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Small Business Management and Technical
Assistance Training Programs
Robert Jay Dilger
Senior Specialist in American National Government
Oscar R. Gonzales
Analyst in Economic Development Policy
August 2, 2010
Congressional Research Service
7-5700
www.crs.gov
R41352
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008
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Small Business Management and Technical Assistance Training Programs
Summary
The Small Business Administration (SBA) has provided “technical and managerial aides to small-
business concerns, by advising and counseling on matters in connection with Government
procurement and on policies, principles and practices of good management†since it began
operations in 1953. Initially, the SBA provided its own small business management and technical
assistance training programs. However, over time, the SBA has relied increasingly on third parties
to provide that training.
The SBA’s FY2010 budget for management and technical assistance training for small business
owners is $181.1 million. The SBA expects more than one million aspiring entrepreneurs and
small business owners to receive training from an SBA-supported resource partner in FY2010.
The SBA has argued that these programs have contributed “to the long-term success of these
businesses and their ability to grow and create jobs.†It currently provides funding to about
“14,000 resource partners including about 900 small business development centers, more than
100 women’s business centers and more than 350 chapters of the mentoring program, SCORE.â€
The Department of Commerce also provides management and technical assistance training for
small businesses. For example, its Minority Business Development Agency provides training to
minority business owners to assist them in becoming suppliers to private corporations and the
federal government.
For many years, a recurring theme at congressional hearings concerning the SBA’s management
and technical assistance training programs has been the perceived need to improve program
efficiency by eliminating duplication of services and increasing cooperation and coordination
both within and among SCORE, women’s business centers, and small business development
centers. Congress has also explored ways to improve the SBA’s measurement of the programs’
effectiveness and to address the impact of national economic conditions on women’s business
center and small business development center finances and their capacity to meet federal
matching requirements and to maintain client service levels.
This report examines the historical development of federal small business management and
technical assistance training programs; describes their current structures, operations, and budgets;
and assesses their administration and oversight, the measures used to determine their
effectiveness, and women’s business center and small business development center finances and
their capacity to meet federal matching requirements and to maintain client service levels.
This report also examines provisions in S.Amdt. 4519, an amendment in the nature of a substitute
for H.R. 5297, the Small Business Jobs and Credit Act of 2010, which was introduced on July 27,
2010, and H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009, which has passed
the House. They would authorize several changes to the SBA’s administration and oversight of its
management and technical assistance training programs, the measures used to access the
programs’ effectiveness, and funding for women business centers and small business
development centers.
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Small Business Management and Technical Assistance Training Programs
Contents
Federal Management and Technical Assistance Training Programs .............................................. 1
SBA Management and Technical Assistance Training Programs .................................................. 3
Small Business Development Centers.................................................................................... 4
Women’s Business Centers.................................................................................................... 6
SCORE (Service Corps of Retired Executives)...................................................................... 8
7(j) Management and Technical Assistance Program ............................................................. 9
Microloan Technical Assistance Program ............................................................................ 10
Native American Outreach Program .................................................................................... 12
Program for Investment in Micro-entrepreneurs (PRIME) ................................................... 13
Veterans Business Development Programs .......................................................................... 14
Department of Commerce Small Business Management and Technical Assistance
Training Programs.................................................................................................................. 17
The Minority Business Development Agency (MBDA) ....................................................... 17
The EDA Local Technical Assistance Program .................................................................... 18
Congressional Issues ................................................................................................................. 19
Program Administration ...................................................................................................... 20
Program Evaluation ............................................................................................................ 22
WBC and SBDC Finances .................................................................................................. 24
Concluding Observations .......................................................................................................... 25
Tables
Table 1. SBA Management and Technical Assistance Training Programs Funding ....................... 1
Table A-1. Brief Descriptions of SBA Management and Technical Assistance Training
Programs ............................................................................................................................... 28
Appendixes
Appendix. Brief Descriptions of SBA Management and Technical Assistance Training
Programs ............................................................................................................................... 28
Contacts
Author Contact Information ...................................................................................................... 30
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Small Business Management and Technical Assistance Training Programs
Federal Management and Technical Assistance
Training Programs
The Small Business Administration (SBA) administers several programs to support small
businesses, including loan guaranty programs to enhance small business access to capital;
programs to increase small business opportunities in federal contracting; direct loans for
businesses, homeowners, and renters to assist their recovery from natural disasters; and access to
entrepreneurial education to assist with business formation and expansion.1 The SBA has
provided “technical and managerial aides to small-business concerns, by advising and counseling
on matters in connection with Government procurement and on policies, principles and practices
of good management†since it began operations in 1953.2
Initially, the SBA provided its own management and technical assistance training programs.
However, over time, the SBA has relied increasingly on third parties to provide that training.
The SBA’s FY2010 budget for third-party management and technical assistance training for small
businesses is $181.15 million (see Table 1).3 The SBA expects more than one million aspiring
entrepreneurs and small business owners to receive training from an SBA-supported management
and technical assistance training resource partner in FY2010.4
Table 1. SBA Management and Technical Assistance Training Programs Funding
Training Program
FY2010
7(j) Technical Assistance Program
$3,400,000
Microloan Technical Assistance Program
$22,000,000
Native American Outreach Program
$1,250,000
PRIME Technical Assistance Program
$8,000,000
Smal Business Development Center Grants Program
$113,000,000
SCORE (Service Corps of Retired Executives)
$7,000,000
Veterans Business Development Program
$2,500,000
Women’s Business Center Grants Program
$14,000,000
Entrepreneurial Development Initiatives (clusters)
$10,000,000
Total $181,150,000
Source: U.S. Smal Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual
Performance Report,†Washington, DC, 2010, p. 18, http://www.sba.gov/idc/groups/public/documents/
sba_homepage/fy_2011_cbj_09_apr.pdf.
1 U.S. Small Business Administration, “Fiscal Year 2011 Congressional Budget Justification and FY2009 Annual
Performance Report,†Washington, DC: GPO, 2010, p. 1.
2 U.S. Congress, Senate Committee on Banking and Currency, Extension of the Small Business Act of 1953, report to
accompany S. 2127, 84th Cong., 1st sess., July 22, 1955, S.Rept. 84-1350 (Washington: GPO, 1955), p. 17.
3 U.S. Small Business Administration, “Fiscal Year 2011 Congressional Budget Justification and FY2009 Annual
Performance Report,†Washington, DC: GPO, 2010, p. 21.
4 Ibid., p. 52.
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Small Business Management and Technical Assistance Training Programs
The SBA has argued that its support of management and technical assistance training for small
businesses has contributed “to the long-term success of these businesses and their ability to grow
and create jobs.â€5 It currently provides financial support to about “14,000 resource partners
including about 900 small business development centers, more than 100 women’s business
centers and more than 350 chapters of the mentoring program, SCORE.â€6
The Department of Commerce also provides management and technical assistance training for
small businesses. For example, the Department of Commerce’s Minority Business Development
Agency provides training to minority business owners to assist them in becoming suppliers to
private corporations and the federal government.7 In addition, the Department of Commerce’s
Economic Development Administration’s Local Technical Assistance Program promotes efforts to
build and expand local organizational capacity in economically distressed areas. As part of that
effort, it funds projects that focus on technical or market feasibility studies of economic
development projects or programs, which often include consultation with small businesses.8
For many years, a recurring theme at congressional hearings concerning the SBA’s management
and technical assistance training programs has been the perceived need to improve program
efficiency by eliminating duplication of services and increasing cooperation and coordination
both within and among its training resource partners. Congress has also explored ways to improve
the SBA’s measurement of the programs’ effectiveness and to address the impact of national
economic conditions on women’s business center and small business development center finances
and their capacity to meet federal matching requirements and to maintain client service levels.
This report examines the historical development of federal small business management and
technical assistance training programs; describes their current structures, operations, and budgets;
and assesses their administration and oversight, the measures used to determine their
effectiveness, and women’s business center and small business development center finances and
their capacity to meet federal matching requirements and to maintain client service levels. It also
examines legislation that has been introduced to address these programs, including S.Amdt. 4519,
an amendment in the nature of a substitute for H.R. 5297, the Small Business Jobs and Credit Act
of 2010, which was introduced on July 27, 2010, and H.R. 2352, the Job Creation Through
Entrepreneurship Act of 2009, which has passed the House.
5 Ibid., p. 4.
6 Ibid.
7 U.S. Department of Commerce, Minority Business Development Agency, Annual Performance Report, Fiscal Year
2008, Washington, DC, 2009, p. 6, http://www.mbda.gov/?section_id=2&bucket_id=643&content_id=3205&well=
entire_page&portal_document_download=true&download_cid=3205&name=
MBDA_Annual_Performance_Report_2008.pdf&legacy_flag=false.
8 13 C.F.R. § 306.
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Small Business Management and Technical Assistance Training Programs
SBA Management and Technical Assistance
Training Programs
The SBA supports a number of management and technical assistance training programs, including
the
• Small Business Development Center Grants Program,
• Women’s Business Center Grants Program,
• SCORE (Service Corps of Retired Executives),
• 7(j) Technical Assistance Program,
• Microloan Technical Assistance Program,
• Native American Outreach Program,
• PRIME Technical Assistance Program, and
• Veterans Business Development Programs.
The legislative history and current operating structures, functions, and budget for each of these
programs is presented. In addition, if the data are available, their performance based on outcome-
based measures, such as their effect on small business formation, survivability, and expansion,
and on job creation and retention, is also presented. Also, a brief description of each of these
programs is provided in the Appendix.
Given that it has just become operational, the recently announced SBA Entrepreneurial
Development Initiatives Program is not discussed in detail. It is designed to “accelerate small
business opportunities in existing regional clusters across the country.â€9 Regional clusters are
“geographic concentrations of firms and industries that do business with each other and have
common needs for talent, technology, and infrastructure.â€10 Regional cluster advocates argue that
these networks “create a multiplier effect that increases efficiency, innovation, and ultimately
produces conditions for high-growth, high-impact small businesses to prosper.â€11 The SBA’s
Entrepreneurial Development Initiatives Program will provide 15 one-year grants of up to
$600,000 each, with an option for an additional funding year, to local and regional business
clusters to “provide business training, commercialization and technology transfer services,
counseling, mentoring and other services that support the growth and development of small
businesses in the cluster area and its industries.â€12 The clusters “will be assessed on the impact
they will have on the region’s economic growth, creation of sustainable jobs and the opportunities
the cluster provides for small businesses.â€13
9 U.S. Small Business Administration, “Regional Clusters Initiative,†Washington, DC, http://www.sba.gov/clusters/
index.html.
