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Status of SBIR Reauthorization Unclear

Written by on Monday, October 20th, 2008

The status of SBIR reauthorization is unclear, according to an update by Rick Shindell of the SBIR Insider..

In his October 3rd newsletter, Rick Shindell had pronounced SBIR reauthorization dead.  Shindell wrote in his email update the following:

Over the last month and through today, October 3, 2008, there has been a flurry of intense efforts in the Senate to get an SBIR Reauthorization bill passed. . . .  Unfortunately the valiant efforts on SBIR reauthorization by the leaders and staff of the Senate Committee on Small Business and Entrepreneurship (SBE), John Kerry (D-MA) chair and Olympia Snowe (R-ME), were rebuffed by a few and ultimately could not be brought to the full Senate for a vote, in spite of the fact that the original bill S.3362 was passed unanimously 19-0 in the SBE committee back in July. . . .

In today’s update, however, Shindell appears to have changed his opinion somewhat, stating:

In our October 3rd issue we announced that SBIR reauthorization was dead in the 110th Congress. Although this scenario is still likely, the events of the last few weeks heighten the chances for more action in a “lame-duck” Congress which “may” present an opportunity for additional SBIR reauthorization activity.

So, the question is this: will the current economic climate push the Senate to move forward on this reauthorization effort?

In all honesty, I doubt it.  I have a bit of a bias when it comes to the subject of the SBA, since I started my law firm in a down economy following the sudden closing of my large law firm, and I found it disappointingly difficult to obtain funding through the SBA.  At one bank, I asked about SBA funding, and to my surprise, I was asked what my spouse’s salary was.  When I replied in some shock that I was single, I was told the bank could not assist me.  At another bank, I received the run-around on SBA funding on the basis that law was a “highly risky profession” and I wouldn’t be able to do anything other than practice law if my business failed.   Of all the businesses I could have started, I honestly would never have thought that a law practice would have been placed in a high risk category–particularly when I had already practiced law for a number of years.   Wnile I did eventually obtain a small SBA loan, I never obtained the loan I really needed to build my business. I must admit I became somewhat disenchanted with the whole concept of the SBA.  In my opinion, the whole program would benefit from an overhaul.

So, having disclosed my personal bias on the SBA program, I would argue that the SBA program is exactly where Congress should be focusing its attention in a down economy.

Why do I say this?

Well, in a down economy, there are generally a number of layoffs, and a number of laid off employees will not be able to find the right job.   Rather than sitting home, collecting unemployment, and potentially losing their home to foreclosure, many of the unemployed will contemplate starting a small business.  As anyone who has ever started a small business can tell you, securing adequate financing is often critical to the success of a small business.  So, in my opinion, it makes perfect sense for Congress to focus its efforts on improving the SBA program in a down economy, if it is serious about taking steps to invigorate the economy.

So, how does this relate to SBIR reauthorization?  Well, I would argue that Congress should ensure that the SBIR gets reauthorized for the very same reason–to promote small business and invigorate the economy.

Unfortunately, however, to date I have heard absolutely nothing of any plans by Congress to focus on the SBA as part of its economic relief efforts.  Instead, Congress and the administration are busy taking all kinds of economic steps that have little or nothing to do with small business.  For this reason, I doubt that SBIR reauthorization is going to get much attention by the Senate before the end of the year either.

The California Biotech Law Blog will continue to keep you posted as any new SBIR reauthorization developments occur.


Comment from California Bankruptcy Lawyer
Time October 23, 2008 at 12:56 pm

I’m also starting my own small business a listing of all bankruptcy lawyers in the US. It’s taken me quite some time to put it all together and to get to the next level I’v contemplated a SBA loan. The two banks I’ve talked to said it’s going to be an uphill battle and asked tons of questions about my salary – which is way down since I worked in corporate america. Unfortunately these days the only way to get a loan is to already have money – a tough Catch 22 when you’re stuck w/out a lot of money.

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