Linda McMahon is the current Administrator of the U.S. Small Business Administration (SBA) and a member of President Trump’s cabinet. As Administrator of the SBA, Ms. McMahon advocates for over 30 million small businesses in America. Ms. McMahon is a hands-on businesswoman, who oversees a $700 million budget with 68 offices and over 3,000 employees.
In less than 2 years into the job, Ms. McMahon has taken to the road to visit regional offices and a myriad of small business owners to see what is working and not working for them. Her biggest conclusion from her travels was pretty straightforward; the SBA does more than guarantee loans for small businesses.
The SBA stepped up big after the last round of hurricanes that hit the mainland U.S. and Puerto Rico. The agency provided 96,000 disaster loans totaling some $5.3 billion. Her leadership in quickly organizing such disaster relief was in stark contrast to the events that unfolded after Hurricane Katrina in 2005.
In her reaching out to small business owners, one question she asked each time was how the recent Trump tax cuts would affect their business. She states, “Without fail, every business I talked to said they would take tax cuts and put money back into their business. They would hire more. They would increase benefits. They would provide benefits. They might produce more goods and services. They might opt to have another location.”
While McMahon and the SBA boast of many other services that they provide, it is really the guaranteed loan backing that businesses want. Yes, they can get counseling from SCORE and be made aware of various government contracts that target certain groups, but most people feel that when they go in to business, they have a handle on how the business should be run, which may be why such consulting services are underutilized. It’s all about the capital.
With loans being the core driver behind the SBA, McMahon has helped to expedite the time it takes to receive capital. McMahon articulates, “We have also been able to reduce the time it takes to process loans by being more efficient and making it paperless. The applications are now online for 7(a) program. For loans over $350,000, we have reduced that from 15 days to 8 days. And for small business loans under that, from 6 days to 3 days.”
Administrator McMahon has also embraced the role of women in small business. Women still don’t have the access to capital via networks, so the SBA is attempting to facilitate arrangements and mentors in this area. Women are a driving force today in the entrepreneurial economy. It is estimated that women run businesses today account for some $1.7 trillion in sales. That’s trillion with a “t.”
While a 6% cut was made to the SBA budget, McMahon says that most of that was made up for internally through efficiency and consolidation. While wanting to push their ancillary services, the SBA still seems locked into their role as a source of guaranteed capital for small businesses.