Q: You are retiring from your position at the SBA on Monday. What precisely does the SBA do, and what was your role within that?
A: Region Eight has six states — it has North Dakota, South Dakota, Montana, Utah, Wyoming and Colorado — and it’s the most rural region in the nation. It has 82,000 square miles, and it has less people than the city of Chicago. Additionally, one in two of them live in Colorado and one in four live in Denver, so the population mass of course is centered in Colorado, and the business activity is the same. But there’s still a great need for business development and capital in the more rural areas.
In the region, since I’ve been regional administrator in 2001, we’ve provided $3.5 billion in capital to over 20,000 businesses.
Q: How has the environment for small businesses changed during your tenure?
A: Actually, I think it’s probably changed for the better, where there’s more people who are looking to start their own businesses and work, and the numbers indicate that.
Q: What were some of the major changes during your term?
A: There’s three distinct economies in the region. There’s the metropolitan economy of Denver and Salt Lake City. Once you get outside those two towns, you have what I’ve come to call interstate economy, where the towns on the interstate tend to be prospering, but once you get off the interstate and into the more rural areas, you see a population decline and a decline in small businesses.
We developed a program called Rural Lender Advantage. Over the years, one of the changes we had noticed was we were losing the smaller banks because it was hard to get in contact with them and cover all those miles. We came up with a very simplified loan process that a bank could get online, fill out a two-page application, send it in to a processing center and get a response in 48 hours. That was launched in May this year. I think that’s probably the single most important contribution the agency in the region has made to small-business development, making access to capital for rural America easier.
Q: How have the credit crisis and slowing economy impacted these small businesses?
A: The credit crisis made it much harder to obtain capital because the credit boxes have gotten much tougher on their lending standards over the last 18 months. Particularly with startup businesses, there’s a problem of not enough capital and equity, and bankers are a little hesitant to make loans to those people. On loans less than $150,000, we’ll guarantee 85 percent of it with the bank, which means they only have 15 percent of loan at risk, and it’s much easier for them.
The use of our programs tend to be counter- cyclical. As the economy gets better and things are booming, people don’t have to have the guarantee, and it’s easier to get the loan from the bank, but when the economy tightens up, it gets pretty tough and in many times, without a federal guarantee, you can’t get the loan.
Q: How did you get involved in SBA? You ran Miller’s Boots and Shoes, a family store.
A: My brother-in-law owned a family shoe store in Butte since 1977, and our wives’ grandfather started the store.
As I got involved in economic development in Montana, I was appointed in 1989 to the state advisory board, which advised the SBA on programs we needed to do. In 2001, I was in the shoe store and the phone rang and they said, “This is the White House calling, the president would like you to serve as the regional administrator of the SBA.” I’m an old Army officer, and when the commander in chief calls, you snap to attention and say, “Yes, sir.” So 48 hours later, I was in Denver.
Owning a small business is sort of like owning a hundred dairy cattle — seven days a week, 24 hours a day, and you only get a break if you hire a babysitter for the cattle or the business.
Q: What are your plans after retirement?
A: I’m going back to Montana first of all and reintroduce myself to my wife and spend a couple months getting the house caught up because it’s been badly neglected for seven years. I’ll go back to the small business with my brother-in- law, and I’m certainly not going to not be involved in small business. There’s several options out there, and I’m having a hard time deciding which direction to follow. It’s been a great job, but it’s very time-intensive and demanding.
Edited for length and clarity by Alex McCarthy
