What's Happening at the SBA? Small Businesses Don't Know
"I didn't even know they still exist," Eric Segal, owner, Security Business Solutions, responded when I asked a group of small business owners if they thought the U.S. Small Business Administration was fulfilling its mission of helping small business.
The U.S. Small Business Administration was founded to strengthen the overall economy by helping small businesses start and grow. Does the SBA actually do what it's supposed to do?
Senator Olympia Snowe, (R-Maine) ranking member of the U.S. Senate Committee on Small Business & Entrepreneurship, recommending to President-Elect Obama that the position of the SBA Administrator be elevated to a cabinet level post so the voice of small business can be heard. In theory, Senator Snowe's proposal seems to make sense. After all, it's small business that will be the savior of our country's economy. However, in practical terms, would a cabinet level post enhance the operations of the SBA and its effectiveness in helping small business?
Look at the facts. Loan volumes from the department's flagship 7(A) loan program fell 30 percent during the 2008 fiscal year which ended September 30, and district office staffs have been slashed to the bare bones, resulting in minimal grassroots support for small businesses. Yet, take a look at the SBA's web site and it's obvious to me, a former corporate marketing executive that the marketing team must be substantial. There are dozens of e-newsletters for which you can subscribe. There are live online chats along with podcasts and videos. The videos are primarily SBA success stories, not instructional programs. In fact, under marketing and outreach, the site says in order to ensure proper branding of the agency it is to be referred to as "Your Small Business Resource."
All of that's nice to have, I guess, if you are producing a measurable return on your investment -- in this case the taxpayer's investment. However, a poll taken of our audience on SBTV.com several years ago, found over 90 percent of small businesses responding had never had any type of contact with the SBA. Subsequently, in the fall of 2006, we asked, "Is the SBA being effective in helping disaster-stricken small businesses?" Of the nearly 1,000 respondents, 50 percent were completely unaware of anything the SBA was doing.
So you have to wonder: Are they doing their job? The defining blow for me was delivered last year during the holidays when the SBA issued its proposed rule in response to Public Law 106-554 which was created to allow federal contracting officers to award up to five percent of all contracts to women-owned businesses. The law had been passed by Congress in 2000, and it had taken seven years for the SBA to act. Once the rule was issued, it alarmed women-business owners across the country because of its narrow scope. It allowed a contracting officer in any federal agency to set aside contracts or work, but only within an industry in which women owned small businesses had been identified as under-represented or substantially under-represented. Furthermore, only small businesses owned or controlled by economically disadvantaged women would then be eligible for these contracts.
The industries selected included National Security and International Affairs; Coating, Engraving, Heat Treating, and Allied Activities; Households and Institutional Furniture and Kitchen Cabinet Manufacturing and; Other Motor Vehicle Dealer. At the time, I couldn't name a single women-business owner in any of the named industries. It was a slap in the face to women-business owners. Despite strong efforts to level the playing field, women have continually received far less than five percent goal of federal contracting dollars in all industries. In fact a study conducted by the SBA itself, confirmed that women-owned small businesses are under-represented in 87 percent of industries. Fixing the deficiencies is one of Snowe's priorities for the agency.
Now, armed with this information, I repeat my question: Is the SBA fulfilling its mission? I would argue that the agency should review its process and procedures and refocus its energies on assisting small businesses with the funding they need to hire new employees, create new products and services, and expand. And if the agency itself needs additional funding or assistance, let's give it to them so they can do their job.
As Barbara Weltman, attorney and contributing editor at John Wiley & sons commented, "The SBA isn't hitting on all eight. While their online information is great (organized by topic and easy to access), their loan programs leave much to be desired. In the past, there were multiple loan programs for different purposes, most have ended and access to SBA loans at commercial banks is virtually at a standstill these days. SBA isn't fulfilling the mission in my opinion."
Enough of the brand marketing, hoopla and propaganda. We don't need the SBA to tell us what a great job they are doing (NOT), we need them to actually do what the agency was created to do -- help small businesses succeed.
