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Maria Contreras-Sweet—SBA Administrator—spoke last week at the Center for American Progress in Washington D.C. regarding entrepreneurial equality. She emphasized the growing number of women and minority entrepreneurs in the United States while explaining new initiatives on behalf of the SBA.
President Obama appointed Contreras-Sweet as SBA Administrator and gave her the tasks of promoting the agency to new heights, maintaining the effectiveness of the agency, and creating a strong voice for small businesses throughout the United States.
Under the direction of Contreras-Sweet, the SBA plans to strengthen businesses through multiple initiatives that help small businesses in general, minority-owned businesses, and simplifies processing times.
One initiative confronts the issue of rapidly evolving technology by modernizing preexisting systems into a more simplified format. For example, the process of documenting loans has previously been arduous and typically called for specialists. In its place, ‘SBA One’ was created. SBA One is a lending platform that is user-friendly and expedites the process of documenting and generating forms for loans. Fax machines will no longer be needed and electronic signatures will be allowed, speeding up processing time significantly to not only save money but help produce more loans for small business owners.
In addition, a new credit score model has been created based off careful research and testing. The model combines the business and personal credit score of an entrepreneur which means loans will be based on risk characteristics instead of socio-economic factors. This model will soon become available to SBA lending partners if the loan is $350,000 or less.
As previously mentioned by Contreras-Sweet, the number of minority entrepreneurs is steadily growing in the United States. Statistics show that loan applications from African-American and Hispanic-American business owners are for smaller amounts–$150,000 or less. The SBA is improving the likelihood that these types of loans will be accepted by asking for a partnership between banks and microlenders if banks cannot say “yes” to a borrower. Involving microlenders or Community Advantage lenders in addition to banks will increase the chances that underserved business owners will receive the loans they need while receiving assistance throughout the process.
The SBA will also enact the Boots to Business Program which will help 15,000 transitioning service members start their own businesses. Veterans will receive counseling and training through the expanded program to help them achieve their dreams of owning their own business.
However, veterans are just one of many demographics that the SBA seeks to help. Contreras-Sweet is working hard to give women equal access to federal contracting. Women-owned businesses have a strong presence that grows each year. It is clear that Maria Contreras-Sweet’s speech at the Center for American Progress has revealed countless initiatives that will benefit people of all colors, genders, and backgrounds. Although the initiatives are abundant, Contreras-Sweet has revealed that they are only the beginning steps to creating a modern SBA that keeps up with the evolving times.