Special Presentation: Karen Gordon Mills
Special Presentation on The State of Small Business by Karen Gordon Mills, Former Administrator of the U.S. Small Business Administration, at LendIt USA 2015.
View and download the slides here.
Karen Mills from the SBA led the panel off talking about the integral part small businesses play in the US jobs scene. Half of the jobs in our country come from the 23 million small businesses. Of those, only 5 million have employees.
These small businesses, like all those who are credit dependent, were dispraportionately affected by the financial crisis. 60% of job losses post 2008 came from small business. Karen then discussed the post 08 decision with Larry Summers to guarantee up to 90% of SBA bank loans. The 90% guarantee helped a lot but there was no good data to figure out how big the need was. Data on loan origination is set to come from Dodd Frank.
Small community banks do 40% of the small business loans. Pre 08 there were 14 thousand of these, now there are 7 thousand. Even banks that are lending to small business, who say they are lending to everyone who are creditworthy are not issuing the loans small businesses need.
70% of small businesses want loans that are for less than 250k. This is the large gap in the market opportunity. Online lending has stepped to fill a lot of this gap. Karen Mills then answered several questions surrounding capital, growth, regulation and components of the industry.