Concerns Surface on Sequestration Impact on SBA’s Ability to Operate
A month after the federal budget cuts went into effect, the SBA is being called on to provide contingency plans on how the agency plans to operate in an environment with limited resources.
In a Wednesday letter to SBA Administrator Karen Mills, Rep. Sam Graves (R-Mo.), chairman of the House Small Business Committee, raised concerns about the SBA’s 7(a) and certified development company loan programs, both which he said requires an appropriation to cover their costs as defined in the Federal Credit Reform Act.
To assist the House Small Business Committee with oversight, Graves asked Mills to provide several pieces of information including expected demand through Sept. 30 for the 7(a) and CDC loan programs and procedures the SBA will use to allocate funds in the business loan accounts for both programs.
Graves also requested details on any plans to cap the size of loans available in either program to ensure that sufficient funds are in place to operate through Sept. 30.
The SBA was also asked to provide any plans to establish a priority list to allocate loans to potential borrowers should the expected loan demand exceed funds, Graves said.
Mills was also asked to describe any expected reprogramming funds as authorized by Congress from other SBA accounts to the business loan account in order to cover any shortfalls in funds.
Finally, Graves has also requested information from the SBA on expected cost of travel by the agency’s employees through Sept. 30, costs incurred through its National Small Business Week events, and expenses to host a website associated with an award program for small businesses involved in an innovation research program and continued funding of the Regional Innovation Clusters program.
Graves asked Mills to provide the information by April 15. He also told Mills to be prepared to testify on the SBA’s sequestration contingency plans during a House Small Business Committee hearing scheduled for April 24.