The Small Business Administration's budget includes $69 million in congressional earmarks but doesn't include $80 million that could have been used to reduce fees on SBA loans.
The SBA's $569 million budget for this year is a miniscule part of the $555 billion omnibus appropriations bill that the House sent to President Bush Dec. 19. The overall bill contained nearly 9,000 earmarks -- funding for specific projects requested by lawmakers -- and the SBA portion had its share: 191 earmarks for everything from small business incubators to renovation of a riverfront park in Charleston, W.Va.
The House's original SBA funding bill included an extra $80 million in funding for the agency's 7(a) business loan program, a popular source of long-term financing for small businesses. The House wanted the SBA to use this money to reduce fees on these government-guaranteed loans. Rep. Nydia Velazquez, D-N.Y., who chairs the House Small Business Committee, contended the fees are too high for many small businesses and some community banks.
The Senate, however, didn't include the $80 million in its SBA budget bill, and the agency didn't want the money. SBA officials contended the 7(a) program is stronger since it became self-supporting in fiscal 2005, and they didn't want to go back to being subsidized.
Last year, the SBA approved a record 99,607 of these loans, but the dollar volume dropped slightly to $14.3 billion. Lending so far this fiscal year, which began Oct. 1, is a little behind last year's pace, according to the agency.
Congress did add about $40 million to other SBA programs, including additional support for Small Business Development Centers and Women's Business Centers. It once again rejected the Bush administration's request to eliminate the Microloan program, which provides small loans and technical assistance to low-income entrepreneurs. Instead, it expanded the program.
"For the first time since President Bush took office, small business programs will receive a real funding increase thanks to the Democratic leadership of this Congress," said Sen. John Kerry, D-Mass., who chairs the Senate Small Business and Entrepreneurship Committee.
The SBA also will carry over from last year about $304 million in funding for its disaster loan program. That's enough money to support $1.9 billion in low-interest loans to homeowners and businesses who experience property damage or economic losses due to disasters. That's almost double the amount of disaster loans the agency makes in a normal year, according to the SBA.
