The SBA looks will see it's budget cut by 40% (to $539 million) under the Bush Administration's recent budget plan.

The Arizona Daily Star (Tucson, AZ) reported today that the cuts would be reflected in the following changes:

* Increase fees for guaranteed small business loans of $150,000 or more;
* Charging as much as $11 per hour (currently free) for counseling from its Small Business Development Centers;
* Make the SBA's venture capital program, which is already partially self-funded, fully self-supporting;
* Raise interest rates on disaster loans up 1.5% to 5.5%;
* Cut 200 full-time workers (many are retiring).

These increased fees could be found in SBA 7(a) loans. Fees would remain at 2% for loans under $150,000. However, those between $150,000 & $700,000 would increase 0.5% to 3.5%. Loans over $700,000 would increase 0.5% to 4%. Last year there were over 500 loans over $150,000 in Arizona (318 under $150,000).

Potentially more harmful than loan fee increases, may be the charging of fees for counseling services by the 1000 or so SBDC centers around the US. Many small business owners sought much needed counseling (377 in Tucson's SBDC office located at Pima Community College) because it was free. That will surely change if the SBA starts charging.