SBA Refutes Critics' Allegations

The Small Business Administration is defending itself from critics' claims in a recent New York Times article blaming the agency for lingering problems, including failure to provide a greater availability of loans.

The article by Elizabeth Olson cited various disgruntled small business groups who criticized the agency and said its former chief, Steven Preston, who recently moved to head the nation's housing agency, "left behind various problems."

Olson also notes that because Preston's departure "comes in the waning months of the Bush administration, it is unlikely that a permanent leader for the SBA, with a mandate to make major changes, will arrive before next year."

SBA Acting Administrator Jovita Carranza responded in a letter to the editor published in the Times yesterday. She defends the agency's loan program and the SBA itself, saying the agency has designed more relevant products for the market, sought to improve the integrity of small business contracting data and has improved employee morale.

The agency launched a public relations offensive after the article was published June 12, sending a six-page document intended to debunk some of the critics' claims in the story. The SBA document, titled "Myth vs. Fact," was sent to reporters and posted on the SBA Web site. It lists 10 "myths" such as "SBA has focused on disaster assistance reform and ignored small-business concerns" and "the SBA loan program has inadequate lender oversight which has resulted in a $329 million loss in recent years" with agency positions on why these charges are unfounded.

By Sharon McLoone |  June 20, 2008; 12:24 PM ET Policymakers
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