Mr. Small Biz Goes to Washington

Nominated to head the SBA, Steven Preston is facing his confirmation hearing. Here is what small-business leaders say about him

By Stacy Perman, Jeffrey Gangemi and Douglas MacMillan

For some time now, the Small Business Administration has found itself under fire. Frequently referred to as the "embattled SBA, " the agency has received criticism and censures for its management of a raft of situations—in particular, its response to the Gulf Coast hurricanes last year and its handling of economic disaster-recovery loans to small businesses following the September 11 terrorist attacks (see BusinessWeek.com, 5/11/06, "The SBA's Iffy Future").

This represents a critical juncture for the SBA. In April, SBA administrator Hector Barreto announced he was stepping down after five years, to head up the Washington (D.C.)-based Hispanic business-advocacy group, the Latino Coalition. The White House's nominee to replace Barreto, Steven Preston, an executive vice-president for Downers Grove (Ill.)-based ServiceMaster (SVM), faces a host of challenges, should his confirmation go forward. Questions have arisen regarding the Bush Administration's commitment to the SBA, particularly in light of proposed budget cuts. While Democrats have called for a complete overhaul of the SBA, some critics have asked for its dissolution altogether.

As Preston, whose nomination has received a mixed reaction, prepares to go before the Senate this week, BusinessWeek.com spoke to industry watchers, policy makers, and entrepreneurs to hear their responses to the nomination of the man who would head up the SBA.

Spokeswoman for Nydia Velázquez (D-N.Y.), ranking Democrat on the Congressional Committee on Small Business

"There's been some concern about [Preston's] lack of experience in working with small businesses. However, he apparently has a lot of experience working in financial management operations, and this could be [an] asset in addressing the multitude of problems facing the agency, from contracting fraud to its inadequate response to Hurricane Katrina, and a lot of mismanagement issues that have prevented them from reaching its full potential in helping small businesses."

Harry Alford, president and CEO, National Black Chamber of Commerce

"I find nothing in this guy's background that says he's a small-business advocate…We need a strong SBA and a stronger focus on small business contracting. "

Representative Marilyn Musgrave (R-Colo.), member of the Congressional Small Business Committee

"I think very highly of chairman Manzullo, and he recommends our new guy, Steven Preston. He's from Illinois, and he has a good background in finance. From what I've heard, Mr. Preston specifically is going to focus on disaster assistance. After the scrutiny that Mr. Barreto got, Steven Preston will be very conscientious in that area. I'm not saying Barreto wasn't. I'm just saying that you get a lot of scrutiny when people are in desperate straits. I think Mr. Barreto has served us well, and I look forward to this administrator. "

Lloyd Chapman, president, American Small Business League

"In my way of thinking, Steven Preston couldn't be more unqualified to head the SBA. He's a Fortune 500 exec—that's the opposite of small business. Appointing a Fortune 500 executive to head the SBA is like appointing the head of Exxon (XOM) to head the Sierra Club. I think that Bush has selected Preston to continue to close the agency with the goal of ending all federal programs for small, women-owned, minority-owned, and disabled-veteran-owned firms. And if he does, he will find, just as Barreto did, that I will be one of his biggest opponents. "

Margot Dorfman, president, U.S.