Apr 13 • General discussion
The SBA Just Got Cut by 67%. Here's What That Actually Means for You.
Quick update before we dive in.
Last week I ran a 5-day series on the FY 2027 budget. Some of you followed all five days. Some caught one or two. The feedback was solid and a few of you asked me to go deeper on specific agencies.
So here's what I'm doing. Instead of posting every day and flooding your feed, I'm switching to one deep post per week. Less noise, more substance. And I want these to be conversations, not lectures. So when you see the question at the bottom, don't just read it. Answer it. That's how this community gets valuable for everyone.
Ok. Let's talk about SBA.
One of the people who grabbed the contractor impact summary last week asked me to dig into what the SBA cuts actually mean for small businesses. So I read every SBA-related section in the budget, plus the six other agency chapters that affect small business contractors. Here's what I found.
THE HEADLINE IS MISLEADING.
$329 million. That's the FY 2027 request. Down from $1 billion. A 67% cut. Sounds like the government is abandoning small businesses.
It's not. But it is abandoning the support system that helped small businesses figure out how to compete.
WHAT'S ACTUALLY BEING ELIMINATED:
- SCORE. Gone. That's 10,000+ volunteer mentors and 150,000 small business clients a year.
- Community Navigator. Gone. $100M grant program for underserved entrepreneurs.
- Small Business Development Centers. At risk. Over 900 locations nationally.
- Women's Business Centers. At risk. Over 140 centers providing training and counseling.
- Veteran programs. Preserved at $21.4M. The only carve-out that survived.
SBA staffing is also dropping because there are fewer programs to administer. And there's a new administrative fee on lenders in the 7(a) and 504 programs, which could mean higher borrowing costs for small businesses.
WHAT'S NOT BEING CUT (AND THIS IS THE PART MOST PEOPLE MISS):
- Small business set-asides. Unchanged.
- 8(a) program. Unchanged.
- HUBZone. Unchanged.
- SDVOSB / VOSB. Unchanged.
- WOSB / EDWOSB. Unchanged.
- The 23% small business goaling requirement. Unchanged.
- 7(a) and 504 loan guarantees. Still there.
The contracting pathways are intact. The on-ramps are disappearing.
That's the distinction. You can still compete for every set-aside, every sole-source, every small business contract that exists today. You just won't have free mentoring, free training, and free counseling to help you figure out how.
THE PART NOBODY IS TALKING ABOUT:
This isn't just an SBA story. I found six other agency cuts that hit small businesses at the same time:
- MBDA at Commerce. Eliminated. That's $47M in minority business development support gone.
- Rural Business Service at USDA. Eliminated. $82M. And the budget says SBA covers rural businesses, except SBA's own support infrastructure is being cut simultaneously.
- CDFI Fund at Treasury. Redirected from urban to rural. Small businesses that used CDFI-backed financing in metro areas may find fewer options.
- OFCCP at Labor. Defunded. The compliance landscape around federal contractor hiring practices is fundamentally shifting.
When you stack these together, the picture is bigger than any one agency.
BUT HERE'S THE OPPORTUNITY:
Defense is up 44%. That budget explicitly says "broaden opportunities for new entrants." VA is up 9%. Energy is up 10%. DOJ is up 13%. Transportation is up 6.2%.
Every one of these agencies still has to meet their small business contracting goals. More total contract dollars means more small business set-aside dollars. The opportunity isn't shrinking. It's relocating.
Also, this is the sixth time some of these cuts have been proposed. Congress has historically restored SBA funding. SCORE has strong bipartisan champions. Under a Continuing Resolution, these programs would continue at FY 2026 levels. So the cuts aren't guaranteed. But the direction of travel is clear.
I put together a full SBA impact analysis document that goes deeper on all of this, including cross-agency impacts and six specific action items. Drop a comment if you want a copy.
DISCUSSION QUESTION:
Here's what I want to hear from you. If SCORE, SBDCs, and the free counseling infrastructure disappears, where do you go for help? What replaces it?
- Paid consultants?
- Industry associations?
- Peer communities like this one?
- Figure it out yourself?
- Something else?
Don't just pick one. Tell me why. The answer shapes what I build next in this community.
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The SBA Just Got Cut by 67%. Here's What That Actually Means for You.
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