February 12, 2014
By Bob Coleman
Editor, Coleman Report
Playing off SBA Administrator Phil Lader’s quote 20 years ago that “This is not your Father’s SBA,” Maria Contreras-Sweet emphasized the point in her Senate Confirmation hearing today that SBA continues to evolve its programs to support Main Street.
And she wants to be part of that change.
Check out this clip of her talking about community banks and SBA 7(a) lending, and her support of a SBA 504 refinance bill.
Senator Mary Landrieu: Our committee was very active, both Republicans and Democrats, in trying to expand by encouraging many of our community banks. There are about 7000 in the country. When I took over as chair five years ago only 1,300 were participating in the small business programs. Now I am proud to say that there are 2,400 SBA lenders around the country, you being one of them. What could you share with us about what some of your ideas might be to even expand that to more community banks that could be partners with the SBA? What do you think we the federal government could do better to either minimize unnecessary regulations or paperwork to encourage banks to really become partners with us, because they are the ones that know the customers, they are the ones that are in the communities. How do you see community banks particularly being a partner with you in your new role?
Maria Contreras-Sweet: Thank you Senator for your overall leadership in this regard. Specifically let me share with you what I have been experiencing. What I see is large and small financial centers have been addressing the area of small business loans to families and entrepreneurs across America but indeed it is the small local community banks that really benefit from this product the most. Unless you have a specialized officer in the bank that really understands the covenants, the warrants, the underwriting, and the standards that SBA promulgates, it is somewhat daunting and a little overwhelming. You want to make sure that when you are pursuing a SBA loan, with the guaranty element, you want to make sure you are not sacrificing the 50%, 75%, or 90% guaranty depending on the product. What I have been pleased with is SBA has already made some progress on that. The introduction of SBA One for example. The way that they are clearing up the paperwork, streamlining, delegating authority to so many of these banks. For example ours is a Preferred Lender so we get the benefit of delegated authority. I already see great improvement. To the extent that we can get the word out, there is also push and pull marketing as I like to call it. There are ways to get the public more informed. when I approach a prospective client or an existing client about an SBA product, they are not fully aware of it. We take a lot of time to consult them to walk them through and explain to them this alternative. I think the SBA can even market the products more, we can brand the SBA so people are comfortable with it and understand that this is not your grandfathers SBA. I think it will go a long way in encouraging local communities and local community banks to do more of that work.
Senator Maria Cantwell: One of the things in that Small Business 2010 Jobs Act was the 504 refinancing program. That refinancing expired in June of 2012. I wanted to have your thoughts on whether you support re-authorizing that section of the bill.
Maria Contreras-Sweet: Thank you for speaking to 504, it is an important product. To the extent that you were able to offer up the re-fi program, let me tell you from my personal experience it was very well received. At the very beginning, I must say, we were trying to work our way through, trying to understand it a little bit. But once we got it down is about when it sunset. We were a little disappointed about that. As I understand it now, the President is supportive. Coming from the community I understand the importance of the product. If I am confirmed I am willing to work with you in ways to continue to fill that gap.
Senator Maria Cantwell: So you would support re-authorization of that?
Maria Contreras-Sweet: If given the opportunity, I support the product. I think it is an important tool for American’s today.
Opening Statement by Maria Contreras-Sweet
Watch the full Senate Confirmation Hearing