Senate Votes To Increase SBA Budget The Senate voted to add $130 million to President Bush’s budget request for the Small Business Administration, bringing the agency to a total of $754 million for 2007. The amendment would provide funds to block a fee increase on SBA-guaranteed loans of more than $1 million and to kill a proposed interest rate increase on disaster loans. It would boost funding for small business development centers and continue three programs the administration wants to eliminate: the Microloan program, PRIME loans and the New Markets Venture Capital program. The Senate approved the 2007 budget blueprint March 16 on a 51-49 vote and sent it to the House. Final spending levels will be set in appropriations bills to be considered later in the year. The president’s proposed $624 million budget for SBA would be 37% lower than the agency’s budget when he took office. The cuts have caused unease even among the Republicans who head Congress’s small business committees. The Senate committee chair, Olympia Snowe (R-ME), said, “The SBA argues that it ‘does more with less,’ but the agency’s resources and employees are stretched too thin.” She and the committee’s ranking Democrat, John Kerry (MA), sponsored the amendment to increase the budget. House Small Business Committee Chairman Don Manzullo (R-IL) said he opposes the increases in loan fees and disaster-loan interest rates. At a hearing before the House committee March 15, SBA Administrator Hector Barreto said the agency “will be able to serve record numbers of small businesses” with a smaller budget. “Lending is at an all-time high, more clients than ever are being served by our entrepreneurial development programs, and improved methods to assist small businesses gain access to government contracting opportunities have been implemented,” he said. Disaster Aid Debated SBA’s disaster assistance program in the Gulf Coast hurricane zone continues to draw fire. Rep. Nydia Velazquez, ranking Democrat on the House committee, said SBA has rejected 65% of loan applications from victims of Hurricanes Katrina, Wilma and Rita, a far higher rejection rate than in previous disasters. Sen. Snow said only 8% of loan funds that have been approved have actually been disbursed. Barreto said the rejection rate is high because many homeowners had to apply for SBA loans they didn’t want, and be turned down, in order to qualify for grants from FEMA. He said the slow pace of disbursements is largely up to the borrower, who decides when to close on the loan, and many businesses have not been able to get flood insurance or building permits or find contractors to repair damage. Louisiana Senator Mary Landrieu (D) said SBA is moving so slowly that prospective borrowers “have just sort of given up and gone elsewhere.” But Barreto testified there is no “huge backlog” of business loans. SBA said it has approved more than 94,000 disaster loans to victims of last year’s hurricanes, totaling $6.5 billion. The agency announced it has extend the deadline for applications an additional month, until April 10.