Proposed SBA Budget Offers More Financing and Technical Assistance for Small Businesses

“President Clinton released his Fiscal Year 2001 budget proposal yesterday for the U.S. Small Business Administration. The proposed budget will bring more small business and start-up technical assistance to the Tacoma-Pierce County area, especially to the Native American community, according to the SBA.The new budget proposal offers an agenda for small businesses that provides a record amount of financing, contracting and training programs to the growing ranks of small businesses, according to SBA Administrator Aida Alvarez.The proposed budget would fund $18 billion of loan and venture capital assistance and build on the New Markets Initiatives announced last year.President Clinton’s balanced approach to the FY 2001 budget offers the American people a sound proposal for fiscally responsible tax cuts, for key investments in health care, education and economic growth and the elimination of the national debt by 2013 – a prospect considered impossible just a few years ago, Alvarez said.This budget maintains the fiscal discipline that has brought us unprecedented prosperity, and gives us the tools to extend that prosperity into the future, Alvarez said. For small businesses and for the SBA, this is a great budget that will allow us to guarantee a record level of small business loans, finance record levels of venture capital and support record levels of business development, technical assistance and innovation.At the same time, it gives us the resources to extend the benefits of economic growth to places it hasn’t yet reached, Alvarez said.Alvarez said since the beginning of the Clinton/Gore administration, the SBA has focused on newer, smaller businesses. In 1999, 32 percent of SBA 7(a) loans and 40 percent of microloans were made to start-ups.This budget represents an unprecedented investment in the talent, drive and entrepreneurial spirit of Americans, Alvarez said. It will help us accomplish our basic mission: building communities, one small business at a time.The total new budget proposed for the SBA is $1.06 billion.The President’s budget proposal would expand the SBA’s core financial assistance programs with $11.5 billion in guaranteed loans for small businesses, up from $9.8 billion in FY 2000; $2.5 billion in venture capital support for investments in small businesses; $3.75 billion in loans under the 504 Certified Development Company program; and $60 million for microloans, doubled from that program’s previous $30 million.The proposal also reduces fees for the 504 CDC loan program for the fourth consecutive year, while simplifying the fee structure for the agency’s flagship 7(a) guaranteed loan program and increasing the SBA guarantee on those loans up to $150,000 to 90 percent.Clinton’s budget proposal also provides funds for several of the President’s key initiatives, including the New Markets Venture Capital Program designed to increase access to equity capital and technical assistance to women, minorities and to businesses located in low and moderate-income rural areas and inner cities. It also proposes $150 million in SBA-backed funds for these venture capital companies, and $30 million for technical assistance provided for the firms in which they invest.The budget would also provide $6.6 million for the BusinessLINC mentor program.The budget for FY 2001 provides $5.75 million targeted for Native American small businesses, $4 million for veterans assistance, $5 million to encourage small business use of electronic commerce, and $15 million to help small companies bring to market products they develop with federal research and development funding.The budget proposal includes $24 million in funding for the ongoing transformation of the SBA into a leading-edge institution, including modernizing the agency’s systems and processes, development of up-to-date risk management and internal control systems, as well as helping to provide quality customer service.”