SBA Administrator Urges Expansion of Lending Program
December 14, 2009 | By Kenneth Dalecki | email@example.com
Small Business Administrator Karen Mills urged Congress to renew and expand SBA lending programs that she says are helping breath new life in the nation's struggling economy.
In a Dec. 14 luncheon speech, Mills said she is hopeful that SBA loan application fees will continue to be waived and that lending levels will increase under legislation pending in Congress.
Mills, a former venture capitalist, Obama presidential transition team member and heir to the Tootsie Roll candy company fortune, noted that stimulus bill money enabled the SBA to lure some 1,200 lending institutions back into lending to small businesses. The funds, which ran out last month, allowed SBA to eliminate loan application fees and boost its guarantees from 70% to 90% of loans approved though some 5,000 lending partners. Guarantees have dropped back to 70% and will stay there unless Congress approves additional funding.
Mills unveiled a program designed to help small business owners rebound from the recession and expand job creation. In partnership with computer manufacturer Dell, the SBA is now hosting an online video series that provides tools and advice for small business owners.
"Some of the best advice a small business owner can get is from other small business owners who've been in their shoes," she said. "This video series brings those real-life experiences together, along with information on other valuable resources and opportunities, in a way that will help other small business owners chart their own path to success."
Mills said SBA has leveraged $375 million in stimulus money into $16 billion in small business loans by underwriting private lender loans. Government contracts under the stimulus package have channeled $5 billion to small businesses. SBA manages a portfolio totaling $90 billion in loans through private lenders.
SBA could greatly expand its services if Congress goes along with its request for hiking the size of loans it can guarantee from a maximum of $2 million to a new level of $5 million, Mills said. She also called for tax incentives such as tax breaks for new hires and a continuation of write-offs for loses going back five years.
Mills said SBA will continue to create regional innovation clusters such as a boat-building cluster in Maine that uses composite materials and a robotics cluster in Detroit that uses auto manufacturing techniques for new products such as unmanned vehicles for the U.S. military.
Mills echoed President Obama's urging of big banks to lend more aggressively to boost the economy. "Many good companies can't get loans," she said, even though their credit scores are better than for prior loans. She said her agency will put special emphasis on helping small businesses owned by women, minorities and veterans.