Entrepreneurs thinking about obtaining SBA financing or looking to the agency for other assistance in the coming months may soon need to alter their plans to work with the organization. It was recently announced U.S. Small Business Administration Chief Karen Mills will step down, and significant changes could be implemented after her departure.
The SBA, which helps small-business owners and entrepreneurs obtain access loans, most recently reached out to help victims of Hurricane Sandy, approving more than $1.1 billion in disaster relief loans, according to The Associated Press. During Mills' time with the agency, she helped fight fraud, streamline agency processes, get lending to business owners in need and made it easier for smaller organizations to obtain federal contracts.
"Small businesses are now ready to go on the offensive," wrote Mills in a letter to SBA employees. "They are ready to expand to new markets, to scale their operations and to hire new workers. And I am confident that the SBA will be a driving force in the success for decades to come."
Are changes on the way?
Mills announced she will remain in her position until President Barack Obama names her successor, who will likely face challenges and need to make changes to programs as the economy continues to struggle.
According to Bloomberg Businessweek, the new chief will face a variety of struggles as he or she comes into office, the first of which could be the sequestration that is set to hit the country March 1. Unless lawmakers can come to an agreement in regard to spending cuts and deficit reduction, automatic cuts of $85 billion will kick in and impact every government agency, including the SBA. The sequester could limit the agency's lending capabilities, something Mills' successor would need to address in order to keep entrepreneurs coming to the SBA for business financing.
One of the other difficulties the new SBA chief will face is convincing potential business owners the recession is truly over and getting them to begin expanding their companies, even though markets are still shaky. Many entrepreneurs may still be hesitant to obtain investment loans with revenue still growing slowly, and it will be up to the SBA's new leader to ensure business owners feel comfortable launching and expanding their firms with help from the agency.
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