WASHINGTON — Under President Bush's proposal, the Small Business Administration's 7(a) guaranteed loan program would receive $17.5 billion and the 504 or Certified Development Company program would get a $7.5 billion boost.
The president recently proposed $657 million in new budget authority for SBA in FY 2009, a 15.5% increase over the FY 2008 enacted level and a 6% increase in core operating budget over FY 2008, according to SBA. Including anticipated carryover funds for disaster lending and other revenues, the total spending package for the year would be $819 million.
That budget level provides funding for more than $1 billion in loans in the agency's disaster assistance program, which has undergone several changes since the 2005 Gulf Coast hurricanes, according to SBA.
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The SBA is also proposing a zero-subsidy Microloan program, which it said would expand its support to microlenders across the country. By raising the rate at which intermediaries borrow–from as low as 2% below the five-year Treasury rate to 1.3% above the FY 2009 five-year Treasury rate–the agency said it could eliminate the subsidy cost of this program. SBA said it would also discontinue technical assistance funding for microlenders, and work with existing technical assistance providers, including the agency's Small Business Development Centers, SCORE counselors, and Women's Business Centers, to arrange technical help for microloan clients.
On the technical assistance side, the budget requests more than $87 million for Small Business Development Centers, almost $12 million for grants to Women's Business Centers, and nearly $5 million for SCORE.
"This is a fiscally responsible budget proposal which supports SBA's mission to foster small business growth and assist home and business owners affected by a major disaster," said SBA Administrator Steve Preston. "The increased lending capacity will also allow us to provide more capital to small business, enhancing our ability to boost the economy."
Preston said the proposal also builds on initiatives to improve operational efficiency, further strengthen SBA's disaster assistance program and increase outreach to underserved markets in inner cities and rural communities. Several initiatives are planned to improve federal contract opportunities, and training and counseling to women, veteran and minority entrepreneurs, Preston added.
Nearly 400 credit unions are SBA lenders.
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