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SMALL BUSINESS ADMINISTRATION
The budget provides $701 million in new budget authority
for the Small Business Administration (SBA). When combined
with anticipated carryover and decreased loan subsidy costs,
this funding level allows SBA to continue to expand assistance to small businesses at a reduced cost to the Federal
taxpayer.
In 1998, SBA proposes to continue to increase its reliance
on its private sector partners. Three initiatives will allow
SBA to complete its transition from physically servicing and
liquidating its $36 billion loan portfolio to overseeing its private sector partners. First, 7(a) General Business lenders will
be required to service and liquidate all loans approved after
FY 1997. Second, SBA will sell its $10 billion portfolio of
defaulted guarantees and direct loans beginning in FY 1998.
Third, SBA requests $18 million to improve its portfolio monitoring capabilities. These proposals will allow SBA to focus
its limited resources on expanding assistance to small businesses while relying on its private sector partners for ‘‘backend’’ activities. The budget estimates that these proposals
will lead to lower credit, administrative, and subsidy costs.
The budget proposes growth in programs to expand access
to capital, assist disadvantaged small businesses, and provide
education and training. As part of SBA’s goal of stretching
taxpayers’ dollars, the budget also assumes that (1) Small
Business Development Companies will charge counseling fees
to substitute for a reduction in federal grants and proposes
that (2) disaster loan borrowers pay an interest rate equal
to the rate on Treasury securities of comparable maturity.
Federal Funds
General and special funds:
SALARIES

AND

EXPENSES

For necessary expenses, not otherwise provided for, of the Small
Business Administration as authorized by Public Law 103–403, including hire of passenger motor vehicles as authorized by 31 U.S.C.
1343 and 1344, and not to exceed $3,500 for official reception and
representation expenses, ø$223,547,000, of which $1,000,000 shall
only be available for obligation and expenditure for projects jointly
developed, implemented and administered with the Minority Business
Development Agency of the Department of Commerce¿ $246,100,000:
Provided, That the Administrator is authorized to charge fees to
cover the cost of publications developed by the Small Business Administration, and certain loan servicing activities: Provided further, That
notwithstanding 31 U.S.C. 3302, revenues received from all such activities shall be credited to this account, to be available for carrying
out these purposes without further appropriations: Provided further,
That ø$75,500,000¿ $57,500,000 shall be available to fund grants
for performance in fiscal year ø1997¿ 1998 or fiscal year ø1998¿
1999 as authorized by section 21 of the Small Business Act, as
amended. øIn addition, for expenses not otherwise provided for, of
the Small Business Administration, $11,500,000, of which: $3,000,000
shall be available for a grant to continue the WVHTC Foundation
outreach program to assist small business development; $7,000,000
shall be available for a grant to the Center for Rural Development
in Somerset, Kentucky, for small business and rural technology development assistance; $1,000,000 shall be available for a grant to Indiana State University for the renovation and equipping of a training
facility, to assist in creating small business and economic development opportunities; and $500,000 shall be available for a continuation
grant to the Center for Entrepreneurial Opportunity in Greensburg,
Pennsylvania, to provide for small business consulting and assistance.¿ (Departments of Commerce, Justice, and State, the Judiciary,
and Related Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)
Identification code 73–0100–0–1–376

Obligations by program activity:
Government Contracting and Minority Enterprise Development ..................................................................
00.02 Disaster assistance .......................................................
00.03 Economic development ..................................................
00.04 Management and administration ..................................
00.05 Executive direction .........................................................
00.06 General counsel .............................................................
00.07 Congressional and legislative affairs ...........................
00.08 Hearings and appeals ...................................................
00.09 Communications and publications ................................
00.11 Advocacy ........................................................................
00.12 Field operations .............................................................
00.13 Equal Employment Opportunity and civil rights compliance .......................................................................
00.14 Regional and district offices .........................................
00.15 Chief financial officer ....................................................

1996 actual

1997 est.

1998 est.

00.01

10.00

Total obligations ........................................................

Budgetary resources available for obligation:
Unobligated balance available, start of year:
Uninvested balance ...................................................
22.00 New budget authority (gross) ........................................
22.22 Unobligated balance transferred from other accounts
22.30 Unobligated balance expiring ........................................

21
112
117
83
2
5
1
1
3
5
3

21
126
132
75
1
5
1
1
2
5
4

32
123
127
77
1
5
1
1
2
5
5

2
123
10

2
123
9

2
126
10

488

507

517

21.40

23.90
23.95
24.40

Total budgetary resources available for obligation
488
508
517
New obligations .............................................................
–488
–507
–517
Unobligated balance available, end of year:
Uninvested balance ................................................... ................... ................... ...................

New budget authority (gross), detail:
Current:
40.00
Appropriation .............................................................
Permanent:
68.00
Spending authority from offsetting collections: Offsetting collections (cash) .....................................
70.00

4 ................... ...................
487
508
517
2 ................... ...................
–5 ................... ...................

Total new budget authority (gross) ..........................

Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Appropriation .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
73.40 Adjustments in expired accounts ..................................
74.40 Unpaid obligations, end of year: Obligated balance:
Appropriation .............................................................

219

235

246

268

273

271

487

508

517

72.40

174
182
181
488
507
517
–477
–508
–514
–3 ................... ...................
182

181

184

86.90
86.93
86.97

Outlays (gross), detail:
Outlays from new current authority ..............................
Outlays from current balances ......................................
Outlays from new permanent authority .........................

169
40
268

180
55
273

188
55
271

87.00

Total outlays (gross) .................................................

477

508

514

Offsets:
Against gross budget authority and outlays:
Offsetting collections (cash) from:
Federal sources:
88.00
Payments from business loan program account ............................................................
–97
88.00
Payments from disaster loan program account
–164
88.00
Reprogramming of disaster loan subsidy ........ ...................
88.40
Non-Federal sources .............................................
–7

–95
–97
–127
–173
–50 ...................
–1
–1

88.90

Total, offsetting collections (cash) ..................

–268

–273

–271

89.00
90.00

Net budget authority and outlays:
Budget authority ............................................................
Outlays ...........................................................................

219
209

235
235

246
243

987

988

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

General and special funds—Continued
SALARIES

AND

EXPENSES—Continued

Summary of Budget Authority and Outlays
(in millions of dollars)

1996 actual
1997 est.
Enacted/requested:
Budget Authority .....................................................................
219
235
Outlays ....................................................................................
209
235
Legislative proposal, subject to PAYGO:
Budget Authority ..................................................................... .................... ....................
Outlays .................................................................................... .................... ....................

Total:
Budget Authority .....................................................................
Outlays ....................................................................................

219
209

235
235

1998 est.

246
243
1
1
247
244

This appropriation funds salaries, other administrative expenses of the Small Business Administration (SBA), and business education and training programs. The SBA provides assistance to small businesses and to victims of natural disasters through these primary program areas:
Economic Development.—The Associate Deputy Administrator (ADA) for this function exercises direction over the
following SBA program offices: Financial Assistance; Surety
Bond Guarantees; Investment; International Trade; Women’s
Business Ownership; Small Business Development Centers;
Veterans’ Affairs; Native-American Affairs; and Business Initiatives, which includes the Service Corps of Retired Executives.
These offices are responsible for the administration of all
SBA credit and business education training programs. In
1998, SBA plans to continue providing business management
training and tools for the small business community through
U.S. Export Assistance Centers, and Business Information
Centers. In addition, through new programs such as LowDoc,
FASTRAK, and the Export Working Capital Programs
(EWCP), SBA has begun targeting financial assistance to segments of the population that have historically been under
represented in SBA’s credit programs. The SBA’s efforts to
reduce unnecessary paperwork and make the agency more
customer-friendly have attracted new banks interested in establishing partnerships with SBA.
Government Contracting and Minority Enterprise Development.—The Associate Deputy Administrator for this function
exercises direction over the following SBA program offices:
Government Contracting; Minority Enterprise Development;
Technology; and Size Standards. These offices are responsible
for effectively advocating for small businesses in the area
of government contracting. Government contracting activities
are aimed at ensuring that small businesses receive a fair
share of Federal procurement awards. The Minority Enterprise Development programs provide assistance to socially
and economically disadvantaged small business concerns, primarily in the areas of business development and Federal procurement. Through this office, SBA assists firms that are
owned by disadvantaged persons to help them develop into
viable competitive businesses in a reasonable period of time.
Disaster Assistance.—The Associate Administrator for the
Office of Disaster Assistance oversees the Disaster Loan Program which provides physical disaster loans to individuals
and businesses of any size, and economic injury loans to small
businesses unable to obtain credit elsewhere. In addition to
Presidentially-declared disasters, the program provides loans
when a declaration is made by the SBA Administrator. Program eligibility is based on financial criteria and interest
rates are set according to statutory formulas. In recent years,
the average interest rate on disaster loans has been about
four percent. The budget proposes to reduce the cost of disaster loan subsidies by increasing the interest rate on disaster
loans to the Treasury’s cost of borrowing.
Advocacy.—The Chief Counsel for Advocacy is charged by
law to be an independent voice for small business within

the government, and to: (1) examine the role of small business
in the economy and its contribution to competition; (2) evaluate financial markets and the credit needs of small business;
(3) measure the costs of regulation on small business; and,
(4) monitor agency compliance with the Regulatory Flexibility
Act (RFA), as amended by the Small Business Regulatory
Enforcement Fairness Act (SBREFA).

