Small shot a 70 after being one shot behind Schulte at the start of the day.
An eagle on the fifth hole by Small and Schulte's first double-bogey of the tournament on the 13th hole -- when he had a chance to put some distance on the rest of the field -- helped Small take a share of the lead.
'I hit a five iron on my second shot and then had a 15-foot putt,' Small said about his eagle.
'You want to be in position (for the final day),' Small said. 'I bogeyed holes two and three and it's like ... oh no ... then I birdied four and eagled five and it righted the ship a little bit. The putter saved me coming in and we're in there for tomorrow.'
Small is trying to be the first player to win back-to-back titles since Larry Gilbert in 1981-82.
Schulte, who finished the day with a 71, started the day at 9 under but quickly dropped that to 11 under with birdies on the third and fourth holes.
'I was actually a little bit nervous this morning so the good start really helped calm me down and play a little more aggressive the rest of the day,' he said.
That aggressive play caused Schulte to hit into a creek on 13, leading to the double bogey.
Four players are three shots back at 6 under, including Lee Rinker, of Juniper, Fla., and Ron Philo, Jr., of Westchester, N.Y.
Philo eagled the 14th hole by hitting a wedge about 114 feet that bounced twice and dropped in the cup.
'There's 18 holes left and you need to get into a position to win,' Philo said.
Rinker, Jerry Haas, of Winston-Salem, N.C., and Ted Parker, of Denver, all shot the day's best round of 68. Haas and Parker and four others sit five shots back at 212.
The top 20 finishers Sunday earn an automatic berth in this year's PGA Championship at the Medinah Country Club near Chicago.