Agency Administrator Touts Clinton Record
On Economy, Budget
Today’s economic picture is just about the best it’s ever been, both for small businesses and the country in general.
So announced a jubilant Aida Alvarez, administrator of the Small Business Administration, in a telephone press conference in Washington, D.C., on Feb. 7.
“Thanks to the Clinton-Gore policies, the largest-ever budget deficits have become the largest-ever budget surpluses. Unemployment is at a 30-year low,” she said.
The outlook for small business is also strong, with a record number of small business start-ups since President Bill Clinton and Vice President Al Gore took office, Alvarez said.
The proposed 2001 Clinton-Gore budget , which continues the policies of the last eight years , is similarly bright, she said.
“This budget maintains the fiscal discipline that has brought us unprecedented prosperity and gives us the tools to extend that prosperity into the future,” Alvarez said.
“(It) offers the American people a sound proposal for fiscally responsible tax cuts, for key investments in health care, education and economic growth and the elimination of the national debt by 2013 , a prospect considered impossible just a few years ago,” Alvarez said.
Most important of all, it provides additional funding for the SBA, she said.
“(This) will allow us to guarantee a record level of small business loans,” she said. “At the same time, it gives us the resources to extend the benefits of economic growth to places it hasn’t yet reached.”
Tom Burke, vice president of SBA lending for Wells Fargo Bank, agreed. Although the SBA has historically faced budget shortfalls which limited the amount of businesses the SBA could help finance, that hasn’t been the case in the past few years.
“It’s probably been about three or four years since there was a shortfall,” he said. “We anticipate that the funding this year will be adequate enough to cover the demand for SBA loans.
That’s especially important to San Diego, since this area relies heavily on SBA loans.
“Southern California is probably the largest SBA market in the country. SBA lending is obviously a significant method for capitalizing small business for California. So it’s a very critical way of delivering capital to business that in general are undercapitalized.”
The Southern California region includes San Diego, Orange and Los Angeles counties, all of which are strong SBA markets.
SBA has focused on newer smaller businesses since the beginning of the Clinton/Gore administration. Last year, 32 percent of SBA 7(a) loans and 40 percent of Microloans were made to start-ups, Alvarez said.
The New Markets Initiative builds on that record.
“This budget represents an unprecedented investment in the talent, drive and entrepreneurial spirit of Americans,” Alvarez said. “It will help us to accomplish our basic mission: building communities, one small business at a time.”
The president’s budget proposal offers $11.5 billion in guaranteed loans for small businesses, up from $9.8 billion in fiscal 2000; $2.5 billion in venture capital support for investments in small businesses; $3.75 billion in loans under the 504 Certified Development Co. (CDC) program; and $60 million for Microloans, up from $30 million.
The proposal also reduces fees for the 504 CDC loan program for the fourth consecutive year, simplifies the fee structure for the agency’s flagship 7(a) guaranteed loan program and increases the SBA guaranty on 7(a) loans up to $150,000 to 90 percent.
The budget also promises funds for several of Clinton’s key initiatives, including the New Markets Venture Capital Program, which increases access to equity capital and technical assistance to women, minorities and to businesses in poorer areas.
It proposes $150 million in SBA-backed funds for these venture capital companies, and $30 million to pay for technical assistance for the firms they invest in. The budget also seeks $6.6 million for the BusinessLINC mentor/prot & #233;g & #233; program.
The budget also seeks $5.75 million for Native American small businesses; $4 million to assist veterans; $5 million to encourage small business to use E-commerce; and $15 million to help small companies bring to market products they develop with federal research and development funding.
Finally, the budget proposal includes $24 million for bringing the SBA into the 21st century, which will help save time and money as the agency conducts more paperless transactions.
Alvarez was pleased with the proposals.
“This is a straightforward budget. It’s great news for small business, and I look forward to its implementation,” she said.