SBA is developing a simplified, web-based process for submission of Section7(a) loans under for all approved SBA lenders. Extending this streamlined process to all lenders for this category of loans will help lower the cost of originating small dollar loans for many small businesses, reduce paperwork burden and improve underwriting efficiencies, thereby enabling lenders to originate more loans for small businesses.

Until this past year there has not been a central place for applicants to browse open solicitations across all eleven participating agencies in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs. The new SBIR.gov website now contains a central searchable database to find open solicitations. This saves applicants time in finding opportunities that fit the goals of their research and development work.

The reauthorization of the SBIR/STTR Programs in December 2011 brought a host of new data reporting requirements that pose new challenges for SBA's efforts to streamline time and cost burdens for small businesses. During the next couple of years SBA will focus on meeting new congressionally mandated reporting requirements, while streamlining data collection and preventing reporting duplication by small businesses. SBA's efforts to streamline administrative burden fall into three areas:

(i) Company Registry - The SBIR/STTR statute requires new reporting requirements regarding the ownership structure of small businesses. SBA will develop and deploy a company registry system for all SBIR and STTR applicants. SBA will develop a secure method of sharing this data with all other participating agencies that a company applies to in order to ensure that small businesses report this data only once. The new system is projected to be operational by January 2013.

(ii) Application and Award Databases - The new statute requires data reporting that is broader in scope and collected more frequently. SBA is assessing ways to leverage technology across participating agencies to reduce the administrative burden on small businesses of applying to the program.

(iii) Commercialization Database - The new SBIR/STTR statute also requires additional commercialization data from program awardees. SBA and DOD, together, are assessing ways to leverage and scale existing technology platforms to collect this data, while ensuring companies will not have to re-enter any data they have previously entered.

For loans of less than $250,000, SBA is evaluating an optional credit scoring methodology to be used by SBA lender partners in their underwriting process, which could result in lowering the lenders' cost of delivering capital to borrowers and would likely expand their interest in making low dollar loans. This initiative may also attract additional lenders (e.g., small community banks, credit unions, and rural lenders) to become SBA partners and increase credit availability for small businesses.

This system would allow the HUBZone and 8(a) programs to process applications, certifications and other program processes (e.g. protests, and annual reviews) electronically. This approach would reduce the amount of paperwork that a small business has to submit to SBA, and increase the efficiency of the program by allowing applicants to submit information common to both programs once rather than with each application. The planned initiative is projected to result in substantial maintenance cost savings. In addition to reducing waste, fraud and abuse, it will support three new programs and business processes currently handled manually. SBA estimates that this initiative will impact approximately 25 percent of all HUBZone participants that are also in the 8(a) program. During the later phases of this initiative, the system will be extended to other SBA contracting programs such as the Women-Owned Small Business, and Service-Disabled Veteran-Owned Small Business.

Private industry approves a substantial number of loans through credit scoring to reduce the cost of underwriting. The portfolio analysis that is being currently completed indicates that the performance of loans to borrowers with a higher FICO score have limited risk. Changing this process would allow SBA more flexibility to design a loan approval that is in line with current private sector practices and reduce the processing cost for lower dollar disaster loans. Parameters for this auto approval initiative are in development, and the agency is assessing which changes would be necessary to fully complete the process through the Disaster Credit Management System (DCMS), the electronic system used by SBA to process disaster loan applications.

Openness and Transparency

SBA promotes transparency, collaboration, and public participation in its rulemaking process. To that end, SBA routinely solicits comments on its regulations, even those that are not subject to the public notice and comment requirement under the Administrative Procedure Act. Where appropriate, SBA also conducts hearings, webinars, and other public events as part of its regulatory process. For example, during May and June 2012, SBA held public webinars and roundtable discussions to solicit public feedback on the Agency's proposed implementation of the National Defense Authorization Act for Fiscal Year 2012 amendments to the ownership, control and affiliation rules for the SBIR and STTR Programs. These public discussions will not only help to shape the final rule but the development and implementation of other SBIR and STTR program changes as well.

Retrospective Review of Existing Regulations

SBA also promotes public participation in the retrospective review of its rules, as the agency seeks to determine which rules may be outmoded, ineffective, insufficient, or excessively burdensome, and which ones should be streamlined, expanded, or repealed. Pursuant to section 6 of Executive Order 13563 "Improving Regulation and Regulatory Review" (Jan. 18, 2011), the following Regulatory Identifier Numbers (RINs) have been identified as associated with retrospective review and analysis in SBA's final retrospective review of regulations plan. The final agency plan can be found at http://www.sba.gov/content/sba-final-plan-restropective-analysis-existing-rules-0.

