Karen Mills, the administrator of the Small Business Administration, signaled Monday that policymakers are not considering making direct loans to small businesses, but are instead choosing methods to attract banks back to the SBA.

Amid speculation that the Obama administration is considering a special program to use Troubled Asset Relief Program funds to boost small business, Mills said that the SBA involving its lending partners is the "right formula to serve the marketplace that's not being served today."

Speaking at the National Press Club, she touted efforts to increase guarantee amounts for SBA loans and waive lender fees to boost participation among banks in her agency's lending programs.

"We have just under 3,000 [banks] who have made an SBA loan in the last year. That's a pretty powerful network," she said. "So our choice … is to continue what works. … We were able to get 1,200 banks back to lending, who had stopped, with the 90% guarantees and the fee reductions."

But Mills provided little detail on what a Tarp program for small business would look like. Talking to reporters after the speech, she said the SBA and the Treasury Department are "looking at all kinds of structures" for providing the funds, and officials are not only considering utilizing small banks. "There are a number of avenues we're pursuing right now in partnership. One of the important things is the banks need to avail themselves of it," she said, adding, "We are looking at both large and small banks participating in a structured facility that we could create that would be appropriate for Tarp, appealing to the banks and allow access for small businesses."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.