Mills Vows to Reinvigorate the SBA

Advocates and politicians hope new chief Karen Mills acts quickly to help small business owners and reform the Small Business Administration

By Jeremy Quittner

Editor's note: This is an updated version of the story.

President Barack Obama's pick to head the Small Business Administration, Karen Gordon Mills, was approved on Apr. 1 by the Senate Committee on Small Business & Entrepreneurship in a cordial hearing that emphasized the dire straits of the nation's small businesses and the need to work rapidly to help them. The full Senate unanimously confirmed her nomination April 2.

"Karen Mills is precisely the right person at this critical juncture for our economy to assume the reins of the agency responsible for small businesses, America's preeminent job generators that will lead us out of our economic morass," says Senator Olympia Snowe (R-Me.), ranking committee member, who recommended Mills for the post. "She promises to be a strong and vibrant advocate for our nation's 27 million small businesses, and I look forward to partnering with her on bold initiatives to tackle America's economic problems."

Mills, 55, brings experience from both private capital markets and the public policy arena. Small business advocates say she will enhance the agency's partnerships with elements in the public and private sectors, address shortcomings in SBA programs intended to help women and minority small business owners, and improve small business access to government contracts. They also hope Mills will push the agency to be more responsive to small businesses that seek credit: The SBA backed only 69,434 flagship 7(a) loans for the fiscal year 2008, down 30% from 2007.

A Harvard-Educated Venture Capitalist

"I think [Mills] can be highly successful in transforming the agency by simply focusing on collaborative partnerships with other agencies and departments, as well as business associations and private-sector partners," says Karen Kerrigan, president of the Small Business & Economic Council in Washington. Small business advocates and politicians have also been pushing to increase the SBA's stature by making the administrator a Cabinet Secretary.

Harvard-educated, with both an economics degree and an MBA from her alma mater, Mills founded two venture capital firms, MMP Group in Brunswick, Me., and Solera Capital in New York. More recently she chaired Maine Governor John Baldacci's Council on Competitiveness & the Economy, where she met regularly with the state's small business owners. Serving on the council also required her to seek bipartisan support for the passage in 2007 of a $50 million research and development bond issue to spur innovation among Maine's small businesses. "She led the effort to raise the funds for the research and development bond issue," Governor Baldacci said in an earlier interview with BusinessWeek SmallBiz. "And people were surprised she got that done without having any earmarks."

America's Recovery Capital Program

Mills nevertheless inherits an SBA that languished under the Bush Administration, which cut its funding by about 26% since 2001 and sliced staff by 18% since 2003. Lobbyist Todd McCracken, president of the National Small Business Assn., says he hopes Mills will deploy her nonpartisan credentials and experience to reach across the aisles in crafting policy. "There is often an antagonistic relationship between committees and the SBA," McCracken says, adding: "She has the strong support of Senator Snowe, which is important because the SBA, more than any other agency, operates on a nonpartisan basis—or needs to."

In the hearing, senators grilled Mills about how she would unfreeze the credit market for small businesses, ensure that more federal contracts go to small business owners, and help them cope with the astronomical cost of health insurance.