2012 federal budget proposes cuts for small businesses

Programs that support small businesses may be on the chopping block if President Obama's proposed fiscal 2012 budget is approved.

The budget, which was released on Monday, cuts funding to the Small Business Administration (SBA) by 45 percent.

"We have to tighten our belt, too," said SBA Administrator Karen Mills. "We looked through to see if there are programs that are duplicative or that we could eliminate."

Funding for the agency for fiscal year 2012, which begins in October 2011, is slated at $985 million, a cut from the $1.8 billion the SBA had in 2010 due in large part to stimulus funding.

According to the Wall Street Journal, the SBA is primarily known for its lending initiatives, which provide bank-issued, government-backed loans to small firms. The agency also provides counseling programs for small businesses.

The proposed budget would cut $10 million in funding to the Small Business Development Centers, which provide mentoring programs.

Other savings will come from job eliminations, salary reductions and programs aimed at simplifying the loan application process for business owners.

The final budget is expected to be debated in Congress and could be reduced even further. In fact, Congress has yet to approve the proposed budget for the 2011 fiscal year - which began five months ago.
 

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