While many discretionary Federal programs--those not involving legally required spending--will receive at least 7 percent less funding in the 2012 budget than under the prior year’s appropriations, the SBA was subject only to the .02 percent reduction imposed, across the board, in the bill just approved. Advocates for the SBA and its counseling and lending initiatives have fought hard to provide the resources it needs to support small businesses across the country.
Among the Agency’s backers are Sens. Mary Landrieu (D-LA) who heads the Senate Small Business Committee and ranking committee member Olympia Snowe (R-ME), along with President Obama. Their efforts helped protect funding that some Congress members sought to divert into other programs during 2011 budget debates. And in the past two years, Federal stimulus money granted to the SBA has enabled it to provide incentives so lenders would make money available to entrepreneurs seeking to purchase and expand small businesses. The most recent infusion was authorized under the Jobs Act of 2010, signed in September, providing about $500 million for the agency. And SBA Administrator Karen Mills has pointed out that in the most recently completed quarter of FY 2011, SBA lending initiatives, such as the 7(a) and 504 programs, have facilitated about $12 billion in lending to small businesses.
More recently, however, Landrieu and Snowe are among lawmakers putting the SBA on notice that it will need to do more with less. In a letter sent earlier this year to Administrator Mills, the two senators cited the “fiscal imperative we are facing,” and raised the “possibility of eliminating duplicative, ineffective or redundant programs,” (government speak for “you’d better duck).” Meanwhile, Representative Sam Graves (R-MO) new leader of the House Small Business Committee made it clear the SBA would be targeted for severe funding reductions. The committee’s recommendation calculates the cut at about $100 million. Conceding that the SBA will have to operate on a smaller budget President Obama is proposing a reduction of $28 million from the prior fiscal year. The SBA budget request for 2012 approaches $1 billion.
About The Author: Peter Siegel, MBA is the Founder and President of BizBen.com and is a SBA Loan Consultant/Broker specializing in SBA loan financing for business purchases. He has coordinated SBA loans for business acquisitions and partner buy-outs since 1994 and currently works with over 20 national and local SBA lenders and financial institutions. Mr. Siegel provides SBA loan pre-qualifications and advises business buyers, business owners, and business brokers. He can be reached directly at 866-270-6278.