Program Performance
Small Business Development Centers (SBDCs).—The SBDCs
provide long term counseling to small businesses at about
1,000 locations in 50 states. In FY 1996, nearly 600,000 customers were helped of which roughly 40 percent of the customers were women and 17 percent were minorities.
Service Corps of Retired Executives (SCORE).—Using oneon-one counseling and workshops SCORE reaches about
270,000 business owners annually using approximately 13,000
counselors through approximately 400 chapters located across
the country. Counseling costs to the Government are less
than $3 per hour. For 1998, the budget proposes a funding
level of $3.5 million for this program.
Microloan Technical Assistance.—The Microloan Program
helps support the Administration’s initiative to put those on
welfare to work by providing opportunities to start up small
businesses using SBA-guaranteed microloans. Microloan Technical Assistance grants ensure that microloan borrowers are
provided the necessary education and training needed for
them to succeed. The budget provides $16.5 million in
Microloan grants.
Outreach Initiatives.—The SBA is actively involved in fostering the development of entrepreneurial skills and economic
development opportunities involving veterans, women and
businesses engaged in international trade. The budget proposes a 1998 funding level of approximately $1 million to
support veterans, women, and international trade outreach
initiatives.
Women’s Demonstration Program.—Through this program
the SBA makes awards to private entities to deliver entrepreneurial training programs for women business owners or
those interested in starting a business. In 1996, 54 demonstration sites, or business centers, were operating in 28
states and Washington, DC. Each offers financial, management, marketing and technical assistance to current and potential women business owners. This budget proposes $4 million for this program in 1998 to establish 10 to 12 new sites,
and to continue two initiatives begun in 1996: the Women’s
Business Intranet (which links all of the demonstration sites)
and a virtual demonstration site on the Internet, which will
allow women nationwide to have access to these services.
Business Information Centers (BIC).—These centers offer
self-help hardware, software and reference materials, and onsite counseling provided by SCORE volunteers. Individuals
who are in business or are interested in starting a business
will find many resources specifically targeted at helping businesses grow or find new market niches. For 1998, the budget
proposes $500 thousand for this program.
Native American Affairs.—This program supports the economic development needs of reservation communities. In
1996, over 400 loans were made to Native Americans under
the agency’s 7(a) program, amounting to more than $66 million in loans. The agency also opened 15 new Tribal Business
Information Centers (TBICs) to deliver business education
and training on reservations.
Business Assistance Publications.—The SBA provides publications on a self-funding basis and distributes an estimated
300,000 items to the public each year.
One Stop Capital Shops (OSCS).—One Stop Capital Shops
are located in Empowerment Zone, Enterprise Community,
and Rural Economic Area Partnership communities. The objectives of these programs are to stimulate and sustain eco-

SMALL BUSINESS ADMINISTRATION

nomic development in these economically distressed and underserved areas. The OSCS is a delivery mechanism for existing SBA programs that emphasize the use of public/private
relationships. The SBA serves as a catalyst by offering its
business development and capital resources together in one
location with other federal, state, local, and private sector
resources in order to leverage and complement those resources and provide better customer service. Based on the
performance of the 15 shops, the SBA plans to expand the
number in 1998.
Other Services.—The SBA co-sponsors a variety of special
activities with the for-profit, not-for-profit, and public sectors.
Many co-sponsored events cost customers between $35 and
$100, with comparable commercially-sponsored training costing $300 to $800. Among the most visible public/private cosponsorships undertaken is SBA Online, SBA’s electronic bulletin board for small businesses. The SBA Online system has
been principally underwritten by Sprint, which has paid the
cost of all toll-free connections to the system. Between October, 1992, and January, 1996, more than one and a half
million connections to SBA Online were logged, and more
than 120,000 individuals used the system on a regular basis.

Performance Measures
Program and Policy Goals under the GPRA.—President
Clinton has made small business formation and growth an
essential part of his national economic plan. He has asked
the Small Business Administration to focus on five program
and policy goals as part of the plan: (1) improve small businesses’ access to capital; (2) reduce the regulatory and paperwork burden on small firms; (3) offer quality business education, information, and training; (4) serve as the President’s
eyes and ears, reporting back to him on the needs of small
business, and function as an ‘‘advocate’’ for small businesses;
and, (5) help disaster victims to rebuild so they can contribute
again to the Nation’s economy.
SBA Strategic Plan.—It is the mission of the SBA to serve
America’s small businesses in the most cost effective manner
possible to help preserve free competition, to contribute to
strengthening the Nation’s economy, and to assist disasterravaged communities recover from their losses.
Performance Indicators.—In the long run, the Agency’s performance goal is true economic development and the capacity
to assess how SBA assistance contributes to helping small
businesses succeed. A variety of credit and non-credit business
output and outcome measures are included in the SBA strategic and annual performance plan to measure progress in the
following areas: businesses created, maintained, and/or expanded; jobs created, and revenues generated; cost effective
access to quality training, counseling and information; private
capital leveraged more effectively; improved customer satisfaction; reduced paperwork, more understandable regulations,
and increased compliance; increased use of resource partners
and more flexible lending; small businesses receiving an increased share of Federal procurement and research; efficient
delivery of disaster service and a greater satisfaction level;
and, delivery of SBA programs that ‘‘work better and cost
less.’’

1998 Proposals
For agency operating expenses, the budget proposes to continue SBA’s efforts to increase administrative efficiencies and
enhance the delivery of its programs. Although the agency’s
programs have grown substantially in recent years, SBA’s
administrative budget has been able to decline gradually as
efficiencies have been realized. Total employment at the agency, excluding disaster-funded positions which fluctuate with
the incidence of natural disaster activity, has been reduced
by more than 22 percent since the end of 1992.

989

Federal Funds—Continued

Portfolio monitoring.—Over the past four years, SBA has
aggressively increased access to capital, reduced staffing, and
delegated authority to its private sector partners. In order
to support these trends and to maintain a quality portfolio,
the budget requests $18 million for improving portfolio monitoring. This initiative, which is a key part of the 1998 7(a)
General Business Loan Guaranty Program proposal, will
allow SBA to: recruit expertise in lender oversight; develop
the necessary in-house systems for lender monitoring; contract with a financial advisor on asset disposition; and establish performance standards for SBA lenders similar to those
developed by other financial institutions such as Fannie Mae.
The ADA for Economic Development will re-engineer portfolio
management, incorporate the best practices of the other financial institutions with lender oversight, and develop lender
performance goals. The Chief Information Officer will direct
the design of a corporte database that provides timely information on portfolio performance, and the Chief Financial Officer will guide the collection of financial information, analysis
and the reporting needed to support this enhanced oversight
capability.
SBDC counseling fees.—The budget requests $57.5 million
for the SBDC program, $16 million below the 1997 level.
The Administrator assumes that SBDCs will charge fees for
counseling services to offset this reduction in Federal support.
Disadvantaged business development.—The budget includes
additional resources that will enable SBA to assume increased
responsibilities pursuant to the U.S. Department of Justice’s
Affirmative Action Review. The budget provides $1.9 million
to re-engineer business processes and improve SBA’s ability
to provide support for Small Disadvantaged Businesses. The
budget also proposes to increase the 7(j) program to $9.2
million in order to provide increased management and technical assistance and training for the development of firms
owned by socially- and economically-disadvantaged individuals. Assistance to these 8(a) program participants will be
tailored to the developmental needs of individual firms. The
existing 7(j) Executive Education Program will be expanded
to four additional sites to reach a geographically wider audience of new entrepreneurs.
PASS database.—The 1998 budget includes $1.2 million for
the Procurement Automated Source System (PASS). PASS
is the cornerstone of SBA’s system for posting the profiles
of small businesses interested in procurement opportunities
with the federal government or its large, prime contractors.
The system also will accept data required to support the
certification process as recommended by the Department of
Justice’s Affirmative Action Review and will be an important
component of new efforts to ensure compliance with federal
acquisition regulations.
Object Classification (in millions of dollars)
Identification code 73–0100–0–1–376

11.1
11.3
11.5
11.9
12.1
21.0
22.0
23.1
23.3
24.0
25.2
26.0
31.0
41.0
92.0
92.0

Personnel compensation:
Full-time permanent ..................................................
Other than full-time permanent ...............................
Other personnel compensation ..................................
Total personnel compensation ..............................
Civilian personnel benefits ............................................
Travel and transportation of persons ............................
Transportation of things ................................................
Rental payments to GSA ................................................
Communications, utilities, and miscellaneous charges
Printing and reproduction ..............................................
Other services ................................................................
Supplies and materials .................................................
Equipment ......................................................................
Grants, subsidies, and contributions ............................
Undistributed:
Undistributed (disaster loan making) .......................
Undistributed (disaster loan servicing) ....................

1996 actual

144
7
4

1997 est.

148
7
4

1998 est.

152
7
4

155
159
163
39
40
41
5
5
5
1 ................... ...................
26
25
27
12
12
13
2
1
1
35
31
54
2
1
1
3
1
1
96
106
88
93
19

104
22

102
21

990

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

General and special funds—Continued

22.22

Unobligated balance transferred from other accounts ...................

SALARIES

23.90
23.95
24.40

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year:
Uninvested balance ...................................................

AND

EXPENSES—Continued

Object Classification (in millions of dollars)—Continued
1996 actual

Identification code 73–0100–0–1–376

99.9

Total obligations ........................................................

1997 est.

488

11
–10

1 ...................
11
–11

11
–11

1 ................... ...................

1998 est.

507

517

Personnel Summary

40.00

New budget authority (gross), detail:
Appropriation ..................................................................

Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Appropriation .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
74.40 Unpaid obligations, end of year: Obligated balance:
Appropriation .............................................................

9

9

11

1
10
–10

1
11
–10

1
11
–11

1

1

1

72.40

1996 actual

Identification code 73–0100–0–1–376

Total compensable workyears:
1001 Full-time equivalent employment ..................................
1005 Full-time equivalent of overtime and holiday hours

1997 est.

4,640
300

1998 est.

4,450
290

4,522
300

Note.—The personnel summary includes regular (non-disaster) full-time equivalents (FTEs) of 3,023, 2,985, and
3,047 in 1996, 1997, and 1998, respectively.

SALARIES

AND

Outlays (gross), detail:
Outlays from new current authority ..............................
Outlays from current balances ......................................

8
2

8
2

10
1

87.00

Total outlays (gross) .................................................

10

10

11

89.00
90.00

EXPENSES

86.90
86.93

Net budget authority and outlays:
Budget authority ............................................................
Outlays ...........................................................................

9
10

9
10

11
11

(Legislative proposal, subject to PAYGO)
Program and Financing (in millions of dollars)
1996 actual

Identification code 73–0100–4–1–376

1997 est.

1998 est.

00.03

Obligations by program activity:
Economic development .................................................. ................... ...................

1

10.00

Total obligations (object class 25.2) ........................ ................... ...................

1

22.00
23.95

Budgetary resources available for obligation:
New budget authority (gross) ........................................ ................... ...................
New obligations ............................................................. ................... ...................

1
–1

42.00

New budget authority (gross), detail:
Transferred from other accounts ................................... ................... ...................

1

73.10
73.20

Change in unpaid obligations:
New obligations ............................................................. ................... ...................
Total outlays (gross) ...................................................... ................... ...................

1
–1

86.90

Outlays (gross), detail:
Outlays from new current authority .............................. ................... ...................

1

89.00
90.00

Net budget authority and outlays:
Budget authority ............................................................ ................... ...................
Outlays ........................................................................... ................... ...................