10 Ibid.
11 Ibid.
12 Ibid.; and U.S. Small Business Administration, Press Office, “SBA Announces Funding Available to Support
Regional Clusters, Job Creation,†Washington, DC, June 22, 2010, http://www.sba.gov/idc/groups/public/documents/
sba_homepage/news_release_10-36.pdf.
13 U.S. Small Business Administration, Press Office, “SBA Announces Funding Available to Support Regional
(continued...)
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Small Business Development Centers
In 1976, the SBA created the University Business Development Center pilot program to establish
small business centers within universities to provide counseling and training for small businesses.
The first center was founded at California State Polytechnic University at Pomona in December,
1976. Seven more centers were funded over the next six months at universities in seven different
states. By 1979, 16 small business development centers (SBDCs) received SBA funding and were
providing management and technical training assistance to small businesses.14
The SBDC program was given statutory authorization by P.L. 96-302, the Small Business
Development Center Act of 1980.15 SBDCs were to “rely on the private sector primarily, and the
university community, in partnership with the SBA and its other programs, to fill gaps in making
quality management assistance available to the small business owner.â€16 Although most SBDCs
continued to be affiliated with universities, the legislation authorized the SBA to provide funding
to any State government or any agency thereof, any regional entity, any State-chartered
development, credit or finance corporation, any public or private institution of higher
education, including but not limited to any land-grant college or university, any college or
school of business, engineering, commerce, or agriculture, community college or junior
college, or to any entity formed by two or more of the above entities.17
In 1984, P.L. 98-395, the Small Business Development Center Improvement Act of 1984,
required SBDCs, as a condition of receiving SBA funding, to contribute a matching amount equal
to the grant amount, and that the match must be provided by non-federal sources and be
comprised of not less than 50% cash and not more than 50% of indirect costs and in-kind
contributions.18 It also required SBDCs to have an advisory board and a full-time director who
has authority to make expenditures under the center’s budget. It also required the SBA to
implement a program of onsite evaluations for each SBDC and to make those evaluations at least
once every two years.
(...continued)
Clusters, Job Creation,†Washington, DC, June 22, 2010, p. 2, http://www.sba.gov/idc/groups/public/documents/
sba_homepage/news_release_10-36.pdf.
14 Association of Small Business Development Centers, “A Brief History of America’s Small Business Development
Center Network,†Burke, VA, http://www.asbdc-us.org/About_Us/aboutus_history.html.
15 Ibid.; and U.S. Congress, Senate Committee on Small Business, Oversight of the Small Business Administration’s
Small Business Development Center Program, 98th Cong., 1st sess., February 8, 1983, S.Hrg. 98-31 (Washington: GPO,
1983), p. 2.
16 U.S. Congress, Senate Committee on Small Business, Oversight of the Small Business Administration’s Small
Business Development Center Program, 98th Cong., 1st sess., February 8, 1983, S.Hrg. 98-31 (Washington: GPO,
1983), p. 2.
17 Ibid., p. 4.
18 For American Samoa, Guam and the U.S. Virgin Islands, the SBA is required to waive the match requirements on
awards less than $200,000 and has discretion to waive the match for awards exceeding $200,000. See 48 U.S.C. Sec.
1469a. Also, there is one exception to the disallowance of federal funds as a cash match. Community Development
Block Grant (CDBG) funds received from the Department of Housing and Urban Development are allowed when: (1)
the SBDC activities are consistent with the authorized CDBG activities for which the funds were granted; and (2) the
CDBG activities are identified in the Consolidated Plan of the CDBG grantee or in the agreement between the CDBG
grantee and the subrecipient of the funds.
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Today, the SBA provides grants to SBDCs that are “hosted by leading universities, colleges, and
state economic development agencies†to deliver management and technical assistance training
“to small businesses and nascent entrepreneurs (pre-venture) in order to promote growth,
expansion, innovation, increased productivity and management improvement.â€19 These services
are delivered, in most instances, on a non-fee, one-on-one confidential counseling basis and are
administered by 63 lead service centers, one located in each state (four in Texas and six in
California), the District of Columbia, Puerto Rico, the Virgin Islands, Guam and American
Samoa.20 These lead centers manage nearly 900 service centers located throughout the United
States and the territories.21 The SBDC program assisted 55,936 small business owners and
prospective owners in FY2009.22 Its FY2010 appropriation is $113 million.23
Special areas of emphasis for the SBDC program include “technology transfer and other
assistance to high growth companies, defense economic transition assistance, disaster recovery
assistance, energy efficiency, veterans assistance, manufacturing, technology, international trade,
and market research and development.â€24 In FY2009, 12,700 new businesses were formed with
assistance from SBDC counselors.25
As part of its legislative mandate to evaluate each SBDC, in 2003, the SBA’s Office of
Entrepreneurial Development designed “a multi-year time series study to assess the impact of the
programs it offers to small businesses.â€26 The survey has been administered annually by a private
firm. The latest survey findings were released on September 10, 2009.
The latest survey was sent to 4,000 SBDC clients during the fourth quarter of 2008 to assess their
“initial attitudinal assessment of their counseling experience, and a follow-up with FY2006 and
FY2007 clients to assess the financial impact of the received assistance.â€27 A total of 3,716
surveys were completed.28
The 2008 survey of SBDC clients indicated that
19 U.S. Small Business Administration, “Small Business Development Center Fy/Cy 2011 Program Announcement for
Renewal of the Cooperative Agreement for Current Recipient Organizations,†Washington, DC, p. 3,
http://www.sba.gov/idc/groups/public/documents/sba_program_office/sbdc_2011_prgm_announce.pdf.
20 Ibid.
21 Association of Small Business Development Centers, “Welcome,†Burke, Virginia, http://www.asbdc-us.org/; and
U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 53, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
22 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 53, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
23 Ibid., p. 18.
24 Ibid., p. 53.
25 Ibid.
26 U.S. Small Business Administration, Office of Entrepreneurial Development, “Impact Study of Entrepreneurial
Development Resources,†Washington, DC, September 10, 2009, p. 2, http://www.sba.gov/idc/groups/public/
documents/sba_program_office/ed_finalreport_2009.pdf.
27 Ibid.
28 Ibid., p. 39.
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• approximately 82% of SBDC respondents reported that the information they
received from their counselor was valuable,
• 81% of SBDC respondents that received between three and five hours and 85%
that received more than five hours of counseling rated SBDC usefulness as
“high†as compared to 78% of respondents that received less than three hours of
counseling, and
• 55% of start-up clients reported that SBDC educational assistance was useful
with the decision to start a business.29
Women’s Business Centers
The Women’s Business Center (WBC) Renewable Grant Program was initially established by
P.L. 100-533, the Women’s Business Ownership Act of 1988, as the Women’s Business
Demonstration Pilot Program. The act directed the SBA to provide financial assistance to private,
nonprofit organizations to conduct demonstration projects giving financial, management, and
marketing assistance to small businesses, including start-up businesses, owned and controlled by
women. Since its inception, the program has targeted the needs of socially and economically
disadvantaged women.30 The WBC program was expanded and provided permanent legislative
status by P.L. 109-108, the Science, State, Justice, Commerce, and Related Agencies
Appropriations Act, 2006.
Since the program’s inception, the SBA has awarded women business centers (WBCs) a grant of
up to $150,000 per year. Initially, the grant was awarded for one year, with the possibility of
being renewed twice, for a total of up to three years. As a condition of the receipt of funds, the
WBC was required to raise at least one non-federal dollar for each two federal dollars during the
grant’s first year (1:2), one non-federal dollar for each federal dollar during year two (1:1), and
two non-federal dollars for each federal dollar during year three (2:1).
P.L. 105-135, the Small Business Reauthorization Act of 1997, authorized the SBA to award
grants to WBCs for up to five years—one base year and four option years, subject to availability
of funds and the recipient organization’s compliance with federal law, SBA regulations, and terms
and conditions specified in a cooperative agreement. In addition, the matching requirement was
reduced to one non-federal dollar for each two federal dollars in years one through three rather
than just during the first year (1:2), one non-federal dollar for each federal dollar in year four
rather than during year two (1:1), and two non-federal dollars for each federal dollar in year five
rather than in year three (2:1). In addition, not more than one-half of the non-federal matching
assistance could be in the form of an in-kind contribution, including office equipment and office
space.31 The SBA was also required to “develop and implement an annual programmatic and
financial examination of each†WBC.32
29 Ibid., pp. 43-45.
30 U.S. Congress, House Committee on Small Business, Review of Women’s Business Center Program, 106th Cong.,
February 11, 1999, Serial No. 106-2 (Washington: GPO, 1999), p. 4.
31 P.L. 105-135, the Small Business Reauthorization Act of 1997, Sec. 29. Women’s Business Center Program.
32 Ibid.
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P.L. 106-17, the Women’s Business Center Amendments Act of 1999, reduced the program’s
matching requirement to one non-federal dollar for each two federal dollars in years one and two
(1:2), and one non-federal dollar for each federal dollar in years three, four and five (1:1).
P.L. 106-165, the Women’s Business Centers Sustainability Act of 1999, authorized the SBA to
create a WBC Sustainability Pilot Grant program. Subject to annual reauthorization, it provided
WBCs that had completed the initial five year grant an opportunity to apply for an additional five
year grant. Thus, the act allowed successful WBCs to receive SBA funding for a total of 10 years.
P.L. 110-28, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007, changed the federal share to not more than 50% for all grant years
(1:1). It also allowed WBCs that successfully completed the initial five-year grant period to apply
for an unlimited number of three-year funding renewals.
Today, there are 113 WBCs located throughout most of the United States and the territories.
