Some mainstream banks are not doing enough to grant small businesses’ access to financing, Small Business Administration head Maria Contreras-Sweet said at the ongoing eMerge Conference, and that means the SBA has to do more to pick up the slack.
According to Contreras-Sweet, there has been a “dramatic change” among small business owners thanks to an all-time high level of confidence. That outlook has led to two out of three net jobs in the nation being generated by SMEs, and that movement, she added, is spreading “from young girls, millennials, to hard-core entrepreneurs. Everybody’s thinking about starting their own business today."
But that confidence and a renewed interest in establishing small businesses means that demand for working capital is rising. In response, Contreras-Sweet said that the SBA is turning to more “aggressive” means of increasing SME lending.
These means include three initiatives: recruiting more credit unions and online alternative lenders, nixing any fees for SME loans of $150,000 or less, and streamlining its form and documentation requirements make the application process less complicated.
Contreras-Sweet also highlighted several of the most successful companies that took advantage of the SBA lending program in their earlier years, including FedEx, Nike, Apple and Ben and Jerry’s.
The SBA’s remarks at the eMerge Conference, sponsored by CNBC, aimed to address certain criticisms of the federal program that its small business loans are too expensive and burdensome in its application process. In spending with CNBC in a separate interview, Contreras-Sweet added that there are five key programs that the SBA has to offer small business owners who may be unaware of the services.
These include LINC, the SBA’s online loan matchmaking service; Free Business Counseling; Win a Contract, which helps SMEs learn the best way to secure a government contract and join corporate supply chains; the Small Business Innovation Research Program, which awards research grants to SME innovators; and the Administration’s new Spanish-language website, a response to the rising population of Hispanic entrepreneurs. According to the SBA, this demographic yields nearly half a trillion dollars every year to the U.S. economy.
The SBA’s public push of its lesser-known services comes after Contreras-Sweet announced last month that the week of May 4-8 would be declared Small Business Week with a 2015 theme of “SBA: Dream Big, Start Small."