We know that TA is a necessary element of job creation through very small businesses. In order to take advantage of loan money and microlending, borrowers need to be loan-ready. They become ready through the TA and business management training that you offer.
I think the SBA is beginning to get the message about the need for TA. My impression is that those within the SBA’s Capital Access Program recognize that the success of the new Community Advantage program depends on good front-end and post-loan TA – where success is measured by good loan performance and low defaults.
The next step for the SBA is how to pay for it. One way to pay for it is through loan volume. And the SBA needs to realize that it takes time to achieve enough loan volume to financially support the training activities.
The perception in SBA and the Small Business Committees in the Senate and House is that programs overlap and are duplicative and that they need to be consolidated to respond to Congressional pressure – and Obama pressure – to relieve the deficit. “We have to cut somewhere,” replied top SBA officials. So TA is the target for cuts. They believe that SBDC’s and SCORE could provide the same services as Women’s Business Centers, PRIME and the RBEG grants in rural areas.
Duplication is a bogus argument. The above-mentioned programs serve different populations. You wouldn’t cut a community college’s budget because there’s a university in town. We have to be relentless in advocating for TA – to define it, to communicate its cost effectiveness, its reach and its depth in stimulating new business and new job growth.
TA funds need to be restored. We need to urge the SBA to stand up for Micro Enterprise and hold ground on the budget. We need to urge the SBA leaders to demand a serious budget conversation, one that includes cutting a tiny fraction of the tens of billions in wasteful defense spending instead $10 million for programs that create jobs.
As always, CAMEO will continue to fight the good fight, but we do need your help.