WBCs assisted 1,564 small business owners in FY2009.33 Its FY2010 appropriation is $14
million.34
As part of its legislative mandate to implement an annual programmatic and financial
examination of each WBC, the SBA’s Office of Entrepreneurial Development includes WBCs in
its previously mentioned multi-year time series study of its programs.35 The survey has been
administered annually by a private firm. The latest survey findings were released on September
10, 2009.
The firm administering the 2008 survey of SBA management and training clients received 278
completed surveys from WBC clients.36 The survey indicated that
• approximately 80% of WBC respondents reported that the information they
received from their counselor was valuable,
• 80% of WBC respondents that received more than three hours of counseling
rated WBC usefulness “high†as compared to 79% of respondents that received
less than three hours of counseling, and
• 53% of start-up clients reported that WBC educational assistance was useful with
the decision to start a business.37
33 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 56, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
34 Ibid., p. 18.
35 U.S. Small Business Administration, Office of Entrepreneurial Development, “Impact Study of Entrepreneurial
Development Resources,†September 10, 2009, p. 2, http://www.sba.gov/idc/groups/public/documents/
sba_program_office/ed_finalreport_2009.pdf.
36 Ibid., p. 67.
37 Ibid., pp. 71-73.
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SCORE (Service Corps of Retired Executives)
The SBA has partnered with various voluntary business and professional service organizations to
provide management and technical assistance training to small businesses since the 1950s. On
October 5, 1964, then-SBA Administrator Eugene P. Foley officially launched SCORE (Service
Corps of Retired Executives) as a national, volunteer organization with 2,000 members, uniting
over 50 independent nonprofit organizations into a single, national nonprofit organization.38 Since
then, the SBA has provided financial assistance to SCORE to provide training to small business
owners and prospective owners.39
Over the years, Congress has authorized the SBA to take certain actions relating to SCORE. For
example, P.L. 89-754, the Demonstration Cities and Metropolitan Development Act of 1966,
authorized the SBA to permit members of SCORE and other nonprofit organizations use of the
SBA’s office facilities and services. P.L. 90-104, the Small Business Act Amendments of 1967,
added the authority to pay travel and subsistence expenses “incurred at the request of the
Administration in connection with travel to a point more than fifty miles distant from the home of
that individual in providing gratuitous services to small businessmen†or “in connection with
attendance at meetings sponsored by the Administration.â€40 P.L. 106-554, the Consolidated
Appropriations Act, 2001 (Section 1(a)(9)—the Small Business Reauthorization Act of 2000)
authorized SCORE to solicit cash and in-kind contributions from the private sector to be used to
carry out its functions.
The SBA currently provides grants to SCORE to provide “in-person mentoring†and “nearly
7,000 local training workshops annually†to small businesses.41 SCORE’s 364 chapters and more
than 800 branch offices are located throughout the United States and partner with more than
12,400 volunteer counselors, who are working or retired business owners, executives and
corporate leaders, to provide management and training assistance to small businesses.42 The
SBA’s SCORE program’s FY2010 appropriation is $7 million.43
38 U.S. Congress, Senate Select Committee on Small Business, Small Business Administration - 1965, 89th Cong., 1st
sess., May 19, 1965 (Washington: GPO, 1965), pp. 21, 45; and SCORE (Service Corps of Retired Executives),
“Milestones in SCORE History,†Washington, DC, http://www.score.org/milestones.html.
39 U.S. Congress, Senate Select Committee on Small Business and House Select Committee on Small Business, 1966
Federal Handbook for Small Business: A Survey of Small Business Programs in the Federal Government Agencies,
committee print, 89th Cong., 3rd sess., January 31, 1966 (Washington: GPO, 1966), p. 5; and U.S. Congress, House
Committee on Small Business, Subcommittee on Rural Development, Entrepreneurship, and Trade, Subcommittee
Hearing on Legislative Initiatives to Modernize SBA’s Entrepreneurial Development Programs, 111th Cong., 1st sess.,
April 2, 2009 (Washington: GPO, 2009), p. 6.
40 U.S. Congress, Senate Select Committee on Small Business, Small Business Act, 90th Cong., 1st sess., November 22,
1967 (Washington: GPO, 1967), pp. 13, 14.
41 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 60, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
42 SCORE (Service Corps of Retired Executives), “About SCORE,†Washington, DC, http://www.score.org/
explore_score.html.
43 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 18, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
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W. Kenneth Yancey, Jr., SCORE’s Chief Executive Office, provided the following description at a
congressional hearing of SCORE’s efforts to assist small businesses as they deal with the nation’s
current economic environment:
SCORE volunteers know things that only experience can teach. All across the country,
SCORE is helping clients navigate the credit crunch. SCORE can mentor an aspiring
entrepreneur through the business plan process to get them through the start-up phase. For
in-business clients, SCORE can provide advice on handling cash flow problems and
marketing to drive leads and sales. Many SCORE chapters offer team counseling, where a
group of volunteers examine various aspects of the client’s business and make
recommendations.44
The SBA Office of Entrepreneurial Development includes SCORE in its multi-year time series
study to assess its programs’ effectiveness. The firm administering the 2008 survey of SBA
management and training clients received 2,617 completed surveys from SCORE clients.45 The
survey indicated that
• approximately 76% of SCORE respondents reported that the information they
received from their counselor was valuable,
• 79% of SCORE respondents that received three or more hours of counseling
rated SCORE usefulness as “high†compared to 73% of respondents that
received less than three hours of counseling, and
• 51% of start-up clients reported that SCORE educational assistance was useful
with the decision to start a business.46
7(j) Management and Technical Assistance Program
Utilizing what it viewed as broad statutory powers granted under Section 8(a) of the Small
Business Act of 1958, as amended, the SBA issued regulations in 1970 creating the 8(a)
contracting program to “assist small concerns owned by disadvantaged persons to become self-
sufficient, viable businesses capable of competing effectively in the market place.â€47 Utilizing its
statutory authority under Section 7(j) of the Small Business Act to provide management and
technical assistance through contracts, grants and cooperative agreement to qualified service
providers, the regulations specified that “the SBA may provide technical and management
assistance to assist in the performance of the subcontracts.â€48
44 U.S. Congress, House Committee on Small Business, Full Committee Hearing on Legislation to Reauthorize and
Modernize SBA’s Entrepreneurial Development Programs, 111th Cong., 1st sess., May 6, 2009 (Washington: GPO,
2009), p. 53.
45 U.S. Small Business Administration, Office of Entrepreneurial Development, “Impact Study of Entrepreneurial
Development Resources,†Washington, DC, September 10, 2009, p. 53, http://www.sba.gov/idc/groups/public/
documents/sba_program_office/ed_finalreport_2009.pdf.
46 Ibid., pp. 57-69.
47 13 C.F.R. § 124.8-1(b) (1970); and Notes, “Minority Enterprise, Federal Contracting, and the SBA’s 8(a) Program: A
New Approach to an Old Problem,†Michigan Law Review, vol. 71, no. 2 (December 1972), pp. 377, 378. For further
analysis of the Minority Small Business and Capital Ownership Development Program, also known as the 8(a)
program, see CRS Report R40744, The “8(a) Program†for Small Businesses Owned and Controlled by the Socially
and Economically Disadvantaged: Legal Requirements and Issues, by John R. Luckey and Kate M. Manuel.
48 13 C.F.R. § 124.8-1(d) (1970).
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Small Business Management and Technical Assistance Training Programs
On October 24, 1978, P.L. 95-507, to amend the Small Business Act and the Small Business
Investment Act of 1958, provided the SBA explicit statutory authority to extend financial,
management, technical, and other services to socially and economically disadvantaged small
businesses. The SBA’s current regulations indicate that the 7(j) Management and Technical
Assistance Program, named after the section of the Small Business Act of 1958, as amended,
authorizing the SBA to provide management and technical assistance training, will, “through its
private sector service providers†deliver “a wide variety of management and technical assistance
to eligible individuals or concerns to meet their specific needs, including: (a) counseling and
training in the areas of financing, management, accounting, bookkeeping, marketing, and
operation of small business concerns; and (b) the identification and development of new business
opportunities.â€49 Eligible individuals and businesses include “8(a) certified firms, small
disadvantaged businesses, businesses operating in areas of high unemployment, or low income or
firms owned by low income individuals.â€50
In FY2009, the 7(j) Management and Technical Assistance Program provided seven grants,
ranging from $47,000 to $455,000, and one interagency agreement, for $150,000, to six
management and technical assistance service providers.51 They assisted 2,865 small business
owners in FY2009.52 The program’s FY2010 appropriation is $3.4 million.53
Microloan Technical Assistance Program
Congress authorized the SBA’s Microloan lending program in 1991 (P.L. 102-140, the
Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 1992) to address the perceived disadvantages faced by women, low-income,
and minority entrepreneurs and business owners gaining access to capital for starting or
expanding their business. The program became operational in 1992. Its stated purpose is
to assist women, low-income, veteran ... and minority entrepreneurs and business owners and
other individuals possessing the capability to operate successful business concerns; to assist
small business concerns in those areas suffering from a lack of credit due to economic
downturns; ... to make loans to eligible intermediaries to enable such intermediaries to
provide small-scale loans, particularly loans in amounts averaging not more than $10,000, to
start-up, newly established, or growing small business concerns for working capital or the
acquisition of materials, supplies, or equipment; [and] to make grants to eligible
intermediaries that, together with non-Federal matching funds, will enable such
intermediaries to provide intensive marketing, management, and technical assistance to
microloan borrowers.54
49 13 C.F.R. § 124.702.
50 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 63, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
51 U.S. Small Business Administration, Office of Legislative Affairs, correspondence with the author, July 29, 2010.
52 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 63, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
53 Ibid., p. 18.
54 15 U.S.C. § 636 7(m)(1)(A).
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Initially, the SBA’s Microloan program was authorized as a five-year demonstration project. It
was made permanent, subject to reauthorization, by P.L. 105-135, the Small Business
Reauthorization Act of 1997.
The SBA’s Microloan Technical Assistance Program, which is part of the SBA’s Microloan
program but receives a separate appropriation, provides grants to Microloan intermediaries to
provide management and technical training assistance to Microloan program borrowers and
prospective borrowers.55 There are approximately 160 intermediaries participating in the
Microloan program.
