SBA administrator faces a tough crowd at House Small Business Committee
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SBA administrator faces a tough crowd at House Small Business Committee
By Kent Hoover
Washington Bureau
September 10, 2014
SBA Administrator MariaContreras-Sweet got a taste Wednesday of what awaits her from the HouseSmall Business Committee, which doesn't want the Small Business Administration to do anything that ithasn't authorized.
Contreras-Sweet got off relatively easy since it was her first appearance before thecommittee. Chairman SamGraves, who will step down as head of the committee at the end of thisyear, scolded the SBA for making policy changes, such as a new credit scoringmodel for loans of under $350,000, without going through the normal rulemakingprocess. This means the agency ignored "valuable input of those most affected,"the Missouri Republican said.
"Additionally, the agency has a history of pursuinginitiatives it creates on its own, while ignoring congressionally mandatedactivities," Graves complained.
The SBA has failed to fully implement reforms to governmentcontracting programs that were enacted two years ago, "while resources insteadhave been devoted to potentially duplicative, unauthorized entrepreneurialdevelopment programs dreamed up by the agency with little public input," hesaid.
Looking over the SBA's shoulder is the committee's mainresponsibility, and the House committee in recent years has been tougher on theagency than its Senate counterpart. For the most part, small businesses benefitfrom this oversight the SBA is a small agency with limited resources, so it'simportant that it gets the biggest bang for the buck.
Wednesday's hearing shows the SBA still has work to do in anumber of areas, including getting more loans and federal contracts into thehands of women-owned businesses.
Rep. NydiaVelazquez, D-N.Y., challenged Contreras-Sweet on this point. Since 2010,when Congress increased the maximum size of loans available through the SBA'sflagship 7(a) loan program, the share of loan dollars going to women-ownedbusinesses has declined, Velazquez noted. That's because male-owned businessesare disproportionately benefiting from the larger loans, she said.
So the congresswoman, who has been the top Democrat on thecommittee for more than a decade, pressed Contreras-Sweet about what the SBAadministrator was going to do to reverse this slide in lending to women-ownedbusinesses.
Contreras-Sweet said there's "no one silver bullet" to servingany particular market, but she said the SBA's emphasis on increasing the numberof small loans it backs should help more women-owned businesses get financing.
That wasn't good enough for Velazquez, who toldContreras-Sweet to review the data and come back with "specific steps" toincrease lending to women-owned businesses.
Velazquez also had concerns about government contracting. TheSBA is in charge of working with federal agencies to meet Congress' goal ofawarding at least 23 percent of their contracting dollars to small businesses.This year, the SBA finally was able to announce that the goal had been met, butthis achievement came with some asterisks. For example, many types of contractsare excluded from consideration when agencies calculate how much of their moneywent to small businesses.
Plus, agencies keep counting some contracts being performed bybig businesses as small business contracts, Velazquez said.
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