Like her predecessors, Karen Mills has taken up the torch ofincreasing the number of credit unions that are Small BusinessAdministration lenders.
The newly tapped administrator of the agency said she wasencouraged by the number of lenders that have returned to the SBAafter a dry spell going back to 2007. From Feb. 17 to May 1, 361lenders that had not previously made a loan since October 2008 made7(a) loans. Of those lenders, 166 had not made a loan since atleast 2007, according to the agency.
And while there are more than 400 credit unions that are SBAlenders, Mills said she is on a mission to increase those numbersconvinced that they are “important on the ground and as an accesspoint for the kind of borrowers that might be advantaged by havingan SBA loan.”
Credit Union Times recently spoke with Mills about her new role,her top three priorities for the SBA and why credit unions thathave scaled back using the agency's programs shouldreconsider.

Credit Union Times: Since becoming administrator ofthe SBA more than a month ago, the agency has not wasted any timeimplementing parts of the Recovery Act? Are you seeing any tangibleresults so far?

Karen Mills: One of my top priorities is to workquite quickly to implement provisions of the Recovery Act. I havesome good news. [As of May 10], the SBA has approved $2.4 billionin Recovery Act loans, and supported $3.3 billion in lending tosmall businesses. Since the signing of the Recovery Act, weeklyloan dollar volumes have risen more than 25% in the 7(a) and 504programs, compared to the weeks preceding passage of thelegislation. We're still going along at a much-reduced level. We'revery concerned that capital is not flowing to small businesses. Bytemporarily eliminating certain loan fees and raising guarantees onsome 7(a) loans up to 90%, we're starting to see an immediateimpact. Banks have increased their lending 25%. That means muchmore is getting into the hands of small businesses.

CU Times: What do you see as your biggest challengesas the new administrator of the SBA?

Mills: I have three priorities. The first is to getthe Recovery Act provisions out there, which will help get smallbusinesses to lead us out of the recession. Second, to reinvigoratethe agency. It hasn't had an investment priority over the lasteight years. There has been a reduction in terms of budget andpersonnel. We have a robust agenda for small businesses. We want toinvest in our people in terms of growth and training and invest ininformation technology to give them the tools to measure. The thirdpriority is to be the voice of small business across theadministration. Be it innovation, health care discussions orpartnering with trade and energy, we want to work across issues andagencies to give a voice to all of these kinds of policies.

CU Times: As you know, credit unions continue to signon as SBA lenders. However, there are some financial institutions,including credit unions, that have scaled back their participationin the agency's loan programs. What can you say to encourage themto consider coming back?

Mills: One of the positive impacts from the RecoveryAct is since we've implemented the programs more than 300 lenderswho had not made a loan in the past six months have come back inthe programs. About 40% of them had not made a loan since 2007. Wefeel pretty good we're attracting them because the Recovery Actprograms are quite attractive. These [lenders] have been concernedabout factors in the marketplace. So, we've responded with thingslike the 90% guarantee and reducing borrowers' fees. We've made[increasing credit union participation and bringing lenders back] apriority with field operations. Investing in IT to make the processmore paperless. The turnaround times are way down and we continueto make the process more transparent and seamless.

CU Times: When it comes to memberbusiness lending, credit unions are restricted to 12.25% of theirfinancial institution's assets. There have been industry efforts toraise that cap to 20%. What are your thoughts on raising the capand how would it impact credit unions working with the SBA?

Mills: Our role is to be an advocatefor small business. We want to help with any changes that areappropriate that could be beneficial for small businesses.

CU Times: What areas of the SBA'sprograms and operations would you like to see improvements in?

Mills: The three priorities that Imentioned. To me, this is about investing in people and IT. Thoseare the areas of focus on giving the people the best tools toserve. We have some more good news on where are loans are going.Twenty-four percent of funding has gone to rural borrowers, 22% tominority-owned businesses, 19% to women and 9% to veterans. We'reover-indexed compared to other lenders. Our job is to provideopportunities for underserved borrowers that don't have muchaccess.

CU Times: What can credit unions and other lendersexpect going forward to help open up more capital access to smallbusinesses?

Mills: We see credit unions andlenders as critical links to small businesses who want to availthemselves to our borrowing products. We see incredible resourcesout there including [the SBA's] 14,000 counselors as importantlinkages. We want to make sure they are as robust as possible. Wewant them to know about that credit union that might want to becomean SBA lender. We want to have those linkages; no silos. We want tosee more collaboration out in the field. The more connected webecome to lenders who are working in our communities, the moreeffective we will be.
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