In Senate, an eye out for small companies

Posted: April 16, 2013

When a witness at a March Senate hearing on small business accused state and local governments of not doing enough to prepare for disasters, he got a sharp retort from the committee chair.

"You're talking, with all due respect, to a person who had a whole city go under water," said Mary Landrieu, the Louisiana Democrat who heads the Senate Committee on Small Business and Entrepreneurship, as she rejected a charge that state and local officials are not inclined to prepare for disasters because they expect financial help from the federal government.

"That is not the experience in Louisiana," Landrieu said. "All 64 parishes are just frightened to death that Katrina's going to happen to them."

In 2009, when Landrieu became chair of the committee, which oversees the Small Business Administration, she was well aware of the struggles small companies deal with when disaster strikes.

After Sandy swept across several states last fall, Landrieu campaigned in Congress for aid, saying: "I'm going to step up for New York, New Jersey, and the East Coast. We know what a successful recovery needs."

Disaster aid for small businesses is one of the key responsibilities of the SBA. So are small-business loans. But Landrieu's current agenda also includes helping companies' continuing recovery from the recession, as well as finding skilled workers and a voice in the debate in Congress over taxes. And she wants to make federal agencies reach government goals for contracts to small business.

"It is hard to pinpoint exactly when our economy, including small-business expansion, will really take off, but we are seeing encouraging signs," she said in a recent interview.

Lawmakers can help the recovery pick up momentum, Landrieu said, by making loans easier for small businesses to get and by sponsoring programs to mentor business owners and train workers so they'll have the skills companies increasingly need.

But she's critical of lawmakers' bickering over the budget and the $85 billion in across-the-board cuts.

"Businesses both large and small are not only suffering the direct impact of these budget cuts," Landrieu said. "They are also operating through a never-ending cycle of uncertainty that makes business investment risky and is holding back growth."

At last month's hearing on small business, she asked witnesses' opinions of a bill introduced with Sen. Jeanne Shaheen (D., N.H.) that calls for reinstating a law allowing companies to use so-called 504 loans to refinance mortgages. The law expired Sept. 27, and companies can now use 504 loans only to buy or expand property. Those who want to use cash from refinancing to run businesses no longer can.

"I'm such a strong believer in this program - I've seen it literally with my own eyes save businesses in Louisiana," Landrieu said during the hearing.

But her concerns about loans go beyond the Small Business Administration. Though companies borrowed $30.3 billion through SBA loan-guarantee programs in the fiscal year that ended Sept. 30, it was a fraction of the $584.1 billion in outstanding small-business loans the Federal Deposit Insurance Corp. reported for 2012.

"The problem for small business in America is not only do they have difficulty getting loans, but when they get them, they are not as affordable as they should be, nor are they under the terms that are the most helpful. So you have a lot of small business operating debt on credit cards, [which are] high interest and basically short term," Landrieu told the Associated Press.

She will preside this year over confirmation hearings for a successor to SBA head Karen Mills.

"I'm looking for a new administrator that is energetic, that is innovative, that believes in partnerships," Landrieu said.

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