<<Back to Article National Association of Government Contractors www.governmentcontractors.org SBA reports on progress after ranking last in employee morale Jan 30, 2008 Steve Preston head of U.S. Small Business Administration head delivered what he called a “State of the Agency Address” outlining the agency’s progress in the past year and a half. Administrator Preston, who came to the agency in mid-2006, described some of the key issues within the agency and then outlined the changes that have been implemented to address those problems. Last year, SBA ranked last among the federal agencies in terms of employee morale, which many attributed to a period of restructuring at the agency. Preston also cited a lack of cooperation among varying SBA responsibilities as well as the agency being overwhelmed by the 2005 Hurricanes: Rita, Wilma, and Katrina. Preston went on to note that 368 banks have quit the SBA lending programs in the last two years. Although many believe increased fees in the 7(a) loan guarantee program and burdensome lender oversight fees have caused banks to drop out, Preston attributed the decrease in bank participation to the complexity of SBA rules, slow turnaround times, paperwork burdens, and the lack of support when banks have issues. In spite of the negatives, Preston noted highlights in some of the key areas of reform. In the last fiscal year, more than one-third of the 110,000 loans SBA guaranteed went to companies in under-served markets. As shown in studies from the Urban Institute, SBA has been effective in reaching people that are not as likely to get credit from conventional loans. Nearly 23 percent of SBA loan dollars go to start-up firms compared to around 6 percent of conventional small-business loan dollars. More than 28 percent of SBA loan dollars go to minority-owned companies compared to 5 percent of conventional small business loan dollars. Preston described the improved disaster response plan SBA has implemented and the new loan products that he hopes will encourage the banking community to work with SBA. He said that SBA is rewriting their Standard Operating Procedure—the playbook SBA gives banks to understand its programs—to simplify the process for banks. Preston also mentioned efforts to improve the bank oversight process and small-business support at processing centers. In regard to federal contracting, Preston said the SBA was working to streamline the paperwork for small businesses participating in its contracting programs, and will be increasing its number of Procurement Center Representatives. Preston also said that the SBA was increasing accountability through its recertification process and annual scorecard. Preston reiterated the Administration’s policy on government’s role in creating an environment where small businesses can grow. He called for passage of NSBA-opposed Associated Health Plans and also urged small-business tax parity when it comes to health insurance costs—a top priority for NSBA. Preston also touched on the importance of exporting and the need to make President Bush’s tax cuts permanent. Article URL: http://www.governmentcontractors.org/articles/a.508.asp © Copyright 2005-2008 The National Association of Government Contractors