Cutting government red tape and helping increase funding for small businesses are among the tasks small businesses are hoping President Barack Obama’s nominee, Maria Contreras-Sweet, to head the Small Business Administration, will tackle once she is confirmed.
Cutting government red tape and helping increase funding for small businesses are among the tasks small businesses are hoping President Barack Obama’s nominee, Maria Contreras-Sweet, to head the Small Business Administration, will tackle once she is confirmed.Jacquelyn Martin/Associated Press

The SBA needs to get banks to lend more, help small companies win more federal contracts and work toward easing regulations, they say. And it needs to get the word out to companies about what it has to offer.

This month, Obama nominated Contreras-Sweet to head the agency tasked with helping Americans start, build and grow businesses. She’s worked with small companies as head of the California Business, Transportation and Housing Agency and is co-founder of Los Angeles-based PROAMÉRICA BANK, whose customers are small and medium-sized companies.

Small business owners may be looking to the next SBA administrator for help making their companies stronger, but the role reaches into job creation and the health of the broader economy. More than 99 percent of the 27 million companies in the U.S. are small businesses. They employ about half the nation’s workforce.

The new administrator will face ongoing challenges like the government’s inability to meet its goals for small business contracts, banks that don’t want to lend to small businesses and pressure to aid the slow economic recovery. The new SBA head must attempt to accomplish this with the smallest budget of any federal agency. The SBA’s most recent annual budget was $929 million compared to $573 billion for the Pentagon.

Since August, the SBA has been run by acting-Administrator Jeanne Hulit, the agency’s former head of its Office of Capital Access. She would not comment for this story, according to SBA spokesman Terrence Sutherland.

Contreras-Sweet was not giving interviews while her nomination was pending, said Bobby Whithorne, a spokesman for Obama.

Make Uncle Sam a better customer

Contracts with the federal government are a huge source of revenue for small businesses. But small company owners and members of Congress complain government agencies don’t do enough to ensure more contracts go to them. The government has a goal of granting 23 percent of contracting dollars to small businesses. It hasn’t reached that level for seven years. Small business owners want the next administrator to make sure big companies subcontract work to small ones.

The SBA needs to work harder to help small businesses in all industries get contracts, said Penny Chuang, owner of Adventium Marketing & Design in New York. The agency, which mentors socially- and economically-disadvantaged owners, has done well for owners of construction or janitorial firms, she said. But from what she’s seen, graphic designers don’t get as much help getting contracts.

“It’s not a mandate; there’s nothing forcing the agencies to give work to small businesses,” Chuang said.

The SBA also should encourage agencies to award contracts to companies that help to build or rebuild their communities, said Richard Eidlin, co-founder of the American Sustainable Business Council, an advocacy group. While some contracts are allocated to companies owned by women, minorities and veterans, the government doesn’t take into consideration the fact some companies hire local residents to help their communities, he said.

Ease regulations

Small businesses say burdensome government regulations are another issue Contreras-Sweet needs to tackle.

“We feel that’s something where some real headway could be made,” said Dan Bosch, manager of regulatory policy at the National Federation of Independent Business.

Thousands of federal, state and local regulations are created each year. Most are specific to different industries. The cumulative impact of the regulations places a burden on small businesses interfering with their ability to grow and create jobs, business groups say.

The types of regulations small businesses find troublesome vary. One regulation the NFIB opposes is an Occupational Safety and Health Administration proposal to limit the amount of crystalline silica workers can inhale. Crystalline silica, a component of sand, granite and other materials, has been linked to lung cancer and respiratory diseases.

“We’re extremely concerned about what this regulation will to do construction firms and small manufacturers,” Bosch said.

Another proposed OSHA regulation would require employers to create programs to prevent injuries and illnesses in the workplace. The NFIB opposes it because of the expense and amount of paperwork it could create for small businesses.