Intermediaries are eligible to receive a Microloan technical assistance grant “of not more than
25% of the total outstanding balance of loans made to it†under the Microloan program.56 Grant
funds may be used only to provide marketing, management, and technical assistance to Microloan
borrowers, except that up to 25% of the funds may be used to provide such assistance to
prospective Microloan borrowers. Grant funds may also be used to attend training required by the
SBA.57
In most instances, intermediaries must contribute, solely from non-federal sources, an amount
equal to 25% of the grant amount.58 In addition to cash or other direct funding, the contribution
may include indirect costs or in-kind contributions paid for under non-federal programs.59
Intermediaries which make at least 50% of their loans to small businesses located in or owned by
residents of an Economically Distressed Area are not subject to the 25% contribution
requirement.60 Intermediaries may expend no more than 25% of the grant funds on third-party
contracts for the provision of management and technical assistance.61
The SBA does not require Microloan borrowers to participate in the Microloan Technical
Assistance Program. However, intermediaries typically require Microloan borrowers to
participate in the training program as a condition of the receipt of a microloan. Combining loan
and intensive management and technical assistance training is one of the Microloan program’s
distinguishing features.62
55 For further analysis of the SBA’s Microloan program see CRS Report R41057, Small Business Administration
Microloan Program, by Robert Jay Dilger.
56 15 U.S.C. § 636(m)(4)(A).
57 13 C.F.R § 120.712.
58 Ibid.
59 13 C.F.R § 120.712. Intermediaries may not borrow their contribution.
60 An economically distressed area is a county or equivalent division of local government which, according to the most
recent available data from the United States Bureau of the Census, 40% or more of the residents have an annual income
that is at or below the poverty level. See 13 C.F.R § 120.701.
61 13 C.F.R § 120.712.
62 Intermediaries that make at least 25% of their loans to small businesses located in or owned by residents of an
Economically Distressed Area (defined as having 40% or more of its residents with an annual income that is at or
below the poverty level), or have a portfolio of loans made under the program that averages not more than $10,000
during the period of the intermediary’s participation in the program are eligible to receive an additional training grant
equal to 5% of the total outstanding balance of loans made to the intermediary. Intermediaries are not required to make
a matching contribution as a condition of receiving these additional grant funds. See 13 C.F.R § 120.712; and 15 U.S.C.
§ 636(m)(4)(C)(i).
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The Microloan Technical Assistance Program assisted 2,757 small business owners in FY2009.63
Its FY2010 appropriation is $22 million.64
Native American Outreach Program
The SBA established the Office of Native American Affairs in 1994 to “address the unique needs
of America’s First people.â€65 It oversees the Native American Outreach Program, which provides
management and technical educational assistance to American Indians, Alaska Natives, Native
Hawaiians and “the indigenous people of Guam and American Samoa … to promote entity-
owned and individual 8(a) certification, government contracting, entrepreneurial education, and
capital access.â€66 The program’s management and technical assistance services are available to
members of these groups living in most areas of the nation.67 However, “for Native Americans
living in much of Indian County, actual reservations communities where the land is held in trust
by the U.S. federal government, SBA loan guaranties and technical assistance services are not
available.â€68
The SBA’s Office of Native American Affairs has four goals:
• to increase financial literacy across a broad section of the community and to
educate internally on the roles of tribal governments;
• to formulate an SBA-specific tribal consultation policy to engage with tribally
run economic development branches;
• to conduct a Native American veterans’ outreach initiative to increase the
utilization of the SBA’s counseling services and the Patriot Express loan guaranty
program; and
• to conduct an in-depth market research analysis to fine tune marketing efforts
ending in a comprehensive communications plan to reach the target market with
the end goal being a measurable increase in the use of all SBA tools with
particular emphasis on loans and contracting.69
Data concerning the number of clients served by the Native American Outreach Program for all
of FY2009 is not available. From May 2009 through the end of FY2009, the program served
63 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 41, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
64 Ibid., p. 18.
65 U.S. Congress, House Committee on Small Business, Subcommittee on Workforce, Empowerment, and Government
Programs, Oversight of the Small Business Administration’s Entrepreneurial Development Programs, 109th Cong., 2nd
sess., March 2, 2006, Serial No. 109-40 (Washington: GPO, 2006), pp. 5, 37. H.R. 2352, the Job Creation Through
Entrepreneurship Act of 2009, would provide statutory authorization for the Office of Native American Affairs. It was
passed by the House on May 20, 2009.
66 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 65, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
67 Ibid.
68 Ibid.
69 Ibid.
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1,221 clients.70 The Native American Outreach program’s FY2010 appropriation is $1.25
million.71
Program for Investment in Micro-entrepreneurs (PRIME)
P.L. 106-102, the Gramm-Leach-Bliley Act (of 1999) (Subtitle C ─ Microenterprise Technical
Assistance and Capacity Building Program) amended P.L. 103-325, the Reigle Community
Development and Regulatory Improvement Act of 1994, to authorize the SBA to “establish a
microenterprise technical assistance and capacity building grant program.â€72 The program was to
“provide assistance from the Administration in the form of grants†to “nonprofit microenterprise
development organizations or programs (or a group or collaborative thereof) that has a
demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs; an
intermediary; a microenterprise development organization or program that is accountable to a
local community, working in conjunction with a state or local government or Indian tribe; or an
Indian tribe acting on its own, if the Indian tribe can certify that no private organization or
program referred to in this paragraph exists within its jurisdiction.â€73
The SBA was directed “to ensure that not less than 50% of the grants … are used to benefit very
low-income persons, including those residing on Indian reservations.â€74 It was also directed to
(1) provide training and technical assistance to disadvantaged entrepreneurs; (2) provide
training and capacity building services to microenterprise development organizations and
programs and groups of such organizations to assist such organizations and programs in
developing microenterprise training and services; (3) aid in researching and developing the
best practices in the field of microenterprise and technical assistance programs for
disadvantaged entrepreneurs; and (4) for such other activities as the Administrator
determines are consistent with the purposes of this subtitle.75
The SBA’s Program for Investment in Micro-entrepreneurs (PRIME) was designed to meet these
legislative requirements by providing “assistance to organizations that help low-income
entrepreneurs who lack sufficient training and education to gain access to capital to establish and
expand their small businesses.â€76 The program offers four types of grants:
• Technical Assistance Grants support training and technical assistance to
disadvantaged micro-entrepreneurs,
70 U.S. Small Business Administration, Office of Legislative Affairs, correspondence with the authors, July 16, 2010.
71 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 18, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
72 P.L. 106-102, the Gramm-Leach-Bliley Act, Sec. 173. Establishment of Program.
73 P.L. 106-102, the Gramm-Leach-Bliley Act, Sec. 173. Establishment of Program and Sec. 175. Qualified
Organizations.
74 P.L. 106-102, the Gramm-Leach-Bliley Act, Sec. 176. Allocation of Assistance; Subgrants.
75 P.L. 106-102, the Gramm-Leach-Bliley Act, Sec. 174. Uses of Assistance.
76 U.S. Small Business Administration, “PRIME Program,†Washington, DC, http://www.sba.gov/financialassistance/
prospectivelenders/prime/index.html.
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• Capacity Building Grants support training and capacity building services to
micro-enterprise development organizations and programs to assist them in
developing micro-enterprise training and services,
• Research and Development Grants support the development and sharing of best
practices in the field of micro-enterprise development and technical assistance
programs for disadvantaged micro-entrepreneurs, and
• Discretionary Grants support other activities determined to be consistent with
these purposes.77
Grants are awarded on an annual basis. Applicants may be approved for option year funding for
up to four subsequent years. Award amounts vary depending on the availability of funds.
However, no single grantee may receive more than $250,000 or 10% of the total funds made
available for the program in a single fiscal year, whichever is less.78
Recipients must match 50% of the funding from non-federal sources. Revenue from fees, grants,
and gifts; income from loan sources; and in-kind resources from non-federal public or private
sources may be used to comply with the matching requirement.79 SBA regulations indicate that
“applicants or grantees with severe constraints on available sources of matching funds may
request that the Administrator or designee reduce or eliminate the matching requirements.â€80 Any
reductions or eliminations must not exceed 10% of the aggregate of all PRIME grant funds made
available by SBA in any fiscal year.81
The SBA awarded 58 PRIME grants to management and technical assistance service providers in
FY2009, ranging from $50,000 to $200,000.82 The number of clients served by this program
during FY2009 is unavailable. The PRIME program’s FY2010 appropriation is $8 million.83
Veterans Business Development Programs
The SBA has supported management and technical assistance training for veteran-owned small
businesses since its formation as an agency. However, during the 1990s, some in Congress noted
that a direct loan program for veterans was eliminated by the SBA in 1995 and that the “training
and counseling for veterans dropped from 38,775 total counseling sessions for veterans in 1993 to
29,821 sessions in 1998.â€84 Concerned that “the needs of veterans have been diminished
77 Ibid.
78 U.S. Small Business Administration, Office of Financial Assistance, “Program for Investment in Microentrepreneurs
Act (“PRIMEâ€): Microenterprise and Technical Assistance Programs to Disadvantaged Entrepreneurs, Fiscal Year
2010,†June 2010, Washington, DC, p. 2, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
serv_fa_2010_primetrack123.pdf.
79 Ibid., pp. 2, 8.
80 13 C.F.R § 119.8.
81 Ibid.
82 U.S. Small Business Administration, Office of Legislative Affairs, correspondence with the authors, July 27, 2010.
83 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 18, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
84 U.S. Congress, House Committee on Small Business, Veterans Entrepreneurship and Small Business Development
Act of 1999, report to accompany H.R. 1568, 106th Cong., 1st sess., June 29, 1999, H.Rept. 106-206 (Washington: GPO,
1999), pp. 14, 15.
