Mills Vows to Reinvigorate the SBA

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For her part, Mills said the SBA must start to distinguish between typical small businesses critical throughout the country's Main Streets and those whose innovative potential might help lift the U.S. economy out of its slump. "If the SBA can help these people, America will grow," Mills said. She also stressed the need to begin immediately approving bridge financing through the SBA's new America's Recovery Capital program, which will provide emergency short-term loans of up to $35,000 once operating details are hammered out.

Mills' confirmation follows President Obama's recent emphasis on small business in policy decisions related to the bailout. Specifically, he met with some 200 small business advocates and entrepreneurs on Mar. 16 to discuss using $15 billion from the Troubled Asset Relief Program to help unfreeze the secondary market for SBA-guaranteed loans, as well as increasing the guarantee on such loans to 90% from 75% while reducing fees for the 7(a) program. Some banks and brokerages that specialize in selling SBA loans to the secondary market have indicated that they may not participate, however, because they say TARP imposes too many restrictions in return for bailout money, including limits on executive compensation and a partial ownership stake for the government.

Nevertheless, with the stimulus putting more funds in small business hands, advocates also hope Mills will push for minority procurement, which the SBA oversees. "There is an expectation among the Beltway's small business crowd that President Obama will make sure that small business gets its fair share," says Kerrigan. Others, like the National Association of Women Business Owners, say they hope the new SBA chief will pay closer attention to female-owned small businesses that seek government contracts. "It is our hope and expectation that [Karen Mills] will aggressively move the procurement agenda forward for women," says NAWBO's president, Cynthia McClain-Hill, who adds: "Women business owners make up one of the fastest-growing segments of the small business market." In recent years, the SBA has set a goal of 5% of procurements for women-owned businesses, but probably half that amount has actually found its way to them.

Quittner is a staff writer for BusinessWeek in New York.