Without hype, McMahon’s SBA goes about business
WASHINGTON — On Feb. 14, the second anniversary of her Senate confirmation, Small Business Administration chief Linda McMahon gets what she may view as the greatest Valentine’s Day gift of all: an open and functioning government agency.
Throughout the 35 days of shutdown, McMahon maintained radar silence. Her official Twitter account last posted an item on Dec. 20, just before the shutdown began. Her private Twitter account has been dormant since Nov. 3.
An SBA spokesman said the shutdown prevented him from even calling up SBA progress reports that are publicly available. A request to interview McMahon conveyed through the spokesman did not get a response.
The SBA was among the dozen or so government departments and agencies that closed when President Donald Trump demanded congressional funding for his long-promised wall on the U.S.-Mexico border.
In his standoff with congressional Democrats, Trump blinked on Friday and the SBA will be among the government entities back in business Monday morning — at least until Feb. 15.
The closure of SBA hit the small business and contractor community hard, especially in Connecticut. A total of 443 small contractors who do business with the federal contractors had $4.8 million in income at risk. And that doesn’t include losses of other small businesses, restaurants that serve lunch to employees of the Danbury federal prison or coffee to Navy personnel at the submarine base in Groton.
But the most acute losses have been felt by small businesses in the state that use SBA-loan guarantees to finance new equipment, expansions or opening their doors in the first place.
“The government shutdown is having a demonstrated impact on activities and loans linked to the SBA,” said Brian Griffin, president of the Greater Norwalk Chamber of Commerce. “We have heard from both business owners and commercial lenders that various processes are on hold, delaying needed loans, and just generally slowing down or pausing economic activity.”
Above the fray
McMahon’s silence during the shutdown may be Exhibit Afor her staying power in office. Despite her roots in bombastic World Wrestling Entertainment scripts and deep friendship with Trump along with husband, Vince, McMahon has been careful to tread through the Washington political thicket very lightly.
“My impression is she’s moving loans out door, listening to business, and trying to steer clear of toxic politics,” said Sen. Chris Murphy, who beat McMahon in an oftenbitter Senate campaign in 2012 but voted for her confirmation two years ago. “The fact that she’s still there after two years speaks volumes.”
Murphy was referring to the heavy traffic of Trump cabinet officials abruptly heading for the exits amid alleged ethical lapses. Included in this category are former EPA administrator Scott Pruitt, former Interior Secretary Ryan Zinke, and former Health & Human Services Secretary Tom Price.
Many of these miscues had to do with travel expenditures and otherwise questionable use of official money. Although McMahon departed WWE in 2009 to embark on a political career in Connecticut — losing to Sen. Richard Blumenthal in 2010 before losing to Murphy in 2012 — she and her husband still maintains a net worth in the $1 billion-plus range.
McMahon has proven herself a dutiful defender of Trump economic policy, which is built around his “America First” concept of keeping jobs in the U.S. and bringing them back from overseas.
Small business plays no small role in Connecticut’s economy, as well as the rest of the nation.
In Connecticut, according to SBA data, 342,443 small businesses employ 735,788 — 49 percent of the state’s total employment.
But as is the case in other areas of Connecticut’s economy, small business has not completely returned to the levels prior to the Great Recession of 2007 and 2008. The small-business workforce is down 2 percent in firms employing 20 to 99 employees, and down 8 percent in firms employing 20 or fewer, according to U.S. Census data.
Under McMahon’s watch, SBA approved $33.1 billion in loans nationwide in fiscal 2018 — almost double the amount of 10 years ago. And it is often among the first on the scene of a hurricane or other natural disaster, providing support to homeowners and small businesses alike.
Vital loan source
Although it has a small direct microloan program, the vast majority of SBA loans are actually loan guarantees to banks who actually issue the money.
Adozen or so banks in Connecticut are the principle dispensers of the SBA-backed cash. Two are based in the state, Webster Financial and First Connecticut Bancorp.
It is not overstatement to say the money is the lifeblood of small business in Connecticut, or elsewhere in the nation.
“SBA is one of the bestknown government brands around the country,” said Karen Mills, who served as SBA administrator under President Obama and is now a fellow at the Harvard Business School. “I used to say I went to sleep at night worrying about half of all U.S. jobs.”
McMahon has traveled the country to promote small business and SBA’s role in nurturing it.
“SBA is extremely important to some of these businesses,” said Joseph Ercolano, director of the Connecticut Small Business Development Center, which provides counseling to start-ups and existing businesses. “They provide loan guarantees to banks, but they’re not necessarily the only source of capital. There are other options out there.”
Among them is the state Department of Economic and Community Development, which among other things operates “Small Business Express” that provides loans and grants with a ceiling of $100,000 or $300,000, depending on the program.