March  2004      Vol. 13, No. 3  REAP HOME PAGE  A publication of the Center for Rural Affairs    
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Administration Budget Would Slash Key SBA Micro Business Programs

Despite proven success of the Small Business Administration (SBA) Micro-loan and SBA PRIME Programs, the President has requested that Congress discontinue funding for these programs in Fiscal Year 2005.

The potential loss of these vital federal funding sources represents a critical threat to the future of the American microenterprise industry and microentrepreneurs across the nation. A microenterprise is defined as a business with five or fewer employees.

While federal funding for micro-enterprise decreased steadily over the past 3 years, microenterprises Ė the nationís smallest businesses Ė have played an increasingly large role in our nationís economy. Across the United States, over 27 million microentrepreneurs account for 17 percent of all private employment.

The Microloan Program is the nationís largest funder Ė public or private Ė of microenterprise capital and technical assistance. For many very-low- and moderate-income entrepreneurs, these programs represent their only opportunity to receive business training, a business loan, and a real chance at success through self-employment.

For over 10 years, the SBA Micro-loan Program has successfully served communities across America, specifically in those areas suffering from a lack of credit due to economic downturn. In 2003, the Microloan Program provided over 2400 loans.

These are individuals who, despite facing challenges to successful business ownership, strike out to make better lives for themselves, their families, and their communities. These borrowers are unique to the Microloan Program and are not adequately served by alternate government programs, as suggested in the Administrationís 2005 Budget Proposal.

The PRIME Program is also unique in that it provides business technical assistance to low- and very-low income entrepreneurs across the country. The PRIME Program provides business training regardless of whether or not trainees seek business capital.

The Rural Enterprise Assistance Project (REAP) was started by the Center for Rural Affairs in 1990 to meet the needs of self employed people in the rural Midwest. REAP is Nebraskaís largest microenterprise program and operates on a statewide, rural basis through regionally based Business Specialists. In fact, REAP is the nationís largest statewide rural microenterprise program.

REAP provides lending, training, networking, and technical assistance opportunities for startup and existing small businesses and has provided development services to over 3000 micro businesses. REAP recently reached the two million lending plateau for the history of the program and has been an SBA Microloan Intermediary since the program began in 1992. REAP is also very proud to operate Nebraskaís only SBA Womenís Business Center.

 Contact: Jeff Reynolds, REAP Program Director, 402.656.3091 or
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