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Federal court gives HUBZone program priority

March 15, 2010 By Leave a Comment

This article on Mar 9th in Federal Computer Week has the GovCon industry abuzz about the potential ramifications…

Federal Court Gives HUBZone Program Priority

The Small Business Act makes it mandatory, not optional, to give HUBZone companies a preference over other small businesses, a judge rules

A federal judge has thrown a wrench into the Obama administration’s small-business contracting policy by ruling that agencies must give priority to businesses in economically depressed areas when setting aside contracts for small businesses.

The U.S. Court of Federal Claims determined that the Small Business Act requires contracting officers to consider companies in the Small Business Administration’s Historically Underutilized Business Zone (HUBZone) program before opening contracts to firms in the 8(a) and service-disabled, veteran-owned small business set-aside programs.

The Obama administration had argued that the HUBZone preference was simply an option available to contacting officers, but not a requirement. But Federal Judge Emily Hewitt disagreed, noting the text of the provision left little room for debate.

“The court interprets the language of the HUBZone competition provision—‘shall be awarded’—to be mandatory,” the judge wrote in an opinion released March 2.

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Would welcome your opinion on what this will mean!

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SBA Advocacy Efforts under the Regulatory Flexibility Act Saved Small Businesses $7 Billion in FY 2009

February 12, 2010 By Leave a Comment

Advocacy Efforts under the Regulatory Flexibility Act Saved Small Businesses $7 Billion in FY 2009

SBA cutting red tapeWASHINGTON, D.C. – Small businesses realized $7 billion in first-year cost savings and $745 million in annually recurring savings as a result of fiscal year (FY) 2009 efforts to help agencies comply with the Regulatory Flexibility Act (RFA). The law requires agencies to review the economic impacts of proposed regulations on small entities and consider less burdensome alternatives. The figures are reported in the FY 2009 edition of the Office of Advocacy’s annual Report on the Regulatory Flexibility Act. (http://www.sba.gov/advo/laws/flex/09regflx.html)

“Small firms are better equipped to do what they do best—grow the economy—when they are given regulations that are less burdensome and duplicative,” said Acting Chief Counsel for Advocacy Susan M. Walthall. “Federal agencies are learning that the RFA is an extremely valuable tool to help them consider the impact of their rules on small business while still meeting regulatory goals.”

The Regulatory Flexibility Act was enacted in 1980 in an effort to give small businesses, small nonprofits, and small government entities a voice in the rulemaking process. Together with Executive Order 13272, the RFA as amended by the Small Business Regulatory Enforcement Fairness Act encourages agencies to enact regulations that are more rational without negating the intent of the rules. The law requires the Office of Advocacy to report annually on agency compliance with the RFA.

In FY 2009, Advocacy reviewed hundreds of regulations to assess RFA compliance, convened numerous roundtables to solicit the priorities and comments of small entity stakeholders, and submitted more than 30 public comment letters to federal agencies on regulatory proposals.

The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small businesses to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.

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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers. For more information, visit www.sba.gov/advo, or call (202) 205-6533.

Follow SBA news and announcements via Twitter at: http://twitter.com/smallbusinessad/

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Proposed budget increases SBA funding by more than 20 percent

February 2, 2010 By Leave a Comment

Proposed Budget Increases SBA funding by more than 20 percent

Mary Landrieu

WASHINGTON, Feb. 1  – Senate Committee on Small Business and Entrepreneurship Chair Mary L. Landrieu, D-La., today praised the Small Business Administration (SBA) components of President Obama’s budget proposal. For the second year in a row, the President has proposed increasing funding for the SBA and its programs, taking decisive steps to rebuild the SBA after eight years of cuts. The request proposes to increase funding to the agency by $170 million from last year’s enacted level, to $994 million. This, along with new small business job-creating proposals the President outlined in his State of the Union address last week, show the Obama Administration’s strong support for small businesses.
“By requesting more money to help our small businesses succeed, President Obama’s budget proposal emphasizes that small business remains a top priority for the Administration and is central to the President’s efforts to create jobs,” Sen. Landrieu said.

“As part of his budget, the President again showed his support for increasing the caps on small business loans as a way to provide small businesses with immediate capital to grow and hire workers. This is a proposal I, along with Ranking Member Olympia Snowe, introduced last year. It has since gained even more bipartisan support and passed the Committee. It is my hope the proposal will be included in any job-creating measure introduced in the Senate.

