"President Obama's fiscal 2012 budget proposal for the Small Business Administration asks Congress for $985 million—45% less than the $1.8 billion that the agency received in 2010."
It’s not all bad news for business owners, though. Some of the savings, an estimated $20 million in fact, should come from the SBA’s efforts to streamline loan applications, re-engineering certification processes and generally making loan-management and accounting systems more efficient. If you have applied for an SBA loan, you can easily understand how some of the process could be streamlined. I recently had to deal with some SBA loan issues for a client on a corporate business transaction, and found the SBA to be incredibly slow at making some very basic decisions that pertained to our deal. Although the SBA ultimately approved the deal, the delays harmed the deal (and the reputations of the banker, buyer, and broker involved--in my opinion).
It should be said, too, that the 45% reduction is not so much a cut as the repeal of some of the spending authorized by the Recovery Act and the Small Business Jobs Act, which gave the SBA a budget bump of $963 million. Had those supplemental appropriations not existed, the proposed 2012 SBA budget would actually be 20% more instead of 45% less than 2010.
While the cuts will eliminate some useful programs and will cut support for Small Business Development Centers, streamlining the loan application process would be a welcome relief for business owners and bank lenders alike.
If you are working to start a business or fund an expansion, I highly recommend checking with the SBA to see what programs might be available, and you might want to do it sooner rather than later to avoid suffering cuts. Note, however, that you will need to have all your business documents in order (articles of incorporation/articles of organization, bylaws/operating agreements, minutes/resolutions, etc.) to streamline the processing of your loan.
Suggested key words:
SBA, Obama, Recovery and Small Business Jobs Act, 2011 budget
-The Wall Street Journal Online (Feb 15, 2011) “Obama Proposes Belt-Tightening for SBA”
If you and your small business utilize the services of the Small Business Administration, then you will want to follow President Obama’s budget proposals. The President’s 2012 budget proposal asks for $985 million for the SBA, a 45% reduction from last year’s budget, reports The Wall Street Journal.