SBA: Take Our Funding, Please

SBA: Take Our Funding, Please

D

avid Kohler spent five nights in a Washington hotel at his own expense to make sure the East Coast's blizzard of 1996 in January didn't prevent him from trimming the Small Business Administration's regulations in half.

"I knew we had this very significant project to get the regs redone and over to the Federal Register. I heard the storm was coming and the severity of it and I figured the government would be closed. I was heading a team of lawyers from around the country. I knew I could work with them even though D.C. was snowbound.

"It mattered to the agency and to our constituency. The government was back so I was being paid my salary," Kohler says.

Kohler, an SBA associate general counsel, personifies an agency that asked for a 35 percent reduction in funding for 1996. Congressional appropriators granted the request, but most of the agency's 1996 funding changes got hung up in the vetoed appropriation for the Commerce, State and Justice departments.

If the measure is signed into law, the SBA won't miss the lost $29 million in operating expenses because most of it was salary and benefits for 552 fewer staffers, most of whom left voluntarily. Nor will the agency mourn $57 million lost in non-credit initiatives. Most was for small business information centers sought more by legislators than by the agency, said SBA spokesman Michael Stamler.

"This is not your father's SBA," SBA Administrator Philip Lader said in his 1995 year-end report. He points to the way SBA has gotten out of the direct lending business by taking on 7,000 bank partners who lend their own capital with the government's guarantee. Lader credits a 52 percent jump in 1995 loan volume to a streamlined application process suggested by SBA employees for loans under $100,000.

With changes in guaranteed loan fee structures, the agency can make more funds available to small businesses at a lower cost. With $100 billion less funding, the SBA plans to increase small business loans from $7.8 billion to $10.8 billion in 1996, Stamler says.

The agency also is out of the education and training business, Lader says, handing those duties over to 13,000 members of the Service Corps of Retired Executives and 950 small business development centers run in partnership with colleges.

Lader, former deputy director for management at the Office of Management and Budget, took over SBA in 1994 determined to help create the kind of change he had been preaching governmentwide. Even a new SBA voice mail system has reinvention potential. It let him leave budget updates on employees' office phones during the late fall and winter shutdowns.

"It's not rocket science, but we're using voice mail trying to reduce the need for several layers of management," Lader says.

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