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Karen Mills was confirmed as head of the Small Business Administration (SBA) Thursday. Her nomination drew widespread head-scratching because of her background as a venture capitalist, rather than as someone familiar with small business needs.

The SBA is supposed to be the federal government champion of small businesses. According to its web site:

The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.

But to many entrepreneurs, the SBA is a joke. The main thrust of the SBA has been its loan program, but these loans were used by only 4% of businesses in 2006. Most small businesses would never need or qualify for this type of funding. They need available micro-loans, a simplified tax code, reduction in governmental bureaucracy, and affordable health care.

And Ms. Mills’ background is with venture capital, early, private equity funds that typically start lending at $1 million or more, and take an ownership position in their investment. Yet Ms. Mills seems to be trying. In her confirmation hearing, Ms. Mills stated:

Small business is the heart of the American economy. There are over twenty-six million small businesses in this country and they create 70 percent of the new jobs. This means that to find our way out of the current economic crisis, we have to find ways to help small businesses stay in operation and even expand. . . .

If confirmed I will work on three important fronts:

First, the SBA must continue executing the plans in the Recovery Act and get capital flowing again through the core SBA loan programs.

Second, we must reinvigorate the Agency by attracting a strong and passionate leadership team and investing in the information technology the agency needs to operate.

Finally, we must &endash; and I will &endash; act as an advocate for small business across the administration. As Chair Landrieu and Ranking Member Snowe have suggested, I will coordinate with other Agencies, including Commerce, Labor and Energy, whose programs also affect small businesses.

I hope she can make the SBA relevant to small businesses and spur the economy from the ground up.

Tags: Karen Mills, loans, SBA, small business, Small Business Administration, venture capital

This entry was posted on Monday, April 6th, 2009 at 8:09 am and is filed under business law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.