The SBA Chief Comes Out Swinging

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One complaint we got, especially from minority and women, was that they had the know-how but not the "know-who." So we introduced them to buyers from every federal agency and Fortune 500 companies.

In the last two and a half years we have set up 40,000 appointments that have generated millions of dollars in new contracts, and fully 50% of those appointments were women and minority owned businesses. We are definitely reaching out and we still think there is more to do.

Chapman has frequently criticized the SBA for creating policies that allow money set up for small businesses to go to large companies, going so far as to sue the SBA. How do you respond?

[Again] we are giving $69 billion -- more loans than the $50 billion that we did four years ago. The contention is made because many times a small business gets a contract as a small business -- and then outgrows the size standard. That is a good thing -- we want them to grow.

Another thing that happens is that a Big Business buys a small business and when they are taking it over some of those contracts were for a small business and they are not eligible for them. When a small business gets a contract they get it for the life of the contract.

[However], there is no wholesale process of setting aside procurements to big businesses. Those that continue to assert that don't understand or don't want to understand the reality on the ground -- $69 million went to small businesses as classified by [SBA] size standards.

The SBA's handling of loans following 9/11 and Hurricane Katrina has been a point of contention. How do you answer the critics who say that money was not necessarily given to those adversely and directly affected?

We do two types of loans: working capital, that is done through banks directly, and during times of disaster.

After 9/11, Congress approved a supplemental terrorist activity or Star loan as an economic stimulus. We did exactly [what] they asked us to do: to make loans to small businesses in the U.S. that could justify that their business was [affected].... The definition was very general -- any small business affected by the downturn in the economy following 9/11. There was a lot of confusion and misreporting about the inaccuracies and misconceptions.

[In regard to Katrina loans], we did $1 billion worth of loans to small businesses affected in the Gulf areas and we've done over $3 billion to victims throughout the area. We will surpass $4 billion in loans.

We're still not satisfied. We are producing $70 million in loans a day. We are working seven days a week in two shifts. The bottom line is that this is the biggest response that the U.S. has ever [undertaken].

Finally, Chapman contends that ultimately the Bush Administration intends to shut down the SBA and is cutting its budget to the bone. Is that the plan?

I have been here for five years and I have never heard a U.S. President talk as much about small business as Bush has.

[In terms of the budget], nothing is further from the truth. We have the 2006 budget in place, and I am already working on the 2007 budget and after that the 2008 budget. The President has been a champion for small business. I don't remember a President with as aggressive a small business agenda. For someone to say otherwise they either don't care about small business or do not have knowledge about the facts on the ground.

Perman is a staff writer for BusinessWeek.com in New York.