Filed in archive Small Business on December 2, 2024

Small Business Administration Funding to Be Reduced

© HowardLake

Under President Barack Obama's proposed budget the Small Business Administration (SBA) is facing a 45% cutback in funding. However, this is in relation to the extra funding they had received previously under the economic stimulus legislation. The agency would get $985 million in fiscal 2012 to support its loan programs and disaster assistance for small businesses.

The budget would specifically back $27 billion in loan guarantees for small business, but would cut spending and funds for SBA Development Centers. $1.1 billion would be designated for disaster assistance, which is an increase from the last budget. The allocation for SBA salaries on the other hand would decrease. The SBA also guarantees government backing on loans made by commercial lenders to some small businesses, covering up to 85% of a loan in the event of a default. This loan guarantee program has been showing in creased losses recently, so the administration is planning to allow the SBA to increase fees for these programs to counteract the losses.