Efforts to make the U.S. Small Business Administration smaller could cost Spokane its district office, but Deputy Director Larry Billin said Wednesday closure would be a “last resort.”
The Clinton administration has outlined a plan for downsizing the agency that calls for reducing manpower nationwide by about 500, out of a total work force of 3,600, Billin said.
He said the proposal also calls for changes in SBA loan-guarantee programs that would eliminate subsidies by increasing fees to lenders and borrowers.
If approved by Congress, which likely will receive the plan next month, the agency’s budget would be reduced by $220 million, or 29 percent, for the fiscal year that starts Oct. 1.
Over the next five years, the savings would be $1.2 billion, Billin said.
As a beginning, he said agency employees were offered buyouts to leave by March 31. Two of SBA’s 20 Spokane employees were among the more than 300 nationwide who accepted by package, he said.
The agency also has consolidated some offices in big cities - Seattle among them - and closed some one-person offices, most of which are in the East and South.
Billin said the last step under consideration is closure of district offices in some of the nine states, including Washington, that have more than one.
“That’s where we get concerned,” he said.
Billin said the budget for the Spokane district, which covers 20 Eastern Washington counties and 10 in North Idaho, is about $1.3 million.
For the fiscal year that ended Sept. 30, 1994, the office guaranteed 376 loans worth $91 million under the SBA’s two major programs, he said, and the pace of lending has increased this year.
In 1993, the most recent year for which figures are available, the district also was ranked No. 1 for loan performance, Billin added.
“We have consistently had a good rating,” he said.
If changes in guarantees are approved, a five-year $54,000 loan made under SBA’s Low Documentation program would cost an additional $13.50 monthly, with an upfront hike of $108.
Larger loans made under the agency’s 504 program would carry an interest rate percent higher. On the average $350,000 loan, the result would be a $27 hike in monthly payments.
The National Federation of Independent Business has said it supports the Clinton administration plan.
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