SBA Administrator Karen Mills

Thursday, September 17, 2009, 2:32pm MDT | Modified: Friday, September 18, 2009, 12:28am
DBJ Q&A with SBA Administrator Karen Mills
Denver Business Journal - by Bruce Goldberg
The Denver Business Journal spoke with Karen Mills, the 23rd administrator U.S. Small Business Administration, prior to her keynote speech Thursday at the U.S. Hispanic Chamber of Commerce Convention, taking place this week at the Colorado Convention Center.

Mills took office April 6, at a time when the American Recovery and Reinvestment Act, the federal stimulus program, gave the SBA $730 million to help promote lending to small business.

As of Sept. 11, the SBA had started programs for most of that $730 million. The SBA approved $7.5 billion in loans since Feb. 17, and the agency says loan dollar volume has jumped 60 percent in the 7(a) and 504 programs under the stimulus.

Mills was a co-founder and managing director of Solera Capital. Most recently, she was president of the MMP Group, which invested in companies in the consumer products, food, distribution, textile and industrial components sectors.

She also has consulted in the United States and Europe for McKinsey and Co., a management consulting firm, and product management for General Foods.

In 2007, Maine Gov. John Baldacci appointed her chair of the state’s Council on Competitiveness and the Economy. She also served on the Governor’s Council for the Redevelopment of the Brunswick Naval Air Station.

Q: You took over SBA during very tough times. Is there more of a sense of urgency to act?

A: Yes. ... The sense of urgency is, the No. 1 priority is to implement the recovery act, and get the money into the hands of the small businesses. Because they were just frozen, and the banks were frozen, and they could not survive without some kind of liquidity. We knew we had the right formula, we saw this go back up, we got it out to our network, our field operations. We have 1,000 banks that have come back, that are lending now that weren’t lending before. Half of them had not made a loan going back to 2007. So there are 1,000 additional banks, more points of access.

Q: Still, a lot of business owners say they can’t get loans.

A: We’re seeing that small businesses are beginning to get back in the market for credit, and banks here in Colorado are beginning to make those loans. We still have a ways to go. And this is why it’s very important we stay lending, because with our guarantees, banks can sell those loans in the secondary market. The other thing that happened that we were able to fix is that the secondary market for SBA loans also died, froze, in October [2008]. Now, it’s back functioning. Now, a bank can make a loan, sell the loan on the secondary market at a pretty good premium — premiums are back — take the money and make the next loan.

So things are easing.

Q: What areas of the SBA do you most want to improve?

A: The first priority was to implement the recovery act. The second priority was to reinvigorate the SBA. We picked two particular areas. One is to improve our information technology, and the other is to invest in people with more training. We’re very excited about that. ... Small business is vital to our recovery. If small biz doesn’t get back on their feet, we’re not going to come out of this recession, and in the future, if we’re going to be competitive in this country, it’s going to be the small, innovative companies that are growing. So everyone has realized, we’re really at the heart of the economy.

Q: What has President Obama said to you about this?

A: We have a president who really believes in small business, who understands that small business is the path to middle-class prosperity, and for women-owned companies, minority-owned and veteran-owned. When you have that kind of commitment from the top, and have sort of a shared economic view that these are vital forces ... When I interviewed with him, he made it clear how important it is that small business has access to the tools it needs.

Q: What is the top concern of small business owners?

A: Surveys are pretty clear about it: The No. 1 concern of small business is access to affordable health care. Right now, small businesses are paying 18 percent more than large businesses for the same health care — when they can find it. Only 50 percent of small businesses with between three and nine people provide health insurance to their employees. This is untenable. ... I think the atmosphere is getting much better [for health care reform], as people see this can’t wait.

Q: Are you traveling a lot for the job?

A: I travel every week. I’m a believer that you have to be in the field. And we have SCORE partners — retired executives that we partner with — and 900 small business development centers around the nation.