“While this budget request shows the President’s strong dedication to small businesses, I will work to increase funding for critical counseling programs and restore funding for the Federal and State Technology (FAST) Partnership Program. The FAST program increases small business innovation opportunities and is vital for the growth of rural areas. The program received funding last year for the first time since 2004 and must not disappear.”

The President’s proposed budget:

Expands Access to Capital

  • Supports the increase of the maximum 7(a) loan size from $2 million to $5 million, 504 from $1.5 million to $5.5 million and microloans from $35,000 to $50,000. Sen. Landrieu introduced, and the Committee passed, legislation that matches these increases;
  • Supports more than $28 billion in small business financing, including $17.5 billion for the 7(a) loan guarantee program, $7.5 billion for the 504 loan guarantee program and $3 billion for the Small Business Investment Company (SBIC) program – which provides venture capital financing to small firms;
  • Supports $25 million in microloans, allowing intermediaries to provide small loans to entrepreneurs and start-ups; and
  • Provides $5.9 million for the SBA’s international trade and export promotion programs, allowing the Agency to support more than $1.1 billion in capital to small exporters and maintain their network of 18 export finance specialists.

Supports Counseling and Contracting Programs

  • Provides $113 million to support about 900 Small Business Development Centers;
  • Provides $14 million to support about 100 Women’s Business Centers;
  • Provides $7 million to support about 370 chapters of SCORE, a mentoring program involving retired executives;
  • Provides $2.2 million for the Historically Underutilized Business Zones program (HUBZones), which creates incentives for contracting with small firms to create jobs in underserved communities;
  • Provides $3.4 million for the 7(j) technical assistance program, which provides small disadvantaged businesses with training in financing, business development, management, accounting and marketing;
  • Provides $3 million to increase the reach of Emerging Leaders. Graduates of this program – often in distressed areas – have reported significant increases in revenues, government contracts, local hires, and access to financing; and
  • Provides $11 million to support the job growth potential found in regional clusters of businesses. These clusters will involve public-private partnerships, which align federal resources with existing regional strengths and economic growth opportunities.

Provides Help for Those hit by a Disaster

  • Supports $1.1 billion in direct disaster assistance loans, in line with the 10-year average;
  • Includes a legislative proposal that would extend, from three to seven years, the maximum term for businesses that want an SBA disaster loan but have an existing line of credit with a bank or have enough cash on hand where they could get a conventional loan from non-SBA sources; and
  • Requests $203 million to support for administrative expenses for the disaster program – an increase of $126 million from last year’s enacted level. These funds are critical in supporting SBA’s effort to efficiently and effectively service its $8.4 billion active loan portfolio.

Reduces Risk and Increases Oversight

  • Provides $2 million to strengthen lender oversight and on-site reviews to ensure taxpayer dollars are going to those who need help the most;
  • Provides $4 million to improve oversight of government contracting programs, including the HUBZone program, and to strengthen performance assessment and management of the Small Business Innovation Research program; and
  • Provides $1.1 million to evaluate the SBA’s loan, counseling and other programs to optimize effectiveness.

SOURCE U.S. Senate Committee on Small Business & Entrepreneurship

Contact:
Vicki Ekstrom, +1-202-224-9431, Victoria_Ekstrom@sbc.senate.gov or Richard Carbo, +1-202-224-3655, Richard_Carbo@sbc.senate.gov, both of the Office of the U.S. Senate Committee on Small Business & Entrepreneurship

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SBA, Minority Business RoundTable Renew Partnership

January 25, 2010 By Leave a Comment

WASHINGTON – The U.S. Small Business Administration announced today that it renewed its two-year partnership agreement with the Minority Business RoundTable (MBRT) to continue joint outreach efforts to minority entrepreneurs.

Minority Business RoundTable“During these difficult economic times, it is imperative that we provide small and minority businesses with the necessary tools to drive economic growth and create jobs in their communities,” said SBA Administrator Karen Mills. “Far too often, minority-owned small businesses and entrepreneurs encounter hurdles to getting capital, contracts and other assistance to help them succeed in the marketplace. Making sure we do all we can to remove these hurdles is a top priority for SBA and the Obama Administration.”

The strategic alliance is part of SBA’s ongoing effort to support small business development initiatives in underserved communities. The agreement allows the organizations to share resources and educate minority entrepreneurs on how to use SBA products and services to establish and grow their businesses.

