THE BLOG
01/23/2009 05:12 am ET | Updated May 25, 2011

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.