House Funding Bill Increases SBA Subsidy For Small Business Loans
Funding Bill Would Provide An Additional $123 Million For Small Business Loans
Last Thursday the House of Representatives approved a six-month continuing resolution that would allocate $1.05 trillion to government agencies beginning October 1. Even as other agencies face budget cuts, the House voted in favor of increasing the Small Business Administration's annual budget from $210 million to $333 million. This additional funding would help the SBA continue to issue small business loans despite a high rate of defaults on loans issued between 2005 and 2008. If the Senate approves the bill, the SBA would be able to provide up to $16 billion in 7(a) small business loans next year.
During the current fiscal year, which ends September 30, the SBA has backed $13.9 billion in 7(a) loans. This number is down from last year's record figure of $18.3 billion, which was bolstered by temporary incentives that included higher loan guaranties and lower fees for SBA loans. Despite this year's drop, the agency is still well above its 2010 level of $12.1 billion.