Does the SBA Still Matter?

The SBA itself hasn't fared nearly so well. Chartered in 1953 to "aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise," the agency's portfolio is bigger than ever. It guarantees more loans, its partners coach more small companies, it helps more contractors negotiate the labyrinthine ways of the federal government, and SBA officials spend more effort stumping for the President's economic policy. Yet the agency's budget (excluding disaster loans) has been slashed by nearly 40 percent since 2001. The SBA, one hears all the time, is "doing more with less."

Meanwhile, complaints of mismanagement, nearly as old as the agency itself, have grown more vehement; in particular, they still swirl around the difficulties processing Hurricane Katrina recovery loans. And small businesses, SBA partners, and advocates in Congress--Democrats and Republicans--fear that in its main line of work the agency is in fact doing less with less. They worry that the retrenchments of the past five years have disproportionately hurt rural and minority businesses and that all borrowers are paying more for services. They note how President Bush demoted the SBA from the cabinet status it enjoyed beginning in the Clinton administration and that the loss of attendant prestige has made it even harder for it to lobby other agencies on behalf of small contractors. On the other hand, to a small but noisy band of ideologues who consider the whole premise of government intervention to preserve free enterprise oxymoronic, all this is hardly enough; they've intensified a campaign to shut down the SBA altogether.

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.

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