Obama looks to cut SBA budgets

2/15/2011

Under President Barack Obama's new budget guidelines, the U.S. Small Business Administration will face significant budget cuts, Bloomberg reports.

The organization would receive a 2012 fiscal year spending budget of $985 million - a 45 percent cut from last year's budget - if Obama's plan goes into effect. The SBA, which specializes in providing small business commercial loans and assistance, would reduce administrative spending and funds for Small Business Development Centers as a result.

"The agency's guaranteed loan programs are showing a $3.7 billion increase in losses and subsidy costs on outstanding loans, excluding interest, in 2011, according to the budget proposal. To shore up the program, the administration will submit legislation 'to provide the SBA the flexibility to adjust fees in these programs to enable them to be self-sustaining,'" notes the source.

The budget cut comes after a highly successful year for the organization. The SBA announced in January that it had helped support more than $12 billion in loans to small businesses since the passing of September's Jobs Act..