The House Committee on Small Business submitted its recommendations for the Small Business Administration’s (SBA) Fiscal Year 2010 budget, doubling previous budgets by proposing $1.43 billion in funding for agency programs that will help local businesses stay afloat and promote economic recovery. The recommendations submitted by the committee would restore SBA funding levels similar to those under the last year of the Clinton Administration.
Lawmakers said that as the country seeks a new path to prosperity, small-business innovation and job creation will be vital to economic recovery.
“Now is not the time to shortchange small businesses,” said Rep. Nydia Velázquez (D-NY), Chairwoman of the House Small Business Committee. “Given the current economic difficulties, we need a revitalized SBA with the resources to foster small-business growth and help drive our economy out of this downturn.”
The Committee also recommended full funding for important Entrepreneurial Development Programs such as the Small Business Development Centers (SBDCs), Women’s Business Centers (WBCs), the SCORE program, veterans’ business development initiatives and Native American programs. Lawmakers said that during economic downswings, many Americans start their own ventures, making Entrepreneurial Development Programs important to the nation’s economic recovery. In addition, Entrepreneurial Development Programs are proven investments, returning $2.87 in tax revenues for every $1 spent on them.
“During recessions, many Americans respond by launching their own business,” Velázquez said. “Studies have found that businesses that make use of Entrepreneurial Development Programs are twice as likely to succeed compared to those that do not. As our country responds to the current downturn, the technical services that Entrepreneurial Development Programs offer can help a new generation of entrepreneurs get off the ground, grow their businesses and contribute to economic recovery.”
To meet the growing need for affordable capital in today’s credit markets, the Committee proposed $29 billion in small business loans and investments to promote entrepreneurship with an additional $1.1 billion in financial assistance for small businesses affected by disasters. This is in addition to $21 billion in new lending and capital initiatives already approved for small businesses under the recently passed American Recovery and Reinvestment Act. In the Economic Recovery and Reinvestment Act, Congress made SBA-backed loans less expensive for small businesses borrowers and lenders. The Committee recommended sustaining this change going forward in order to help small businesses access credit.
“The single biggest issue blocking small businesses from growing and contributing to economic recovery is access to affordable credit,” said Velázquez. “The Committee’s budget recommendation would mean additional loans for small businesses, so they can weather the downturn, expand and hire new employees.”
The budget recommendations were approved by voice vote. They were submitted to the House Budget Committee for inclusion in Congress’ annual budget.