SBA chief urges respect, support for small businesses
For starters, says Maria Contreras-Sweet, cities need to level the playing field
Since 1963, the first week of May has been designated by the president of the United States as a time to celebrate entrepreneurs.
To mark the start of this year’s Small Business Week, small-business owner and USA TODAY contributor Rhonda Abrams sat down for an in-depth discussion with Maria Contreras-Sweet, the current administrator of the U.S. Small Business Administration.
Contreras-Sweet, the founder of Pro-America Bank, talked about technology and small-business lending. She also elaborated on some of the challenges — and resources — for the nation’s estimated 28 million small businesses.
In addition, she encouraged shoppers to spend at their local stores. “When you shop at a small business, 64 cents of that dollar stays right in your neighborhood,” she says.
In turn, she adds, those neighborhood stores could become a “destination” for more consumers, leading to more job creation in the community.
“Small businesses should be respected for the role they play: Two out of three net new jobs are created by small businesses,” she says.
“This is the time to celebrate small businesses.”
Here are some other thoughts from Contreras-Sweet. The following comments have been edited for clarity and content.
Q: What’s a main message that you would like to get out there during Small Business Week?
A: Let’s level the playing field for small businesses. I see small businesses getting the runaround at every turn. When a corporation arrives at a municipality and says, “We’re going to locate here,” that municipality says, “We’re going to give you tax breaks; we’re going to open up this for you.” When a small business shows up in city hall, (they’re told) “Stand in line, take a ticket.”
We need to address the different needs of small business. We can create unique products, services, programs to be more responsive to the varying Americans across the country that are in different stages of their journey of entrepreneurship.
Q: How is the SBA already addressing those varying needs?
A: If someone is in their nascent stage, they can go into one of our Small Business Development Centers and get some counseling. If you’re a woman and you feel more comfortable amongst your peers, we have Women’s Business Centers. If you’re a veteran, then you may want to visit one of our Veteran’s Business outreach centers.
Q: For small businesses, finding and managing technology, keeping up with it, is really overwhelming. How can the SBA help small businesses handle technology-related challenges?
A: We recently launched the Small Business Tech Coalition (which provides technology- focused education and resources). We went through the process of curating (the technologies small businesses need to get started). You may need Zenefits (which provides an online human resource management system), you may need Salesforce as a CRM (a system for customer relationship management) and you may need Facebook to get your message out. We put together a series of technologies, and over time, we’ll keep refreshing that.
Q: Virtually every day, I get offers from new “alternative” small-business lenders. Currently, they ’re fairly unregulated, some with interest rates as high as 40% to 60% per year. What’s appropriate for the government to do to protect small businesses?
A: Let me give you three answers. One is that SBA has to use technology to make it easier and more efficient for people to get loans from the SBA. To that end, we put up a program called LINC. It’s like Match.com. Answer 20 questions. We route that to all of our banks in our network, they respond, and now you’re in the driver’s seat.
Next, (current SBA) bankers said our technology was old and antiquated. We’ve invested a lot of time and effort to make sure our portal to the lending institutions is much more efficient.
Thirdly, we’ve been meeting with online solutions (such as institutional investor, peer-to-peer and crowdfunding lenders) On-Deck, Kabbage, Kiva, Kickstarter. We have a duty to make sure there’s no abuse in the system, that people are getting the most rational rates, that there’s transparency, accountability, all the things you would expect us to be doing.
Q: In 2000, the funding for Small Business Development Centers was $88 million — about $122 million in today ’s dollars. Last year’s allocation was $115 million. What can you tell us about these training and counseling centers?
A: SBDCs are marvelous resources for small businesses. SBDC consultants are passionate about the work. They help businesses navigate contracts with U.S. government and the corporate supply chain. SBDCs are gearing up and training to navigate small businesses through the international market. We’re bringing more technology capacity into these SBDC centers.
“Small businesses should be respected for the role they play: Two out of three net new jobs are created by small businesses.” Maria Contreras- Sweet