On Monday, President Obama presented his Fiscal Year 2016 Budget to Congress. Below is a statement from the Administrator of the U.S. Small Business Administration (SBA), Maria Contreras-Sweet.
“This budget shows what we can do if we invest in America’s future and commit to an economy that rewards hard work, generates rising incomes, and allows everyone to share in the prosperity of a growing America.
The President looks to the SBA to provide smart, bold and accessible services to entrepreneurs by providing access to capital, high quality consultation, federal contracting opportunities, and disaster assistance.
To support this mission, the President’s Budget provides SBA $701 million in discretionary funding and $159 million related to major disasters as a discretionary cap adjustment. With this funding, SBA will support more than $40 billion in loan guarantees to help over 75,000 small businesses secure the financing necessary to start or expand their businesses. Additionally, SBA will be able to increase microloans and small dollar lending to credit worthy borrowers; promote inclusive entrepreneurship through targeted initiatives to ensure equal access to SBA services; offer unique training opportunities for transitioning service members and current veterans to pursue business ownership; expand entrepreneurial education programs; provide over $1 billion in disaster relief lending and facilitate access to over $80 billion in federal contracting.
In FY16, we are requesting $0 in taxpayer subsidy for our core capital loan programs. Our two primary lending vehicles, our 7(a) and 504 programs, supported nearly $29 billion in small business lending in FY 2014. With default rates being so low on these programs, along with reforms I implemented around collateralizing loans, the fees cover the cost of these key programs. And that is while we have zeroed out fees on 7(a) loans under $150,000 for all entrepreneurs, and on SBA Express loans under $350,000 for our nation’s veterans.
The Budget also proposes the Scale-Up Manufacturing Investment Funds (SUMIF) program, a new loan guarantee program to assist in financing the scale-up of innovative new manufacturing technologies to commercial-scale production through a combination of federal loan guarantees and matching private funds totaling $10 billion over five years.
The President is also requesting $14.6 million for FY16 to improve agency performance, transform the customer service experience, and bring our agency fully into the 21st century. The centerpiece of our modernization plan is SBA One, the total automation of the 7a loan application that will dramatically cut the time and cost of applying for SBA capital. Four hundred lending partners have already signed on to the SBA network in recent months, and we expect that number to grow once SBA One is fully implemented. This budget will expand automation into government contracting to make it easier for small businesses to find opportunities to do business with the federal government. It also funds an SBA Idea Lab with coders and software engineers to incubate cutting-edge ideas; an SBA Digital Services Team focused on implementing online innovations; an SBA Center on Efficiency to cut costs and reduce risk; an SBA 24-hour licensing tool to help startups rapidly research and apply for municipal and state licenses; and an online tool that brings SBA lenders and prospective borrowers together.
The agency is expanding access to capital through SBA’s extensive lending programs, growing mentorships, increasing exporting opportunities for small businesses, investing in high-growth businesses, fully funding disaster assistance loans, increasing opportunities for underserved communities and reducing regulatory barriers to entrepreneurship, innovation and U.S. competitiveness.”