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SBA assisting veterans

Administrator visits Boston area to plug lending programs

Martin Desmarais
SBA assisting veterans
SBA Administrator Maria Contreras-Sweet at Constant Contact in Waltham. (Photo: Courtesy of the SBA)

The government’s start-up czar — U.S. Small Business Administration Administrator Maria Contreras-Sweet — was in Boston last week furthering efforts to help U.S. veterans start companies, but also to chat about the state of entrepreneurship and remind all about the cash the SBA can help pump into needy small businesses.

Author: Courtesy of the SBAThe Massachusetts SBA District Office loan programs provided 2,591 loans for $645 million in its fiscal year 2015.

The visit was also opportune as it highlighted recently released numbers that showed Massachusetts had a landmark year in loans to small businesses, and its best year ever for loans to black and Latino business owners.

Author: Courtesy of the SBASBA Administrator Maria Contreras-Sweet.

Massachusetts also continued its status as one of the best places to pick up small loans to get businesses off the ground — in SBA lending programs the state is No. 1 in low dollar loans of less than $50,000 and No. 2 on loans less than $150,000. These low dollar loan amounts are those most often cited by small businesses as crucial to expansion and growth, but at the same time the hardest to obtain from banks and traditional lending sources. The SBA, and its Massachusetts office in particular, have reaped much praise for the ability to get these important small loans to fledging companies.

Contreras-Sweet began her Nov. 3 day-long visit to the area in Waltham at the headquarters of email marketing company Constant Contact to expand the Boots to Business: Reboot program, a two-part training program for veterans that provides participants with an overview of how to start a business and an introduction to resources available to support entrepreneurship. The SBA already helps about 200,000 veterans a year with small business loans — $1 billion in 2015 alone — but with 20 million veterans in the country the organization is trying to ramp up efforts to connect with more of them.

Contreras-Sweet called veterans “a vast talent pool with tested skills that makes them natural business leaders.” According to the SBA, veteran businesses employ 5.8 million people and generate $210 billion in annual payroll.

For SBA loan programs, of which there are many targeting different kinds of businesses and sectors, veterans are part of the “underserved” category, including black-owned businesses and Latino-owned business.

The SBA’s biggest loan program is its 7(a) Loan Guarantee Program, which helps businesses that have difficulty getting loans from banks or traditional lenders. This category is where Massachusetts shines in its ability to help underserved communities.

All told, Massachusetts SBA loan programs doled out $645 million in just over 2,500 loans in the last year — the most in years. The biggest “underserved” rise was in the American Indian category up from four loans in 2014 fiscal year to 14 in 2015. Black/African American businesses had a record year with 64 loans. Latino businesses also set a new standard with 124 loans. Asian American and Pacific Islander also had a record 177 loans.

SBA Massachusetts District Director Robert Nelson credited the rise to increased efforts by his office to connect with underserved business, as well as a fee waiver program that saved Massachusetts business owners $1.2 million in fees on loans and made access to loans even easier.

“The fee waiver incentive for borrowers continued helping entrepreneurs that need small dollar loans realize their dreams, while our underserved markets continued gaining awareness and access to SBA programs,” said Nelson.

As part of her trip to Boston, Contreras-Sweet also visited two local spots for small business innovation — Greentown Labs in Somerville and the Harvard Innovation Lab — but her comments at the MIT EmTech Conference in Cambridge reiterated the SBA’s efforts to reach out to entrepreneurs of all walks of life, reflected in Massachusetts’ increased loan numbers to underserved businesses.

Innovation and diversity

Author: Courtesy of the SBASBA Administrator Maria Contreras-Sweet visits Greentown Labs in Somerville.

At one of the world’s innovation hubs, Contreras-Sweet referenced the SBA’s Small Business Investment Research program, known as SBIR, which provided 85 grants for $26.8 million in the last year for companies developing new innovations in a variety of sectors, and its ability to connect with diverse businesses that are often overlooked by traditional investors and venture capitalists.

“The program does a far better job than the private sector when it comes to allocating capital to women and minorities. In our country today, less than 3 percent of VC funding goes to women and less than 1 percent goes to African Americans or Hispanics. These are not impressive statistics,” Contreras-Sweet said. “SBIR, on the other hand, is color blind and gender neutral. You will be judged on your science and your vision and not your race or your gender.”

Acknowledging the general concern that government help often brings unwanted delays and obstacles, Contreras-Sweet said the SBA — and the government — must help clear obstacles for small businesses to succeed, not create them.

“We are looking to invest in the best and the brightest and then get of the way,” Contreras-Sweet said.

The goal is to support innovation and ideas that move society forward, which often come from small businesses.

“I know that starting a business is a challenge. But the work that you are pursuing is so extraordinary. It is not just that you are creating jobs and a stronger economy — 67 months of consecutive job growth — you are creating progress and hope,” Contreras-Sweet added.