White House’s Proposed Budget Slashes SBA Funding by 67 Percent |
White House’s Proposed Budget Slashes SBA Funding by 67 Percent
Some critics argue that reducing the Small Business Administration’s budget from $1 billion to $329 million would effectively dismantle the agency that serves the country’s 36 million small businesses.
BY MELISSA ANGELL, SENIOR STAFF WRITER @MELISSKAWRITES
Illustration: Inc; Photo: Getty Images
The White House’s proposed budget for the next fiscal year would cut the Small Business Administration’s funding by 67 percent and gut numerous small business-friendly programs.
The White House earmarked $329 million for the SBA’s budget for fiscal 2027, a startling difference compared with the $1 billion the agency, which is tasked with serving the country’s 36 million small businesses, received the prior fiscal year.
In cutting $671 million from the SBA’s proposed budget, the White House seeks to severely cut entrepreneurial development programs, including funding for small-business development centers and women’s business centers. Women’s business centers, for example, work with female entrepreneurs to help them start or grow their companies by extending access to free training, counseling, capital opportunities, and help in navigating the procurement process.
In total, the proposed budget seeks to cut $309 million from entrepreneurial development programs. In doing so, the White House argues that it is getting rid of several agency programs “that waste taxpayer dollars on failed business counseling and training programs.” That said, the SBA will save $21.4 million to go toward veterans operating small businesses.
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The proposed budget further axes the community navigator pilot program, a $100 million program originally started by Senator Mark Kelly (D-Ariz.) that sought to connect entrepreneurs with federal resources. The Service Corps of Retired Executives, also known as SCORE, would be eliminated as well. That program offered free and low-cost mentoring services to business owners to help nurture entrepreneurship
“If these cuts were enacted, it would effectively dismantle the one and only federal agency dedicated to serving the needs of Main Street,” John Arensmeyer, the founder and CEO of Small Business Majority said in a written statement, later adding: “If Congress were to embrace all or even some of the administration’s requests, it would deal a fatal blow to countless small businesses.”
The budget is further cutting $170 million from salaries and expenses, and will slash $158 million from business loan program expenses. Additionally, the budget wants to introduce a new fee on lenders that work with SBA-backed lending to “address the long-standing imbalance of taxpayers covering the cost of administering these business lending programs.” The exact fee was not disclosed. The SBA did not immediately respond to Inc.’s request for comment.
Some lawmakers have already slammed the White House’s proposal, including Senator Ed Markey (D-Maine), the ranking member on the U.S. Committee on Small Business & Entrepreneurship.
“Once again, the Trump administration is showing that it is actively working against America’s 36 million small businesses,” Markey said in a statement. “Trump and Administrator Loeffler have chosen to eliminate resources that help make the American dream a reality for all, especially for those who face barriers to entry and endure discrimination, such as women and minority entrepreneurs.”
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