If the House Committee on Small Business has its way, the Small Business Administration is about to have its day.
The committee on Wednesday recommended that Congress double the budget of the Small Business Administration, an arm of the federal government whose functions include making loans to small businesses and helping them to procure government contracts.
By proposing $1.43 billion in funding for agency programs in 2009-2010, the committee aims to restore the SBA funding levels similar to those under the Clinton Administration.
Some committee members say the recommendation is necessary because during economic downswings, many Americans start their own ventures.
What's more, they say, the stimulus package signed into law last month by President Obama is setting the stage for a flurry of federal contracting opportunities.
"Now is not the time to shortchange small businesses," said Rep. Nydia Velazquez (D-NY), Chairwoman of the House Small Business Committee, in a statement. "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."
Wednesday's move comes about a month after the Obama administration vowed to enhance lending opportunities for small businesses.
Specifically, the committee voted to provide $69.5 million for targeted SBA contracting programs that help small firms navigate the federal procurement process. The money, for instance, would bolster funding for marketing experts, who would promote small business participation in federal prime contracts and subcontracts.
The committee also recommended full funding for entrepreneurial development programs such as the Small Business Development Centers, Women's Business Centers, the SCORE program -- which provides free mentoring services to entrepreneurs -- veterans' business development initiatives and Native American programs.
"During recessions, many Americans respond by launching their own business," Velazquez said. "Studies have found that businesses that make use of entrepreneurial development programs are twice as likely to succeed compared to those who do not."
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.
