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Karen Gordon Mills is new SBA Administrator

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Karen Gordon Mills, confirmed earlier this month as the new SBA Administrator, has a unique set of qualifications for the position: Baker Scholar at Harvard Business School, General Foods product manager, McKinsey consultant, Chair of the Council on Competitiveness and the Economy for the state of Maine, and co-author of a Brookings Institute paper on the importance of industrial clusters in bolstering U.S. competitiveness. According to the Institute for Strategy and Competitiveness, “clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that are present in a nation or region. Clusters arise because they increase the productivity with which companies can compete.”

Obtaining a Small Business Loan Should Become Easier

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President Obama and Treasury Secretary Geithner’s March 16th announcement of plans to “Unlock Credit for Small Business” should have a very positive impact on small business lending in the U.S. Specifically, they have temporarily increased the Small Business Administration 7(a) loan program guarantees from 75% to 90% of the loan value, as the lower percentages had not been large enough to give banks the confidence they need to lend. As most small business owners realize the first time they apply for a small business loan, the SBA is not the actual lender, there still needs to be a lending institution that is willing to take them on as a credit risk. This recent action by the Obama administration shifts more of that risk to Uncle Sam, and should have a very favorable impact on how lending institutions view the risk-return of small business loans, increasing the flow of credit to this essential part of the U.S. economy.

SBA Reconsidering Definition of Small Business

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The Small Business Administration has holding hearings, starting in St. Louis and Seattle, as it considers changing the definnition of small business, the Seattle Times reported. Under current rules, the definition of a small business ranges by industry, but is generally defined as having 500 or fewer employees. Last summer, the SBA withdrew a proposal that would have defined the limit of “small” at 100 employees. Hearings are to continue in New York, Chicago, Los Angeles and other cities through the month of June.

SBA guaranteed lending in Westchester County Triples

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Loans guaranteed in Westchester County, New York by the Small Business Administration increased by 187 percent to $23.4 million, for the six-month period ending March 31, 2005, compared to the same period one year earlier. An SBA official speculated that the economy in Westchester and nearby counties is stronger than elsewhere in New York. SBA lending increased 83 percent in the same time period for the total New York district.