What the Spending Bill Means for Your Business
UPDATE: The House passed the bipartisan $1.1 trillion spending bill late in the day on January 15th.
The latest spending bill is all but assured to land swift approval in Congress, but that doesn't mean small businesses will be happy about it.
On Tuesday, the Republican-led House of Representatives approved a measure to keep the government funded for three days past a Wednesday night deadline to give members and their counterparts in the Senate more time to consider a new $1.1 trillion spending bill.
That action is seen as a sign that a House and Senate negotiated bill, which gained committee approval on Monday night, might receive swift assent in Congress--thereby staving off another government shutdown through Sept. 30th.
Though many companies are still digesting what this "omnibus" spending bill means for them, its anticipated pain-free passage is a welcome change for many business owners. After months of bickering over the debt ceiling and spending, getting lawmakers to come to the table should offer much needed consistency, which small business owners prize for longer-range decision making.
"It reduces uncertainty," says Bill Dunkelberg, National Federation of Independent Business's chief economist. "With 30 percent of NFIB owners who think it is a bad time to expand, blaming the political climate, agreement on anything should improve things at least for these owners."
Still, available funds to support the Small Business Administration could drop if the bill goes through. According to a preliminary reading of the spending bill, the federal agency tasked with representing small businesses on Capitol Hill will have more than $1.1 billion to work with for fiscal year 2014 if the bill passes.
While this figure is more or less consistent with funding levels in years past, it's less than it looks.
For the 2014 fiscal year, the SBA will get just $929 million to support its network of small business development centers around the country and offer loan guarantees to needy businesses. That's a reduction of $116 million from the fiscal year 2013 enacted level. The SBA had requested $968 million to fund its activities for FY2014.
Though, less than what the SBA wants, it's higher than the agency would have received under the sequester. In March of 2013, the across-the-board spending cuts known as sequestration forced the SBA to shave $92 million, or 5 percent, from its annual operating budget.
Also tasked with administering the Disaster Loan program, which provides businesses and individuals funding assistance in times of disaster, the SBA this year will get another $192 million if the proposed spending bill goes through.
The bill additionally would fully fund business loans at $263 million, down $222 million from the fiscal year 2013 enacted level. Lawmakers cite a reduction in loan subsidy rates as a reason for the drop. They also suggest that the revised rates are in keeping with expected demand.
Loan guarantee levels should remain consistent with years past, however. The cap on the agency’s flagship 7(a) loan program, as laid out in the bill, is $17.5 billion. The SBA’s other popular 504 loan program, which provides real-estate support for brick-and-mortar businesses, gets $7.5 billion.
"This bill is an important step forward for the economy and the SBA, as it helps keep our critical programs running and provides an increase in funding over the current operating level for important SBA priorities like Boots to Business and entrepreneurial education," says a SBA spokeswoman. "These are programs that will help small business owners and entrepreneurs grow their businesses and create jobs."
The House is expected to vote on the bill on Wednesday, while the Senate should take it up later in the week. The White House has also indicated its support.
DIANA RANSOM | Features Editor
Diana Ransom is features editor at Inc. She has been covering the never-dull world of small business and entrepreneurship for years at a variety of publications including The Wall Street Journal, SmartMoney.com, the New York Daily News, Fast Company magazine and Entrepreneur. She lives in Brooklyn, N.Y.