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systematically at the SBA,†Congress adopted P.L. 106-50, the Veterans Entrepreneurship and
Small Business Development Act of 1999.85 It authorized the establishment of the federally
chartered National Veterans Business Development Corporation (now also known as The
Veterans Corporation) to
(1) expand the provision of and improve access to technical assistance regarding
entrepreneurship for the Nation’s veterans; and (2) to assist veterans, including service-
disabled veterans, with the formation and expansion of small business concerns by working
with and organizing public and private resources, including those of the Small Business
Administration, the Department of Veterans Affairs, the Department of Labor, the
Department of Commerce, the Department of Defense, the Service Corps of Retired
Executives …, the Small Business Development Centers …, and the business development
staffs of each department and agency of the United States.86
The act re-emphasized the SBA’s responsibility “to reach out to and include veterans in its
programs providing financial and technical assistance.â€87 It also included veterans as a target
group for the SBA’s 7(a), 504/CDC, and Microloan programs. It also required the SBA to enter
into a memorandum of understanding with SCORE to, among other things, establish “a program
to coordinate counseling and training regarding entrepreneurship to veterans through the chapters
of SCORE throughout the United States.â€88 It also directed the SBA to enter into a memorandum
of understanding with small business development centers, the Department of Veteran Affairs,
and the National Veterans Business Development Corporation “with respect to entrepreneurial
assistance to veterans, including service-disabled veterans.â€89 The act specified that the following
services were to be provided:
(1) Conducting of studies and research, and the distribution of information generated by such
studies and research, on the formation, management, financing, marketing, and operation of
small business concerns by veterans.
(2) Provision of training and counseling to veterans concerning the formation, management,
financing, marketing, and operation of small business concerns.
(3) Provision of management and technical assistance to the owners and operators of small
business concerns regarding international markets, the promotion of exports, and the transfer
of technology.
(4) Provision of assistance and information to veterans regarding procurement opportunities
with Federal, State, and local agencies, especially such agencies funded in whole or in part
with Federal funds.
(5) Establishment of an information clearinghouse to collect and distribute information,
including by electronic means, on the assistance programs of Federal, State, and local
85 Ibid.
86 P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999, Sec. 33. National
Veterans Business Development Corporation.
87 U.S. Congress, House Committee on Small Business, Veterans Entrepreneurship and Small Business Development
Act of 1999, report to accompany H.R. 1568, 106th Cong., 1st sess., June 29, 1999, H.Rept. 106-206 (Washington: GPO,
1999), p. 14.
88 P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999, Sec. 301. Score Program.
89 Ibid., Sec. 302. Entrepreneurial Assistance.
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governments, and of the private sector, including information on office locations, key
personnel, telephone numbers, mail and electronic addresses, and contracting and
subcontracting opportunities.
(6) Provision of Internet or other distance learning academic instruction for veterans in
business subjects, including accounting, marketing, and business fundamentals.
(7) Compilation of a list of small business concerns owned and controlled by service-
disabled veterans that provide products or services that could be procured by the United
States and delivery of such list to each department and agency of the United States. Such list
shall be delivered in hard copy and electronic form and shall include the name and address of
each such small business concern and the products or services that it provides.90
The SBA’s Office of Veterans Business Development (OVBD) was established to address these
statutory requirements by promoting “veterans’ small business ownership by conducting
comprehensive outreach, through program and policy development and implementation,
ombudsman support, coordinated Agency initiatives, and direct assistance to veterans, service-
disabled veterans, Reserve and National Guard members, and discharging active duty
personnel.â€91
The OVBD provided, or supported third-parties to provide, management and technical assistance
training services to 122,901 veterans during FY2009. These services were provided “through
SBA district offices; OVBD-developed and distributed materials; websites; partnering;
management of regional Veterans Business Outreach Centers; direct guidance and assistance to
Agency veteran customers; inter-agency assistance with federal partners; and through
enhancements to intra-agency programs used by the military and veteran communities.â€92 For
example, OVBD provided “207 public presentations and training events to enhance veterans’
understanding of and access to SBA programs and partners to improve access to broader federal
procurement opportunities, initiatives, and programs for veterans and for service-disabled
veterans.â€93 It also regularly referred veterans to SBA district offices and SBA management and
technical assistance training resource partners for locally based training, workshops and
assistance.94 The OVBD’s FY2010 appropriation is $2.5 million.95
The OVBD’s Veterans Business Outreach Centers Program is one of its larger and better known
third-party provider management and technical assistance training programs. It was established
by the SBA under the authority in section 8(b)(17) of the Small Business Act. It is to “provide
outreach, assessment, long term counseling, training, coordinated service delivery referrals,
mentoring & network building, procurement assistance and E-based assistance to benefit Small
Business concerns and potential concerns owned and controlled by Veterans, Service Disabled
Veterans and Members of Reserve Components of the U.S. Military.â€96
90 Ibid.
91 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 66, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
92 Ibid.
93 Ibid., pp. 66, 67.
94 Ibid., p. 67.
95 Ibid., p. 18.
96 U.S. Small Business Administration, Office of Veterans Business Development, “Special Program Announcement:
(continued...)
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There are currently 16 Veterans Business Outreach Centers. Each center is funded on an annual
basis, with funding not to exceed $150,000 each year. Awards “may vary, depending upon
location, staff size, project objectives, performance and agency priorities, and additional special
initiatives initiated by the Office of Veterans Business Development.â€97 Existing centers may
receive additional funding for special outreach or other initiatives. The initial grant award is for
12 months, with the possibility of four additional (option) years.
In FY2009, the Veterans Business Outreach Centers Program conducted its fifth annual
“Customer Satisfaction Survey.†The centers surveyed 2% of their total veteran customer
population. The FY2009 survey found that
89.3% of the clients using the centers were satisfied or highly satisfied with the quality,
relevance and timeliness of the assistance provided. Clients evaluating the centers gave
89.3% ratings for the training programs provided and 89.3% ratings for program
evaluation.98
Department of Commerce Small Business
Management and Technical Assistance Training
Programs
As mentioned previously, the Department of Commerce’s Minority Business Development
Agency provides training to minority business owners to assist them in becoming suppliers to
private corporations and the federal government.99 In addition, the Department of Commerce’s
Economic Development Administration’s Local Technical Assistance Program promotes efforts to
build and expand local organizational capacity in distressed areas. As part of that effort, it funds
projects that focus on technical or market feasibility studies of economic development projects or
programs, which often include consultation with small businesses.100
The Minority Business Development Agency (MBDA)
The Minority Business Development Agency (MBDA) was established by President Richard M.
Nixon by Executive Order 11625, issued on October 13, 1971 and published in the Federal
Register the next day. It clarified the authority of the Secretary of Commerce to:
(...continued)
Veterans Business Outreach Center Program,†Washington, DC, April 2010, p. 1, http://www.sba.gov/idc/groups/
public/documents/sba_program_office/ovbd_vboc_prgm_announce2010.pdf.
97 Ibid., p. 2.
98 U.S. Small Business Administration, “FY2011 Congressional Budget Justification and FY2009 Annual Performance
Report,†Washington, DC, 2010, p. 67, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
fy_2011_cbj_09_apr.pdf.
99 U.S. Department of Commerce, Minority Business Development Agency, Annual Performance Report, Fiscal Year
2008, Washington, DC, 2009, p. 6, http://www.mbda.gov/?section_id=2&bucket_id=643&content_id=3205&well=
entire_page&portal_document_download=true&download_cid=3205&name=
MBDA_Annual_Performance_Report_2008.pdf&legacy_flag=false.
100 13 C.F.R. § 306.
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• implement federal policy in support of the minority business enterprise program,
• provide additional technical and management assistance to disadvantaged
businesses,
• assist in demonstration projects, and
• coordinate the participation of all federal departments and agencies in an
increased minority enterprise effort.101
The MBDA’s FY2010 appropriation is $31.5 million.
As part of its mission, the MBDA seeks to train minority business owners to become first- or
second-tier suppliers to private corporations and the federal government. Progress is measured in
the business’s increased gross receipts, number of employees, and size and scale of the firms
associated with minority business enterprises.
According to the MBDA’s annual report:
In fiscal year 2008 the Return on Agency Investment (ROAI) was $74. The ROAI is one of
several indicators that the agency uses to track overall performance. This measure takes all
agency appropriations ($28.6 million) and divides it by the total dollars of obtained closed
transactions for financials and contracts. Accomplishments were reported by a total of 44
funded projects that were funded across the country. These projects, along with agency staff,
reported that they were successful in securing over $1 billion dollars in contracts and over $1
billion dollars in closed financial transactions.
MBDA funded two flagship programs, the (Minority and Native American) Business
Enterprise Centers (BECs) and the Minority Business Opportunity Centers (MBOCs). The
BEC program services minority business entrepreneurs through the Minority Business
Enterprise Centers (MBECs) and through the Native American Business Enterprise Centers
(NABECs). Technically, the BECs are the primary drivers of the agency. It is through this
program that the majority of MBDA’s success is accomplished.
The 36 BEC projects which were funded in FY 2008 secured close to $700 million in
contracts and over $l billion in closed financial transactions for their minority clients. By
comparison, the BEC program reported accomplishments of $619.5 million in contracts and
$398.3 million in secured financial transactions in FY2007.102
The EDA Local Technical Assistance Program
P.L. 89-186, the Public Works and Economic Development Act of 1965, authorized the
Department of Commerce’s Economic Development Administration (EDA) to provide financial
assistance to economically distressed areas in the United States that are characterized by high
101 The Executive Office of the President, “Executive Order 11625,†36 Federal Register 11625, October 14, 1971; and
3 C.F.R., 1971-1975 Comp. 9. 616. The MBDA superseded the Office of Minority Business Enterprise, which was
established by Executive Order 11458 signed by President Richard Nixon on March 5, 1969.
102 U.S. Department of Commerce Minority Business Development Agency, Annual Performance Report, Fiscal Year
2008, Washington, DC, 2009, p. 14, http://www.mbda.gov/?section_id=2&bucket_id=643&content_id=3205&well=
entire_page&portal_document_download=true&download_cid=3205&name=
MBDA_Annual_Performance_Report_2008.pdf&legacy_flag=false.
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levels of unemployment and low per-capita income. The EDA currently administers seven
Economic Development Assistance Programs (EDAPs) that award matching grants for public
works, economic adjustment, planning, technical assistance, research and evaluation, trade
adjustment assistance, and global climate change mitigation.103 In FY2010, these programs were
appropriated $293 million.