1
1

In 1998, the budget proposes that fees collected for SBIC
examination and licensing be collected by the Salaries and
Expenses Account to fund the costs of contracting out for
SBIC examination and licensing.
OFFICE

OF

This appropriation provides funds for agency-wide audit,
investigative, and inspection/evaluative functions to identify
and recommend corrections of management or program deficiencies which may create conditions for fraud, waste, or
abuse. The audit function provides internal audit, external
audit, and inspection/evaluation oversight activities. Internal
audits assess the general management and efficiency of SBA
program operations. External audits review all program participants and their compliance with SBA regulations and procedural requirements. Inspection/evaluations address specific
requirements of program management and effectiveness. The
investigative function detects and investigates allegations of
illegal and improper activities involving agency personnel,
programs, and operations.
The 1998 budget requests $10.6 million to support an increase in staff required for critical oversight of SBA’s burgeoning business loan portfolio, the disaster assistance program,
and other programs. The OIG oversight efforts and investigative activities: (1) enhance the SBA’s efficiency and effectiveness; (2) serve to deter fraud and abuse in agency programs;
and (3) consistently demonstrated a high rate of return on
invested funds.
Object Classification (in millions of dollars)

For necessary expenses of the Office of Inspector General in carrying out the provisions of the Inspector General Act of 1978, as amended (5 U.S.C. App. 1–11, as amended by Public Law 100–504),
ø$9,000,000¿ $10,600,000. (Departments of Commerce, Justice, and
State, the Judiciary, and Related Agencies Appropriations Act, 1997.)

7
1
2

8
2
1

8
2
1

99.9

Total obligations ........................................................

10

11

11

Personnel Summary

1001

00.01
00.02
00.03
00.04
10.00

Obligations by program activity:
Management and counsel .............................................
Audit ...............................................................................
Investigations .................................................................
Disaster ..........................................................................

2
3
4
1

Total obligations ........................................................

10

Budgetary resources available for obligation:
Unobligated balance available, start of year:
Uninvested balance ...................................................
22.00 New budget authority (gross) ........................................

2
9

1998 est.

Personnel compensation: Full-time permanent .............
Civilian personnel benefits ............................................
Undistributed .................................................................

Identification code 73–0200–0–1–376

Program and Financing (in millions of dollars)
1996 actual

1997 est.

11.1
12.1
92.0

INSPECTOR GENERAL

Identification code 73–0200–0–1–376

1996 actual

Identification code 73–0200–0–1–376

1997 est.

1998 est.

2
3
4
2
11

2
3
5
1
11

21.40

1 ...................
9
11

Total compensable workyears: Full-time equivalent
employment ...............................................................

1996 actual

109

1997 est.

110

1998 est.

112

Public enterprise funds:
SURETY BOND GUARANTEES REVOLVING FUND
For additional capital for the ‘‘Surety Bond Guarantees Revolving
Fund’’, authorized by the Small Business Investment Act, as amended, ø$3,730,000¿ $3,500,000, to remain available without fiscal year
limitation as authorized by 15 U.S.C. 631 note. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.)

SMALL BUSINESS ADMINISTRATION

991

Federal Funds—Continued

Program and Financing (in millions of dollars)
1996 actual

Identification code 73–4156–0–3–376

1997 est.

3100
3300

1998 est.

NET POSITION:
Appropriated capital ................................
Cumulative results of operations ............

319
–315

321
–320

326
–317

326
–317

Obligations by program activity:
Total obligations (object class 42.0) ............................

3999

Total net position ................................

4

1

9

9

16

16

16

4999

Total liabilities and net position ............

42

42

45

45

Budgetary resources available for obligation:
Unobligated balance available, start of year: Fund
balance ......................................................................
22.00 New budget authority (gross) ........................................

2
16

1
22

6
21

Credit accounts:

18
–16

23
–16

27
–16

1

6

11

10.00

21.90

23.90
23.95
24.90

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year: Fund
balance ......................................................................

New budget authority (gross), detail:
Current:
40.00
Appropriation .............................................................
Permanent:
68.00
Spending authority from offsetting collections: Offsetting collections (cash) .....................................

3

4

4

13

17

17

70.00

Total new budget authority (gross) ..........................

16

21

21

Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Fund balance .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
74.90 Unpaid obligations, end of year: Obligated balance:
Fund balance .............................................................

40
16
–15

41
16
–18

39
16
–18

41

39

37

72.90

86.90
86.93
86.97
86.98
87.00

Outlays (gross), detail:
Outlays from new current authority ..............................
2
1
1
Outlays from current balances ...................................... ................... ................... ...................
Outlays from new permanent authority .........................
13
17
17
Outlays from permanent balances ................................ ................... ................... ...................
Total outlays (gross) .................................................

Offsets:
Against gross budget authority and outlays:
88.40
Offsetting collections (cash) from: Non-Federal
sources ..................................................................

15

18

18

BUSINESS LOANS PROGRAM ACCOUNT
For øthe cost of direct loans, $1,691,000, and for¿ the cost of guaranteed loans, ø$182,017,000¿ $173,235,000, as authorized by 15
U.S.C. 631 note, of which ø$2,317,000, to be available until expended,
shall be for the Microloan Guarantee Program, and of which
$40,510,000¿ $20,233,000 for the Small Business Investment Company
Debentures Program and the Small Business Investment Company
Participating Securities Program shall remain available until September 30, ø1998¿ 1999: Provided, That such costs, including the cost
of modifying such loans, shall be as defined in section 502 of the
Congressional Budget Act of 1974: Provided further, That during fiscal year ø1997¿ 1998, commitments to guarantee loans under section
503 of the Small Business Investment Act of 1958, as amended,
shall not exceed øthe amount of financings authorized under section
20(n)(2)(B) of the Small Business Act, as amended¿ $2,300,000,000,
and direct loan obligations and commitments to guarantee loans
under section 7(m) of the Small Business Act of 1953, as amended,
shall not exceed $44,086,000.
In addition, for administrative expenses to carry out the direct
and guaranteed loan programs, $94,000,000, which may be transferred to and merged with the appropriations for Salaries and Expenses. (Departments of Commerce, Justice, and State, the Judiciary,
and Related Agencies Appropriations Act, 1997.)
Unavailable Collections (in millions of dollars)
Identification code 73–1154–0–1–376

1996 actual

1997 est.

Balance, start of year:
Balance, start of year .................................................... ................... ...................
Receipts:
02.01 Business loan program downward reestimate of subsidy ............................................................................ ...................
188
01.99

–13

Net budget authority and outlays:
89.00 Budget authority ............................................................
90.00 Outlays ...........................................................................

–17

3
2

–17

5
1

4
1

04.00
07.99

Total: Balances and collections .................................... ...................
Total balance, end of year ............................................ ...................

188
188

1998 est.

188

50
238
238

Program and Financing (in millions of dollars)

Under this program, the Small Business Administration
guarantees a portion of the losses sustained by a surety company as a result of the issuance of a bid, payment, and/
or performance bond to a small business concern.
In 1998, the budget proposes a program level anticipated
to accommodate expected demand from the preferred surety
bond program authorized in P.L. 100–590. The SBA will continue to rely on both preferred and prior approval sureties
to deliver this program, with SBA oversight.

00.01
00.02
00.07
00.08
00.09
00.10

Obligations by program activity:
Direct loan subsidy ........................................................
Guaranteed loan subsidy ...............................................
Reestimate of loan guarantee subsidy .........................
Interest on reestimates of loan guarantee subsidy
Administrative expenses ................................................
Microloan grants (in S&E) .............................................

1
117
245
29
93
4

2
2
226
180
183 ...................
15 ...................
94
94
1
3

Statement of Operations (in millions of dollars)

10.00

Total obligations ........................................................

489

521

Identification code 73–4156–0–3–376

1995 actual

1996 actual

1997 est.

1998 est.

0101
0102

Revenue ...................................................
Expense ....................................................

20
–18

16
–16

22
–16

21
–16

0109

Net loss ...................................................

2

..................

6

5

Balance Sheet (in millions of dollars)
Identification code 73–4156–0–3–376

1995 actual

1996 actual

1997 est.

1998 est.

ASSETS:
1101 Federal assets: Fund balances with
Treasury ...............................................
1206 Non-Federal assets: Receivables, net .....

40
2

43
..................

43
2

43
2

1999

Identification code 73–1154–0–1–376

Budgetary resources available for obligation:
Unobligated balance available, start of year: Fund
balance ......................................................................
22.00 New budget authority (gross) ........................................
22.21 Unobligated balance transferred to other accounts
22.30 Unobligated balance expiring ........................................

1996 actual

1997 est.

1998 est.

279

21.90

23.90
23.95
24.90

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year: Fund
balance ......................................................................

41
77
33
527
478
267
–2 ................... ...................
–1 ...................
–23
565
–489
77

555
–521

277
–279

33 ...................

42

43

45

45

38

41

36

38

41

36

36

279

274

199 ...................

527

478

267

36

2999

253

70.00

Total assets ........................................
LIABILITIES:
2201 Non-Federal liabilities: Accounts payable

New budget authority (gross), detail:
Current:
40.00
Appropriation .............................................................
Permanent:
60.05
Appropriation (indefinite) ..........................................

Total liabilities ....................................

Total new budget authority (gross) ..........................

267

992

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

2340
2340

Credit accounts—Continued
BUSINESS LOANS PROGRAM ACCOUNT—Continued

2349

Program and Financing (in millions of dollars)—Continued
Identification code 73–1154–0–1–376

Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Appropriation .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
74.40 Unpaid obligations, end of year: Obligated balance:
Appropriation .............................................................

1996 actual

1997 est.

1998 est.

72.40

129
489
–522

96
521
–458

160
279
–272

96

160

165

86.90
86.93
86.97

Outlays (gross), detail:
Outlays from new current authority ..............................
Outlays from current balances ......................................
Outlays from new permanent authority .........................

119
129
274

176
168
83
104
199 ...................

87.00

Total outlays (gross) .................................................

522

458

272

89.00
90.00

Net budget authority and outlays:
Budget authority ............................................................
Outlays ...........................................................................

527
522

478
458

267
272

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)
Identification code 73–1154–0–1–376

1996 actual

1997 est.

1998 est.

Direct loan levels supportable by subsidy budget authority:
1150 Micro loans ....................................................................

9

24

19

1159

Total direct loan levels .............................................
Direct loan subsidy (in percent):
1320 Micro loans ....................................................................

9

24

19

15.69

8.86

10.28

1329

15.69

8.86

10.28

1

2

2

Total subsidy budget authority .................................
Direct loan subsidy outlays:
1340 Micro loans ....................................................................

1

2

2

2

2

2

1349

Total subsidy outlays ................................................

2

2

2

Guaranteed loan levels supportable by subsidy budget
authority:
2150 General business—7(a) ................................................
2150 General business—7(a) DELTA .....................................
2150 Section 504 ....................................................................
2150 Section 504 DELTA .........................................................
2150 SBIC debentures ............................................................
2150 SBIC participating securities .........................................
2150 Micro loan guarantees ...................................................

