SMALL BUSINESS ADMINISTRATION

Federal Funds

For necessary expenses, not otherwise provided for, of the Small Business Administration as authorized by Public Law 108–447, including hire of passenger motor vehicles as authorized by 31 U.S.C. 1343 and 1344, and not to exceed $3,500 for official reception and representation expenses, [$417,348,000] $423,577,000: Provided, That the Administrator is authorized to charge fees to cover the cost of publications developed by the Small Business Administration, and certain loan program activities, including fees authorized by section 5(b) of the Small Business Act: Provided further, That, notwithstanding 31 U.S.C. 3302, revenues received from all such activities shall be credited to this account, to remain available until expended, for carrying out these purposes without further appropriations: Provided further, That the Small Business Administration may accept gifts in an amount not to exceed $4,000,000 and may co-sponsor activities, each in accordance with section 132(a) of division K of Public Law 108–447, during fiscal year [2012] 2013: Provided further, That [$112,500,000] $101,093,000 shall be available to fund grants for performance in fiscal year [2012] 2013 or fiscal year [2013] 2014 as authorized by section 21 of the Small Business Act, to remain available until September 30, [2013] 2014: Provided further, That [$20,000,000] $19,760,000 shall remain available until September 30, [2013] 2014 for marketing, management, and technical assistance under section 7(m) of the Small Business Act (15 U.S.C. 636(m)(4)) by intermediaries that make microloans under the microloan program: Provided further, That $7,100,000 shall be available for the Loan Modernization and Accounting System, to be available until September 30, [2013] 2014[: Provided further, That $2,000,000 shall be for the Federal and State Technology Partnership Program under section 34 of the Small Business Act (15 U.S.C. 657d)]. (Financial Services and General Government Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

This account funds the administrative expenses of SBA headquarters and field office operations. Appropriations for the administration of the disaster and business loan programs are merged with this account. The 2013 Budget provides funding for the continued development of a revised loan management accounting system, which will improve oversight of SBA's more than $99 billion portfolio of loans and loan guarantees. Funding is also requested for core agency activities, including information technology investments and human capital development. In addition, this account funds non-credit business assistance grant programs. The 2013 Budget includes funds for SBA's regional clusters initiative.

Object Classification (in millions of dollars)

Employment Summary

For necessary expenses of the Office of Inspector General in carrying out the provisions of the Inspector General Act of 1978, [$16,267,000] $19,400,000. (Financial Services and General Government Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The 2013 Budget proposes $19.4 million in new budget authority and $1.0 million transferred from the Disaster Loans Program account for a total of $20.4 million for the Office of Inspector General (OIG). This appropriation provides funds for agency-wide audit, investigative, and related functions to promote economy and efficiency in SBA operations and to prevent and detect waste, fraud, and abuse. In addition, the passage of the American Recovery and Reinvestment Act of 2009 provided an additional $10 million, available from 2009 through 2013, for oversight and audit of SBA Recovery Act programs, grants, and projects.

Object Classification (in millions of dollars)

Employment Summary

For necessary expenses of the Office of Advocacy in carrying out the provisions of title II of Public Law 94–305 (15 U.S.C. 634a et seq.) and the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.), [$9,120,000] $8,900,000, to remain available until expended. (Financial Services and General Government Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The 2013 Budget proposes $8.9 million in new budget authority. This appropriation provides funds for operations of the Office of Advocacy, in accordance with the Small Business Jobs Act of 2010 (P.L. 111–240). Pursuant to Section 1602 of the Jobs Act, SBA is requesting that the funds remain available, without fiscal year limitation, until expended.

The Office of Advocacy's advice and small business research help the Federal Government take into account the concerns of small businesses when it develops policies and regulations. The Office's regional advocates support regulatory flexibility at the State level, work with the regional Regulatory Fairness Boards established by the Small Business Regulatory Enforcement Fairness Act, and promote the use of Advocacy research and data products in the curricula of universities and other schools in their respective regions.

