SBA sidesteps efforts to streamline the agency.
The federal agency that financially guarantees loans to small businesses dodged a bullet in 1999. Congress last year proposed deep cuts to the U.S. Small Business Admin-istration’s budget that could have forced the administration to fire 75 percent of its staff and scale back services across the country, according to administration officials. The SBA’s Providence district office, for example, faced the possibility of having to fire as many as 12 of its 17 employees.
But President Clinton signed a SBA budget in late November that didn’t cut nearly as deeply as that proposed by Congress, which called for the agency to slash $87 million from its budget in the House of Representatives version.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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As the budget debate played out on Capitol Hill in 1999, the local SBA office continued its work in Rhode Island and around New England.
The agency announced in late October that it had guaranteed loans of more than $660 million to more than 3,800 small businesses in New England during the federal government’s fiscal year, which ends in September. The final loan guarantee figures for the last fiscal year represent a more than 14 percent increase over the previous fiscal year, according to SBA officials.
The list of SBA lenders in New England for the last fiscal year was topped by Citizens Bank, which made 523 loans backed by the agency for more than $40 million. Fleet Bank, which has since merged with BankBoston and been renamed Fleet Boston, was a close second with 503 loans backed by the agency for more than $37 million.
In Rhode Island alone, Citizens also topped the list of SBA lenders with 203 loans totaling nearly $24.3 million. The other banks at the top of the Rhode Island list included Fleet with 79 loans totaling $11.1 million, First Bank & Trust Co. with 44 loans totaling $7.8 million, Coastway Credit Union with 37 loans totaling $3.4 million and Bank Rhode Island with 36 loans totaling $4.2 million.
The number of SBA loans that went to women in New England last year increased to more than 5 percent of the region’s overall loan volume, while the number of SBA loans to minorities jumped 44 percent compared to the previous year, according to figures reported by the agency.
Although New England small business got more SBA-backed loans than in previous years, some studies indicated small businesses in the East weren’t faring as well as in other parts of the country in 1999.
Eastern small business owners realized a less than 1 percent increase in operating income in the third quarter of 1999 compared to the same period the previous year, far behind the national average increase of nearly 8 percent, according to the latest survey by the accounting firm Padgett Business Services of Athens, Ga.
A nearly 12 percent increase in wages at Eastern small businesses may have been responsible for the lackluster profit growth here.
The Padgett survey – based on a representative sample of 3,277 small businesses – also showed that as 1999 drew to a close, nearly half of those businesses surveyed had done little or nothing to prepare for Y2K and that an equally significant number of businesses still do not use computers.
Similar studies from other firms and a national small business advocacy group confirmed at year’s end that small business owners and decision-makers were underwelmed by the Internet. Many said the fast-growing global network had little or no impact on their businesses.
But observers said that’s likely to change this year as more and more small businesses learn how to use the Net for more than an online brochure.
