It's morning in DC, and the Washington Hilton is overflowing with small-business owners here for the SBA Expo '05. Hector Barreto, in an early AM conversation with Inc., had quite a bit to say about the future of small business.

First, Barreto says the budget he proposed is looking good. "I'm pretty confident we'll get pretty close to what we asked for," he said, noting the budget is with Appropriations now; when it's finalized, he said, is "everybody's guess--we're constantly in budget mode."

I asked him about the cuts to the microloan program, which small-business committee chair Olympia Snowe, among other Congressional delegates, has been a vocal champion of. The argument goes that microloans help out fledgling businesses, while 7a loans, Barreto's preferred vehicle, are bigger, and so only help those who are already established. "The reason for that is we only did 2,300 microloans, so under $35,000 [per], in the U.S. last year," Barreto said. "Something like 700 microlenders do it better and cheaper." He also noted that 7a covered around 24,000 loans of that size, so having a separate program for the microloans didn't make sense to him.

Why, then, is Snowe so opposed? "Olympia's a champion for a lot of things," Barreto said, "and in some states, the microloan entity does a really good job. But we don't see that kind of consistency across the board." Still, Snowe's objections have gained some ground in Congress, and Appropriations could mandate that the microloan program be saved. "We feel that we shouldn't be in that program, but if Appropriations decides differently, we will abide by that, and have a microloan program as we did this year," Barreto says.

Earlier, in a breakfast meeting with about 20 small-business owners, Barreto highlighted a few useful facts about the SBA.

  • The national ombudsman is a guy named Mike Barrera, and if companies are having trouble with anything--getting federal contracts, getting security clearance, red tape--send comments his way.

  • In the coming months, SBA administrator Allegra McCullough will be touring the country to get comments about SBA size rules in 11 hearings. If you want to weigh in, you can send a testimonial to her or attend one of the meetings.

  • Business matchmaking is taking place here at the DC Hilton today. It matches small businesses with buyers at companies such as American Airlines, HP, AstraZeneca, and others; the small businesses have 15 minutes to pitch the big guys on their products and services. The SBA is now doing a pilot 'virtual' matchmaking program, which will use the Internet to connect buyers and sellers.

  • And, in case you weren't aware of it, you can now access all of those red-tape forms through a single site.

Before signing off, let me give props to Hector Barreto's style. At 8 AM, he's in a charcoal suit, sky-blue oxford (with a monogram at the cuff, no less), and a gold tie. Most impressively, his black hair stands about an inch high--without any visible use of product. Bravo.