Federal Small-Business Programs

Sunday, March 29, 2009
The NASE Position:

 The NASE is a fervent supporter of federal small-business programs that have a proven track record of efficiently aiding very small businesses and the self-employed, such as the SBA Office of Advocacy, Small Business Development Centers and the SBA Microloan Program. The NASE feels that any cut to the Small Business Administration’s budget, most especially the cuts in the SBA Microloan Program, will negatively affect small business. The NASE supports appropriation of more funds to the Microloan Program and the strengthening of the SBA Office of Advocacy. The NASE would also like to see continued support and added funds to assist Small Business Development Centers.

Background:
Congress created the Small Business Administration with the passage of the Small Business Act of 1953. The SBA’s function was to “aid, counsel, assist and protect, insofar as is possible, the interests of small-business concerns.” By 1954, SBA had begun making direct business loans and guaranteeing bank loans to small businesses, working to obtain government procurement contracts for small businesses and helping business owners with management and technical assistance. Today, the SBA is the nation’s largest single financial backer of small business.

The role of the SBA Office of Advocacy is to be an independent voice for small business in the formulation of public policy across the entire federal government. The Chief Counsel, appointed by the President from the private sector and confirmed by the Senate, is the head of the Office of Advocacy. The primary duties assigned to the Office are to generate research on small-business trends, characteristics and contributions to the economy, and to monitor federal agency compliance with the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).

The SBA administers the Small Business Development Center Program to provide management assistance to current and prospective small-business owners. SBDCs offer one-stop assistance to small businesses by providing a wide variety of information and guidance in central and easily accessible branch locations. The SBA provides 50 percent or less of the operating funds for each state SBDC; one or more sponsors provide the rest. These matching fund contributions are provided by state legislatures, private sector foundations and grants, state and local chambers of commerce, state-chartered economic development corporations, public and private universities, vocational and technical schools, community colleges, and others.

The SBDC Program is designed to deliver up-to-date counseling, training and technical assistance in all aspects of small-business management. SBDC services include, but are not limited to, assisting small businesses with financial, marketing, production, organization, engineering and technical problems and feasibility studies. Special SBDC programs and economic development activities include international trade assistance, technical assistance, procurement assistance, venture capital formation and rural development.

The SBDCs also make special efforts to reach minority members of socially and economically disadvantaged groups such as veterans, women, ethnic minorities and the disabled. Assistance is provided to both current or potential small-business owners. They also provide assistance to small businesses applying for Small Business Innovation and Research (SBIR) grants from federal agencies.

Legislative Activity:
During the Bush Administration, we consistently saw cuts to key SBA programs such as the Women’s Business Centers, the Microloan and Technical Assistance programs, the competitive edge programs, and the advanced technology program. The NASE is hoping to reverse these trends under the new Obama Administration.

The American Reinvestment and Recovery Act (H.R. 1) that has been introduced in the 111th Congress includes $35 million for SBA lender oversight activities and information technology systems related to loan oversight. The bill would also provide $6 million for direct loans and $615 million for guaranteed loans until 2010, and would temporarily eliminate fees for the 7(a) and 504 loan programs.

With our declining economy, now more than ever small businesses need the assistance of the Small Business Administration and its’ programming.