7,328
23
2,443
10
109
238
2

7,815
48
2,650
50
300
410
19

6,595
88
2,300
139
376
456
25

10,153

11,292

9,979

1.06
3.15
0.00
0.57
15.46
9.00
11.95

2.54
4.57
0.00
1.01
3.19
3.29
8.21

2.32
3.25
0.00
0.72
2.30
2.54
8.12

Weighted average subsidy rate .................................
Direct loan subsidy budget authority:
1330 Micro loans ....................................................................
1339

2159

Total loan guarantee levels ......................................
Guaranteed loan subsidy (in percent):
2320 General business—7(a) ................................................
2320 General business—7(a) DELTA .....................................
2320 Section 504 ....................................................................
2320 Section 504 DELTA .........................................................
2320 SBIC debentures ............................................................
2320 SBIC participating securities .........................................
2320 Micro loan guarantees ...................................................
2329

Weighted average subsidy rate .................................
1.15
2.12
1.51
Guaranteed loan subsidy budget authority:
2330 General business—7(a) ................................................
78
199
153
2330 General business—7(a) DELTA .....................................
1
2
3
2330 Section 504 .................................................................... ................... ................... ...................
2330 Section 504 DELTA ......................................................... ...................
1
1
2330 SBIC debentures ............................................................
17
10
9
2330 SBIC participating securities .........................................
21
14
12
2330 Micro loan guarantees ................................................... ...................
2
2
2339

Total subsidy budget authority .................................
117
228
180
Guaranteed loan subsidy outlays:
2340 General business—7(a) ................................................
103
135
149
2340 General business—7(a) DELTA ..................................... ...................
1
2
2340 Section 504 ....................................................................
5
1 ...................
2340 Section 504 DELTA ......................................................... ................... ...................
1
2340 SBIC debentures ............................................................
17
10
9

SBIC participating securities .........................................
21
Micro loan guarantees ................................................... ...................
Total subsidy outlays ................................................

146

14
1

12
2

162

175

As required by the Federal Credit Reform Act of 1990,
this account records, for this program, the subsidy costs associated with the direct loans obligated and loan guarantees
committed in 1992 and beyond (including modifications of
direct loans or loan guarantees that resulted from obligations
or commitments in any year), as well as administrative expenses of this program. The subsidy amounts are estimated
on a present value basis; the administrative expenses are
estimated on a cash basis.
Budget authority is not requested for the section 504 and
microloan programs in 1998. Instead, an appropriated loan
level that currently reflects expected needs is requested.
General Business Assistance.—The Small Business Administration guarantees loans under its section 7(a) General Business Loan program to small businesses that are unable to
obtain private financing. These loans must be of such value
or so secured as to reasonably assure repayment. No loan
may be made unless the financial assistance is not otherwise
available on reasonable terms. Under the guarantee plan,
the SBA agrees to purchase the guaranteed portion of the
loan only upon default.
Investment Company Assistance.—A primary function of
small business investment companies is to provide a source
of equity capital or long-term loans to new or expanding small
businesses. The Small Business Investment Act, as amended,
authorizes the SBA to guarantee the timely payment of all
principal and interest, as scheduled, on debentures issued
by such companies. In addition, since 1994, the SBA has
guaranteed the performance of participating securities issued
by these companies.
Development Company Assistance.—Under the Small Business Investment Act, the SBA makes loans through State
and local development companies to small businesses.
Through these programs, the SBA promotes economic development and job creation and maintenance by stimulating the
flow of long-term financing to small business concerns for
projects involving fixed assets. These projects are designed
to create or retain a meaningful number of jobs in the communities affected, with a special emphasis on distressed areas.
Approximately 243,500 jobs were created or maintained
through the $2.4 billion in loans guaranteed under the Development Company programs in 1996.

Program Performance
Program performance and policy goals.—SBA has the following program performance and policy objectives to support
its first GPRA goal of Improving Access to Capital: (1) focus
lending on ‘‘traditionally under-served’’ small businesses; (2)
offer specialized financing, such as venture capital, export
financing, and bonding opportunities; (3) improve methods
of providing credit assistance through electronic lending, less
documentation, centralized functions, and one-stop capital access points; (4) reduce costs by maintaining high quality portfolio through an improved liquidation process; and, (5) effectively implement a loan asset sales program.
Performance Indicators.—During the past three years SBA
has focused on quantitative, measureable lending goals for
underserved segments of the small business market in each
district, e.g., minorities, women, and small exporters. The
SBA began this process in 1994 when it established internal
performance agreements that contained two-year lending
goals. Using goal monitoring, the agency is able to track,
on a regular basis, the status of each district office’s progress
in meeting these goals.
Appropriate finance program effectiveness assessment involves the consideration of a number of indicators. First, effec-

SMALL BUSINESS ADMINISTRATION

993

Federal Funds—Continued

tiveness can be assessed by loan-making activity levels—the
number and dollar amount of loans guaranteed by SBA. Second, effectiveness can be measured by the health of the loan
portfolio—its currency and default figures, and the agency’s
ultimate record on loan recovery. Beyond these very tangible
indicators of success are the more difficult-to-measure indicators. These include such things as the economic benefits that
accrue to the small business, its employees, and the community in which it is located.
The number and dollar volume of loans made under the
section 7(a) loan program has increased dramatically in recent
years. In 1991, SBA made or guaranteed approximately 9,000
loans totaling about $4 billion. In 1996, those figures had
risen to approximately 46,000 loans totaling about $7.3 billion. The section 504 program has also shown impressive
growth. In 1991, the SBA provided about 1,400 financings
totaling nearly $400 million. By 1996, those figures had increased to about 6,900 financings for $2.4 billion. Performance
measures to be used in 1998 to assess progress in achieving
the above goals follow.
Outputs

• Financial viability: higher percentages of business skill in
business after five years, and
higher percentage of borrowers
who fully repay loans.
• Numbers of businesses created,
expanded and/or maintained.
• Jobs created and revenue generated.

Object Classification (in millions of dollars)
Identification code 73–1154–0–1–376

1996 actual

1997 est.

1998 est.

25.2
41.0

Other services ................................................................
Grants, subsidies, and contributions ............................

97
392

95
426

97
182

99.9

Total obligations ........................................................

489

521

279

Outcomes

• Number and dollar value of
guaranteed loans.
• Percentages of loans going to
underserved markets.
• Client access to SBA services
(customer satisfaction).
• Percentage of loans taken that
are current.
• More flexible credit delivery instruments developed.

Loan asset sales: As part of SBA’s transition from loan
servicing to lender oversight, the budget proposes the sale
of all direct and defaulted business loans in FYs 1998 and
1999. (SBA disaster loans will be sold over a three-year period.) These sales will allow SBA to focus its limited resources
on expanding access to capital rather than servicing and liquidating a growing portfolio. The budget estimates that SBA’s
business loan assets will be sold at a net gain to the Government.
Microloan Program: The Agency proposes to continue the
Microloan direct and guarantee loan programs in 1998, using
carryover funding remaining from 1997.

Section 7(a): Reflecting an improvement of the 7(a) loan
portfolio and implementation of SBA’s Liquidation Improvement Project, the baseline (current services) 7(a) subsidy rate
declines from 2.54 percent to 2.32 percent. The budget proposes to reduce this rate to 1.80 percent through a threepart policy initiative. First, lenders will be required to service
and liquidate all loans approved after 1997. This initiative
builds on SBA’s record of success in working with lenders
under the LowDoc, Preferred Lender, and Fastrack programs,
which are now serviced and liquidated by 7(a) lenders. This
initiative will also allow SBA to focus its resources on expanding access to capital and portfolio monitoring, rather than
physically servicing and liquidating defaulted loans. Second,
SBA will establish a deferred purchase policy for all new
loans, requiring lenders to liquidate all business chattel prior
to SBA’s default claim payment, reducing the Government’s
present value default costs. Third, SBA will invest $18 million
in portfolio monitoring improvements. This funding will be
used to recruit expertise in lender oversight, establish financial performance goals for private sector partners, create a
database for tracking lender and portfolio performance, and
develop a management information system to provide timely
and accurate information to agency management. In combination, these three proposals will lower the 7(a) subsidy rate
from 2.32 percent to 1.80 percent, reducing the subsidy budget
authority needed to fund the requested $8.5 billion loan level
by $44.2 million. This reduction reflects the estimated improvement in defaults and an increase in recoveries resulting
from improved monitoring of servicing and more efficient liquidation performed by SBA lenders. The lower rate also reflects the present value savings resulting from the deferred
purchase.
Section 504: The 1998 subsidy rate reflects improved 504
loan performance. However, this improvement is more than
offset by reductions in the estimate of recoveries on defaulted
loans. Therefore, to maintain the baseline subsidy rate at
zero, the budget increases the pass-through fee to the 1997
authorized level of .9375%.

BUSINESS LOAN PROGRAM ACCOUNT
(Legislative proposal, not subject to PAYGO)
Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)
Identification code 73–1154–2–1–376

1996 actual

1997 est.

1998 est.

Guaranteed loan levels supportable by subsidy budget
authority:
2150 General business—7(a) ................................................ ................... ...................
Guaranteed loan subsidy (in percent):
2320 General business—7(a) ................................................ ................... ...................

1,905
–0.52

BUSINESS DIRECT LOAN FINANCING ACCOUNT
Program and Financing (in millions of dollars)
Identification code 73–4148–0–3–376

1996 actual

1997 est.

1998 est.

00.01
00.02

Obligations by program activity:
Direct loans ....................................................................
Interest on Treasury borrowing ......................................

9
7

24
8

39
10

10.00

Total obligations ........................................................

16

32

49

22.00
23.95

Budgetary resources available for obligation:
New financing authority (gross) ....................................
New obligations .............................................................

15
–16

30
–32

50
–49

13

24

41

32
–1
–29

19
–3
–10

46
1
–38

Spending authority from offsetting collections
(total) ................................................................

2

6

9

Total new financing authority (gross) ......................

15

30

50

Change in unpaid obligations:
Unpaid obligations, start of year:
72.90
Obligated balance: Fund balance .............................
72.95
Receivables from program account ..........................

54
5

44
4

11
1

59
16
–28

48
32
–68

12
49
–41

74.90
74.95

Total unpaid obligations, start of year ................
New obligations .............................................................
Total financing disbursements (gross) .........................
Unpaid obligations, end of year:
Obligated balance: Fund balance .............................
Receivables from program account ..........................

44
4

11
1

17
2

74.99
87.00

Total unpaid obligations, end of year ..................
Total financing disbursements (gross) .........................

48
28

12
68

19
41

New financing authority (gross), detail:
Authority to borrow (indefinite) .....................................
Spending authority from offsetting collections:
68.00
Offsetting collections (cash) .....................................
68.10
Change in receivables from program account .........
68.47
Portion applied to debt reduction .............................
67.15

68.90
70.00

72.99
73.10
73.20

994

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

Credit accounts—Continued

BUSINESS GUARANTEED LOAN FINANCING ACCOUNT

BUSINESS DIRECT LOAN FINANCING ACCOUNT—Continued

Program and Financing (in millions of dollars)

Program and Financing (in millions of dollars)—Continued
1996 actual

Identification code 73–4148–0–3–376

Identification code 73–4149–0–3–376

1997 est.

