Obama Plans to Cut SBA Budget Almost in Half

The president's 2012 budget proposal slashes Small Business Administration funding by 45 percent, although the agency's 2010 total was significantly inflated because of stimulus spending.

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Budget buster: President Obama's 2012 budget proposal cuts funding for the SBA by 45 percent.Uncle Sam's Great Recession stimulus for small businesses may soon be over. The Small Business Administration faces a 45 percent decrease in funding, as part of President Obama's 2012 proposed budget released Monday.

The proposed SBA budget stands at $985 million for 2012 -- down from the $1.8 billion the SBA received in 2010, a total that was fueled in large part by $962 million in supplemental stimulus appropriations that were designed to help boost small-business loans. Those appropriations are no longer available for 2012.

Other areas slated for budget cuts include Small Business Development Centers, which provide support and mentoring to entrepreneurs, and administrative costs, including a $7 million drop in salaries and expenses.

The SBA isn't the only government department that will have to figure out how to do more with less in the 2012 budget. Overall, Obama's $3.73 trillion budget proposal makes substantial cuts to some domestic programs and freezes others, with the goal of slashing the federal deficit by $1.1 trillion over a decade.

In that context, small-business lending fares pretty well. The 2012 SBA budget allows for about $27 billion in loan guarantees, including $16.5 billion in 7(a) loan guarantees and $7.5 billion in guaranteed lending for commercial real estate development and heavy machinery purchases, as well as $1.1 billion in direct loans for disaster assistance. From fiscal 2007 to 2010, the annual amount of disaster loans for businesses and homeowners in federal disaster areas averaged $837 million.

To see the complete 2012 SBA budget proposal, click here.

Tags: 2012 budget, 2012 budget cuts, 7a loans, budget cuts, News, Obama, Obama budget, Obama small business, SBA, SBA budget, SBA loans

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