The President's Proposed Budget for the Small Business Administration Fiscal Year 2003: Hearing Before the Committee on Small Business, House of Representatives, One Hundred Seventh Congress, Second Session, Washington, DC, February 13, 2002, Volume 4 |
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2003 budget request 504 program Administration's Administrator Barreto agency America's small businesses appropriation areas ASBDC average banks Business Development Center business owners BusinessLINC CDCs Chairman MANZULLO COMMITTEE ON SMALL companies CONGRESS THE LIBRARY Congresswoman cost counseling create credit subsidy Debenture SBICs default estimate default rate Disaster Loan economic development entrepreneurs February 13 fees financing fiscal year 2003 forecasts funding FY 2003 budget going guarantee Hector Barreto HUBZone increase issue legislation lending LIBRARY CONGRESS LIBRARY OF CONGRESS loan program loan volume look lookback microentrepreneurs million NAGGL Office of Management percent performance portfolio President's program level proposal Question Ranking Member recovery says SBA 7(a SBA budget SBA's SBDC program Small Business Administration Small Business Committee Small Business Development Small Business Investment Stephanie Tubbs Jones subsidy model subsidy rate calculation testimony Thank Treasury U.S. Small Business VELÁZQUEZ venture capital
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Page 64 - This represents an 80% reduction in the estimated cost of the program to the government. This reduction in subsidy costs has been achieved by improved underwriting guidelines, establishment of lender review procedures, and fee increases on both borrowers and lenders. There are many positive attributes of the SBA 7(a) loan program, including: o SBA loan programs provide as much as 40% of all long-term loans (loans with maturities of three years or longer) to small businesses.
Page 57 - The SBA is dedicated to ensuring that all Native Americans who seek to create, develop and expand small businesses have full access to the necessary business development and expansion tools available through Agency programs. This program is a comprehensive initiative designed to meet specific cultural needs and to result in small business creation.
Page 64 - NAGGL is a trade association for lenders and other participants who make approximately 80 percent of the Small Business Administration ("SBA") section 7(a) guaranteed loans. The SBA's 7(a) guaranteed loan program has proven to be an excellent public/private partnership. Over the last decade, the SBA has approved more man 450,000 loans for almost 5 1 00 billion. We thank the Committee for the opportunity to comment on the SBA 7(a) program. Since the beginning of "Credit Reform...
Page 64 - House testimony last year) were used, the current subsidy rate of 1.17% would be reduced by over 120 basis points. This would mean that the subsidy rate today is already below zero. At the same House Small Business Committee hearing last year, the former SBA Administrator testified "the program is already being run at a profit to the government.
Page 82 - ... to stimulate and supplement the flow of private equity capital and longterm loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply...
Page 82 - ... provided, however, that this policy shall be carried out in such a manner as to insure the maximum participation of private financing sources.
Page 64 - SBA 7(a) loans have significantly longer maturities tian conventional loans to small businesses. The average original maturity of SBA 7(a) loans, according to the Office of Management and Budget ("OMB"), is 14 years. By comparison, only 16% of conventional small business loans have maturities in excess of one year, and of those loans, the average maturity is less than four years o Longer maturities mean substantially lower monthly payments for borrowers. For example, the difference...
Page 64 - Budget ("OMB"), is 14 years By comparison, only 16% of conventional small business loans have maturities in excess of one year, and of those loans, the average maturity is less than four years o Longer maturities mean substantially lower monthly payments for borrowers. For example, the difference in monthly payments from a 10 year SBA 7(a) loan to a five year conventional loan (which would be above the average maturity for conventional loans), would be 35-40%. This is a significant increase for the...
Page 95 - First, they (small firms) are an integral part of the renewal process that pervades and defines market economies. New and small firms play a crucial role in experimentation and innovation that leads to technological change and productivity growth.
Page 64 - Banks can not be expected to make long-term loans, the kind most needed by small business, when banks are funded by a short-term deposit base. o The SBA 7(a) appropriations are leveraged almost 99 to 1 by the private sector, making this one of the governments' best economic development instruments. With a more accurate subsidy rate estimate (as discussed below), the leverage ratio would be even higher. o The SBA 7(a) loan program is just that - a loan program - which helps qualified small businesses...