The President’s FY2020 Budget was released on Monday. The budget gives SBA a 5% cut in overall funding. Although the total number listed ($820 million) is an increase from FY19, the Administration plans to increase fees across SBA’s business loan programs in order to technically reach the “net” decrease of funding to $665 million. The Agency Appendix, which breaks down amounts line by line, is expected to be released on March 18th, and will provide further clarity.
Sections of note (SBA § on p. 111):
- Microloan Program. In addition to $25 million in technical assistance (TA) grant funds requested for the Microloan program, the Budget requests $4 million in subsidy resources to support $40 million in direct lending.
- Small Business Development Centers. The Budget requests $101 million for the Small Business Development Center program and proposes the creation of a competitive set-aside within this total to reward partners who most efficiently serve small businesses. The Budget continues to invest in counseling and mentoring programs such as Women’s Business Centers, Veterans Outreach, and SCORE that provide essential coaching opportunities to developing small businesses and entrepreneurs.
- Note: It is unclear at this point if the $101M includes all entrepreneurial development programs or just SBDCs. We will know more when the Agency Appendix is released next week.
- CDFI Fund. Like last year’s request, the Budget eliminates funding for Community Development Financial Institutions (CDFI) Fund discretionary grant and direct loan programs. (Note: CDFI Fund ended up being funded at $250M for FY19.)
While the plans for the Microloan Program and SBDCs are encouraging, the elimination of the CDFI Fund’s programs and overall decrease in funding are troubling. We must keep an eye on the Agency Appendix and remain in close contact with our legislators when Congress begins budget negotiations.