Last week, the Trump Administration released its 2026 Budget Request. The request proposes $163 billion in non-discretionary budget authority for FY26; a 22.6% reduction of current year spending. Below are the most relevant cuts and increases that will impact the small business ecosystem.
Small Business Administration (SBA)
The Trump Administration’s budget proposes to cut the Small Business Administration (SBA) budget by approximately $287 million, a 33.2% reduction from the 2025 enacted level. This reduction does not include cuts to supplementary disaster assistance funding. SBA’s total discretionary resources would drop to about $700 million in FY26 under the President’s proposal compared to about $1.3 billion in FY 25.
- Entrepreneurial Development Programs (p.39) proposed cuts: $167 million
- The Budget proposal ends 15 entrepreneurial development programs, leaving only the Small Business Development Centers (SBDCs) program. Programs to be eliminated include WBDCs, SCORE, VBOCs, and 8a.
- Small Business Development Centers (SBDCs) would receive a $10 million funding increase.
- Salaries and Expenses – proposed cuts: $111 million
Department of Treasury
The Trump Administration’s budget proposal includes a 6.7% increase in discretionary funding for the U.S. Department of the Treasury, raising it to $12.1 billion.
- Community Financial Development Institution Fund (CDFI) Discretionary Awards (p.35) proposed cuts: $291 million
- Remaining funding will support oversight and closeout of prior awards, maintaining CDFI certification, and support for New Markets Tax Credit administration and the zerocost Bond Guarantee Program.
- Rural Financial Award Program (p.34) proposed increase: $100 million
- The budget proposed the creation of a $100 million award program to spur economic development in rural America.
- The program would require 60% of CDFI loans and investment to go to rural areas. It would leverage existing CDFI Fund resources.
Department of Agriculture
The Trump Administration’s budget proposal includes a 21% reduction in discretionary funding for the U.S. Department of Agriculture (USDA), amounting to a $4.7 billion cut.
- Rural Development Programs (p.32) – proposed cuts: $721 million
- The President’s budget includes a request to eliminate community facility grants, rural business programs, single family housing direct loans, self-help housing grants, telecommunications and rural housing vouchers.
- The budget includes no additional funding for broadband expansions
Department of Commerce
- Minority Business Development Agency (MBDA)
- The President’s budget proposes the elimination of the MBDA, by zeroing out the proposed funding. The budget justification mentions the court ruling that struck down MBDA’s use of race-based social disadvantage criteria. No new program funding within Commerce is proposed to replace MBDA’s activities – the agency’s functions would simply cease.
Department of Agriculture
The President’s proposed budget eliminates several programs in the Department that directly support rural small businesses. The FY26 proposed budget zeroes out the:
- Rural Business Development Grants
- Rural Cooperative Development Grants
- Intermediary Relending Program
- Rural Microentrepreneur Assistance Program
The House and Senate, which are under Republican control, will be ultimately responsible for advancing government funding through the appropriations process.