My experience tells me that as more and more companies continue to merge and then downsize their workforce, some folks will want to start their own businesses rather than seek another traditional 9 to 5 job. If you fall into this category, then you will want to pay close attention to what is going on with the U.S. Small Business Administration (SBA) budget.
If you are not familiar with the SBA ( HYPERLINK “http://www.sba.gov” www.sba.gov) programs, you may want to learn more about the agency if you have a desire to own or start your own business.
The SBA provides short-and long-term loans to startup and existing small businesses. It also provides training and technical assistance to “want-to-be” small business-owners.
During a recent teleconference, U.S. Small Business Administrator Hector V. Barreto announced that $593 million had been requested for the SBA budget in 2006. The budget for 2005 is $611 million n a difference of $18 million, moving in the wrong direction.
Recognizing the reduction in the SBA budget, the question from those of us listening to Barreto was what was going to be eliminated from the SBA arsenal of services.
We learned that two programs, the Microloan program and the PRIME program, will not be funded in FY 2006. This year, the Microloan program has a loan authority of $14.2 million and $15 million for technical assistance grants. The 2005 budget for the PRIME program is $5 million.
Still in the budget is $22 billion in loan authority for SBA lending programs. Several of the programs will have what Barreto called “zero subsidy, meaning that the program is sustained entirely by modest fees paid by the lenders and borrowers, without requiring an appropriation of taxpayer funds.”
Programs that provide technical assistance (Small Business Development Centers, Women’s Business Centers and SCORE, counselors to small businesses) will have approximately $105 million to continue their services. The Drug Free Workplace Program will receive $1million for FY 2006.
As with most of our favorite federally funded program, when the budget is cut, someone suffers.
“The President’s proposed budget cuts to the SBA show a remarkable lack of commitment to the small business owners of America,” the U.S. Women’s Chamber of Commerce (www.uswomenchamber.com) was quick to respond to the proposed SBA budget cuts.
“The President’s 2006 proposed budget cuts the micro loan program (half of micro loans go to women-owned firms), eliminates grants for about 50 percent of Women’s Business Centers and cuts $1M from Small Business Development Centers.”
If you are a minority or woman with the dream of starting your own business, pursue that dream knowing that, due to proposed budget cuts, some of the support resources that have been available in the past may be limited. Also be prepared for electronic delivery of some of the services and information you may need.
For a free copy of a list of local resources that I have found to be helpful as a first-time business owner, send a self-addressed, stamped envelope to the address below.
Contact Alfreda Brown at the Center for Social and Employment Analyses (C-SEA), 3830 Washington Blvd., St. Louis, MO 63108, email HYPERLINK “mailto:workinginstlouis@aol.com” csea4info@aol.com, call 534-6121 or visit HYPERLINK “http://www.c-sea.com” www.c-sea.com.
