BW Online | March 15, 2001 | Coming Soon, the Smaller Business Administration President Bush's proposed budget would slash outlays to the Small Business Administration by a huge 40% -- and a good chunk of the shortfall will be borne by the SBA's clientele: small companies in need of loans. Under the Administration's plan, the SBA would get approximately $539 million next year, down from this year's $899 million. But the agency doesn't sound terribly concerned. "There are substantial savings to be found in the SBA's programs that allow us to operate with a lower appropriation, but at the same level," of services as last year, says SBA spokesman Mike Stamler. "We're on board." Why so sanguine? Some cost savings -- about $74 million worth -- can be found by eliminating programs that have been declared redundant. These include the New Markets Venture Capital Initiative, which was designed to help bring venture capital to small companies in low-income areas; BusinessLINC, a mentoring program that aims to bring together small and large companies; and Prime, a technical-assistance program for disadvantaged entrepreneurs. The big money to compensate for the budget shortfall -- $235 million -- will come from fee hikes. The 7(a) loan program will collect an additional $114.7 million by raising the guarantee fee paid by borrowers by half a percentage point on loans over $150,000. On loans for amounts between $150,000 and $700,000, borrowers will now pay a 3.5% guarantee fee, up from 3%. For larger loans, the fee goes to 4% from 3.5%. http://www.businessweek.com/smallbiz/content/mar2001/sb20010315_323.htm