1998 est.

00.01
00.02
00.03
00.04

Offsets:
Against gross financing authority and financing disbursements:
Offsetting collections (cash) from:
88.00
Federal sources: Payments from program account .................................................................
–12
–2
Non-Federal sources:
88.40
Repayments of principal, net ...........................
–14
–8
88.40
Interest received on loans ................................
–6
–9
88.40
Proceeds from loan asset sale ........................ ................... ...................

–11
–8
–23

Total, offsetting collections (cash) ..................
Change in receivables from program accounts ............

–32
1

–19
3

–46
–1

23.90
23.95
24.90

89.00
90.00

Net financing authority and financing disbursements:
Financing authority ........................................................
Financing disbursements ...............................................

–16
–4

14
49

3
–5

1997 est.

1998 est.

Obligations by program activity:
Default claims ...............................................................
399
552
701
Payment of downward reestimate to receipt account
16
188 ...................
Payment to liquidation account .................................... ................... ...................
188
Negative subsidy from loan asset sales ....................... ................... ...................
50

21.90

88.90
88.95

1996 actual

10.00

Status of Direct Loans (in millions of dollars)
1996 actual

Identification code 73–4148–0–3–376

1997 est.

Total obligations ........................................................

415

740

939

Budgetary resources available for obligation:
Unobligated balance available, start of year: Fund
balance ......................................................................
22.00 New financing authority (gross) ....................................

1,076
716

1,376
826

1,461
1,017

1,792
–415

2,202
–740

2,478
–939

1,376

1,461

1,539

755
826
–39 ...................

1,037
–20

Spending authority from offsetting collections
(total) ................................................................

716

826

1,017

Total new financing authority (gross) ......................

716

826

1,017

125
415
–455

86
740
–741

86
939
–959

86
455

86
741

66
959

–4

1998 est.

Position with respect to appropriations act limitation
on obligations:
1111 Limitation on direct loans ............................................. ................... ................... ...................
1131 Direct loan obligations exempt from limitation ............
9
24
19

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year: Fund
balance ......................................................................

New financing authority (gross), detail:
Spending authority from offsetting collections:
68.00
Offsetting collections (cash) .....................................
68.10
Change in receivables from program account .........
68.90
70.00

Change in unpaid obligations:
Unpaid obligations, start of year: Receivables from
program account .......................................................
73.10 New obligations .............................................................
73.20 Total financing disbursements (gross) .........................
74.95 Unpaid obligations, end of year: Receivables from
program account .......................................................
87.00 Total financing disbursements (gross) .........................
72.95

1150

Total direct loan obligations .....................................

9

24

19

1210
1231
1251
1264

Cumulative balance of direct loans outstanding:
Outstanding, start of year .............................................
Disbursements: Direct loan disbursements ...................
Repayments: Repayments and prepayments .................
Write-offs for default: Other adjustments, net .............

167
12
–14
–4

161
12
–14
–4

155
13
–28
–8

1290

Outstanding, end of year ..........................................

161

155

132

As required by the Federal Credit Reform Act of 1990,
this non-budgetary account records all cash flows to and from
the Government resulting from direct loans obligated in 1992
and beyond (including modifications of direct loans that resulted from obligations in any year). The amounts in this
account are a means of financing and are not included in
the budget totals.

88.90
88.95

Balance Sheet (in millions of dollars)
Identification code 73–4148–0–3–376

ASSETS:
Investments in US securities:
1106
Federal assets: Receivables, net ........
Net value of assets related to post–
1991 direct loans receivable:
1401
Direct loans receivable, gross ............
1405
Allowance for subsidy cost (–) ...........

1995 actual

1996 actual

Offsets:
Against gross financing authority and financing disbursements:
Offsetting collections (cash) from:
Federal sources:
88.00
Payments from program account .....................
–205
–225
–179
88.00
Payment from program account—Reestimates
–274
–199 ...................
88.25
Interest on uninvested funds ...............................
–36
–65
–65
Non-Federal sources:
88.40
Fees ..................................................................
–153
–169
–183
88.40
Proceeds from loan asset sales ....................... ................... ...................
–386
88.40
Recoveries .........................................................
–87
–168
–224

1997 est.

1998 est.

89.00
90.00
3

302

310

Total, offsetting collections (cash) ..................
Change in receivables from program accounts ............

–755
–826
39 ...................

–1,037
20

Net financing authority and financing disbursements:
Financing authority ........................................................ ................... ................... ...................
Financing disbursements ...............................................
–299
–85
–78

319

Status of Guaranteed Loans (in millions of dollars)
126
–8

120
–53

123
–54

127
–56

118

67

69

71

Total assets ........................................
LIABILITIES:
2104 Federal liabilities: Resources payable to
Treasury ...............................................

121

369

379

390

118

369

379

390

2999

118

369

379

390

3

..................

..................

..................

1499

Net present value of assets related
to direct loans ...........................

1999

Total liabilities ....................................
NET POSITION:
3100 Appropriated capital ................................

Identification code 73–4149–0–3–376

Total net position ................................

3

..................

..................

Total liabilities and net position ............

121

369

379

390

Total guaranteed loan commitments ........................

2210
2231
2251
2261

Cumulative balance of guaranteed loans outstanding:
Outstanding, start of year .............................................
Disbursements of new guaranteed loans ......................
Repayments and prepayments ......................................
Adjustments: Terminations for default that result in
loans receivable ........................................................

..................

4999

1997 est.

1998 est.

Position with respect to appropriations act limitation
on commitments:
2111 Limitation on guaranteed loans made by private lenders .............................................................................. ................... ................... ...................
2131 Guaranteed loan commitments exempt from limitation
10,154
10,641
11,887
2150

3999

1996 actual

2290

Outstanding, end of year ..........................................

10,154

10,641

11,887

20,907
6,773
–2,651

24,630
6,955
–2,723

28,452
7,143
–2,796

–399

–410

–421

24,630

28,452

32,378

SMALL BUSINESS ADMINISTRATION

2299

Memorandum:
Guaranteed amount of guaranteed loans outstanding,
end of year ................................................................

23.95
20,193

23,282

Addendum:
Cumulative balance of defaulted guaranteed loans
that result in loans receivable:
2310
Outstanding, start of year ........................................
393
628
2331
Disbursements for guaranteed loan claims .............
399
410
2351
Repayments of loans receivable ...............................
–62
–63
2361
Write-offs of loans receivable ...................................
–102
–105
2364
Other adjustments, net ............................................. ................... ...................
2390

Outstanding, end of year ......................................

995

Federal Funds—Continued

628

870

–525

–500

–398

24.90
24.90

New obligations .............................................................
Unobligated balance available, end of year:
Fund balance:
Committed .............................................................
Uncommitted .........................................................

1
337

1
347

1
518

24.99

Total unobligated balance, end of year ....................

338

348

519

68.00

New budget authority (gross), detail:
Spending authority from offsetting collections (gross):
Offsetting collections (cash) .....................................

566

551

610

327
525
–463

389
500
–450

439
398
–348

389

439

488

463

450

348

26,455

870
421
–65
–107
–512
607

Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Fund balance .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
74.90 Unpaid obligations, end of year: Obligated balance:
Fund balance .............................................................
72.90

As required by the Federal Credit Reform Act of 1990,
this non-budgetary account records all cash flows to and from
the Government resulting from loan guarantees committed
in 1992 and beyond (including modifications of loan guarantees that resulted from commitments in any year). The
amounts in this account are a means of financing and are
not included in the budget totals.
Balance Sheet (in millions of dollars)
Identification code 73–4149–0–3–376

ASSETS:
Federal assets:
1101
Fund balances with Treasury .............
Investments in US securities:
1106
Receivables, net .............................
Net value of assets related to post–
1991 acquired defaulted guaranteed loans receivable:
1501
Defaulted guaranteed loans receivable, gross ......................................
1502
Interest receivable ..............................
1505
Allowance for subsidy cost (–) ...........

1995 actual

1996 actual

1997 est.

1998 est.

1,258

1,257

1,291

1,326

55

164

168

173

527
23
–331

628
45
–331

870
46
–340

607
47
–349

86.97

Offsets:
Against gross budget authority and outlays:
Offsetting collections (cash) from:
88.00
Federal sources ..................................................... ................... ...................
–188
Non-Federal sources:
Loan repayments:
88.40
Financing programs .....................................
–175
–171
–153
88.40
Investment programs ...................................
–38
–37
–28
88.40
SBIC obligations ..........................................
–6
–5 ...................
88.40
Section 503 development obligations .........
–27
–27
–26
Interest income:
88.40
Financing programs .....................................
–123
–120
–117
88.40
Investment programs ...................................
–50
–48
–23
88.40
Other income ................................................
–137
–133
–65
88.40
Section 503 Prepayments ............................
–10
–10
–10
88.90

1599

Net present value of assets related
to defaulted guaranteed loans

219

342

576

1,532

1,763

2,035

1,804

1,451

1,763

2,035

1,451

1,763

2,035

1,804

81

..................

..................

..................

–566

–551

–610

1,804

2999

Total, offsetting collections (cash) ..................

305

Total assets ........................................
LIABILITIES:
2204 Non-Federal liabilities: Liabilities for
loan guarantees ..................................

Outlays (gross), detail:
Outlays from new permanent authority .........................

1999

Total liabilities ....................................
NET POSITION:
3100 Appropriated capital ................................
3999

Total net position ................................

81

..................

..................

..................

4999

Total liabilities and net position ............

1,532

1,763

2,035

1,804

BUSINESS LOAN FUND LIQUIDATING ACCOUNT
Program and Financing (in millions of dollars)

89.00
90.00

Status of Direct Loans (in millions of dollars)
Identification code 73–4154–0–3–376

1996 actual

1997 est.

1996 actual

1997 est.

BUSINESS LOAN FUND, DIRECT LOANS
Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year .............................................
1,675
1,352
1232 Disbursements: Purchase of loans assets from the
public .........................................................................
152
117
1251 Repayments: Repayments and prepayments .................
–214
–208
1262 Adjustments: Discount on loan asset sales to the
public or discounted ................................................. ................... ...................
1263 Write-offs for default: Direct loans ...............................
–261
–211
1290

Identification code 73–4154–0–3–376

Net budget authority and outlays:
Budget authority ............................................................ ................... ................... ...................
Outlays ...........................................................................
–104
–101
–262

Outstanding, end of year ..........................................

1,352

1,050

1998 est.

1,050
90
–101
–439
–82
518

1998 est.

