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The Small Business Administration Confronts an Historic Crisis

Former agency head Karen Mills says the emergency stimulus package is helpful but rapid delivery is crucial for America's 30 million small businesses

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Photographer: Andrew Harrer/Bloomberg

Karen Mills led the Small Business Administration from 2009 to 2013, helping America’s small businesses recover from the financial crisis. Today, Mills is a senior fellow at Harvard Business School and president of MMP Group, her investment firm in Boston. She's been advising members of Congress, fintech players—she is the author of the 2018 book Fintech, Small Business & the American Dream—and others on the emergency stimulus measures for the 30 million small businesses in the U.S. She spoke with Bloomberg Businessweek on April 1, 2020. This interview has been edited for length and clarity.

What’s your role with respect to the stimulus package?

My response has been to try to be as helpful as possible to anyone who asks. Two, three weeks ago, I began to get calls from Congress, from Speaker Pelosi's office, from various folks, to bounce the ideas off as they got put into the bill. I've been contacted by pretty much all of the fintechs with whom I'm close from having worked on my book for a year, and having written all these white papers. A lot of people have called me to ask, How does this 7a program [the SBA’s flagship loan program] work, how am I going to connect to it?

I see my role as anything that I can do to, first, make the money available; second, to get the money deployed through as many channels as possible; and three, to help small businesses know how to access it.

Do federal policymakers and Americans generally understand how important small businesses are to our economy? 

Small businesses are a critical part of the economy, as you know. What brings it really home to people is when I say half the people who work in this country own or work for a small business. I used to say I went to sleep at night worrying about half of America's jobs. Back in 2009, I had to really pound the table in the White House to make sure everybody understood how important small businesses were to the economy.

I've always been frustrated about why economists don't understand this or see it the way I do. Part of it is because macroeconomists tend to look at the world as consumption, which is consumers, plus investment, which is big business, plus government spending. Small businesses very often don't show up in their macroeconomic models.