Grants awarded under the EDA’s Local Technical Assistance Program are designed to help solve
specific economic development problems, respond to development opportunities, and build and
expand local organizational capacity in distressed areas.104 The majority of local technical
assistance projects focus on technical or market feasibility studies of economic development
projects or programs, including consultation with small businesses. In FY2010, technical
assistance accounted for 3.8% of the total economic development program allocation for the
EDA, or $9.8 million.
Congressional Issues
For many years, a recurring theme at congressional hearings concerning the SBA’s management
and technical assistance training programs has been the perceived need to improve program
efficiency by eliminating duplication of services and increasing cooperation and coordination
both within and among SCORE, WBCs and SBDCs.105 In recent years, Congress has also
explored ways to improve the SBA’s measurement of the programs’ effectiveness and has paid
increased attention to the impact of national economic conditions on WBC and SBDC finances
and their capacity to meet federal matching requirements and to maintain client service levels.106
103 In addition, since 1970, Congress has periodically allocated supplemental funds for EDA to assist with disaster
mitigation and economic recovery. Also, EDA grant applicants must be designated by EDA as part of an EDD—a
multijurisdictional consortium of county and local governments—to be eligible for EDA funding and grants. To be
designated as an EDD, an area must meet the definition of economic distress, under 13 C.F.R 303.3: (i) An
unemployment rate that is, for the most recent twenty-four (24) month period for which data are available, at least one
(1) percentage point greater than the national average unemployment rate; (ii) Per capita income that is, for the most
recent period for which data are available, eighty (80) percent or less of the national average per capita income; or (iii)
A Special Need, as determined by Economic Development Administration (EDA).
104 13 C.F.R. § 306.
105 U.S. Congress, House Committee on Small Business, Full Committee Markup of H.R. 2352 The Job Creation
Through Entrepreneurship Act of 2009, 111th Cong., 1st sess., May 13, 2009, Doc. No. 111-022 (Washington: GPO,
2009), pp. 2, 14; U.S. Congress, Senate Committee on Small Business, SBA’s Management and Assistance Programs,
Roundtable before the Committee on Small Business United States Senate, 106th Cong., 1st sess., May 20, 1999, S. Hrg.
106-337 (Washington: GPO, 1999), pp. 69, 74, 82, 92; U.S. Congress, House Committee on Small Business, To
Investigate the Legislation That Would Increase the Extent and Scope of the Services Provided By Small Business
Development Centers, 107th Cong., 1st sess., July 19, 2001, Serial No. 107-20 (Washington: GPO, 2001), pp. 13, 59, 60;
and U.S. Congress, Senate Committee on Small Business, Oversight on the Small Business Administration’s Small
Business Development Center Program, 100th Cong., 1st sess., October 15, 1987, S. Hrg. 100-339 (Washington: GPO,
1987), pp. 6, 165, 168, 230.
106 U.S. Congress, House Committee on Small Business, Full Committee Hearing on Legislation to Reauthorize and
Modernize SBA’s Entrepreneurial Development Programs, 111th Cong., 1st sess., May 6, 2009 (Washington: GPO,
2009), pp. 12, 13, 15, 18.
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Program Administration
As mentioned previously, a recurring theme at congressional hearings concerning the SBA’s
management and technical assistance training programs has been the perceived need to improve
program efficiency by eliminating duplication of services and increasing cooperation and
coordination both within and among SCORE, WBCs and SBDCs. For example, in 2007, the U.S.
Government Accountability Office (GAO) was asked to assess the SBA’s oversight of WBCs and
the coordination and duplication of services among the SBA’s management and technical training
assistance programs. GAO found that
As described in the terms of the SBA award, WBCs are required to coordinate with local
SBDCs and SCORE chapters. In addition, SBA officials told us that they expected district
offices to ensure that the programs did not duplicate each other. However, based on our
review, WBCs lacked guidance and information from SBA on how to successfully carry out
their coordination efforts. Most of the WBCs that we spoke with explained that in some
situations they referred clients to an SBDC or SCORE counselor, and some WBCs also took
steps to more actively coordinate with local SBDCs and SCORE chapters to avoid
duplication and leverage resources. We learned that WBCs used a variety of approaches to
facilitate coordination, such as memorandums of understanding, information-sharing
meetings, and co-locating staff and services. However, some WBCs told us that they faced
challenges in coordinating services with SBDC and SCORE, in part because the programs
have similar performance measures, and this could result in competition among the service
providers in some locations. We also found that on some occasions SBA encouraged WBCs
to provide services that were similar to services already provided by SBDCs in their district.
Such challenges thwart coordination efforts and could increase the risk of duplication in
some geographic areas.107
Some organizations have argued that the SBA’s management and technical assistance training
programs should be merged. For example, the U.S. Women’s Chamber of Commerce has argued
that
over the last 50 years, the SBA entrepreneurial development system has grown into a
fragmented array of programs, which has resulted in a disorganized, overlapping, and
[in]efficient delivery of service through a system that is ill-prepared to effectively address the
challenges of our economy.
… if we are to serve the needs of American entrepreneurs, we must commit to a top to
bottom restructuring of the delivery of the entrepreneurial services of the SBA. The myriad
of entrepreneurial development programs should be unified into one centrally managed
organization that has the flexibility to provide services when and where they are needed. 108
These organizations argue that merging the SBA’s management and technical assistance training
programs would provide greater coordination of services and “one clear channel for assistanceâ€
that “is paramount to the average business owner seeking help.â€109 Advocates of merging the
107 U.S. Government Accountability Office, Small Business Administration: Opportunities Exist to Improve Oversight
of Women’s Business Centers and Coordination among SBA’s Business Assistance Programs, GAO-08-49, November
2007, pp. 6, 24-31, http://www.gao.gov/new.items/d0849.pdf.
108 U.S. Congress, House Committee on Small Business, Full Committee Hearing on the State of the SBA’s
Entrepreneurial Development Programs and Their Role in Promoting an Economic Recovery, 111th Cong., 1st sess.,
February 11, 2009, Small Business Comm. Doc. No. 111-005 (Washington: GPO, 2009), p. 4.
109 U.S. Congress, House Committee on Small Business, Subcommittee on Rural Development, Entrepreneurship, and
(continued...)
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SBA’s management and technical assistance training programs often mention merging them into
the SBDC Program because, in their view, it has the advantage of having a broader connection to
mainstream resources and its locations are “greater and more diverse†than other SBA
management and technical assistance training programs.110
Others argue that providing separate management and training assistance programs for specific
groups is the best means to ensure that those group’s unique challenges are recognized and their
unique needs are met.111 For example, when asked at a congressional hearing about the rationale
for having separate management and technical assistance training programs for specific groups, a
representative of the Association of Women’s Business Centers stated:
I think that there is tremendous rationale for having different programs…. The women’s
business center programs really target a very different kind of population than the SBDCs.…
We serve very different clientele…. We create a very different culture at the women’s
business center. We really have made it a welcoming place where … they feel
comfortable.… And it’s very important to me that the woman have a place where they feel
comfortable … and where they see other women like themselves who are aspiring to reach
their dreams.112
At another congressional hearing, the Association of Women’s Business Centers’ Executive
Director argued that “the new three-year funding arrangement†for WBCs had enabled them to
“concentrate on better serving their clients and growing their programs†and that WBCs should be
provided continued and expanded funding because they provide effective services:
We know that when our program performance is measured against any other enterprise
assistance program, we will meet or exceed any performance measures. Indeed, the SBA’s
own client-based performance reviews have shown our clients to be just as satisfied or in
some cases more satisfied with the services they have received compared to the SBA’s other
entrepreneurial development efforts.113
Instead of merging programs, some organizations argue that improved communication among the
SBA’s management and technical assistance training resource partners and enhanced SBA
program oversight is needed. For example, during House consideration of H.R. 2352, the Job
Creation Through Entrepreneurship Act of 2009, the House Committee on Small Business
concluded that
(...continued)
Trade, Subcommittee Hearing on Legislative Initiatives to Modernize SBA’s Entrepreneurial Development Programs,
111th Cong., 1st sess., April 2, 2009 (Washington: GPO, 2009), p. 29.
110 U.S. Congress, House Committee on Small Business, Full Committee Hearing on the State of the SBA’s
Entrepreneurial Development Programs and Their Role in Promoting an Economic Recovery, 111th Cong., 1st sess.,
February 11, 2009, Small Business Committee Doc. No. 111-005 (Washington: GPO, 2009), p. 26.
111 Ibid., pp. 15, 17, 26, 29, 58-65, 72; and U.S. Congress, House Committee on Small Business, Women’s Business
Ownership Act of 1988, report to accompany H.R. 5050, 100th Cong., 2nd sess., September 22, 1988, H.Rept. 100-955
(Washington: GPO, 1988), pp. 9, 10, 13, 14.
112 U.S. Congress, House Committee on Small Business, Full Committee Legislative Hearing on Energy, Veterans
Entrepreneurship, and the SBA’s Entrepreneurial Development Programs, 110th Cong., 1st sess., May 16, 2007, Serial
Number 110-22 (Washington: GPO, 2007), p. 20.
113 U.S. Congress, House Committee on Small Business, Full Committee Hearing on the State of the SBA’s
Entrepreneurial Development Programs and Their Role in Promoting an Economic Recovery, 111th Cong., 1st sess.,
February 11, 2009, Small Business Committee Doc. No. 111-005 (Washington: GPO, 2009), pp. 45, 47.