Obligations by program activity:
Capital expenses:
00.02
Defaults on guarantee loans— ................................
00.05
Other expenses ..........................................................

335
106

327
103

318
50

00.91
01.01

Total capital expenses ..........................................
Operating expenses: Interest expense to Treasury ........

441
84

430
70

368
30

SMALL BUSINESS INVESTMENT COMPANY, DIRECT
LOANS
Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year .............................................
6 ................... ...................
Repayments:
1251
Repayments and prepayments ..................................
–6 ................... ...................
1252
Proceeds from loan asset sales to the public or
discounted ............................................................. ................... ................... ...................

10.00

Total obligations ........................................................

525

500

398

1290

SECTION 503 DEVELOPMENT COMPANY, DIRECT
LOANS
Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year .............................................
Repayments:
1251
Repayments and prepayments ..................................
1252
Proceeds from loan asset sales to the public or
discounted .............................................................
1290

Budgetary resources available for obligation:
Unobligated balance available, start of year:
Fund balance:
21.90
Committed .............................................................
21.90
Uncommitted .........................................................

1
339

1
337

1
347

21.99
22.00
22.60

Total unobligated balance, start of year .............
New budget authority (gross) ........................................
Redemption of debt .......................................................

340
566
–43

338
551
–42

348
610
–41

23.90

Total budgetary resources available for obligation

863

847

917

Outstanding, end of year .......................................... ................... ................... ...................

Outstanding, end of year ..........................................

356

319

281

–22

–23

–20

–15

–15

–13

319

281

248

996

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

Credit accounts—Continued
2201
2204

BUSINESS LOAN FUND LIQUIDATING ACCOUNT—Continued
Status of Guaranteed Loans (in millions of dollars)
1996 actual

Identification code 73–4154–0–3–376

2207
2207

1997 est.

Non-Federal liabilities:
Accounts payable ................................
Liabilities for loan guarantees ...........
Other:
Unearned revenue (advances) ........
Other Liabilities ..............................

11
200

15
71

15
72

15
73

37
..................

..................
165

..................
168

..................
169

1998 est.

2999
BUSINESS LOAN FUND, LOAN GUARANTEES
Cumulative balance of guaranteed loans outstanding:
2210 Outstanding, start of year .............................................
2231 Disbursements of new guaranteed loans ......................
2251 Repayments and prepayments ......................................
Adjustments:
2261
Terminations for default that result in loans receivable .......................................................................
2264
Other adjustments, net .............................................
2290

Outstanding, end of year ..........................................

Memorandum:
2299 Guaranteed amount of guaranteed loans outstanding,
end of year ................................................................

7,675
1
–1,078

6,383
1
–896

–135
–12

–91
–10

6,383

5,341

4,491

2,210

2,337

2,353

2,297

Total liabilities and net position ............

2,210

2,337

2,353

2,297

5,341
1
–750

–201
–14

Total liabilities ....................................

4999

Object Classification (in millions of dollars)
Identification code 73–4154–0–3–376

5,495

4,598

430
70
500

368
30
398

Total obligations ........................................................

525

500

398

BUSINESS LOAN FUND LIQUIDATING ACCOUNT
1,255
135

1,390
91

2390

1,255

1,390

1,481

(Legislative proposal, subject to PAYGO)

As required by the Federal Credit Reform Act of 1990,
this account records, for this program, all cash flows to and
from the Government resulting from direct loans obligated
and loan guarantees committed prior to 1992. This account
is shown on a cash basis. All new activity in this program
in 1992 and beyond (including modifications of direct loans
or loan guarantees that resulted from obligations or commitments in any year) is recorded in corresponding program and
financing accounts.

Program and Financing (in millions of dollars)
Identification code 73–4154–4–3–376

1995 actual

1996 actual

Revenue ...................................................
Expense ....................................................

170
–185

189
149

210
165

234
184

0109

Net loss ...................................................

–15

338

375

418

1997 est.

1998 est.

Balance Sheet (in millions of dollars)

1699
1901
1999

Value of assets related to direct
loans ..........................................
Other Federal assets: Other assets ........

Total assets ........................................
LIABILITIES:
Federal liabilities:
2101
Accounts payable ................................
2102
Interest payable ..................................
Debt:
2103
Debt to the FFB ..............................
2103
SBIC and development company
participation certificates ...........

1997 est.

1998 est.

Budgetary resources available for obligation:
Unobligated balance available, start of year: Uncommitted ........................................................................ ................... ................... ...................
23.95 New obligations ............................................................. ................... ................... ...................
24.90 Unobligated balance available, end of year: Uncommitted ........................................................................ ................... ...................
–1

89.00
90.00

Net budget authority and outlays:
Budget authority ............................................................ ................... ................... ...................
Outlays ........................................................................... ................... ................... ...................

DISASTER LOANS PROGRAM ACCOUNT

0101
0102

ASSETS:
Federal assets:
1101
Fund balances with Treasury .............
Investments in US securities:
1104
Agency securities, par ....................
1107
Advances and prepayments ...........
Non-Federal assets:
1206
Receivables, net ..................................
1207
Advances and prepayments ................
Net value of assets related to pre–1992
direct loans receivable and acquired defaulted guaranteed loans
receivable:
1601
Direct loans, gross ..............................
1603
Allowance for estimated uncollectible
loans and interest (–) ....................

1996 actual

21.90

Statement of Operations (in millions of dollars)

Identification code 73–4154–0–3–376

1998 est.

441
84
525

3,866

1,054
201

Identification code 73–4154–0–3–376

1997 est.

Investments and loans ..................................................
Interest and dividends ...................................................
Subtotal, reimbursable obligations ...............................

99.9

Addendum:
Cumulative balance of defaulted guaranteed loans
that result in loans receivable:
2310
Outstanding, start of year ........................................
2331
Disbursements for guaranteed loan claims .............
Outstanding, end of year ......................................

1996 actual

33.0
43.0
99.0

1995 actual

1996 actual

1997 est.

1998 est.

666

727

794

866

120
12

160
9

214
7

286
5

485
7

816
7

780
7

745
7

øFor the cost of direct loans authorized by section 7(b) of the
Small Business Act, as amended, $105,432,000, to remain available
until expended: Provided, That such costs, including the cost of modifying such loans, shall be as defined in section 502 of the Congressional Budget Act of 1974.¿
øIn addition, for¿ For administrative expenses to carry out the
direct loan program, ø$86,500,000, including not to exceed $500,000
for the Office of Inspector General of the Small Business Administration for audits and reviews of disaster loans and the disaster loan
program¿ $173,200,000, øand said sums¿ which may be transferred
to and merged with appropriations for Salaries and Expenses øand
Office of Inspector General¿. (Departments of Commerce, Justice, and
State, the Judiciary, and Related Agencies Appropriations Act, 1997.)
Program and Financing (in millions of dollars)
Identification code 73–1152–0–1–453

1996 actual

1997 est.

1998 est.

00.01
00.09
2,036

1,671

1,331

766

–1,215

–1,114

–787

–401

821
99

557
61

544
37

365
23

2,210

2,337

2,383

Obligations by program activity:
Direct loan subsidy ........................................................
Administrative expenses ................................................

243
164

150
177

90
173

10.00

Total obligations ........................................................

407

327

263

Budgetary resources available for obligation:
Unobligated balance available, start of year:
Uninvested balance ...................................................
22.00 New budget authority (gross) ........................................
22.10 Resources available from recoveries of prior year obligations .......................................................................

92
331

83
327

83
173

67 ...................

35

2,297

1,445
156

1,667
94

1,670
96

1,610
96

361

318

325

7

7

7

23.90
23.95
24.40

327

..................

21.40

40.00

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year:
Uninvested balance ...................................................
New budget authority (gross), detail:
Appropriation ..................................................................

490
–407

410
–327

291
–263

83

83

28

331

327

173

SMALL BUSINESS ADMINISTRATION
Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Appropriation .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
73.45 Adjustments in unexpired accounts ..............................
74.40 Unpaid obligations, end of year: Obligated balance:
Appropriation .............................................................

Federal Funds—Continued

72.40

251
157
407
327
–434
–311
–67 ...................

173
263
–263
–35

157

173

138

86.90
86.93

Outlays (gross), detail:
Outlays from new current authority ..............................
Outlays from current balances ......................................

228
206

232
79

133
130

87.00

Total outlays (gross) .................................................

434

311

263

89.00
90.00

Net budget authority and outlays:
Budget authority ............................................................
Outlays ...........................................................................

331
434

327
311

173
263

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)
Identification code 73–1152–0–1–453

1996 actual

1997 est.

1998 est.

Direct loan levels supportable by subsidy budget authority:
1150 Direct Disaster Loans ....................................................

867

747

785

1159

867

747

785

0.00

0.00

0.00

28.08

20.02

11.44

243

150

90

Total subsidy budget authority .................................
Direct loan subsidy outlays:
1340 Disaster subsidy outlays ................................................

243

150
134

90

1349

Total subsidy outlays ................................................

270

134

90

3510
3590

Administrative expense data:
Budget authority ............................................................
Outlays from new authority ...........................................

164
164

177
177

173
173

During 1996 alone, SBA approved nearly 38,000 disaster
loans for an amount of almost $1 billion.
Program Performance and Policy Goals.—The SBA program
performance and policy goals are: 1) provide disaster assistance to victims in the most effective and cost efficient manner;
2) deliver an effective program that achieves its public policy
objectives; 3) provide customer-focused assistance that satisfactorily accommodates the needs of all disaster victims; 4)
simplify and streamline the loan-making process by re-engineering forms, procedures and processes; and, 5) effectively
implement the proposed asset sales program.
Performance Indicators.—A true assessment of program
effectivess is a long-term process, and there is much to learn
about the true extent that the disaster loan program contributes to effective recovery. In the short term, SBA is committed to providing cost-effective delivery and high satisfaction
levels to the customers who use its services. In the long
run, the agency’s goal is to facilitate true economic recovery
and assess how the program’s business recovery assistance
contributes to the rebuilding of a local or regional economy.
Performance measures to be used in 1998 to assess progress
in achieving the above goals follow.

90

270

997

Total direct loan levels .............................................
Direct loan subsidy (in percent):
1320 Disaster subsidy rate .....................................................
1329

Weighted average subsidy rate .................................
Direct loan subsidy budget authority:
1330 Disaster subsidy budget authority ................................

1339

Outputs

Intermediate Outcomes

Loan decision within 7 to 20 days—
number, percent.
Initial disbursement ordered 4 days
after receipt of loan closing documents—number, percent.
Loans
approved—number,
dollar
amount.

