The New SBA Administrator and the Importance of Community Banks to Small Business

Jessica SarterSmall Business Lending

Jacquelyn Martin/AP -  President Barack Obama announces he will nominate Maria Contreras-Sweet (left) as the head of the Small Business Administration.

Jacquelyn Martin/AP - President Barack Obama announces he will nominate Maria Contreras-Sweet (left) as the head of the Small Business Administration.

The nomination of Maria Contreras-Sweet as SBA Administrator will hopefully help refocus the government on the importance of Community Banks to small business lending and job growth in the United States. The number of banks has been steadily declining according to the 2012 FDIC Community Banking Study. The community banks account for only 14% of the banking industry assets yet they still account for 46% of the small loans to businesses.

The new administrator, because of her background as a community banker, well understands the importance of the SBA 7a guaranteed loan programs and the 504 program to the success of community banks and hopefully will ensure the stability of these programs and encourage the continued participation by small banks in small business lending. Recent attempts to consolidate the SBA into the Commerce Department could marginalize the SBA and jeopardize the important role that it plays in our nation’s recovery.