A new program has been set up to encourage small firms to sell the federal government innovative ideas on everything from stopping shells from exploding when they hit snow (for the Defense Department), to aquatic farming (for the National Science Foundation), to figuring out why adoption rates have declined (for the Health and Human Services Department).
Although the first of the estimated 1,000 grants, worth $45 million in fiscal 1983, will not be awarded until late July, more than 24,000 small businesses have told the SBA that they are interested in participating.
"We are trying to help the nation, as a whole, in surfacing innovation that hasn't come through before because of the reluctance of many federal agencies to give research and development money to small firms," explained Donald R. Templeman, assistant administrator of SBA for innovation, research and technology.
Under the program, the 10 agencies that spend more than $100 million a year on R&D, will outline broad topic areas and then, through competitive bidding, will choose the best innovative ideas from small businesses. By fiscal 1987, $450 million is supposed to have been set aside for the program.
Templeman, who worked for two years as a congressional fellow with Sen. Edward M. Kennedy (D-Mass.) and Rep. Jerry Lewis (R-Calif.), helped push the bill through Congress in 1982. Now, back at his career post at SBA, he is responsible for implementing the law.
NEED A SHRUB? . . . Stashed in the emergency jobs bill that passed in March was a section requiring the SBA to distribute $50 million this year to small businesses in areas with high unemployment to landscape and develop park and recreation property. Checks totaling $2.5 million have been sent to six states; 20 other states, including Maryland (expecting $738,400) and Virginia ($931,600) have been working with the SBA to complete the paperwork necessary to receive an additional $17.3 million. Program director John R. Cox said he has not heard from the District, which is supposed to receive $147,100.
STREMLINED LENDING . . . To make it easier and faster to get an SBA-guaranteed loan, Congress told the SBA in 1979 to develop a streamlined lending program. Now, four years later, SBA is testing a "preferred lenders program" that gives banks most of the decision-making responsibility. In the New York area, six banks have agreed to handle all the paperwork involved and in return will guarantee 25 percent of the amount of each SBA-backed loan they make in the $100,000 to $500,000 range, instead of the traditional 10 percent. The SBA guarantees the rest of the amount of the loan.
The new program will be riskier for the banks, explained Edwin T. Holloway, associate administrator of the SBA for finance and investment. But the idea, he said, "is to extend our resources by letting lenders--experts in the field--handle the loan from beginning to end. The success of the program will be measured by what we hope will be a declining delinquency rate."
SBA administrator James C. Sanders calls the program "the most significant step in SBA's process of streamlining and simplifying financial assistance to the small business community."