’s Business Centers increasing their budget to $17 million from $11.9 million. The 95 Women’s Business Centers provide business assistance to socially and economically disadvantaged women and men. Last year 147,000 businesses received help.
• $2.5 million for the SCORE Program increasing the budget to $7 million from $4.95 million. In the SCORE program, volunteers provide one-on-one counseling to small business owners.
• $1.56 million to Veterans Programs, raising their budget to $2.3 million from $743,000.
• $1.27 million to Native American Outreach raising the budget to $2 million from $730,000.
• $1.6 million for U.S. Export Assistance Centers increasing their budget to $8 million from $6.4 million. The centers help small businesses compete in the global marketplace.
• $5 million to fund a program that invests in Microentrepreneurs. The president’s budget eliminates the program). The program targets low-income and very low-income entrepreneurs.
• $3.25 million for veterans programs at SBDC under a bill signed into law in February, establishing a grant program for SBDCs to provide more information to veterans about small business resources.
• $3.25 million for energy efficiency programs at SBDCs. The energy bill signed into law in Dec. 2007 established a grant program for SBDCs to provide more information to small businesses about how to become more energy efficient.
Contracting Programs and Assistance
• $5 million to hire additional Procurement Center Representatives (PCR), raising the budget to $11.6 million from $6.6 million. PCRs monitor federal contracts and “break out” contracts for small firms.
• $4 million for the 7(j) Technical Assistance Program raising the budget to $5.5 million from $1.5 million. This program provides small disadvantaged businesses with training in financing, business development, management, accounting, and marketing.
• $4 million for HUBZones raising the budget to $5 million from $1 million. Historically Underutilized Business Zones create incentives for small firms to create jobs in underserved communities.