Object Classification (in millions of dollars)

Employment Summary

Program and Financing (in millions of dollars)

Summary of Budget Authority and Outlays (in millions of dollars)

SBA is authorized to issue bond guarantees to surety companies for construction, service, and supply contracts or work orders, and to reimburse these sureties up to 90 percent of the losses sustained if the contractor defaults. SBA's guarantees provide an incentive for sureties to issue bonds to small contractors who could not otherwise secure them and compete in the contracting industry. The American Jobs Act (AJA) includes a proposal to increase the maximum size of surety bond loan guarantees from $2 million to $5 million, to enable small businesses to better compete for and win contracting opportunities. Three million dollars are requested in the AJA for that purpose. Aside from that proposal, it is estimated that there are sufficient funds in reserve to cover the cost of claim defaults in 2013. Therefore, no new appropriated funds are requested in the Budget.

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

For the cost of direct loans, [$3,678,000] $2,844,000, to remain available until expended, and for the cost of guaranteed loans as authorized by section 7(a) of the Small Business Act (Public Law 85–536) and section 503 of the Small Business Investment Act of 1958 (Public Law 85–699), [$207,100,000] $348,600,000, to remain available until expended: Provided, That such costs, including the cost of modifying such loans, shall be as defined in section 502 of the Congressional Budget Act of 1974: Provided further, That subject to section 502 of the Congressional Budget Act of 1974, during fiscal year [2012] 2013 commitments to guarantee loans under section 503 of the Small Business Investment Act of 1958 shall not exceed [$7,500,000,000] $6,000,000,000: Provided further, That during fiscal year [2012] 2013 commitments for general business loans authorized under section 7(a) of the Small Business Act shall not exceed [$17,500,000,000] $16,000,000,000 for a combination of amortizing term loans and the aggregated maximum line of credit provided by revolving loans: Provided further, That during fiscal year [2012] 2013 commitments to guarantee loans for debentures under section 303(b) of the Small Business Investment Act of 1958 shall not exceed $3,000,000,000: Provided further, That during fiscal year [2012] 2013, guarantees of trust certificates authorized by section 5(g) of the Small Business Act shall not exceed a principal amount of $12,000,000,000. In addition, for administrative expenses to carry out the direct and guaranteed loan programs, [$147,958,000] $145,060,000, which [may be transferred to and merged with] shall be paid to the appropriations for Salaries and Expenses. (Financial Services and General Government Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this account records the subsidy costs associated with the direct loans obligated and loan guarantees committed in 1992 and beyond (including modifications of direct loans or loan guarantees that resulted from obligations or commitments in any year), as well as administrative expenses of the business loan program. The subsidy amounts are estimated on a present value basis; the administrative expenses are estimated on a cash basis.

For 2013, the Budget proposes $497 million in new budget authority for the Business Loans Program account. This includes $145 million in administrative expenses funding, $349 million in credit subsidy for the Sections 7(a) and 504 guaranteed loan programs, and $2.8 million in credit subsidy for the direct Microloan Program.

The Section 7(a) program provides general business credit assistance. SBA's modeling and budget presentations treat all 7(a) loans as term loans, however, a portion of approvals consist of revolving lines of credit, under which a borrower is able to draw and repay multiple times during the loan term. In order to be consistent with Federal Credit Reform requirements and better reflect the total economic activity supported by the guarantee, SBA will continue to work with OMB on future budget presentations that ensure that the total 7(a) program levels reflect the full revolving lines of credit disbursement and repayment activity. The Budget supports $14 billion in 7(a) term loans and $2 billion for 7(a) revolving lines of credit, which are estimated to support $46 billion in total economic activity through draws and repayments over the life of the guarantee. Based on the maximum draw activity at any one time, the base approval amounts are consistent with the authorized program level of $16 billion. In addition, as part of the Secondary Market Guarantee (SMG) Program, SBA's fiscal agent pools the guaranteed portion of 7(a) loans and sells the securities to investors. This mechanism provides liquidity to lenders participating in the 7(a) loan program. For 2013, the Budget proposes a program level of $12 billion in such securities.

The Section 504 Certified Development Company program is for long-term, fixed-rate financing, and the requested guaranteed loan program level is $6 billion in 2013. The Small Business Investment Company (SBIC) program provides credit to support venture capital investments. The Budget proposes a program level of $3 billion for SBIC Debentures and a $18 million program level for direct Microloans.

Due to the economic crisis and significantly higher default claims, SBA recorded a $1.8 billion upward reestimate in its loan guarantee programs. This additional subsidy cost is covered by appropriations and increases the Federal Budget deficit in 2012. Further, projected economic conditions have doubled the estimated cost of new 7(a) loan guarantees, net of fees, for 2013 compared to 2010.