Increased funds available at time of
need
Improved customer satisfaction due to
simplified and less burdensome
processes
Reduced costs to Government

1998 Proposals

As required by the Federal Credit Reform Act of 1990,
this account records, for loans made pursuant to section 7(b)
of the Small Business Act, as amended, the subsidy costs
associated with the direct loans obligated in 1992 and beyond
(including modifications of direct loans or loan guarantees
that resulted from obligations or commitments in any year),
as well as administrative expenses of this program. The subsidy amounts are estimated on a present value basis; the
administrative expenses are estimated on a cash basis.
Disaster loans made pursuant to Section 7(b) of the Small
Business Act are the primary form of Federal assistance for
non-farm, private sector disaster losses. For this reason, the
program is the only form of SBA assistance not limited to
small businesses. Through this program, SBA helps homeowners, renters, businesses of all sizes, and non-profit organizations pay for the cost of rebuilding. Pursuant to the Small
Business Act, the government subsidizes borrowers who have
incurred uninsured losses or economic injury as the result
of a natural disaster. These loans are also a critical source
of economic stimulation in disaster-ravaged communities,
helping to spur employment and stabilize the local tax base.
Eligibility is based on financial criteria. There are three loan
programs: physical disaster loans to individuals, physical disaster loans to businesses of any size, and economic injury
loans to small businesses without credit available elsewhere.

Program Performance
Over the 41 year history of the program, SBA has helped
over 1.3 million disaster victims by providing more than $24.1
billion in disaster assistance. Over 90 percent has been to
borrowers that otherwise would not have been able to rebuild.

Under current law, interest rates fluctuate according to
statutory formulas: a lower rate, not to exceed four percent,
is available to applicants without credit available elsewhere;
a higher rate, not to exceed eight percent, is charged to borrowers who have credit available elsewhere. To reduce the
subsidy in this program, the budget proposes to increase the
interest rate for borrowers without credit available elsewhere
to the cost to the U.S. Treasury for securities of comparable
maturity. For borrowers with access to credit elsewhere, the
interest rate would be pegged above the Treasury rate. This
change would reduce the subsidy from 23.46 percent to 11.44
percent, enabling more loans to be made with the same
amount of budget authority. Baseline loan levels would increase from $383 million to $785 million, a difference of $402
million. In the schedules below, the effects of the legislative
proposal should not be added to the regular budget schedules.
Historically, SBA has approved approximately $785 million
in loans for disaster relief annually, excluding the effect of
the 1994 Northridge Earthquake. No appropriation of loan
subsidy budget authority is requested for the Disaster Loans
Program Account for 1998. The 1998 loan program will be
fully funded from anticipated carryforward balances provided
the recommended revisions to the disaster loan interest rates
are enacted.
This budget requests $5.8 billion in contingent funding for
FY 1998, the 1991–1997 average emergency spending under
the BEA. This fund will be available to this and other accounts as the need arises. Please see the Emergency Requirements for Natural Disasters account in the Funds Appropriated to the President Chapter for more detailed information. The requested amount for future years will be based
on average emergency funding under the BEA.
The base programs will have access to the proposed contingency fund once all available appropriations in the affected
account/accounts have been obligated, and a Presidential decision has been made to make additional funds available. The
fund is meant to be flexible enough to respond to a variety
of disasters and thus does not reserve or dedicate specific

998

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

Credit accounts—Continued
DISASTER LOANS PROGRAM ACCOUNT—Continued

amounts within the total for the eligible programs. The flexibility of the fund is essential to meet the full range of disaster
funding requirements.
Object Classification (in millions of dollars)
Identification code 73–1152–0–1–453

41.0
99.0
99.9

Direct obligations: Grants, subsidies, and contributions ...........................................................................
Reimbursable obligations: Subtotal, reimbursable obligations .......................................................................
Total obligations ........................................................

1996 actual

1997 est.

1998 est.

243

150
177

173

407

327

263

–100
–154
–484

88.90
88.95

Total, offsetting collections (cash) ..................
Change in receivables from program accounts ............

–807
86

–760
47

–828
29

89.00
90.00

Net financing authority and financing disbursements:
Financing authority ........................................................
Financing disbursements ...............................................

442
259

430
659

546
594

–90

90

164

Offsets:
Against gross financing authority and financing disbursements:
Offsetting collections (cash) from:
88.00
Payments from program account .........................
–243
–150
Non-Federal sources:
88.40
Repayments of principal, net ........................... ................... ...................
88.40
Repayments of principal, net ...........................
–88
–120
88.40
Interest received on loans ................................
–476
–490

Status of Direct Loans (in millions of dollars)
DISASTER LOANS PROGRAM ACCOUNT

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)
Identification code 73–1152–2–1–453

1996 actual

1997 est.

1998 est.

Direct loan levels supportable by subsidy budget authority:
1150 Direct Disaster Loans .................................................... ................... ...................

402

1159

402

Total direct loan levels ............................................. ................... ...................

DISASTER DIRECT LOAN FINANCING ACCOUNT

1996 actual

1997 est.

Obligations by program activity:
00.01 Direct loans ....................................................................
867
747
00.02 Interest on Treasury borrowing ......................................
296
396
00.03 Purchase of loans from liquidating .............................. ................... ...................

1998 est.

785
459
100

10.00

Total obligations ........................................................

1,163

1,143

1,344

22.00
23.95

Budgetary resources available for obligation:
New financing authority (gross) ....................................
New obligations .............................................................

1,163
–1,163

1,143
–1,143

1150

New financing authority (gross), detail:
Authority to borrow (indefinite) .....................................
1,311
1,436
Spending authority from offsetting collections:
Offsetting collections (cash):
68.00
Offsetting collections (cash) ................................
807
760
68.00
Proceeds from loan asset sales (cash) ................ ................... ...................
68.10
Change in receivables from program account .........
–86
–47
68.47
Portion applied to debt reduction (–) .......................
–869
–1,006

Total direct loan obligations .....................................

728
100
–29
–1,097

–148

–293

–298

70.00

Total new financing authority (gross) ......................

1,163

1,143

785

Outstanding, end of year ..........................................

7,227

7,391

7,285

As required by the Federal Credit Reform Act of 1990,
this non-budgetary account records all cash flows to and from
the Government resulting from direct loans obligated in 1992
and beyond (including modifications of direct loans that resulted from obligations in any year). The amounts in this
account are a means of financing and are not included in
the budget totals.
Balance Sheet (in millions of dollars)
1995 actual

1996 actual

466

227

232

93

6,748
–414

7,227
–248

7,389
–308

7,278
–142

6,334

6,979

7,081

7,136

Total assets ........................................
LIABILITIES:
2104 Federal liabilities: Resources payable to
Treasury ...............................................

6,800

7,206

7,313

7,229

6,334

6,979

7,170

7,135

2999

6,334

6,979

7,170

7,135

ASSETS:
Investments in US securities:
1106
Federal assets: Program account .......
Net value of assets related to post–
1991 direct loans receivable:
1401
Direct loans receivable, gross ............
1405
Allowance for subsidy cost (–) ...........

1,345

1499

Net present value of assets related
to direct loans ...........................

1999

1,870
207

2,053
121

1,824
74

2,077
1,163
–1,066

2,174
1,143
–1,419

1,898
1,344
–1,422

74.95

Total unpaid obligations, start of year ................
New obligations .............................................................
Total financing disbursements (gross) .........................
Unpaid obligations, end of year:
Obligated balance: Fund balance: Unpaid obligations ......................................................................
Receivables from program account ..........................

2,053
121

1,824
74

1,775
45

74.99
87.00

Total unpaid obligations, end of year ..................
Total financing disbursements (gross) .........................

2,174
1,066

1,898
1,419

1,820
1,422

74.90

747

Cumulative balance of direct loans outstanding:
Outstanding, start of year .............................................
6,748
7,227
7,391
Disbursements: Direct loan disbursements ...................
946
874
638
Repayments:
1251
Repayments and prepayments ..................................
–408
–610
–638
1252
Proceeds from loan asset sales to the public or
discounted ............................................................. ................... ................... ...................
1264 Write-offs for default: Other adjustments, net .............
–59
–100
–106

Identification code 73–4150–0–3–453

Spending authority from offsetting collections
(total) ................................................................

72.99
73.10
73.20

867

1997 est.

1998 est.

1,643

68.90

Change in unpaid obligations:
Unpaid obligations, start of year:
72.90
Obligated balance: Fund balance: Unpaid obligations ......................................................................
72.95
Receivables from program account ..........................

1998 est.

1210
1231

1,345
–1,344

67.15

1997 est.

Position with respect to appropriations act limitation
on obligations:
1111 Limitation on direct loans ............................................. ................... ................... ...................
1131 Direct loan obligations exempt from limitation ............
867
747
785

1290

Program and Financing (in millions of dollars)
Identification code 73–4150–0–3–453

1996 actual

Identification code 73–4150–0–3–453

(Legislative proposal, not subject to PAYGO)

Total liabilities ....................................
NET POSITION:
3100 Appropriated capital ................................

466

227

143

94

3999

Total net position ................................

466

227

143

94

4999

Total liabilities and net position ............

6,800

7,206

7,313

7,229

SMALL BUSINESS ADMINISTRATION

999

Federal Funds—Continued

DISASTER LOANS DIRECT LOAN FINANCING ACCOUNT

21.90

Uncommitted .........................................................

207

175

144

(Legislative proposal, not subject to PAYGO)

21.99
22.00
22.40

Total unobligated balance, start of year .............
New budget authority (gross) ........................................
Capital transfer to general fund ...................................

211
307
–249

177
269
–218

148
345
–215

23.90
23.95

269
–91

228
–80

278
–71

24.90
24.90

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year:
Fund balance:
Committed .............................................................
Uncommitted .........................................................

2
175

4
144

2
205

24.99

Total unobligated balance, end of year ....................

177

148

207

68.00

New budget authority (gross), detail:
Spending authority from offsetting collections (gross):
Offsetting collections (cash) .....................................

307

269

345

Program and Financing (in millions of dollars)
Identification code 73–4150–2–3–453

1996 actual

1997 est.

1998 est.

00.01
00.02

Obligations by program activity:
Direct loans .................................................................... ................... ...................
Interest payment to Treasury ......................................... ................... ...................

402
1

10.00

Total obligations ........................................................ ................... ...................

403

Budgetary resources available for obligation:
22.00 New financing authority (gross) .................................... ................... ...................
23.95 New obligations ............................................................. ................... ...................
New financing authority (gross), detail:
Authority to borrow (indefinite) ..................................... ................... ...................
Spending authority from offsetting collections:
68.00
Offsetting collections (cash) ..................................... ................... ...................
68.47
Portion applied to debt reduction (–) ....................... ................... ...................
67.15

68.90

403
–403

403
17
–17

Spending authority from offsetting collections
(total) ................................................................ ................... ................... ...................

