WASHINGTON (5/12/14)--Maria Contreras-Sweet just wrapped up her first month on the job as administrator of the Small Business Administration (SBA) and has already set up a goal for the remainder of her term: getting capital to the small businesses that need it.
At an address to the National Association of Guaranteed Government Lenders last week, she said a major part of achieving that goal was to throw more support behind minority-owned businesses.
According to the Department of Commerce, minority-owned businesses with gross receipts of $500,000 or less were three times more likely to be turned down for a business loan than their non-minority-owned counterparts. Loan denial rates for larger firms are twice as high for minority-owned businesses.
"We know that SBA lending to African-Americans, Asian-Americans, Native Americans, Hispanic Americans--and women-owned businesses--can lift up entire communities," she said. "I'm determined to do more to get loans into those underserved communities hit hardest by the recession."
A study conducted by the Urban Institute found that women and minorities are three to five times more likely to be approved for an SBA-backed loan than a traditional loan because of the guarantee the government provides. Four of every five loan applications received from Hispanic and African-American business owners are for $150,000 or less.
Contreras-Sweet also said the SBA plans to roll out SBA One, which she described as "TurboTax for business lending," that will provide one set of forms, services and data management to thousands of SBA lending partners.
"We'll create a single portal that's a one-stop shop for eligibility, underwriting, closing, loan modification, servicing, and purchase. It will automate the upload of documents. It will automate the generation of forms. It will automate credit scoring. And it will automate electronic signatures," she said. "SBA One will streamline and simplify our lending process."
The Credit Union National Association supports a goal of increasing small business access to capital through the reduction of statutory and regulatory impediments, such as enabling full credit union participation in the SBA's Section 504 programs.
CUNA has urged Congress to increase the member business lending (MBL) cap to 27.5% of assets from 12.25%. CUNA has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.