SBA has supported substantial financing to minority-owned small businesses under the American Recovery and Reinvestment Act. Since the Act was signed into law on Feb. 17, 2009, minority-owned small businesses have received more than $4 billion in SBA-backed loans, about 23 percent of the more than $18.5 billion in small business lending SBA has supported under the Recovery Act. Minority-owned businesses continue to account for about 29 percent of the agency’s overall lending and 37 percent of its microloans.

Minority-owned small businesses also have received more than $3 billion worth of federal contracts under the Recovery Act.

MBRT is a national membership organization for minority CEOs that serves as a unified voice for minority businesses. Through this partnership, the SBA and MBRT intend to help more of these businesses succeed and stimulate economic
growth in their communities and the nation’s economy.

The SBA and MBRT alliance is intended to strengthen and expand small business development across the nation for minority entrepreneurs. SBA will provide MBRT with timely information on the agency’s programs, services and resource partners, participate in roundtable discussions and conferences and advise them on events that will impact their mission.

As part of the resource pooling, MBRT will cooperate with SBA and its resource partners to provide information to members about its business development programs and services, and share current SBA news and information.

The two-year agreement is a renewal of the partnership between the SBA and MBRT and was implemented on January 11, 2010.

Release Date: January 25, 2010
Contact: Tiffani Clements (202) 401-0035
Release Number: 10-01
Internet Address: www.sba.gov/news/
Twitter: www.twitter.com/smallbusinessad/
MBRT: www.mbrt.net/

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Additional Funding for SBA Recovery Lending Programs

December 22, 2009 By Leave a Comment

Additional $4.5 billion in small business loans included in recent appropriations bill signed by the President.

WASHINGTON – President Obama signed the U.S. Department of Defense (DOD) appropriations bill on Saturday, which included $125 million to continue through Feb. 28, 2010, the enhancements made possible through the American Recovery and Reinvestment Act (ARRA) to SBA’s two largest loan programs.

The SBA estimates the additional funding will support $4.5 billion in small business lending.

New approvals of loans with the higher guarantee and reduced fees made possible by ARRA are expected to begin by Dec. 28. Loan applications from borrowers who chose to be placed in the SBA’s Recovery Loan Queue will be funded first, followed by new loan approvals beginning on or before Dec. 28.

“This Administration and Congress recognize that these key programs were successful in helping jump-start the economic recovery for America’s small businesses,” said SBA Administrator Karen Mills. “The increased guarantee and reduced fees on SBA loans helped put more than $16.5 billion in the hands of small business owners and brought more than 1,200 lenders back to SBA loan programs. The extension of these programs through February is important to continuing our path toward recovery and will mean thousands more small business owners have access to the credit they need.

“Just two weeks ago, President Obama laid out key aspects of his jobs plan, including significant ongoing support for small businesses. We will continue to work with Congress on moving those proposals forward, including extending these loan enhancements as the President has called for, to ensure that small business owners have the tools they need to drive economic growth and create jobs in communities all across the country.”

As part of ARRA, SBA received $730 million, which included $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. More information about the waived fees can be found here. The funds for these programs were exhausted on Nov. 23.

SBA created the Recovery Loan Queue as part of its transition back to pre- ARRA lending on Nov. 23 because previously approved loans are sometimes canceled or never disbursed for a variety of reasons. Eligible small businesses, in consultation with their lender, could choose to be placed in the queue for possible approval of an ARRA loan if funding became available. Currently there are 1,069 loans totaling almost $530 million in the Recovery Loan Queue.

The extension included in the DOD bill authorizes the higher guarantee levels through Feb. 28, 2010. The fee relief is authorized until this additional funding is exhausted or the end of the fiscal year, whichever comes first. As was the case in November, SBA will transition into a queue system as the funds start to wind down in order to ensure the maximum stimulative effect of the programs and disbursement of funds.

For non-ARRA 7(a) or 504 loans funded during the transition period, this extension does not provide a retroactive guarantee or waived fees. Loans that were funded under non-ARRA terms cannot be canceled and resubmitted to take advantage of the ARRA extension provisions.

This extension does not affect other SBA ARRA programs, including the America’s Recovery Capital (ARC) loan program or the agency’s microloans. ARRA funding still remains for both of those programs.

Links:
SBA Web site: http://www.sba.gov
SBA Tweets: http://twitter.com/smallbusinessad
SBA Recovery Loan Queue: http://www.sba.gov/recoveryq/index.html

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