Amid the partisan crossfire, it's easy to lose sight of some basic issues: Does the SBA still work? Does it even matter? Is Port Equipment the rule or the exception? The SBA has certainly stumbled over the years, but the debate in D.C. is abstract, complicated by politics and by the contradictions embedded within the SBA's mission. There seems to be a great deal of confusion about what the agency actually does. So I went to a representative district in Virginia to find out whom, if anyone, the SBA really helps.
"They're going to think i'm retarded"
Late on a Wednesday night last May, a small troupe of staffers from the SBA's Richmond office gathered at a cramped television studio on the near northwest side of town. They were there to take part in one of the office's latest marketing initiatives: a six-week recurring role on Sharing It With Bee Bee, a public affairs show on Channel 95.
In the show's first segment, the SBA's Luis Garcia and two counselors from the Service Corps of Retired Executives (which is funded by the agency) crowded around Bee Bee White, the cherubic mistress of ceremonies. Sharing It With Bee Bee was not exactly The View, nor even Charlie Rose. There were three cameras in the studio but nobody manning them, so viewers channel surfing on the far shores of the city's cable system were treated to static shots of the whole panel behind a plain wood veneer desk --no cuts from one speaker to the next, and however ready the guests might have been, no close-up was available. Bee Bee appeared a little nervous; she stumbled over her guests' names, and in a stilted voice posed questions that they themselves had written. Still, she was earnest, and the SBA visitors were game.
"Now, Fred, I understand you have three secret weapons," she said, setting up SCORE volunteer Fred Esposito.
"I do," he replied, proceeding to read off advice honed in 10 years of counseling: Wrap yourself in a "bubble of protection," he suggested. Profit from the counsel and credibility of an advisory board. Be active and generous in the community so you earn the right to make the sales call.
After about 15 minutes, Bee Bee opened up the phones. "I have a question for Fred," the first caller announced. "How often should you review your business plan?" A slow pitch right over the plate--so perfect there were whispers off camera that maybe it had come from a ringer. In fact, it was the second caller who turned out to be a plant. She, too, directed her question to Fred: "I was wondering, Mr. Esposito, what was the latest on the little chocolate shop that opened up recently." He grinned. "Yes--another one of my success stories that hasn't hit the newspaper yet is Bootsie's Chocolate. My wife is one of her best advocates." So she was--in fact, she was on the line now.
So it goes on community access television. These days, the SBA takes its publicity where it can find it. The Richmond District Office, one of 72 such offices, is responsible for administering the array of SBA programs across Virginia, save the area closest to D.C.--92 counties and 36 cities over 38,630 square miles. Traditionally, the most visible of this work has been guaranteeing loans, especially in the flagship 7(a) program, which backs general-purpose credit (see table, here). Staffers here also manage the technical assistance provided by organizations like SCORE, and counsel some businesses on their own. Ask anyone who works with the Richmond office--lenders, business counselors, local economic development officials--and most will speak of the people there with great regard. The district director, Ron Bew, has an unusual pedigree: a long career in commercial banking and then a political appointment at SBA headquarters as head of the Capital Access division. People who know him laud him for making the office more customer-driven. His staffers, they say, like the work they do and really want to help small businesses.
Still, pride in work is one thing; job satisfaction is quite another, and at the SBA a chasm has opened between the two. In the past 10 years, the agency has been radically transformed, spinning off many district functions to lenders and central offices. Banks sign off on most 7(a) loans now, and other loans are approved by SBA national centers. It's unclear whether this is good or bad for borrowers--national banks, especially, support the consolidation; some local lenders and SBA staff say jettisoning the personal relationships makes it tougher to negotiate deals and workouts. What it does mean is that fewer SBA employees work in the Richmond federal building, and the underwriters who remain find themselves with a different job description.
This alone, however, does not explain why almost half of the 30 positions that existed in Richmond five years ago have disappeared, or why, according to various surveys, SBA employees have just about the lowest morale in the federal bureaucracy. No agency has had its operating budget shredded as mercilessly as the SBA's (most agencies have gotten more money), and the cuts of the past six years have struck at all aspects of the agency. "The infrastructure is decaying," says one staffer. "Copiers constantly breaking down, 10- to 15-year-old fax machines."
Particularly hard hit has been the 8(a) program, which targets disadvantaged companies with business counseling and federal contracts. In recent years it has become "harder to keep up with servicing the firms," says Tammy Proffitt, who supervises the program in Richmond. In 2005 two of the four 8(a) business development specialists took early buyouts, leaving just Proffitt and the two remaining specialists to mentor about 260 companies, offering advice and referring them to procurement officers in the government. She wants to be a partner to her clients, "able to really look closely at their businesses and to know them well," she says. "But once you're servicing a hundred firms, that's almost impossible." Proffitt has since hired a third business development specialist, but it's a small improvement. As far back as 1980, when the average counselor in the region managed 17 companies, the General Accounting Office worried that the counselors were spread too thin.