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Given the increasing range and complexity of small business owners’ needs, the agency’s
ED [Entrepreneurial Development] programs must be implemented more effectively. Each
ED program has a unique mandate and service delivery approach that is customized to its
particular clients. However, as a network, the programs have established local connections
and resources that benefit entrepreneurs within a region. Enhanced coordination among this
network is critical to make the most of scarce resources available for small firms. It can also
ensure that best practices are shared amongst providers that have similar goals but work
within different contexts.114
H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009, which was passed by the
House on May 20, 2009, by a vote of 406–15, and is awaiting further action in the Senate,
includes several provisions that are designed to improve the oversight and coordination of the
SBA’s management and technical assistance training programs. For example, the bill would
require the SBA to create a new program that provides “high-quality multilingual distance
training and education to potential and existing entrepreneurs through the use of technology.â€115
The new program is to provide “peer-to-peer learning through the creation of a location online
that allows entrepreneurs and small business owners the opportunity to exchange technical
assistance through the sharing of information.â€116 To ensure that the new on-line learning program
is fully integrated into the SBA’s existing management and technical assistance training
programs, the SBA would be required to “integrate under one Web portal, Small Business
Development Centers, Women’s Business Centers, SCORE, Veterans Business Centers, the
Administration’s distance learning program, and other programs as appropriate.â€117
The bill would also require the SBA to coordinate its management and technical assistance
training programs “with State and local economic development agencies and other federal
agencies as appropriate.â€118 In addition, the bill would require the SBA to “report annually to
Congress, in consultation with other federal departments and agencies as appropriate, on
opportunities to foster coordination, limit duplication, and improve program delivery for federal
entrepreneurial development activities.â€119
Program Evaluation
GAO noted in its 2007 assessment of the SBA’s management and technical assistance training
programs that, in addition to its annual survey of WBC, SBDC, and SCORE participants, the
SBA requires WBCs to provide quarterly performance reports that include “the WBCs’ actual
accomplishments, compared with their performance goals for the reporting period; actual budget
expenditures, compared with an estimated budget; cost of client fees; success stories; and names
of WBC personnel and board members.â€120 GAO also noted that WBCs are also required to issue
114 U.S. Congress, House Committee on Small Business, Job Creation Through Entrepreneurship Act of 2009, report to
accompany H.R. 2352, 111th Cong., 1st sess., May 15, 2009, H.Rept. 111-112 (Washington: GPO, 2009), pp. 17, 18.
115 H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009, Sec. 201. Educating Entrepreneurs Through
Technology.
116 Ibid.
117 H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009, Sec. 601. Expanding Entrepreneurship.
118 Ibid.
119 Ibid.
120 U.S. Government Accountability Office, Small Business Administration: Opportunities Exist to Improve Oversight
of Women’s Business Centers and Coordination among SBA’s Business Assistance Programs, GAO-08-49, November
2007, p. 15, http://www.gao.gov/new.items/d0849.pdf.
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fourth quarter performance reports that “also include a summary of the year’s activities and
economic impact data that the WBCs collect from their clients, such as number of business start-
ups, number of jobs created, and gross receipts.â€121 SBDCs have similar reporting
requirements.122
In recent years, Congress has considered requiring the SBA to expand its use of outcome-based
measures to determine the effectiveness of its management and technical training assistance
programs. For example, Representative Nydia M. Velázquez, chair of the House Committee on
Small Business, has argued that
The SBA has typically relied on quantity-based indicators, such as the number of clients
served or counselor hours provided. A better measure might be outcome-based, such as the
number of businesses started or jobs created.123
During House consideration of H.R. 2352, the Job Creation Through Entrepreneurship Act of
2009, the House Committee on Small Business concluded that
As it stands, the ED [Entrepreneurial Development] network has minimal transparency in
highlighting its contributions to economic growth. Data currently gathered by the SBA for
this type of reporting does not adequately capture ED’s economic impact. For example, there
is an overreliance on capturing data such as participation rates; e.g., total conference
attendees, a figure that often fails to illustrate a program’s utility. Similarly, SBA’s online
services share this problem, as it is difficult to numerically quantify the system’s benefits. As
these resources can be accessed freely and no follow up is required on their use, the agency
cannot definitively demonstrate their use for growing businesses. Instead, the performance
data should indicate activities such as the number of jobs created, employees hired and sales
generated from the outcome of each client relationship and service provided. This type of
data would more accurately reflect the role of these programs in economic growth.124
The bill would require the SBA to create “outcome-based measures of the amount of job creation
or economic activity generated in the local community as a result of efforts made and services
provided by each women’s business center.â€125 It would also require the SBA to
promulgate a rule to develop and implement a consistent data collection process to cover all
entrepreneurial development programs. Such data collection process shall include data
relating to job creation, performance, and any other data determined appropriate by the
Administrator with respect to the Administration’s entrepreneurial development
programs.â€126
121 Ibid.
122 U.S. Small Business Administration, “FY/CY 2011, Program Announcement for Renewal of the Cooperative
Agreement for Current Recipient Organizations,†Washington, DC, pp. 27-38, http://www.sba.gov/idc/groups/public/
documents/sba_program_office/sbdc_2011_prgm_announce.pdf.
123 U.S. Congress, House Committee on Small Business, Full Committee Hearing on Legislation to Reauthorize and
Modernize SBA’s Entrepreneurial Development Programs, 111th Cong., 1st sess., May 6, 2009 (Washington: GPO,
2009), p. 12.
124 U.S. Congress, House Committee on Small Business, Job Creation Through Entrepreneurship Act of 2009, report to
accompany H.R. 2352, 111th Cong., 1st sess., May 15, 2009, H.Rept. 111-112 (Washington: GPO, 2009), p. 18.
125 H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009, Sec. 404. Performance and Planning.
126 H.R. 2352, the Job Creation Through Entrepreneurship Act of 2009, Sec. 601. Expanding Entrepreneurship.
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WBC and SBDC Finances
In recent years, Congress has provided increased attention to the impact of national economic
conditions on WBC and SBDC finances and their capacity to meet federal matching requirements
and to maintain client service levels.127 For example, Donald Wilson, President, Association of
Small Business Development Centers, testified before Congress that national economic
conditions were making it more difficult for SBDCs to raise the funds necessary to meet federal
matching requirements:
One of the issues is the whole design of the program [where] the federal dollar would
leverage the non-federal dollar. And so when you get states that match and the federal dollar
never goes up, the states are not likely to go up.
And now with this current economic downturn, all you have to do is look at foundations and
you see where their stock portfolios are going. You see banks which have often been very
helpful for us because we bring them high quality loan candidates. Their dollars are
declining. States that are facing severe budget deficits which by law by their state
constitution they cannot have. They are cutting back.
And so the issue now is not the same rosy outlook in terms of getting matched that it was,
say, three or four years ago, and quite frankly, we encounter all the time if the federal
government does not believe in this program, you know, we are not going to start pouring a
lot of money into it.128
During House consideration of H.R. 2352, the Job Creation Through Entrepreneurship Act of
2009, the House Committee on Small Business concluded that
Resources to fund ED programs in accordance with demand are significantly below the
necessary levels. This is a result of a budgetary approach in which the entrepreneurial
development programs were funded well below the Congressionally-authorized levels. For
every one of these programs, the funding level is twenty to thirty percent below the
authorized level. Cuts to the supply of resources through these programs run counter to
trends in the small business community, given that there has been significant growth in both
the number and types of entrepreneurs over the past several decades. These reductions have
also occurred simultaneously with new conditions in local and national economies, which are
altering the types of opportunities available for entrepreneurs as well as their business
development needs.129
The bill would have increased WBC funding from $13.75 million in FY2009 to $20 million in
FY2010 and $22 million in FY2011. The WBC program later received a $14 million
appropriation for FY2010. The bill would have also reduced the WBC program’s matching
requirement to one non-federal dollar for each two federal dollars during the first and second
127 U.S. Congress, House Committee on Small Business, Subcommittee on Rural Development, Entrepreneurship and
Trade, Subcommittee Hearing on Legislative Initiatives to Modernize SBA’s Entrepreneurial Development Programs,
111th Cong., 1st sess., April 2, 2009, H. Hrg. 111-015 (Washington: GPO, 2009), pp. 26, 27, 31.
128 U.S. Congress, House Committee on Small Business, Subcommittee on Rural and Urban Entrepreneurship,
Subcommittee Hearing on Oversight of the Entrepreneurial Development Programs Implemented By the Small
Business Administration and National Veterans Business Development Corporation, 110th Cong., 2nd sess., March 12,
2008, House Serial No. 110-78 (Washington: GPO, 2008), pp. 17, 18.
129 U.S. Congress, House Committee on Small Business, Job Creation Through Entrepreneurship Act of 2009, report to
accompany H.R. 2352, 111th Cong., 1st sess., May 15, 2009, H.Rept. 111-112 (Washington: GPO, 2009), p. 18.
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years of the grant (1:2) and one federal dollar for each federal dollar thereafter (1:1). The bill
would have also increased SBDC funding from $116 million in FY2009 to $150 million in
FY2010 and $160 million in FY2011. The SBDC program later received a $113 million
appropriation for FY2010.
The Senate is also considering legislation to provide additional resources for SBDCs and to
reduce federal matching requirements for WBCs. For example, S.Amdt. 4519, an amendment in
the nature of a substitute for the House-passed H.R. 5297, the Small Business Jobs and Credit Act
of 2010, was introduced by Senator Harry Reid for Senator Max Baucus on July 27, 2010. It
would authorize a number of changes to the SBA’s programs, including providing SBDCs up to
$50 million in additional funds for targeted technical assistance to small businesses for various
specified activities, such as seeking access to capital or credit, federal procurement opportunities,
and opportunities to export products. The amendment would guarantee each state not less than
$325,000 of these additional funds and waive the non-federal matching requirement for these
additional funds.130 This provision is not included the House-passed version of the bill.
S.Amdt. 4519 would also allow the SBA to temporarily waive, in whole or in part, for successive
fiscal years, the non-federal share requirement relating to “technical assistance and counselingâ€
for WBCs under specified circumstances (e.g., the economic conditions affecting the center and
the center’s performance).131 This provision is not included the House-passed version of the bill.
On July 29, 2010, a motion to invoke cloture on S.Amdt. 4519 failed, by a vote of 58-42. Senator
Harry Reid voted nay in order to reserve the right to bring the motion up for reconsideration at
another time.132
Concluding Observations
Congressional interest in the federal government’s small business management and technical
assistance training programs has increased in recent years. One of the reasons for the heightened
level of interest in these programs is that small business has led job formation and retention
during previous economic recoveries.133 It has been argued that effective small business
management and technical assistance training programs are needed if small businesses are to lead
job creation and retention during the current economic recovery. As Representative Heath Shuler,
chair of the House Committee on Small Business Subcommittee on Rural Development,
Entrepreneurship and Trade, stated during a congressional hearing,
130 Senator Harry Reid, “Text of Amendments: SA 4519,†Congressional Record, vol. 156, no. 111 (July 27, 2010), pp.
S6320, S6321. This provision is also included in S. 3103, the Small Business Job Creation Act of 2010.
