Another focal point of late is SBA-sponsored Small Business
Development Centers, where new entrepreneurs can obtain
individualized counseling and training. The counseling services are
currently free, but if the Bush fiscal year 2002 budget for the
program is funded at the $88 million level requested—$12
million short of the amount thought needed to fully fund the
program's operations—entrepreneurs may have to begin
paying hourly counseling fees.
Ellen Thrasher, deputy associate administrator for the SBDC
program, doesn't see the proposed fees as problematic: "We
estimate the typical entrepreneur will pay less than $40 a
year," she says, basing her estimate on the average 5.3 hours
of counseling an entrepreneur receives in one year.
But while financially needy entrepreneurs may be able to access
scholarships to help pay counseling fees, Donald Wilson, president
and CEO of the Association of Small Business Development Centers,
believes imposition of any fee, no matter how nominal, will be
detrimental: "We think a fee will deter a number of
pre-venture clients and even some existing clients from using the
SBDCs. I think many will view it as a tax on small
business."
| "We think a fee will deter a number of
pre-venture clients and even some existing clients from using the
SBDCs. I think many will view it as a tax on small
business." |
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There's also the matter of matching funds. According to
Thrasher, centers must secure one-to-one matching funding for the
centers; at least 50 percent of that has to be cash. She says most
centers get their additional funding from state government coffers
and universities.
Wilson points out that a fee may also impact centers'
ability to raise the required matching funds: "What happens is
that when matching partners see that the federal government
isn't willing to ante up, they say, 'Why should
we?'"—and that, in turn, could force 24 of the 58
state programs to make drastic service reductions.
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