70.00

Total new financing authority (gross) ...................... ................... ...................
Change in unpaid obligations:
New obligations ............................................................. ................... ...................
Total financing disbursements (gross) ......................... ................... ...................
Total financing disbursements (gross) ......................... ................... ...................

403
–403
403

93
79
159
91
80
71
–105 ................... ...................
79

159

230

403

73.10
73.20
87.00

Change in unpaid obligations:
Unpaid obligations, start of year: Obligated balance:
Fund balance .............................................................
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................
74.90 Unpaid obligations, end of year: Obligated balance:
Fund balance .............................................................

72.90

Offsets:
Against gross financing authority and financing disbursements:
Offsetting collections (cash) from:
Non-Federal sources:
88.40
Repayments of principal, net ........................... ................... ...................
–2
88.40
Interest received on loans ................................ ................... ...................
–15
88.45
Offsetting governmental collections ..................... ................... ................... ...................
88.90
88.95

Total, offsetting collections (cash) .................. ................... ...................
–17
Change in receivables from program accounts ............ ................... ................... ...................

Net financing authority and financing disbursements:
89.00 Financing authority ........................................................ ................... ...................
90.00 Financing disbursements ............................................... ................... ...................

386
386

86.97
86.98

Outlays (gross), detail:
Outlays from new permanent authority .........................
Outlays from permanent balances ................................

91 ................... ...................
14 ................... ...................

87.00

Total outlays (gross) .................................................

105 ................... ...................

Offsets:
Against gross budget authority and outlays:
Offsetting collections (cash) from:
Non-Federal sources:
88.40
Loan repayments ..............................................
–213
–200
–186
88.40
Interest income .................................................
–80
–60
–52
88.40
Other income ....................................................
–12
–9
–7
88.40
Recovery on Loan Cancellations ......................
–2 ................... ...................
88.40
Proceeds from loan asset sales ....................... ................... ...................
–100
88.90

89.00
90.00

Total, offsetting collections (cash) ..................

–307

–269

–345

Net budget authority and outlays:
Budget authority ............................................................ ................... ................... ...................
Outlays ...........................................................................
–202
–269
–345

Status of Direct Loans (in millions of dollars)
Identification code 73–4150–2–3–453

1996 actual

1997 est.

Status of Direct Loans (in millions of dollars)

1998 est.

1996 actual

Identification code 73–4153–0–3–453

Position with respect to appropriations act limitation
on obligations:
1131 Direct loan obligations exempt from limitation ............ ................... ...................

403

1150

403

1290

1998 est.

1210
1231

................... ...................
...................
403
...................
–17
...................
–16

1997 est.

1210
1231
1251
1264
1290

Total direct loan obligations ..................................... ................... ...................
Cumulative balance of direct loans outstanding:
Outstanding, start of year .............................................
Disbursements: Direct loan disbursements ...................
Repayments: Repayments and prepayments .................
Write-offs for default: Other adjustments, net .............

...................
...................
...................
...................

Outstanding, end of year .......................................... ................... ...................

1997 est.

1998 est.

01.01
01.03

Obligations by program activity:
Interest expense to Treasury ..........................................
Other expenses ...............................................................

78
13

70
10

63
8

10.00

Total obligations ........................................................

91

80

71

Budgetary resources available for obligation:
Unobligated balance available, start of year:
Fund balance:
21.90
Committed .............................................................

1,676

1,416

1,096

As required by the Federal Credit Reform Act of 1990,
this account records, for this program, all cash flows to and
from the Government resulting from direct loans obligated
prior to 1992. This account is shown on a cash basis. All
new activity in this program in 1992 and beyond (including
modifications of direct loans or loan guarantees that resulted
from obligations or commitments in any year) is recorded
in corresponding program and financing accounts.

Program and Financing (in millions of dollars)
1996 actual

Outstanding, end of year ..........................................

370

DISASTER LOAN FUND LIQUIDATING ACCOUNT

Identification code 73–4153–0–3–453

Cumulative balance of direct loans outstanding:
Outstanding, start of year .............................................
1,918
1,676
1,416
Disbursements: Direct loan disbursements ................... ................... ................... ...................
Repayments:
1251
Repayments and prepayments ..................................
–213
–220
–186
1252
Proceeds from loan asset sales to the public or
discounted ............................................................. ................... ...................
–100
1263 Write-offs for default: Direct loans ...............................
–29
–40
–34

Statement of Operations (in millions of dollars)

2

4

1996 actual

Revenue ...................................................
Expense ....................................................

93
–102

93
–102

78
–83

103
–74

0109
4

1995 actual

0101
0102

Net income or loss (–) ............................

–9

–9

–5

29

Identification code 73–4153–0–3–453

1997 est.

1998 est.

1000

THE BUDGET FOR FISCAL YEAR 1998

Federal Funds—Continued

Credit accounts—Continued

Status of Guaranteed Loans (in millions of dollars)

DISASTER LOAN FUND LIQUIDATING ACCOUNT—Continued

Identification code 73–4153–0–3–453

ASSETS:
Federal assets: Fund balances with
Treasury ...............................................
1206 Non-Federal assets: Receivables, net .....
Net value of assets related to pre–1992
direct loans receivable and acquired defaulted guaranteed loans
receivable:
1601
Direct loans, gross ..............................
1603
Allowance for estimated uncollectible
loans and interest (–) ....................

1995 actual

1996 actual

304
112

1997 est.

256
111

1998 est.

1101

1699

1801
1803

Value of assets related to direct
loans ..........................................
Other Federal assets:
Cash and other monetary assets .......
Property, plant and equipment, net

1999

Total assets ........................................
LIABILITIES:
Federal liabilities:
2102
Interest payable ..................................
2104
Resources payable to Treasury ...........
2201 Non-Federal liabilities: Accounts payable

1996 actual

Identification code 73–4147–0–3–376

Balance Sheet (in millions of dollars)

269
78

255
69

Cumulative balance of guaranteed loans outstanding:
2210 Outstanding, start of year .............................................
100
Adjustments:
2261
Terminations for default that result in loans receivable ....................................................................... ...................
2264
Other adjustments, net .............................................
–14

1997 est.

1998 est.

86

73

–1
–12

–1
–10

1,677

1,415

–129

–160

–135

1,764

1,548

1,255

961

1
6

..................
5

1
..................

1
..................

2,187

1,920

1,603

78
..................
1,842

70
..................
1,533

63
..................
1,322

73

62

Memorandum:
Guaranteed amount of guaranteed loans outstanding,
end of year ................................................................

86

73

62

Addendum:
Cumulative balance of defaulted guaranteed loans
that result in loans receivable:
2310
Outstanding, start of year ........................................
46
2331
Disbursements for guaranteed loan claims .............
1
2351
Repayments of loans receivable ............................... ...................

47
1
–5

43
1
–6

2390

43

38

1,286

89
..................
2,098

86

1,096

–154

Outstanding, end of year ..........................................

2299
1,918

2290

2999

Total liabilities ....................................

2,187

1,920

1,603

1,385

4999

Total liabilities and net position ............

2,187

1,920

1,603

1,385

Object Classification (in millions of dollars)
Identification code 73–4153–0–3–453

1996 actual

1997 est.

1998 est.

33.0
43.0
99.0

Investments and loans ..................................................
Interest and dividends ...................................................
Subtotal, reimbursable obligations ...............................

13
78
91

10
70
80

8
63
71

99.9

Total obligations ........................................................

91

80

71

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations (object class 42.0) ............................

1996 actual

1

1997 est.

1998 est.

3

3

Budgetary resources available for obligation:
Unobligated balance available, start of year:
Fund balance:
21.90
Committed .............................................................
21.90
Uncommitted .........................................................

11
3

14
–1

9
3

21.99

Total unobligated balance, start of year .............

14

13

12

23.90
23.95

14
–1

13
–3

12
–3

24.90
24.90

Total budgetary resources available for obligation
New obligations .............................................................
Unobligated balance available, end of year:
Fund balance:
Committed .............................................................
Uncommitted .........................................................

14
–1

9
3

Balance Sheet (in millions of dollars)
Identification code 73–4147–0–3–376

Total unobligated balance, end of year ....................

13

12

1999

Total assets ........................................
LIABILITIES:
2104 Federal liabilities: Resources payable to
Treasury ...............................................
2201 Non-Federal liabilities: Accounts payable

1995 actual

1996 actual

1997 est.

1998 est.

14
9

13
9

12
10

10
9

6

6

7

8

29

28

29

27

15
..................

28
..................

26
..................

27
..................

15

28

26

27

..................
..................
14

..................
..................
1

..................
..................
3

..................
..................
2

7
3

24.99

47

Public Law 94–305 established this fund to alleviate the
adverse impact of pollution regulations on small businesses.
As a result of the elimination of tax exempt financing associated with the Pollution Control Guaranteed program, no new
activity is anticipated for this program.
During 1992, the Small Business Administration started
the process of redeeming a large number of outstanding bonds
on which it has taken over loan payments. Most of these
targeted bonds are ten years old and voluntary redemption
is now viable under the bond documents. Redemption of these
obligations would preclude the SBA from paying excessive
interest over the next ten years.

ASSETS:
1101 Federal assets: Fund balances with
Treasury ...............................................
1206 Non-Federal assets: Receivables, net .....
1701 Net value of assets related to pre–1992
direct loans receivable and acquired
defaulted guaranteed loans receivable: Defaulted guaranteed loans,
gross ...................................................

POLLUTION CONTROL EQUIPMENT FUND LIQUIDATING ACCOUNT

Identification code 73–4147–0–3–376

Outstanding, end of year ......................................

10

2999

Total liabilities ....................................
NET POSITION:
3100 Appropriated capital ................................
3300 Cumulative results of operations ............
3600 Other ........................................................
3999

Total net position ................................

14

1

3

2

4999

Total liabilities and net position ............

29

29

29

29

ADMINISTRATIVE PROVISIONS—SMALL BUSINESS ADMINISTRATION

Change in unpaid obligations:
73.10 New obligations .............................................................
73.20 Total outlays (gross) ......................................................

1
–1

3
–3

3
–3

86.98

Outlays (gross), detail:
Outlays from permanent balances ................................

1

3

3

89.00
90.00

Net budget authority and outlays:
Budget authority ............................................................ ................... ................... ...................
Outlays ........................................................................... ...................
3
3

SEC. 504. Not to exceed 5 percent of any appropriation made available for the current fiscal year for the Small Business Administration
in this Act may be transferred between such appropriations, but
no such appropriation shall be increased by more than 10 percent
by any such transfers: Provided, That any transfer pursuant to this
section shall be treated as a reprogramming of funds under section
605 of this Act and shall not be available for obligation or expenditure
except in compliance with the procedures set forth in that section.
(Departments of Commerce, Justice, and State, the Judiciary, and
Related Agencies Appropriations Act, 1997.)


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102