Maria Contreras-Sweet has been a corporate executive, a private equity manager, the head of California’s transportation agency and, most recently, founder of downtown L.A.’s ProAmerica Bank Los Angeles. But one year ago last week, she took on her biggest job yet, joining President Barack Obama’s Cabinet as administrator of the Small Business Administration. During a recent visit to Los Angeles, Contreras-Sweet sat down with the Business Journal to talk about some of the SBA’s new initiatives – including a competition for business accelerators – as well as L.A.’s changing banking scene and how going straight from the private sector to the Cabinet has made her more focused.
Question: The SBA launched a competition for accelerators last year and just announced it’s coming back for a second. Where did the idea for the competition come from and why is it being continued?
Answer: We’re just trying to understand what the proper role of the federal government is in innovation and entrepreneurship. What we saw is there’s a great deal of activity taking place within these growth accelerators. It’s really encouraging to see that. So we want to support that. But how do we also get them to understand what we have available, so that we can complement each other and make sure the entrepreneur is getting the full array of services available? The real point for us was, we just wanted to know where they were and to be able to be a part of their ecosystem and they a part of ours. We’re the largest seed fund in the world, and few people know that’s what we are. Why wait for people to come to SBA? Let’s go to them.
How do you keep an eye on what entrepreneurs and small-business owners really need?
I’ve tried to bring in smart systems. We’ve done Google Hangouts to try to connect with people who wouldn’t normally reach out to us. I use Twitter and I read my tweets and track them each evening. We ask our lenders to put on roundtables for us. We ask members of Congress to convene people they think we should meet with. You just try to get authentic input. You do your best, and you do see patterns of feedback.
Before taking over the SBA, you were a banker in Los Angeles, a city that’s been shedding banks small and large in recent years. Even City National is being acquired. What’s your take?
I’m discouraged by that. You really hit a sensitive point for me. One thing I was tracking was how many of our banks defaulted and how many of them we lost just through M&A activity. I think it’s important to ask the question, “How do we support a two-tiered banking system?” It’s fundamental.
What’s the value of smaller banks?
When I was in transportation, people would ask me about the role of rail versus airports and buses. And it’s about connectivity. It’s a continuum. The Europeans understand that commuter rail does one thing and then high-speed rail gets them to another place and then they use their airports for international trips. That’s the way I see banking. We have international money-center banks and we have some nationals, but there is a role for the local community bank that truly understands the character of the area.
How have some of the challenges you faced as a community banker influenced what you’re doing at the SBA?
One of the things we did when I got to the SBA was to put up a program that may not seem significant to others, but when you’re a community banker, you realize how important it is. We set up this new interface that we call Smart FICO. It is for loans under $350,000 and largely used by community banks. Now, when you’re a community banker, if you want to process somebody through an SBA loan, you don’t have to worry about the debt-coverage ratios. You don’t have to worry about the last three financial statements. You put in some basic information and we green-light the loan, and we’re going to stand behind it.
How have you dealt with the often-frustrating pace of Washington?
I do think the fact that I came in just after having started a bank, I knew what I was after right away. You have to know what your priorities are and have clarity of purpose. It’s got to be down to one word. And for me, that one word is “modernization.” We have to understand that through technology, we have tools that we can be using to make our systems be more efficient for those small community banks that need a boost.
What about dealing with gridlock in Congress?
To be really fair, it’s hard to be against small business. So when we went to Congress and asked them about sole-source authority for women (which helps get government contracts awarded to woman-owned businesses), we were able to get that through and get the president to sign it within months.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- On the Job at SBA
- Obama to Nominate L.A. Businesswoman to Lead SBA
- Small-Business Loans Spur Banking Exec’s Big Idea
- Small-Business Veteran Sees Big Future for Latinos
- Loan Zone
- 2019 FGPC: A Look at Financing Sources for Business Expansion
- Most Influential Lenders in L.A. County: Looking at Banking Relationships from the Perspective of a Growing or Emerging Business
- SBA Jitters for K-Town