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Small Business Administration - SBAArticle excerpted from the Wall Street Journal dated August 8, 2009Karen G. Mills has a big job: Get struggling small businesses the help they need to power the U.S. into economic recovery. Four months into her term, the new Small Business Administration chief says there's been measurable progress in getting financing and other assistance to the country's 27 million entrepreneurs. Since the passage of the Recovery Act in February, the SBA has approved $5.7 billion in loans and seen 840 financial lenders renew their participation in the agency's 7(a) or ARC loan programs. Under Mills, a venture capitalist and Tootsie Roll heiress from Maine, the 56-year-old agency has also implemented new loan programs, such as inventory financing for car and auto dealerships. Anecdotally, however, many small-business owners say they're still waiting for their bailout. They say loan applications are still being denied by risk-averse banks. They complain that President Barack Obama's $787 billion economic-stimulus package isn't trickling down to Main Street, and the administration's plan to overhaul health care could place new burdens on their businesses. We talked to Ms. Mills about the progress of the Recovery plans, health-care reform, and the SBA's role in serving small businesses. Here are edited excerpts from that conversation. THE WALL STREET JOURNAL: Your background as a venture capitalist is somewhat unusual as an SBA administrator. How has that prepared you for this job? MS. MILLS: I spent more than 25 years growing businesses. They've been all kinds of businesses, from manufacturing operations [in areas such as] plastic injection moldings and electric motors, to all kinds of hardwood-floor and food companies. I've led small businesses through recessions and difficult times. I have a very strong understanding of what it will take to help them through this period. WSJ: In your nomination hearing in April, you said there are two kinds of small businesses served by the SBA: Main Street businesses and innovative, high-growth companies. How will you attend to these two? MS. MILLS: Main Street small businesses are the restaurants, car-repair [shops] and dry-cleaning operations that are part of the fabric of our daily lives. They serve the local community. We don't expect them to be a billion dollar company tomorrow. But we value them and we know that they need a full set of supports. In our country though, most of the job creation is actually from a very small number of high-growth, high-impact companies. Some economists have called them "gazelles." The SBA has supported a great number of them as well. We had Intel, Staples, Federal Express and Ben & Jerry's ice cream. WSJ: One of your first orders of business was to implement President Obama's Recovery Act plans for small businesses. How is that going, and are you satisfied with the progress? MS. MILLS: We have been quite successful, particularly with two of our main programs: increasing the 7(a) guarantee to 90% and reducing or eliminating many of the fees in both the 7(a) and 504 programs. The volume from the weeks before the Recovery Act, when things were really quite low, to the present -- we're up almost 50%. That means about $8 billion we have facilitated getting into the hands of small businesses. WSJ: What is the best health-care solution for small businesses? MS. MILLS: Health care is the No. 1 concern of small businesses and the status quo is untenable. Small businesses are paying up to 18% more for their health care for the same coverage because they're small, so they don't have access to the same affordable healthcare that large companies do. The other piece of this equation is that one third of the uninsured, 13 million, work for businesses that employ less than 100 people. So you can't solve the problem of the uninsured unless you solve the problem of getting access to affordable health care for small businesses. WSJ: But do you support a "pay or play" mandate? MS. MILLS: There's an understanding that small businesses are exempted -- at various levels, but exempted -- because "pay or play" is not about small businesses. It's about making sure that large businesses continue to provide coverage. WSJ: Do you believe small businesses will lead us out of this economic crisis? MS. MILLS: Yes, I do. Seventy percent of the jobs in this country are created in small business. And over half of the people who work in this country own or work for a small business. They are the engines of our economic activity here. They are going to be critical to creating the jobs that will lead us into the recovery and out of this economic difficulty. WSJ: Your parents owned most of Tootsie Roll Industries Inc. for decades. What business lesson did you learn from them? MS. MILLS: I grew up in a family business…that really has provided the core of my belief in American small business, and in America's ability to grow and operate important businesses that can compete and be successful. |
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