President’s Federal Budget Request
Despite the proven success of the SBA Microloan Program and SBA PRIME Programs, the President has requested that Congress discontinue funding for these programs and also reduce funding for the SBA Women’s Business Center by $500,000 in Fiscal Year 2006.
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 (businesses with five or fewer employees) and would obviously be detrimental to the REAP program in Nebraska. The President has also requested severe funding cuts with the Community Development Block Grant (CDBG) and Rural Business Enterprise Grant (RBEG) programs, both of which help to fund the work of REAP.
While federal funding for microenterprise has decreased steadily over the past four years, microenterprises – the nation’s smallest businesses – have played an increasingly large role in our nation’s economy. Across the United States, over 27 million microentrepreneurs account for 17 percent of all private employment.
The Microloan Program is the nation’s largest funder – public or private – of microenterprise lending capital and technical assistance. For many very low and moderate-income entrepreneurs, these programs represent the only opportunity they have to receive business training, a business loan, and a real chance at success through self-employment.