SBA Administrator Karen G. Mills recently reflected on her time with the administration. (Thomas Brown / Staff)
As head of the Small Business Administration, Karen Mills helped guarantee $106 billion in lending to more than 193,000 small businesses, including two record years of more than $30 billion each. She’s the first SBA administrator since the Clinton years to have a Cabinet-level position. She’ll step down once her successor is chosen.
Q: You’re the first SBA chief with Cabinet-level status in years, and the SBA seems to have more clout under President Obama. What’s up?
Mills: We have a president who understands small businesses and entrepreneurs, and he understands what they need to grow. He understands cash flow. He understands our loan products. When you have a leader who actually understands these things and a Cabinet that works together in a very collegial fashion, something like small business, which needs the partnership of all the agencies, plays a very important role in many of the administration’s efforts.
Q: What are you proudest of?
Mills: I think the most important turnaround we’ve made was stepping into the financial crisis and helping small business get access to capital. I was down in a sawmill outside of Arkadelphia, Ark., which is two flights to Little Rock, then two-hours’ drive. We’re in the mud, looking out at the sawmill. The owners are a man and his wife, and the wife is the bookkeeper, and she says, “You saved our business. I keep the books, so I know we would not have made it if we had not been able to get this SBA loan.”
Q: What does sequestration mean for small business?
Mills: The sequester is very bad for small businesses, but it’s particularly bad for small-business contractors. The Department of Defense is 60 percent of federal contracting dollars, and that’s been hit very hard by the sequester. We know some small businesses will not get a contract, because the dollars aren’t there.
Q: How is Obamacare going to affect small business?
Mills: We know small businesses really care about providing health care. Their No. 1 concern since 1987, aside from sales, is access to affordable health care. Small businesses pay 18 percent more than big businesses for the same coverage, because they’re small, and they can’t diversify over a large enough risk pool. This will change, based on their opportunity to buy health care in exchanges that will pool their risk with other companies and create a larger risk pool.
Q: What SBA initiatives in the past four years haven’t gotten enough attention?
Mills: Our changeover of the SBIC (Small Business Investment Company) program. Sixty percent of the venture capital goes to Massachusetts, California and New York. As I travel around the country, I’m seeing unbelievable companies in Nashville; El Paso; Ames, Iowa; New Hampshire. Where are they going to get capital? SBA investment and innovation chief Sean Greene really took this one on. We have the authority to do $3 billion worth of investments in public-private partnerships. We get experienced investors as our partners. They pick the winners, they raise outside capital. They get $50 million, and we match it with a $100 million debenture. We get our money back, because ... these companies do well. It used to take us 15 months to license someone; now, it takes us five. The year I came, we did $600 million out of $3 billion allocations, and last year, we did over $2 billion.
Q: What advice do you have for the next SBA leader?
Mills: We need to be everywhere. The president ... met someone who didn’t know SBA loans were available, and he sent a message: “Karen, you’ve got to make sure everybody knows about it!” I would say to the next guy: Your job is to make sure America’s entrepreneurs and small businesses have the information about and access to the tools we’ve put forward.
Oliver St. John reports for USA Today.