John Cox is in a hard spot. As the associate administrator of the U.S. Small Business Administration, Mr. Cox's loan programs are wildly popular with lenders and small companies alike.

Perhaps too popular, as federal budget restrictions threaten to create a funding shortfall for loan guarantees totaling $1.2 billion in 1995. That, says Mr. Cox, who works closely with lenders, could force his agency to focus on niches ranging from export finance to loans for women-and minority-owned businesses.

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