What Trump’s Controversial Small Business Administration Appointee Means for Your Company
Founded in the 50s as a response to the uncertainty of World War II and The Great Depression, the Small Business Administration was created to provide financial assistance and mentorship to small businesses in the United States. In the years following, the SBA has “delivered millions of loans, […] contracts, counseling sessions and other forms of assistance to small businesses” in addition to providing “specialized outreach to women, minorities and armed forces veterans.”
Reaching out to the SBA for help has garnered mixed reviews from now-established small business owners. Those in opposition to SBA assistance cite the following as a few reasons a debt equity loan could be a poor decision:
- Accountability to the banks to maintain a certain revenue. Not complying could result in losing control of some or all of your business decisions.
- Potentially fluctuating interest rates.
- Proprietors to ensure a ‘personal guarantee’, which allows the loaner to pursue their personal assets should the debtor find themselves unable to pay the loan.
“I had my first run-in with the Small Business Administration three years ago. I was seeking financing for my first start-up and remembered being told by military career counselors that if I wanted to start a business, the SBA was there to help me,” writes Shaun So, veteran and business owner.
“However, after my experience and hearing of other veterans’ experiences, I find that the SBA has failed entrepreneurs,” he continues. So goes on to explain the complicated hoops he would’ve needed to jump through to get financial help from the organization.
The SBA Administrator – the head of the organization, for all intents and purposes – under the Obama administration is Maria Conteras-Sweet. Conteras-Sweet is a three-time business owner, one of which was a downtown-LA community bank servicing small-to-medium sized businesses. Since she was appointed in 2014, the SBA (who are responsible for a $120 billion loan portfolio, the world’s largest seed fund) have worked diligently to provide better services to the public.
She also writes for a myriad of publications, most notably the Huffington Post, authoring progressive articles such as “Women Make History Again as Women Business Owners Achieve Federal Contracting Benchmark” and “SBA Modernization Is Unlocking Commercial Capital”, which details her plan for the organization point-by-point.
Conteras-Sweet lead the agency to produce more thorough results for their clients, their Scorecard steadily climbing year-to-year.
Now, as word rolls in of President-elect Trump’s choices for his administration, we’ve been on the edge of our seats to find out who will fill Conteras-Sweets shoes. And if you’re affiliated with the SBA, so should you – this could affect the way your business functions.
The newly appointed minister is Linda McMahon, transition officials told Reuters in early December. “Linda has a tremendous background and is widely recognized as one of the country’s top female executives advising businesses around the globe,” Trump said in the announcement.
McMahon is the co-founder and former CEO of the World Wrestling Federation (which later became the WWE). Trump also said that “McMahon helped grow WWE from a modest, 13-person operation to a publicly traded global enterprise with more than 800 employees in offices worldwide”
– a statement that also appears on her own website. She was a Republican nominee to represent Connecticut in in US Senate in both 2010 and 2012.
Although McMahon’s website also states she is “an advocate for small business and continues to promote entrepreneurship, particularly among women,” her past business endeavors haven’t always rung true to the sentiment.
When McMahon and her husband Vince took over the WWE from his father, it was part of the National Wresting Allegiance: a network of about 30 wrestling businesses who vowed to get along… or at the very least, not encroach upon each other’s territory.
But in a (very dramatic) statement to Sports Illustrated in the early 90s, Vince McMahon had little good to say about collaboration:
“In the old days, there were wrestling fiefdoms all over the country, each with its own little lord in charge. Each little lord respected the rights of his neighboring little lord. No takeovers or raids were allowed. There were maybe 30 of these tiny kingdoms in the U.S. and if I hadn’t bought out my dad, there would still be 30 of them, fragmented and struggling. I, of course, had no allegiance to those little lords.”
And before we could blink our eyes, the McMahon’s had risen to fame, systematically dismantling each of the other companies and establishing a near monopoly on the wrestling industry.
During her time with the WWE, however, she did gain recognition as one of the broadcasting industry’s leading philanthropists. The organization founded community programs promoting literacy and education, and was recognized by the Make-A-Wish Foundation as one of the top wish granters.
I guess only time will tell what’s to come in the next few years for small business owners. It will be interesting to see how the next few months unfold as the transition from a Democratic to Republican leader of the SBA takes place.