U.S. Senator Olympia J. Snowe (R-Maine) who is the Chair of the Senate Committee on Small Business and Entrepreneurship voiced concern over the proposed Fiscal Year 2005 budget for the Small Business Administration (SBA). Per Snowe, the budget would cut overall SBA funding by about 15 percent and require that the popular 7(a) Guaranteed Loan Program become self-funding.

"I believe the fundamental question in light of this proposal is: How can we provide the best possible assistance to small businesses while reducing SBA funding some 15 percent?" Snowe said. "At this critical juncture, as so many individuals are looking to the small business sector to help strengthen the economy, we must be particularly cautious about anything that could reduce our government's commitment to small businesses," she added.

The President's budget request would require that the 7(a) Program convert to a self- funding status since the direct appropriation for 7(a) loan guarantees would be deleted from the SBA's annual budget. The change would reduce the agency's overall budget by $101 million.

"Cutting these funds for the 7(a) program and possibly passing higher fees on to small business owners raises immediate concerns for me. This program is crucial to the success of American small businesses, and central to our efforts to create more jobs for Americans," said Snowe. "I look forward to getting a comprehensive explanation from the SBA as to what these changes will mean for individual business owners and the 7(a) program as a whole. We cannot put expanding small business owners at risk at this critical juncture for the American economy."

Snowe has scheduled a hearing of the Small Business and Entrepreneurship Committee on Thursday, February 12th, to review the SBA's budget proposal and hear from the agency's Administrator, Hector V. Barreto.