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this non-budgetary account records all cash flows to and from the Government resulting from direct loans obligated in 1992 and beyond (including modifications of direct loans that resulted from obligations in any year). The amounts in this account are a means of financing and are not included in the budget totals.

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this non-budgetary account records all cash flows to and from the Government resulting from loan guarantees committed in 1992 and beyond (including modifications of loan guarantees that resulted from commitments in any year). The amounts in this account are a means of financing and are not included in the Budget totals.

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this account records all cash flows to and from the Government resulting from SBA direct loans obligated and loan guarantees committed prior to 1992. This account is shown on a cash basis. All new activity in this program in 1992 and beyond (including modifications of direct loans or loan guarantees made in any year) is recorded in corresponding program and financing accounts.

Balance Sheet (in millions of dollars)

Object Classification (in millions of dollars)

For administrative expenses to carry out the direct loan program authorized by section 7(b) of the Small Business Act and resulting from major disasters declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(2)), [$117,300,000] $167,000,000, to be available until expended, of which $1,000,000 is for the Office of Inspector General of the Small Business Administration for audits and reviews of disaster loans and the disaster loan programs and shall be [transferred to and merged with] paid to the appropriations for the Office of Inspector General; of which [$110,300,000] $157,000,000 is for direct administrative expenses of loan making and servicing to carry out the direct loan program, which [may be transferred to and merged with] shall be paid to the appropriations for Salaries and Expenses; and of which [$6,000,000] $9,000,000 is for indirect administrative expenses for the direct loan program, which [may be transferred to and merged with] shall be paid to the appropriations for Salaries and Expenses: Provided, That such amount is designated by Congress as being for disaster relief pursuant to section 251(b)(2)(D) of the Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99–177), as amended. (Financial Services and General Government Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this account records, for loans made pursuant to Section 7(b) of the Small Business Act, as amended, the subsidy costs associated with the direct loans obligated in 1992 and beyond (including modifications of direct loans or loan guarantees that resulted from obligations or commitments in any year), as well as administrative expenses of this program. The subsidy amounts are estimated on a present value basis; the administrative expenses are estimated on a cash basis.

Disaster loans made pursuant to Section 7(b) of the Small Business Act provide Federal assistance for non-farm, private sector disaster losses. Through the disaster assistance program, SBA helps homeowners, renters, businesses of all sizes, and non-profit organizations pay for the cost of replacing, rebuilding or repairing property damaged by disasters. The program is the only form of SBA financial assistance not limited to small businesses. The program provides subsidized loans of up to 30 years to borrowers who have incurred uninsured physical losses or economic injury as the result of a disaster.

In 2013, the Budget supports $1.1 billion in loans, the ten-year average for such loans, excluding outlying events. The Budget does not request new credit subsidy budget authority (BA), as SBA has sufficient unobligated balances to support estimated 2013 loan approvals. However, the Budget does request $167 million in new BA for administrative expenses related to major disasters pursuant to a determination under section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. This funding will be designated as being for disaster relief under the cap adjustment in section 251(b)(2)(D) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. SBA expects to reprogram an additional $35 million from unobligated subsidy balances to fund administrative expenses incurred from other disasters, including those declared by the SBA Administrator.

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this non-budgetary account records all cash flows to and from the Government resulting from disaster direct loans obligated in 1992 and beyond (including modifications of direct loans that resulted from obligations in any year). The amounts in this account are a means of financing and are not included in the Budget totals.

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this non-budgetary account records all cash flows to and from the Government resulting from loan guarantees committed in 1992 and beyond (including modifications of loan guarantees that resulted from commitments in any year). The amounts in this account are a means of financing and are not included in the Budget totals.

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this account records all cash flows to and from the Government resulting from SBA disaster direct loans obligated prior to 1992. This account is shown on a cash basis. All new activity in this program in 1992 and beyond (including modifications of direct loans or loan guarantees made in any year) is recorded in corresponding program and financing accounts.

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

Public Law 94–305 established this fund to alleviate the adverse impact of pollution regulations on small businesses. As a result of the elimination of tax-exempt financing associated with the Pollution Control Guaranteed loan program, no new activity is anticipated for this program.

Balance Sheet (in millions of dollars)

(in millions of dollars)

(including transfer of funds)