The Huntsville Item, Huntsville, TX

Business

March 5, 2009

Budget backs $28 billion in small business credit

The following information was recently released by the U.S. Small Business Administration (SBA) concerning small businesses: 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 will account level appropriation details are 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 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 and 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 and enhances human capital resources

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