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Is SBA S.O.L.?

With a general lack of respect from lawmakers and entrepreneurs alike, some say the agency has outlived its usefulness. Can the SBA be saved?

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This story appears in the October 2001 issue of Entrepreneur. Subscribe »

People usually complain, loud and long, when a popular government agency is faced with dramatic budget cuts. So what explains the deafening silence after the Bush administration's initial budget slashed funding for the SBA by 40 percent, to $540 million? Small-business-minded senators rode to the rescue, restoring $264 million to a budget resolution in hopes of protecting the 7(a) Loan Guaranty Program and a venture capital program for businesses in economically depressed areas.

Still, some of the dramatic changes survived: Small businesses will pay twice as much-$2,800-in fees for their guaranteed loans, and for the first time, Small Business Development Centers (SBDCs) will start charging entrepreneurs for counseling.

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