-
President Barack Obama plans to nominate Maria Contreras-Sweet, founder of a Latino-owned community bank in Los Angeles, as the next head of the Small Business Administration, according to multiple news reports.
January 15 -
OnDeck, a New York-based online lender that makes small-business loans, announced Monday that it has raised $130 million in new debt funding.
September 16 -
Online lenders threaten to seize dominant control of the market for small loans to small business.
May 23 -
Karen Mills, the outgoing head of the Small Business Administration, gets high marks from bankers for cutting red tape, revamping little-used programs, improving outreach, and, most important, convincing lawmakers to raise caps so that banks could make larger loans.
June 1 -
Nearly 20 years ago, Chip Mahan's early Internet venture with Security First Network Bank led to the birth of S1 Corp., one of the boom times' most-hyped online-banking technology providers. Today, he's behind a startup small-business lender with another technology offshoot in mind: loan underwriting in the cloud.
June 1
Bankers who work with the Small Business Administration hope that Maria Contreras-Sweet,
Contreras-Sweet is a community banker with experience lending to Latino and other minorities, groups that the SBA wants to target more aggressively. She founded, and is chairman, of the $148 million-asset ProAmérica Bank (PMRA) in Los Angeles, a minority owned bank that focuses on Hispanic groups.
A desired area of emphasis for many involved in SBA lending is making loans online, which would involve competing with
Online lending "is absolutely a key piece" that Contreras-Sweet needs to work on if she is confirmed, says John Arensmeyer, chief executive of Small Business Majority, a San Francisco lobby for small business.
Contreras-Sweet and Bruce Mills, ProAmérica's president and CEO, did not return calls. The White House did not respond to requests for comments and additional information on Contreras-Sweet.
Contreras-Sweet was nominated on Jan. 15 to succeed Karen Mills, who announced her resignation in February 2013 after leading the SBA for about four years. Mills was
Contreras-Sweet was born in Guadalajara, Mexico, and has an extensive background in business and politics. She founded the private-equity fund Fortius Holdings, which specialized in providing capital to small businesses. She has also served as secretary of the California Business, Transportation and Housing Agency.
Mills generally received positive reviews from bankers on her exit from the SBA. But many groups say the agency should catch up to a large group of firms involved in online lending,
"The more streamlined the [application] process, the easier and quicker we can get financing out to those in need," says Rick Sanborn, president and CEO of Seacoast Commerce Bank (SCCB) in San Diego. The $275 million-asset bank was ranked 11th in total SBA-approved loans, with $40 million, as of Dec. 31.
The SBA takes far too long to respond to loan applications, says Rohit Arora, CEO of Biz2Credit, which provides an online service pairing borrowers with lenders.
"There's a big disconnect between borrowers and banks right now," Arora says. "A lot more borrowers are going online. They want quick answers, instead of having to fill out reams of paperwork and wait a month-and-a-half to get an answer."
For many businesses, the SBA is their first choice for a loan because it offers superior rates and terms, as well as a sterling reputation, says Brock Blake, CEO of Lendio, which helps smaller banks make online loans. But the SBA has fallen far behind the technology curve, he says.
"They are years behind," Blake says. "They're losing a significant amount of business to online lenders."
An easy-to-implement upgrade would involve allowing electronic signatures on applications, says Dave Rader, head of SBA lending at Wells Fargo (WFC). "We would love to see online signatures, rather than the current requirements of having a wet signature or a signature in blue ink," he says.
Rader says he wants Contreras-Sweet to continue Mills' policy of expanding SBA lending, in terms of loan size and the range of borrowers eligible for guarantees. "We clearly want to help as many customers as we can and do more lending," he says.
Wells Fargo has worked with Contreras-Sweet on previous ventures, including Hispanas Organized for Political Equality, which promotes voter registration, education and economic development for Hispanic communities in California.
Contreras-Sweet founded ProAmérica, which lacks extensive experience in SBA lending. In the current fiscal year, which began Oct. 1, ProAmérica originated one SBA-guaranteed 7(a) loan valued at $252,000, according to the SBA.
In fiscal 2013, the bank originated nine SBA 7(a) loans, totaling about $2.7 million. That compared to 11 loans valued at about $7 million a year earlier.
Other community banks do far more SBA lending; a few devote at least half of their assets to SBA lending,
Despite questions about her experience with SBA lending, potential borrowers are generally upbeat about her nomination, Arensmeyer says.
"She comes in with a strong background in lending to the Latino community and with women's entrepreneurial issues," Arensmeyer says. "I think she can use those experiences and expand them to work in the SBA."