Regulatory Framework

SBA FY 2011 to FY 2016 strategic plan serves as the foundation for the regulations that the Agency will develop during the next 12 months. This strategic plan proposes three primary strategic goals: (1) growing businesses and creating jobs; (2) building an SBA that meets the needs of today's and tomorrow's small businesses; and (3) serving as the voice for small business. In order to achieve these goals SBA will, among other objectives, focus on:

The regulations reported in SBA's semi-annual regulatory agenda and plan are intended to facilitate achievement of these goals and objectives. Over the next twelve months, SBA's highest regulatory priorities will include: (1) implementing policy and procedural changes to the SBIR and STTR programs through the Policy Directives that provide guidance to the other SBIR/STTR federal agencies; (2) finalizing the Small Business Jobs Act amendments to the regulations governing multiple award contracts and small business set-asides; (3) implementing the Mentor-Protégé Programs, which were also authorized by the Small Business Jobs Act, for participants in the HUBZone, Women Owned Small Business (WOSB) Contracting, and Service-Disabled Veteran-Owned Small Business (SDVOSB) Programs; and (4) proposing amendments to regulations for the 504 and 7(a) loan programs.

(1) Small Business Innovation and Research (SBIR) Program (RIN: 3245-AF84):

The SBIR Policy Directive was listed in SBA's E.O. 13563 Retrospective Review Plan as one of the initial candidates for review. At that time, one of the reasons for the review was to address small business concerns regarding certain program guidelines, including the uncertainty regarding the SBIR data rights afforded to SBIR Awardees and the Federal Government. As a result of recent amendments to the program by the National Defense Reauthorization Act of 2012, one of SBA's priorities is issuance of a revised policy directive that simplifies and standardizes the proposal, selection, contracting, compliance, and audit procedures for the SBIR program to the extent practicable while allowing the SBIR agencies flexibility in the operation of their individual SBIR Programs. Wherever possible, SBA is reducing the paperwork and regulatory compliance burden on the small businesses that apply to and participate in the SBIR program while still meeting the statutory reporting and data collection requirements. For example, as identified above, SBA created a program data management system for collecting and storing information that will be utilized by all SBIR agencies, thus eliminating the need for SBIR applicants to submit the same data to multiple agencies.

(2) Small Business Technology Transfer (STTR) Program (RIN: 3245-AF45):

The STTR Policy Directive is also identified in the Retrospective Review Plan required by E.O. 13563. Many elements of the STTR program are designed and intended to be identical to those of the SBIR program. SBA is therefore issuing an updated STTR Policy Directive to maintain the appropriate consistency with the SBIR program, as described in the preceding paragraphs.

The revised SBIR and STTR Policy Directives are reducing confusion for both small businesses and the Federal agencies that make awards under the program, reducing the regulatory cost burden, potentially increasing the number of SBIR and STTR solicitations, and leading to savings of administrative costs as a result of fewer informational inquiries and disputes.

(3) Multiple Award Contracts and Small Business Set-Asides (RIN: 3245-AG20):

SBA intends to implement authorities provided by section 1331 of the Small Business Jobs Act that would allow Federal agencies to set-aside a part or parts of multiple awards contracts for small business concerns; set-aside orders placed against multiple award contracts for small business concerns; and reserve one or more contract awards for small business concerns under full and open competition in certain circumstances. Allowing small businesses to gain access to multiple award contracts through prime contract awards or through set asides off the orders of the prime contracts should increase Federal contracting opportunities for the small businesses.

(4) Small Business Mentor-Protégé Programs (RIN: 3245-AG24):

SBA currently has a mentor-protégé program for the 8(a) Business Development Program that is intended to enhance the capabilities of the protégé and to improve its ability to successfully compete for Federal contracts. The Small Business Jobs Act authorized SBA to use this model to establish similar mentor-protégé programs for the Service Disabled Veteran Owned, HUBZone and Women-Owned Small Business Programs. During the next 12 months, one of SBA's priorities will be to issue regulations establishing these three newly authorized mentor-protégé programs. The various types of assistance that a mentor will be expected to provide to a protégé include technical and/or management assistance; financial assistance in the form of equity investment and/or loans; subcontracts and/or assistance in performing prime contracts with the Government in the form of joint venture arrangements.

(5) 504 and 7(a) Regulatory Enhancements (RIN: 3245-AG04)

SBA also plans to propose revised regulations to reinvigorate the Section 504 and Section 7(a) loan programs, which are both vital tools for creating and preserving American jobs. This rule is identified in SBA's Retrospective Review Plan required by Executive Order 13563. SBA proposes to strip away regulatory restrictions that detract from the 504 Loan Program's core job creation mission as well as the 7(a) Loan Program's positive job creation impact on the American economy. The revised rule will enhance job creation through increasing eligibility for loans under SBA's business loan programs, including its Microloan Program, and by modifying certain program participant requirements applicable to the 504 Loan Program. The major amendments that SBA is proposing include expanding eligibility for these programs by redefining the permitted affiliations for borrowers when determining the applicant's size, but balancing the expansion by requiring an affidavit as to ownership; eliminating the personal resources test; and changing the 9-month rule for the 504 Loan Program, and CDC operational and organizational requirements.