The sequester is taking its toll on small businesses across the country because of spending cuts to subsidy programs.
It was estimated in February that the Small Business Administration's most popular loan program would be cut by $16.7 million, Politico
“While this may not sound like a significant figure relative to the federal government’s overall budget, each subsidy dollar is used to guarantee an average of $51 worth of loans for small businesses,” outgoing SBA Administrator Karen Mills wrote in a recent letter to Senate Appropriations Committee Chairwoman Barbara Mikulski.
“This means that sequestration would take away SBA’s ability to make 1,928 small businesses loans — loans that could have helped small businesses access more than $901 million of capital."
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She also explains that the subsidies could have helped create “approximately 22,600 jobs in industries like manufacturing, food services and hospitality which are still struggling to recover.”
The toll taken on small businesses is not just related to SBA loans. It also includes cuts to government contractors as well to government agencies that hire out work to small private sector business directly.
Politico noted that small businesses across the country have responded to the sequester by laying off workers, reducing hours, making budget cuts, imposing hiring freezes, and scaling back conferences and other events.
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