Karen Mills, the head of the Small Business Administration as it focused on helping small companies recover from the Great Recession, is stepping down.
Under her leadership, the SBA brought more than 1,000 community banks to its lending programs and it won a commitment from 13 big banks to increase their lending to small businesses over three years. The agency also regained its status as a Cabinet-level agency with Mills at the helm — a status it had lost during the Bush administration. Mills says she will remain in her position until a successor is appointed by President Obama. She joins a number of officials — including former Secretary of State Hillary Clinton — to leave the administration. Many high-level officials leave the government after a president's first term.
Mills has served as SBA administrator since April 2009. Mills says she will remain in her position until a successor is appointed by President Barack Obama and confirmed by the Senate.
Mills joined the SBA during a challenging time. The U.S. was in recession and suffering from the consequences brought on by the financial crisis. Bank lending was nearly frozen and many businesses were suffering from slower sales as people and other companies spent less. In 2008, before the financial crisis, the SBA guaranteed $12.7 billion of its most common loans, 7(a) loans. That amount plunged in 2009 to $9.2 billion, and in the year ended last Sept. 30, had recovered to $15.1 billion. The 7(a) loan program includes money for starting a business or operating or expanding an existing company.
"While there still are many items on the to-do list for America's small businesses, including meaningful regulatory reform, tax simplification and capital availability, Administrator Mills stepped into the position in a turbulent time and pushed the agency forward on these and other small-business priorities," said. Todd McCracken, CEO of the National Small Business Association.
Under Mills' leadership, the SBA took a holistic approach toward helping small businesses. She continually said it wasn't enough for the government to just guarantee loans for companies that could get them. Businesses that weren't strong enough to get financing needed counseling and education so they could succeed — and create jobs to help the country recover from the recession.
"It turns out, if you give them the money without also some other tools, it is not as effective," Mills said in an April 2012 interview with The Associated Press. "We have data that shows that if you are a small business who has a long-term counselor, you get better sales, you get more longevity, you hire more people."
Under Mills, the SBA streamlined its loan process, eliminating many pages from its applications and shortening the amount of time it takes for a loan to be approved.
The SBA itself also grew significantly. The agency has 3,000 employees, up from 2,000 under the administration of President George W. Bush.
Mills has had bipartisan support in Congress that started with a unanimous vote in the Senate to confirm her appointment. She also won praise from small business advocacy groups.
"Small business lost a strong advocate today," John Arensmeyer, CEO of Small Business Majority, a lobbying group, said. "Her work to expand access to capital, encourage investment and promote job creation was critical for small businesses, especially during these difficult economic times."
Mills, 59, knew a lot about the needs of small business before she came to the SBA, having spent decades working for and owning private equity firms that invested in and bought small companies. She was a founding partner of Solera Capital in New York in 1999. After she moved to Maine, where her husband Barry is president of Bowdoin College, she was president of MMP Group