This week, representatives and senators agreed on appropriations for much of the federal government, and their compromise is good news for the Small Business Administration — and its clients. Excluding earmarks, the disaster-loan program (which fluctuates wildly and, like disasters, can’t really be anticipated) and the stimulus, the S.B.A. will get $687 million in new appropriations for the 2010 fiscal year. That is $137 million more than last year, and $174 million more than in 2008.

The S.B.A. will be able to use that money to hire 80 new full-time equivalent employees, who will mostly help the agency in the loan programs. In addition to seeing an organization that perhaps runs a bit more smoothly, borrowers in the 7(a) loan guarantee program will pay less for loans. For the first time since 2004, Congress included a subsidy ($80 million), which should reduce borrower fees by about 45 basis points — on a $200,000 loan, just more than $900. (Unless the forthcoming jobs bill eliminates them altogether.)

The appropriation also supports $25 million in microloans, a nearly 20 percent increase over the last two years. And a rule change will allow a microlender to receive more grant money for technical assistance. At the same time, Congress is increasing total microloan technical assistance funding by 10 percent, to $22 million.

In era of President George W. Bush, Congress was always much more generous to the S.B.A. than the White House, and when the disaster-loan program and earmarks are excluded, that tradition holds with the first budget prepared by the Obama administration. But it has been greatly diminished: Congress appropriated a modest $11 million more than the administration requested. (Congressional appropriators say (pdf) their package is “$45 million above the request,” but that includes, besides the disaster program, $59 million in earmarks, which, of course, the Obama administration did not request and will not spend on actual S.B.A. programs.*)

One place, though, where the administration sought substantial cuts was in appropriations to the counseling organizations that work with the S.B.A. The White House proposed cutting funding for microloan technical assistance by half (the stimulus included a lot of additional technical assistance money) and for Small Business Development Centers by more than 10 percent. It offered no meaningful increase in money for Score, the Service Corps of Retired Executives, which hadn’t had a raise since 2002. Here, Congress ignored the administration: its 2010 appropriation gives a slight boost to the centers and grants Score a 50 percent increase in funds. Most other programs will also get more money than the administration sought.

The House passed the omnibus on Thursday in a vote largely along party lines. The Senate is slated to vote Sunday afternoon and is expected to pass it.

Report: CIT to File Bankruptcy on Sunday

From the WSJ: CIT, Icahn Reach Tentative Deal Over Lender’s Restructuring

As part of further discussions with CIT, Mr. Icahn has agreed to back down while the company restructures in bankruptcy court. …

The company plans to file for bankruptcy in New York as soon as Sunday night or early Monday, said people familiar with the matter. CIT is poised to enter bankruptcy with enough creditor support to approve its reorganization plan and shorten its stay in Chapter 11 …

… CIT asked bondholders to vote on a prepackaged bankruptcy plan, which would give most bondholders new debt it values at 70 cents on the dollar, and all the equity in a restructured company.

SBA Limits Expanded

SBA has announced SBA provides a number of financial assistance programs for small businesses including
7(a), 504 and disaster assistance loans. Within this section, we’ll review eligibility requirements, SBA’s loan programs, surety bonds and the role of SBA, equity capital topics, special purpose loans, SBA partner topics and 7(a) lender programs. Though the SBA does not provide grants to help you start a business, included is information on organizations and sites that can assist you in locating special purpose grants.

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