On April 5, 2011 the Senate overwhelmingly voted to remove the 1099 Provision from the Affordable Care Act passed by the Obama Administration. A move that Karen Mills, the current SBA Administrator, called “a big win for small businesses.”
The provision would have required businesses to file 1099 forms for all purchases of goods and services over $600 annually. This was seen as an unnecessary bookkeeping burden.
How Mills Changed the SBA
Mills was sworn into the top office of the Small Business Administration in 2009 and unanimously confirmed by the U.S. Senate. She entered the position just two months before the declaration of the end of the great recession stemming from 2007. At the time, default rates for the SBA’s loan portfolio were sharply increasing, from 8.41% in 2007 continuing to 17.09% through 2009. Likewise, charge-offs had more than doubled, from 1.19% in 2007 to 2.40% through 2009.
Only 7 months earlier, in October of 2008, all of credit in lending crashed and no improvement was seen until February, 2009 when Congress and the president passed the America’s Recovery and Reinvestment Act, essentially doubling the SBA’s budget. Mills commented on the budget increase:
“We immediately used most of our funding to increase our loan guarantees to 90% and reduced or eliminated most of our fees. It was a policy decision, it was probably the first thing I did, the first thing I got involved in…and this was the good news. Because immediately banks who were afraid to lend took our loan guarantees and started lending. And small businesses that were just getting crushed from lack of credit, we were able in …to put $21 Billion dollars into the hands of small businesses for the cost of $500 Million.”
There were other housekeeping tasks that the new administrator saw needed immediate attention, which she termed as “reinvigorating the agency.” Sweeping changes to the agency included: more metrics based decision making, more training for employees, modernizing old systems, website redevelopment and a simplification of processes and paperwork. With these changes, she feels the administration is the best it’s been in over a decade and hopes that business owners needing business loans will appreciate the new and improved services they provide.
Small Business Administration’s 5 Main Objectives:
- Provides access capital through issuing loan guarantees to lending institutions
- Ensures at least 23% of all federal contracts go to small businesses
- Offers counseling and entrepreneurial assistance
- Provides disaster assistance, for both home and business owners
- Institutes programs centered on innovation
With the SBA offering so many services, initiatives, programs and training, it really can be a valuable resource for small business owners, you have only to go to the website and learn about the options that may be valuable to your situation.
Small businesses create what % of the American jobs?
How many small businesses are owned by Veterans?
- (a)1 million
What percentage of Americans work own or work for small businesses?
- (a)Over 35%
Small businesses produce how many times more patents per employee than large patenting firms?
- (a) 2 times more
(b) 6 times more
(c) 8 times more
(d) 13 times more
In the first three quarters of 2009, small businesses accounted for what percent of the net job losses?
- (a) 25%
Answers: 1. D, 2. C, 3. B, 4. D, 5. C
The Small Business Economy Report 2010
Karen Mills speech at American Legion 91st National Convention
Repealing the 1099 Reporting Requirement
July 2010 Wisconsin Bankers – A review of SBA’s Portfolio
The Small Business Administration
Karen Mills speech to Kennedy School students for the Leadership Speaker Series
The Recession Timeline Diorama 2007-2010
Congress Moves to Cut Controversial 1099 Provision
The State of the SBA