Myths vs. Facts: SBA’s 08 Budget Proposal

Following the recent submission of the Small Business Administration’s (SBA) 2008 fiscal budget, the agency is attempting to clarify some common misconceptions regarding its spending proposals. Here are a few, according to the agency.

Myth: More subsidies are needed for the 504 program and the SBIC.

Fact: The 504 program has increased 81% from 2003-06, from $3.1 billion to $5.7 billion. Because the program is self-sustaining, all of this growth has been achieved without requiring taxpayer dollars. The 2008 budget proposal provides for $7.5 billion in 504 lending, an increase of almost 32% over the 2006 budget.

Myth: The 2008 budget lacks funding for loans and venture capital programs. This will require the SBA to raise fees or reduce programs.

Fact: The SBA will have the capacity to provide 40% more loans under the 2008 budget compared to what was funded in 2006. In all three of SBA’s largest loan programs (7(a), 504 and SBIC), the fees will be lower under the 2008 budget. In fact, under the 504 loan program the entire upfront borrower fee is being eliminated.

Myth: The entire SBA should be revamped and it should assess the programs it has to see what changes need to be made.

Fact: The agency, which endured great challenges in the aftermath of Hurricane Katrina, is aggressively re-examining its operational structure in order to improve efficiencies and service. Last summer, it re-engineered its disaster loan processes, investing thousands of hours to redesign its operational processes.

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