Supports
Outreach to Underserved Markets
WASHINGTON, Feb. 4
-- President Bush today announced a proposed FY 2009 budget for the U.S. Small
Business Administration that increases small business lending capacity by 37 percent,
increases funding for SBA's ongoing operational reforms and supports a steady
staff of more than 2,100 full-time employees.
The President
proposes $657 million in new budget authority for SBA in FY 2009, a 15.5 percent
increase over the FY 2008 enacted level and a 6 percent increase in core operating
budget over FY 2008. 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 improved disaster assistance program, which underwent
major changes since the 2005 Gulf Coast hurricanes. As a result, SBA eliminated
a backlog of more than 100,000 Katrina loan applications and put more than $6
billion into the hands of disaster victims rebuilding their lives and communities
along the Gulf.
"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.
"In
addition, this proposal enables us to build on initiatives to improve operational
efficiency, further strengthen our disaster assistance program and increase outreach
to underserved markets in inner cities and rural communities. We also have several
initiatives planned to improve federal contract opportunities, and training and
counseling to women, veteran and minority entrepreneurs, which advances this budget
proposal.
"We are enthusiastic about the year ahead
and look forward to working with our congressional oversight committees throughout
the budget process to ensure America's small businesses have SBA resources to
enable their success."
The budget would authorize more
than $28 billion in its primary small business financing programs, including a
level of $17.5 billion for the 7(a) Guaranteed Loan program, $7.5 billion for
the Certified Development Company, or 504, loan program, and $3 billion for venture
capital support under the Small Business Investment company program.
The
agency also proposes a zero-subsidy Microloan program, allowing the agency to
greatly expand its support to Microlenders across the country. In FY 2007 it cost
the government more than 85 cents for each dollar loaned to a Microloan intermediary.
This high cost limits the number of intermediaries which can be supported under
the program, ultimately limiting the impact of the program itself. By raising
the very preferential rate at which intermediaries borrow from as low as 2 percent
below the five-year Treasury rate to 1.3 percent above the FY 2009 five-year Treasury
rate, the agency can eliminate the subsidy cost of this program and greatly expand
funding for Microloan intermediaries.
SBA 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.
The proposed FY 2009 Budget also supports:
--
Continued investment in employees through the successful "SBA University"
training program, mentoring programs, succession planning, and proactive recruitment
of highly qualified staff
-- Continued modernization of
the loan management and accounting system;
-- Assisting
federal agencies as they target a total of $85 billion in prime federal contracting
dollars to be awarded to small businesses in FY 2009;
--
$250,000 for a competitive grant program to support innovative entrepreneurial
development in inner-city and rural geographies;
-- Management
of Business Gateway to provide a single site resource connecting government to
small businesses and entrepreneurs and;
-- Strengthening
and upgrading the agency's information technology infrastructure to provide an
effective, secure, and highly available information system.