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From SBA Acting Administrator Sandy K. Baruah:
Susan Wilson Solovic's column on the U.S. Small Business Administration painted an inaccurate picture.
SBA's loan volume declined in 2008 compared to record volumes set every year from 2002-07. Despite the current economy, 2008 was SBA's fifth best year for number of loans and the fourth largest for dollar volume, dwarfing the previous Administration's best year by 30 percent in loan numbers and 42 percent in dollars.
Since the 2005 Gulf Coast hurricanes, SBA has revamped its disaster operation to ensure faster, more compassionate disaster assistance. As result, key processing times for applications have been cut up to 90 percent. SBA was widely praised for its response to the 2008 Midwest Flood and Gulf Coast hurricanes.
SBA's women’s set-aside rule followed the statute's text, constitutional requirements, and National Academy of Sciences methodology. The final rule increased the number of industries covered from four to 31. Further, prime contracts to women-owned small businesses increased from $4.6 billion at the end of the previous Administration to $11.6 billion in 2006.
Other relevant statistics:
-SBA’s small business loan portfolio has grown from $49 billion in 2001 to $88.1 billion in 2008.
-Federal contracts to small business reached a record $83.2 billion in 2007.
-SBA maintains a robust network of over 100 offices and 1,500 resource partners counseling nearly 1.4 million entrepreneurs annually; another 12 million receive information through SBA’s Web site.
Don't get me started!! I am a small business owner and I have to tell you the SBA does not know their --- from their ----. They are nothing but a sad joke to business people who take themselves seriously. The few contacts I have had with the SBA have been cartoonish at best. Nobody in their right mind goes to the SBA for anything. They are so useless and bad that words cannot convey my disgust and loathing for that organization.
Amen Brother! From one business owner to the next...Mer
When starting my small business about a year ago, I went to the SBA website... and after reading and clicking, I remember thinking "what's the point of the SBA, they tell a lot of stories, but there is no useful instructional informatio
I left that and found my state's website (CA), which was way more helpful.
The facts show that the SBA's budget and staffing have been reduced under Bush more than any other federal agency. It is no secret the contempt that Bush has for the SBA and small businesses in general. The SBA's response to the 5% woman-owned set aside law, which has never been implemented, is a joke, this is merely a symptom of the large problem, which is that large and Fortune 500 companies have been receiving billions in small business contracts every year.
Check out www.asbl.c
The bigger concern now is the Rothe decision from last month that found that minority-owned business set-aside contracts are unconstitutional. This decision could dismantle all of the small business programs and leave small businesses to compete head to head against large and multinational firms. Unless Congress decides to act, all small business programs may be over.
The SBA, especially under the Bush administration, has done nothing but service huge corporations. They made the very name of the agency a travesty.
Your right! The money went into the corporate leaders pockets...
It's not surprising that small business owners aren't experiencing any sense of support from the SBA. It seems that the SBA has been devoting a significant portion of its allotted resources to Big Fat Fortune 500s and other large businesses, rather than the small businesses implied by the name "Small Business Administration".
http://www
Cheney & Bush's friends and relatives all own or run Big Companies, so the SBA's resources had to be redirected to BushCo cronies, like every other agency and aspect of government under the Cheney regime.
Can we get a loan? we want to open a couple of businesses. If at all possible please contact me. thanks
Find the perferred SBA lender in your area.
Write a business plan.
Get between 10% and 30% of the amount you need to start as collateral.
Talk to your preferred SBA lender. Most will help u through the process.
There are TONS of programs run by the SBA, find one that matches what you want to start.
The SBA does not loan money, they guarantee upto 90% of the loan given to you by that preferred SBA lender. usually 10% is sufficient collateral.
Haha you gotta be kidding. The SBA is useless. I think they put in wind up dolls behind those desks. Most of the people I have talked to in the SBA dont know sh#t from shinola.
You must be running for president, because you are misleading the public here.
Unfortunatly, your better off starting your business's yourself. Don't waste precious time on the SBA. Good luck and Merry Christmas.
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