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SBA Budget Request Reflects Commitment to Provide Capital for Small Businesses

The U.S. Small Business Administration has announced a fiscal year 2005 budget request of $678.4 million that increases loan authority for the agency’s flagship lending program and strengthens the agency’s most successful programs.

The budget requests $12.5 billion in loan guarantee authority for the 7(a) program, a 30 percent increase over the FY 2004 requested level. This builds upon the SBA’s record-breaking 2003, which saw an historic number of loans granted under the 7(a) program.

The budget proposal also includes a zero subsidy rate for the 7(a) program, due in part to the expiration of a temporary fee reduction passed by Congress. The result is a funding structure that will add stability and independence to the program, which would no longer rely on an annual appropriation.

In an effort to provide more effective service to small businesses, the budget also includes funding for core programs with an emphasis on making better use of these programs’ extensive resources and well-developed infrastructures. Those program levels include.

• $12 million for Women’s Business Centers

• $88 million for Small Business Development Centers

• $5 million for the SCORE program

• $750,000 for National Women’s Business Council

• $1.5 million for 7(j) technical assistance

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Study Shows 73% of Small Business are Online

A survey by the Office of Advocacy of the U.S. Small Business Administration details small business telecommunications use and spending, offering new insights for policymakers.

Wireless services are now used by 73 percent of small businesses. Of these, 38 percent use dial-up, 26 percent use cable modems, 21 percent use DSL, four percent use satellites, four percent use T-1 lines, and three percent use wireless broadband.

Small businesses spend a considerable amount for telecommunications services. This report finds that small businesses spend on average $543.17 per month for telecommunications services, 89 percent of which are for local, long distance and wireless telephone services.

The cost burden of telecommunications services appears to be higher for very small businesses. For example, firms with 0 to 4 employees spend $82.81 per employee for local and long distance telephone service, while firms with 5-9 employees spend $50.18 per employee and firms with 10-499 spend $20.99 per employee.
 

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Facts About Small Business in America:

1. Small businesses make up more than 99.7% of all employers.

2. Small businesses create more than 50 percent of the non-farm private gross domestic product (GDP).

3. Small patenting firms produce 13 to 14 times more patents per employee than large patenting firms.

4. The 22.9 million small businesses in the United States are located in virtually every neighborhood.

5. Small businesses employ about 50 percent of all private sector workers.

Source: Office of Advocacy of the U.S. Small Business Administration

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