If the Senate approves the Small Business Development Centers Improvement Act of 2022 (HR6445), the program will be recharged with an increase of $40 million annually.
HR 6445 would reauthorize the 2019 SBDC Act (HR 4406) which would end in 2023. If approved by the Senate, HR 6445 would run through 2025.
HR 6445 – Houses Bill Boosts SBDC Funding by $40 Million
SBDCs are run by the Small Business Administration, in partnership with state and local governments and the private sector. Currently, there are 900 of them nationwide.
Small business owners can use the expertise of people at SBDCs to get help developing business plans, securing financing, learning about eCommerce, marketing, and planning growth.
The influx of additional monies would strengthen the existing network and allow for the establishment of new SBDCs.
How does that help small business owners? The SBDC Improvement Act of 2022 has some interesting tweaks:
Fees from Private Partnerships or Co-sponsors
An SBDC which has a private partnership or co-sponsorship can collect fees related to the operation of such private partnerships or co-sponsorships. In other words, a small business that establishes such an agreement with the SBDC can collect fees for their work.
Many grants require the applicant to provide matching funds. Typically, the matching funds are due when the federal money is received. That language is changed in HR 6445 to read “not due when federal funds are received but necessary for final reconciliation.” In other words, you wouldn’t have to match the funds upfront but would be required to do so to finalize the grant.
Data Collection Activities to be Reported
The SBA is to establish a Data Collection Working Group. Any recommendations are to be reported back to the Committee on Small Business and Entrepreneurship.
The SBDC may use up to 10% of its monies to do marketing to reach individuals and small business concerns.
Related Legislation, Women’s Business Center HR 6441, Passes House
The House also passed HR 6441. Women’s Business Center HR 6441 would authorize $31.5 million each year (2022-2025) to be received into the WBC program.
Sharice Davids, D-Kansas, sponsored both measures and serves as chairperson for both.
“Small businesses in every shape and form continue to feel the devastating effects of strong economic headwinds, from the highest inflation rate in 40 years to supply chain issues, to labor shortages that have left the nation with 10.9 million open jobs; small businesses are facing severe economic conditions,” Davids said, in her introductory remarks to the House’s Committee on Small Business and Entrepreneurship, as the committee prepared to work on the bill. “When small business owners are able to plan with certainty and take calculated risks, our nation moves forward.”
Both pieces of legislation were passed in the House on April 26. For a bill to become law, it must be passed in the Senate and signed by the President.
HR 6441 Women’s Business Center is given a 20% chance to pass in the Senate.
HR 6445 SBDC Improvement Act of 2022 is given a 22% chance to pass in the Senate.
Why do both measures appear unlikely to pass? There are several bills currently in circulation regarding the SBDC and the WBC Acts. Although each bill is given a low chance of passing, the Senate may work to combine the related proposed legislation into one measure.
This article, “Small Business Development Centers Could Get $40 Million Boost” was first published on Small Business Trends