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SBA TO ASSIST WELFARE RECIPIENTS IN STARTING BUSINESSES

The U.S. Small Business Administration will be in the vanguard of the Clinton administration's push to move welfare recipients into jobs, the head of the agency said Monday in Buffalo.

"The SBA is uniquely positioned to play a leadership role in the president's welfare-to-work initiatives," said Aida Alvarez, administrator of the SBA.

Ms. Alvarez made the remarks at a policy workshop about capital availability for women-owned businesses. Rep. John J. LaFalce, D-Tonawanda, and Phyllis Hill Slater, incoming president of the National Association of Women Business Owners, also attended the event at the Federal Reserve Bank of New York's Buffalo branch.

Small businesses, as a leading job generator, are a natural place to look for positions that will provide the bridge from welfare to the working world, Ms. Alvarez said.

Her remarks outlined the changing role the agency might play as a healthy economy removes some of impetus from entrepreneurship. Business starts are declining as opportunities in established companies increase. In response, the SBA can shift some of its focus to fostering existing business, she said.

Federal welfare reform law caps recipients' benefits at five years and encourages states to reduce their caseloads. The number of welfare recipients stands at 11.4 million nationally, down 20 percent from 1993 because of a strong job market.

The agency is considering a micro-loan program that would help welfare recipients parlay skills like crafts and sewing into a full-fledged home business, said Thomas M. Bettridge, regional administrator of the SBA. Loan sizes would be a few hundred dollars to about $1,000, he said.

The SBA also is considering a referral program that would connect small businesses with not-for-profit agencies that help welfare recipients succeed in the workplace. With help from a counselor, welfare recipients have a better chance of meeting employers' criteria.

Existing small businesses still need access to capital, training and other aid that the SBA can provide, Ms. Alvarez said.

"People want to grow their business, not just start it up," she said.

The SBA guaranteed a record number of loans over $500,000 last year, indicating that more of its
financing resources are going to existing businesses. The agency also is looking at ways to compensate for the thinning ranks of neighborhood lenders, as industry consolidation absorbs small, community-based institutions.

"Some big lenders do have very good (small business) programs," Ms. Alvarez said. "But small lenders are willing to take a risk where big lenders might not, because they know their customers personally."

Ms. Alvarez said she is working to strengthen Congress' faith in the agency following a bookkeeping error, discovered last month, that undercounted the SBA's available loan guarantee authority by $2.5 billion. She has asked the agency's inspector general to investigate the error, which temporarily put limits on the agency's popular 7(a) loan guarantee program. She also hired accounting firm Price Waterhouse to review the SBA's internal controls.

As Congress debates the budget, the SBA is trying "to preserve and protect what we have," rather than seek increases in small business programs, Ms. Alvarez said.

Measurement society
awards 3 scholarships
Three Erie Community College engineering students were awarded scholarships for academic achievement by the Niagara Frontier section of the International Society for Measurement and Control.

Kevin Kolb of Cheektowaga, Jeanette Smith of Sloan and Dwight Vogel of Cheektowaga, all electrical engineering technology students at ECC's North Campus, each received $500.

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