Budget: SBA

February 16, 2011

The U.S. Small Business Administration (SBA) fared fairly well in President Barack Obama’s 2012 Budget Proposal.

SBA

The administration proposed allocating $985 million to the SBA in Fiscal Year (FY) 2012. In FY 2011, the agency received $993 million in core budget funding. The 2012 budget proposal still represents a marked increase from the $824 million the SBA received in 2010.

It is important to note, however, that in total $1.8 billion was appropriated to the SBA in 2011, due to the $963 million in supplemental appropriations the agency received as Congress and the Obama Administration attempted to offset the small-business credit crunch.

The supplemental appropriations funded the highly-successful and NSBA-supported small-business provisions of the American Recovery and Reinvestment Act, which allowed the SBA to increase the guarantee on 7(a) loans to 90 percent and to reduce borrower fees on most 7(a) and 504 loans. While overall small-business lending was plunging by $43 billion, these provisions led to an increase in SBA-backed lending in FY 2010 to $12.6 billion, following a 27 percent decrease in 2009.

The budget proposal would force the agency to cut spending on salaries and expenses by $7 million. The SBA also would need to slice $5 million of its budget for managing its loan programs. Funding for Small Business Development Centers also would be trimmed.

The budget proposal designates $1.1. billion in direct loans for disaster assistance in 2012.

Office of Advocacy

Thanks to the 2010 Small Business Jobs Act, the SBA Office of Advocacy now has a separate line-item in the budget—an adjustment long sought by NSBA. In its initial budget line item, the administration proposes allocating $9 million for the Office of Advocacy.

Please click here for a broad overview of the President’s budget.

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