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SBA Budget FY13 Details

The U.S. Small Business Administration released its proposed budget for FY2013. Below is the full text of the SBA Press Release.

SBA SBDC Program Driving Job Growth SBA Logo
In FY2013 President Obama continues his investment in small businesses by providing more tools to help them grow and create jobs, while also increasing SBA’s efficiency and effectiveness.

FY2013 Overview:

  • New tools: SBA will roll-out new initiatives for veterans and transitioning workers; launch BusinessUSA.gov; boost efficiencies with electronic loan application submissions and modernized data infrastructure; and guarantee up to $26 billion in loans to small businesses (7a, 504 and SBIC).
  • Drivers of budget growth: 1) Subsidy costs have increased for SBA loan programs because of risks inherent in an environment of sustained unemployment and depressed real estate market as well as low-performing loans made in mid-2000s that continue to influence our credit profile.  2) Disaster funding is increasing based on the $167 million for Disaster Administration Expenses being provided under the disaster cap adjustment for Presidentially Declared Disasters.
  • Tough choices: SBA has made tough budget choices in order to be fiscally responsible, but we will continue to ensure our resource partners have the tools they need to support small business owners and the next generation of entrepreneurs.

Priority Goals to Promote Efficiency and Effectiveness:

  • Process Business Loans Efficiently.
    • By September 30, 2013, increase the use of paperless processing in the 7(a) program from 72% to 90% and in the 504 program from 55% to 75% to improve the efficiency, effectiveness and level of service in its business loan programs.
  • Increase Small Business Participation in Government Contracting.
    • By September 30, 2013, increase small business participation in federal government contracting to meet the government wide goal that 23% of all prime contracting dollars go to small businesses, and continue to ensure that the benefits of SBA’s small business programs flow to the intended recipients.
  • Process Disaster Assistance Applications Efficiently.
    • By September 30, 2013, increase the use of the Disaster Assistance electronic loan application by 50%.
  • Expand Access to Long-Term Capital.
    • From FY 2012 through September 30, 2013, commit at least $4.3 billion of capital via the Small Business Investment Company program in order to facilitate access to capital for high growth companies and enhance job creation and retention by these companies.

New Initiatives to Serve the Next Generation of Entrepreneurs:

  • Lead national, government-wide Veterans Entrepreneurship Training Initiative ($7M)
  • Lead efforts to develop BusinessUSA.gov ($6M)
  • Complete data center consolidation effort ($5M)
  • Boost Office of Investment & Innovation capabilities to get more long-term capital to innovative, high-growth small businesses and spur job creation ($3M)
  • Roll-out Skills Training Initiative to train next generation of workers and experienced workers transitioning to new positions ($1.7M)

Access to Capital:

  • SBA lending is back to pre-recession levels and small businesses continue to have more points of access to capital. But, loans initiated in the mid-2000s continue to alter our credit profile.
  • SBA proposes to increase the loan subsidy and decrease the authority to remain fiscally responsible, while still meeting the capital needs of small businesses.
  • Since SBA’s fees are statutorily capped, SBA proposes to increase the loan subsidy to $351M and set the program cap at the historical average to still meet the needs of the small business community:
    • 7(a) from $17.5B to $16B
    • 504 from $7.5B to $6B
  • Recovery Act and Small Business Jobs Act provisions included higher guarantees to entice lenders to provide access to capital during tough economic times.  As the guarantees and markets return to historical levels, SBA’s lending program levels will return to historical averages.

Making SBA More Efficient by Smartly Trimming Overhead:

  • Reducing printing costs by pivoting from print to the Internet for marketing
  • Using technology to reduce conference costs
  • Modernizing data infrastructure and consolidating data centers to decrease maintenance needs
  • Saving taxpayer dollars by reducing SBA’s service contracts
  • Streamlining administrative services

Tough Choices:

  • While the SBA has made tough budget choices, we will continue to ensure our resource partners have the tools they need to support small business owners and the next generation of entrepreneurs.
  • Working with our resource partners, SBA will roll out targeted entrepreneurial training for returning veterans, skills training for new and mid-career workers, and support for regional hubs of innovators.

Non-Credit Programs

FY2011

FY2012

FY2013

7(j) Technical Assistance Program $      6,354 $      3,100 $      2,790
Drug-Free Workplace

997

0

0

HUBZone Program

2,194

2,500

1,976

Microloan Technical Assistance

24,603

20,000

19,760

National Women’s Business Council

954

998

898

Native American Outreach

1,132

1,250

850

PRIME Technical Assistance

7,983

3,500

0

SBDC Grants*

120,916

112,500

101,093

SCORE*

6,986

7,000

6,300

Veterans Business Development

2,495

2,500

2,496

Women’s Business Centers Grants*

13,866

14,000

12,600

  Entrepreneurial Development Initiatives
(Clusters)

6,581

5,000

3,350

  National Veterans Entrepreneurial
Training (VET) Program

0

0

7,000

TOTAL

$  195,061 $  172,348 $  159,113

* Indicates that in FY2013 resource partner budgets were cut proportionally to ensure fairness.

Accomplishments in FY2011:

  • Record SBA Lending: SBA increased overall lending supported from $22.6 billion in FY2010 to $30.5 billion in FY2011. This reflected the highest ever SBA lending year in 60-year history of agency.
  • Record in growth-capital: Due to a reduction in licensing times and attraction of new funds in the SBIC program, SBA’s SBIC Debenture Program supported nearly $2.6 billion in overall financings to “high-growth” small businesses, a 63% increase from FY2010.
  • Optimized disaster assistance in record year: SBA quickly responded to over 300 disasters, and approved over $700 million in loans to businesses and home owners.

For more information you can view SBA’s budget at www.sba.gov/performance.

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