What's happening to our nation's 27 million small businesses
What is going to happen to our nation's 27 million small businesses, and who is Obama selecting to fix America's economic problems.
Obama is calling on Karen Mills, 55, Harvard-educated, with both an economics degree and an MBA from her alma mater. More recently she chaired Maine Governor John Baldacci's Council on Competitiveness & the Economy, where she met regularly with the state's small business owners. Serving on the council also required her to seek bipartisan support for the passage in 2007 of a $50 million research and development bond issue to spur innovation among Maine's small businesses. Mills has founded two venture capital firms, MMP Group in Brunswick, Me., and Solera Capital in New York.
America's Recovery Program
Mills will inherit an SBA which has reduced staff by 18% since 2003 and had its funding cut by about 26% since 2001.
Two programs stand out, the 504 and the 7a loans. The 504 loans are being funded. I think the SBA loans that are really dropping off are the 7A loans. These loans are held by the banks but guaranteed by the SBA. Many banks would originate these loans and then sell them in the secondary market. There is no secondary market. The 504 is a little different animal and is directly funded by the SBA. The government then bundles these loans and sells them off. The spread has increased but these debentures carry a full guarantee of the Federal government.