President Obama's fiscal 2011 budget proposal would provide $994 million for the Small Business Administration, a 21 percent increase over the 2010 enacted level, which would include $28 billion in loan guarantees.

The budget request also includes proposals that would boost the size of several small business loan programs. Under the budget proposal, the maximum 7(a) loan size would increase from $2 million to $5 million; the maximum size for 504 loans would increase from $2 million to $5 million for regular projects and from $4 million to $5.5 million for manufacturing projects; and the maximum microloan size would increase from $35,000 to $50,000.

The proposal also includes $165 million in subsidy costs to support $17.5 billion in 7(a) loan guarantees — including about $16 billion in term loans and $1.5 billion in revolving lines of credit. It also would increase the maximum outstanding loan amount to microloan intermediaries in their first year of participation, from $750,000 to $1 million, and from $3.5 million to $5 million in subsequent years.

The proposed budget also would support $7.5 billion in guaranteed lending for commercial real estate development and heavy machinery purchases; $3 billion in Small Business Investment Company debentures, the same amount provided in 2010; and $25 million in direct microloans — half of the amount provided in fiscal 2010 — for emerging entrepreneurs.

The budget request also provides for $203 million in new budget authority for disaster-loan administrative expenses, $126 million more than fiscal 2010, and $1.1 billion in direct loans for homeowners and businesses whose property is damaged by natural disasters.

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