Shift in SBA Policies May Benefit Local Businesses

The Small Business Administration’s efforts to streamline and automate its processes will open up additional opportunities for small businesses, said Robert Boyd, president and founder of Tulsa-based Boston Street Advisors Inc.
Citing a recent speech by SBA Administrator Steven Preston, Boyd, who is on the National Advisory Council of the SBA, said Preston’s policies will be important locally because “Oklahoma has a lot of small business, especially Tulsa.”
“When we look at Tulsa, we are not really a large company-driven economy anymore,” he said. “Our future is really going to depend on small businesses and how they prosper, and the main thing affecting their ability is access to capital.”
Preston, speaking before the National Press Club in Washington, D.C. Feb. 1, said that when he came to the agency 11 months after Hurricanes Katrina, Rita and Wilma devastated the Gulf Coast in fall of 2005, the SBA “had made significant progress addressing the disaster’s unprecedented challenges by expanding its capacity in three areas: information systems, staff, and facilities.”
“Finally, we dug deep into the operational processes and we found a multitude of issues leading to high error rates, steep backlogs in critical processes and decision-making bottlenecks,” he said, noting the agency began reengineering its processes to address the issues.
When they initiated the streamlined processes, “Most of our borrowers were stuck in a backlog attempting to modify their loan request,” he said. “We reduced backlogs by over 90 percent, and the age of that backlog from 2 1⁄2 months to under 10 days.”
Of the $7 billion in approved loans requested by borrowers, the agency has put $5 billion in SBA disaster-assistance funds to work rebuilding businesses and homes in the Gulf. Approximately $2 billion in additional commitments are available to be disbursed, he said.
Beyond dealing with disaster loans, the SBA lends or guarantees more than $78 billion in loans and investments, Preston said. The SBA helps small business procure a fair share of government contracts, a record $80 billion in 2005. Last year, SBA and it’s technical assistance partners counseled nearly 1.5 million entrepreneurs and its Web site received 26 million hits, he said.
“While SBA will continue to improve efficiency going forward, I would say we are shifting to a heavier focus on effectiveness to ensure that we maximize the impact of our programs,” Preston said.
“In our best-known programs, we guarantee bank loans to small businesses and provide capital to equity funds that invest in small business. These programs enable banks and equity investors to stretch farther in providing capital to small businesses that may not have access to it otherwise,” he said.
Boyd sees a couple of advantages in the programs and streamlined policies for Oklahoma businesses.
“If the capital is closer to the entrepreneur, I think it’s going to allow the rural areas to take advantage of this,” he said. “If the process is streamlined, and it is easier to make the application, then you can spread it out so you don’t have to just rely on the big money center banks.” ?

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