The President's FY2018 Budget Proposal

WBC: FY17=18; FY18 WH Request=16* PRIME: FY17=5; FY18 WH Request=0* HUBZone: FY17=3; FY18 WH Request=2.5* Microloan TA: FY17=31; FY18 WH Request=25 Microloan Lending: FY17=44; FY18 WH Request=36 CDFI Fund: FY17=248; FY18 WH Request=14* 7(a) Guarantees: FY17=23.5 billion; FY18 WH Request=29 billion NWBC: FY17=1.5; FY18 WH Request=1.5 SBDC: FY17=125; FY18 WH Request=110* Community Development Block Grant (CDBG): FY17=forthcoming*; FY18 WH Request=forthcoming* Rural Business Development Grant (RBDG) Program: FY17=24; FY18 WH Request=forthcoming* Intermediary Relending Program (IRP): FY17= 4.46; FY18 WH Request=0 Rural Microentrepreneur Assistance Program (RMAP): FY17=3; FY18 WH Request=3 *WBC Justification by SBA to Congress: The FY 2018 request strengthens SBA outreach center programs by reducing duplicative services, coordinating best practices, and investing in communities that will benefit from SBA’s business center support. As a result, the SBA is confident that it will be better positioned to strengthen local partnerships and more efficiently serve program participants while achieving savings over the FY 2017 Enacted levels. *PRIME Justification by SBA to Congress: The PRIME program’s function and activities are not discernibly different from many other SBA entrepreneurial assistance programs such as Microloan technical assistance, the Women’s Business Center program, or the Small Business Development Center program. In particular, while the PRIME program is designed specifically for micro-level businesses, it is less targeted than the Microloan program’s technical assistance funding which supports micro-borrowers with both microloans and other support from the intermediaries. In addition, the SBA has been strengthening its partnerships with major U.S. banks, as well as community lenders, to help them to deliver billions more in financing to under-served communities. *HUBZone Justification by SBA to Congress: Following an FY 2017 development effort to enhance HUBZone maps, SBA anticipates decreased development needs for this effort in FY 2018. *CDFI Justification by SBA to Congress: Unlike other CDFI Fund programs, the CDFI Bond Guarantee Program (BGP) — enacted through the Small Business Jobs Act of 2010 — does not offer grants, but is instead a zero-subsidy Federal credit program, designed to function at no cost to taxpayers. Under the BGP, the Secretary of the Treasury provides a 100 percent guaran­tee of long-term bonds issued to CDFIs, with a maximum maturity of 30 years. The BGP does not require discretion­ary budget authority for its credit subsidy, but the annual loan guarantee limitations are appropriated. Through September 30, 2016, Treasury had issued $1.1 billion in bond guarantee commitments to 17 CDFIs that have supported investments in low-income and underserved communities, including for the development of multi-family rental properties, charter schools, and healthcare facilities. The Budget proposes to extend and reform the BGP through 2018 with an annual commitment limi­tation of $500 million and a minimum individual bond size of $50 million, while maintaining strong protections against credit risk. *SBDCs Justification by SBA to Congress: The FY 2018 request strengthens SBA outreach center programs by reducing duplicative services, coordinating best practices, and investing in communities that will benefit from SBA’s business center support. As a result, the SBA is confident that it will be better positioned to strengthen local partnerships and more efficiently serve program participants while achieving savings over the FY 2017 Enacted levels. There were also several proposals that affect some of our programs. ENTREPRENEURIAL DEVELOPMENT PROGRAM: For necessary expenses of programs supporting entrepreneurial and small business development, $192,450,000, to remain available until September 30, 2019: Provided, That $110,000,000 shall be available to fund grants for performance in fiscal year 2018 or fiscal year 2019 as authorized by section 21 of the Small Business Act: Provided further, That $25,000,000 shall be for marketing, management, and technical assistance under section 7(m) of the Small Business Act (15 U.S.C. 636(m)(4)) by intermediaries that make microloans under the microloan program: Provided further, That $10,000,000 shall be available for grants to States to carry out export programs authorized under section 22(l) of the Small Business Act (15 U.S.C. 649(l)) to assist small business concerns MICROLOAN AMENDMENTS: The SBA requests authority to make two changes that will help make SBA’s Microloan Program operate more efficiently and reach more micro-borrowers and micro-entrepreneurs.
  • The SBA requests the authority to eliminate the 25/75 RULE. The governing statute currently requires that micro-lenders spend at least 75% of their technical assistance grant funding on actual microloan borrowers (post-loan technical assistance), and limits expenditures on up-front technical assistance to 25% of the grant funding (pre-loan technical assistance). The proposed amendment would eliminate this 25/75 rule and enable microloan intermediaries to provide technical assistance to an increased number of small businesses or prospective businesses.
  • The SBA also requests the authority to adjust the 1/55th Rule. Currently, during the first 6 months of a fiscal year, SBA is restricted from putting more than 1/55th of available microloan funding into any given state. This restriction, originally added to the statute to protect the interests of small states, effectively delays deployment of microloan funds by six months thereby limiting the availability of capital for small businesses regardless of the size of the state or the needs of the business
  • community.
OFFICE OF ADVOCACY: For necessary expenses of the Office of Advocacy in carrying out the provisions of Title II of Public Law 94–305 (15 U.S.C. 634a et seq.) and the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.), $9,120,000, to remain available until expended. SBDC and WBC DATA COLLECTION: Currently, Small Business Development Centers (SBDCs) and Women’s Business Centers (WBCs) collect data on each individual and small business to which they provide counseling and training services. Except for the limited purposes identified in the Small Business Act, SBDCs and WBCs may not disclose to SBA certain information (e.g., name, address, telephone number) that they collect. However, the SBA needs access to this type of information to be able to contact the individuals or small businesses to determine their level of success after receiving counseling and training assistance. Disclosure of the information to SBA would greatly enhance the agency’s efforts to conduct rigorous program evaluations, including the impact of the counseling and training on those who received such assistance, identify best practices, and improve efficiency of the SBDC and WBC programs. As a result, SBA is proposing to add program evaluations and similar program assessments to the list of allowable purposes for which the data may be disclosed to SBA. ]]>