Let us take a moment to offer a belated welcome to Karen Gordon Mills, who was finally confirmed as the head of the Small Business Administration earlier this month. Her appointment couldn’t come fast enough, as cracks in President Obama’s small business stimulus package are already beginning to emerge.
Ms Mills, who comes to the position after a successful career as a venture capitalist, perhaps does not seem like the ideal candidate for revitalizing the small business sector, but she has made all the right soundings during the confirmation process.
“I am a believer in American small business,” she told the committee. "… If confirmed I pledge to pursue these tasks with the utmost energy, and to be your partner in giving small businesses the help they need to thrive, to grow and put Americans back to work.”
As Business Week magazine chronicles, Ms Mills’s appointment has been widely hailed by those in politics and the small business sector. They quote Karen Kerrigan, president of the Small Business & Economic Council, who said, “I think [Mills] can be highly successful in transforming the agency by simply focusing on collaborative partnerships with other agencies and departments, as well as business associations and private-sector partners.”
Unfortunately, Ms Mills really has her work cut out for her. The Washington Post recently reported that only two weeks after President Obama pledged $15 billion for the small business sector, “every major provider of these kinds of loans says the plan will not work as designed." It seems that lending institutions are finding the terms of the government’s plan, in particular having to surrender ownership to the government and limit executive pay, so unappealing they’re not participating.
“How can you do business if the government at any time can change the rules of the game to protect its investment? That unknown today … puts us in a position that we don’t feel is prudent,” said Joseph J. DePaolo, chief executive of Signature Bank.
So the challenge for Karen Gordon Mills is pretty clear. The country is full of prospective small business owners ready to start work. What they are waiting for is free-flowing capital. Her success (or failure) in her post will be judged on whether small business people can get the lifeline they desperately need.