131 Senator Harry Reid, “Text of Amendments: SA 4519,†Congressional Record, vol. 156, no. 111 (July 27, 2010), p.
S6320. This provision is also included in S. 3165, Small Business Community Partner Relief Act of 2010; and a similar
provision is included in S. 3103, the Small Business Job Creation Act of 2010.
132 U.S. Senate, “U.S. Senate Roll Call Votes 111th Congress - 2nd Session, Vote No. 221,†Washington, DC, July 29,
2010, http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=
00221.
133 U.S. Small Business Administration, Office of Advocacy, Small Business Economic Indicators for 2003,
Washington, DC, August 2004, p. 3, http://www.sba.gov/advo/stats/sbei03.pdf; Brian Headd, “Small Businesses Most
Likely to Lead Economic Recovery,†The Small Business Advocate, vol. 28, no. 6 (July 2009), pp. 1, 2,
http://www.sba.gov/advo/july_09.pdf; and U.S. Small Business Administration, Fiscal Year 2010 Congressional
Budget Justification (Washington, DC: GPO, 2009), p. 1.
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We often talk about the role that small business plays in the creation of jobs and with good
reason. Small firms generate between 60 and 80 percent of new positions. Following the
recession in the mid-1990s, they created 3.8 million jobs…. we could use that growth today.
But unfortunately, many firms are struggling to make ends meet. Let’s allow them to hire
new workers. In the face of historic economic challenges, we should be investing in
America’s job creators. SBA’s Entrepreneurial Development Programs, or ED, do just that.
Of all the tools in the small business toolbox, these are some of the most critical. They help
small firms do everything from draft business plans to access capital.134
There is a general consensus that federal management and technical assistance training programs
serve an important purpose and, for the most part, are providing needed services that are not
available elsewhere. As Karen Mills, SBA Administrator, stated during a press interview:
We find that our counseling operations are equally important as our credit operations because
small businesses really need help and advice, and when they get it, they tend to have more
sales and more profits and more longevity, and they hire more people. So we have looked
forward and said, “How do we get all the tools small businesses need into their hands?â€
Maybe they want to export. Maybe they want to know how to use broadband. Maybe they
are veterans who are coming back and want to start a business or grow their business. Our
job is to make sure all that information and opportunity is accessible for small businesses so
they can do what they do, which is keep our economy strong.135
There is also a general consensus that making federal management and technical assistance
training programs more effective and responsive to the needs of small business would assist the
national economic recovery. However, there are disagreements over how to achieve that goal.
Some advocate increasing funding for existing programs to enable them to provide additional
training opportunities for small businesses while, at the same time, maintaining separate training
programs for specific demographic groups as a means to ensure that those groups’ specific needs
are met; require the SBA to make more extensive use of outcome-based measures to better
determine the programs’ effect on small business formation and retention, job creation and
retention, and the generation of wealth; and temporarily reduce or eliminate federal matching
requirements to enable SBA’s management and technical assistance training resource partners to
focus greater attention to service delivery and less to fund raising. Others argue for a merger of
existing programs to reduce costs and improve program efficiency, to focus available resources
on augmenting the capacity of SBDCs to meet the needs of all small business groups, and require
the SBA to make more extensive use of outcome-based performance measures to determine
program effectiveness.
There are no case studies or empirical data available concerning the efficiencies that might be
gained by merging the SBA’s management and technical assistance training programs. Advocates
argue that merging the programs would improve communications, reduce confusion by business
owners seeking assistance by ensuring that all small business management and technical
assistance training centers serve all small business owners and aspiring entrepreneurs, lead to
134 U.S. Congress, House Committee on Small Business, Subcommittee on Rural Development, Entrepreneurship and
Trade, Subcommittee On Rural Development, Entrepreneurship And Trade Markup On Entrepreneurial Development
Programs Legislation, 111th Cong., 1st sess., April 30, 2009, Small Business Committee Document No. 111-118
[ERRATA – printing error, should be 111-018] (Washington: GPO, 2009), p. 1.
135 David Port, “But Where Is the Money?†Entrepreneur Magazine, August 2010, http://www.entrepreneur.com/
magazine/entrepreneur/2010/august/207500.html.
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more sustainable and predictable funding for the programs from non-federal sources, and result in
more consistent and standard operating procedures throughout the country.136 Opponents argue
that any gains in program efficiency that might be realized would be more than offset by the loss
of targeted services for constituencies that often require different information and training to meet
their unique challenges and needs.137
136 U.S. Congress, House Committee on Small Business, Full Committee Hearing on the State of the SBA’s
Entrepreneurial Development Programs and Their Role in Promoting an Economic Recovery, 111th Cong., 1st sess.,
February 11, 2009, Small Business Committee Doc. No. 111-005 (Washington: GPO, 2009), pp. 3-5, 24-27, 29; and
U.S. Congress, House Committee on Small Business, Full Committee Hearing on Legislation to Reauthorize and
Modernize SBA’s Entrepreneurial Development Programs, 111th Cong., 1st sess., May 6, 2009 (Washington: GPO,
2009), pp. 3-5, 15, 27-34.
137 U.S. Congress, House Committee on Small Business, Full Committee Hearing on the State of the SBA’s
Entrepreneurial Development Programs and Their Role in Promoting an Economic Recovery, 111th Cong., 1st sess.,
February 11, 2009, Small Business Committee Doc. No. 111-005 (Washington: GPO, 2009), pp. 44-49; U.S. Congress,
House Committee on Small Business, Job Creation Through Entrepreneurship Act of 2009, report to accompany H.R.
2352, 111th Cong., 1st sess., May 15, 2009, H.Rept. 111-112 (Washington: GPO, 2009), pp. 16-31; and U.S. Congress,
House Committee on Small Business, Women’s Business Ownership Act of 1988, report to accompany H.R. 5050, 100th
Cong., 2nd sess., September 22, 1988, H.Rept. 100-955 (Washington: GPO, 1988), pp. 9, 10, 13, 14.
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Appendix. Brief Descriptions of SBA Management
and Technical Assistance Training Programs
Table A-1. Brief Descriptions of SBA Management and
Technical Assistance Training Programs
Federal Matching
Program Name
Authority
Brief Description
Number
Requirement
Small Business
P.L. 96-302, 1980
Provides
About 900
50% match from
Development
management and
non-federal sources
Center Grant
technical assistance
comprised of not
Program
training to smal
less than 50% cash
businesses through
and not more than
centers located in
50% of indirect
leading universities,
costs.
col eges, and state
economic
development
agencies.
Women Business
P.L. 100-533, 1988
Provides long-term
113
50% match from
Center Grant
training, counseling,
non-federal sources;
Program
networking, and
not more than one-
mentoring to
half of the non-
women
federal matching
entrepreneurs,
assistance may be in
especially those who
the form of in-kind
are socially and
contributions,
economically
including office
disadvantaged.
equipment and office
space.
SCORE ((Service
Section 8(b) of the
Provides technical,
364 chapters and
none
Corps of Retired
Small Business Act;
managerial, and
800+ branch offices
Executives)
P.L. 89-754, 1966
informational
assistance to smal
business concerns
through in-person
mentoring by
volunteer
counselors who are
working or, in most
instances, retired
business owners.
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Federal Matching
Program Name
Authority
Brief Description
Number
Requirement
7(j) Technical
Section 7(j) of the
Provides
6 service providers
none
Assistance Program
Small Business Act;
management and
and 1 interagency
Section 8(a) of the
technical assistance
agreement
Small Business Act;
training to 8(a)
P.L. 95-507, 1978
certified firms, small
disadvantaged
businesses,
businesses operating
in areas of high
unemployment or
low-income and
firms owned by low-
income individuals.
Microloan Technical
P.L. 102-140, 1992
Provides
160+ intermediaries
25% from non-
Assistance Program
management and
federal sources; no
technical assistance
matching
training to Microloan
requirement if the
borrowers and,
intermediary makes
within specified
at least 50% of its
limits, to prospective
loans in an
Microloan
Economically
borrowers.
Distressed Area.
Native American
Section 7(j) of the
Provides
NA none
Outreach Program
Small Business Act;
management and
SBA regulations,
technical assistance
1994
training to American
Indians, Alaska
Natives, Native
Hawaiians and “the
indigenous people of
Guam and American
Samoa … to
promote entity-
owned and individual
8(a) certification,
government
contracting,
entrepreneurial
education, and
capital access.â€
PRIME Technical
P.L. 106-102, 1999
Provides assistance
58 service providers 50% from non-
Assistance Program
in the form of grants
federal sources;
to nonprofit
sources such as fees,
microenterprise
grants, gifts, income
development
from loan sources,
organizations or
and in-kind
programs that has a
resources from non-
demonstrated
federal public or
record of delivering
private sources may
microenterprise
be used to comply
services to
with the matching
disadvantaged
funds requirement
entrepreneurs.
Congressional Research Service
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.
Small Business Management and Technical Assistance Training Programs
Federal Matching
Program Name
Authority
Brief Description
Number
Requirement
Veterans Business
P.L. 106-50, 1999
The mission of the
NA none
Development
SBA’s Office of
Programs
Veterans Business
Development is to
(1) expand the
provision of and
improve access to
technical assistance
regarding
entrepreneurship for
the Nation’s
veterans; and (2) to
assist veterans,
including service-
disabled veterans,
with the formation
and expansion of
smal business
concerns by working
with and organizing
public and private
resources, including
those of the SBA.
Source: Federal statutes, cited in table.
Author Contact Information
Robert Jay Dilger
Oscar R. Gonzales
Senior Specialist in American National Government Analyst in Economic Development Policy
rdilger@crs.loc.gov, 7-3110
ogonzales@crs.loc.gov, 7-0764
Congressional Research Service
30