Maria Contreras-Sweet, are you listening? Now that President Barack Obama has nominated you to run the Small Business Administration, owners have a to-do list for you.
The SBA needs to get banks to lend more, help small companies win more federal contracts and work toward easing regulations, they say. And it needs to get the word out to companies about what it has to offer.
Last week, Obama nominated Contreras-Sweet to head the agency tasked with helping Americans start, build and grow businesses. She's worked with small companies as head of the California Business, Transportation and Housing Agency and co-founder of Los Angeles-based ProAmerica bank, whose customers are small and medium-sized companies.
Small business owners may be looking to the next SBA administrator for help making their companies stronger, but the role reaches into job creation and the health of the broader economy. More than 99 percent of the 27 million companies in the U.S. are small businesses. They employ about half the nation's workforce.
The new administrator will face ongoing challenges like the government's inability to meet its goals for small business contracts, banks that don't want to lend to small businesses and pressure to aid the slow economic recovery. The new SBA head must attempt to accomplish this with the smallest budget of any federal agency. The SBA's most recent annual budget was $929 million compared to $573 billion for the Pentagon.
If confirmed by the Senate, Contreras-Sweet will succeed Karen Mills, who won widespread approval for increasing aid to small businesses during and after the recession. But Mills was also criticized by Republicans in the House for spending on lending programs that didn't appear to be creating jobs.
Mills says the SBA focused on the best ways to give small businesses more access to financing while also driving job creation.
"(The programs) were tracked and measured for their impact, and have contributed to the position where the agency finds itself today, coming off record years in SBA-backed lending," she says.
Since Mills' departure in August, the SBA has been run by Acting Administrator Jeanne Hulit, the agency's former head of its Office of Capital Access. Hulit would not comment for this story, according to SBA spokesman Terrence Sutherland.
Contreras-Sweet was not giving interviews while her nomination was pending, said Bobby Whithorne, a spokesman for Obama.
Contreras-Sweet is expected to use her banking background to persuade banks to lend more. Small businesses have struggled to get loans since the recession, and they're tired of rejection letters.
"Maybe she's going to have some innovative ideas on how to open up those capital lines," says Katie Vlietstra, vice president for government relations and public affairs of the National Association for the Self-Employed.
Under Mills, the SBA won pledges from major banks to increase small business lending. Banks including Wells Fargo & Co. and Bank of America Corp. say they're living up to them. But only about a third of owners surveyed by Pepperdine University's Graziadio School of Business and Management say they were able to get a loan in the July-September quarter. The SBA isn't a lender. It backs loans. Its roughly $100 billion loan portfolio is less than half the $285 billion in small business loans tallied by the Federal Deposit Insurance Corp. on Sept. 30.
The SBA also will need to help educate small businesses about how crowdfunding — the solicitation of investors over the Internet — works. The Securities and Exchange Commission is writing the rules, but the SBA is likely to be the one explaining them, says John Arensmeyer, CEO of Small Business Majority.