If you own a small business outside Washington, D.C., chances are you won’t land a federal procurement contract. That riles Hector V. Barreto, point man at the U.S. Small Business Administration. “If you do not live in D.C., you don’t get contracts,” he said recently in an exclusive interview at The Network Journal’s offices in New York City.
The 8(a) business development program, named after a section of the Small Business Act, helps minority firms access the federal procurement market. But far too few of these businesses are signing up for this and other SBA development programs, Barreto says. “When I looked at the fastest-growing segment [of the business community], I wasn’t sure the word was getting out. We needed more outreach, more communication. We needed to get more small businesses signed up,” he says.
Outreach initiatives include a “business matchmaking” program, introduced about a year ago, to bring together small businesses and large government and corporate buyers in a one-on-one procurement setting. Matchmaking events are planned for New York City, Chicago, Washington, D.C., Houston, and Huntsville, Ala., over the next six to nine months.
Such efforts are beginning to pay off, Barreto says. SBA not only made more loans to small businesses this year than in any previous year, but the number of loans also increased in every community, with loans to African-Americans seeing the biggest jump. Loans to women were up 30 percent, to Asian-Americans 35 percent, to Hispanic-Americans 45 percent and to African-Americans a whopping 75 percent.
Key to bringing more African-Americans into SBA’s fold is a National Urban Development Initiative, the result of a meeting last November of the SBA and the White House Economic Council with the Urban League, the National Association of Black Chambers of Commerce, the Business Roundtable and the National Minority Supplier Development Council. Talks centered on ways in which the Commerce Department’s Economic Development Administration and Minority Business Development Agency, as well as the Department of Housing and Urban Development, can partner with federal agencies to do business in urban centers.
“We’re not just going to work with chambers of commerce. We will work with those groups as well because they’re centers of influence,” Barreto says. Faith-based groups will also be part of the mix. “You can’t always go to the traditional organizations,” he says.
The new year brings to New York businesses a slate of e-options and partnerships. For example, SBAExpress, which authorizes qualified lenders to determine eligibility for SBA-guaranteed loans of up to $250,000, will feature an online application option. So will the 8(a) program by the end of September. Setting up matchmaking appointments will also go online this year. Also on the 2004 agenda are marketing partnership agreements with banks, and more workshops and conferences. The goal, says Barreto, is to “cut out the government bureaucracy. Technology and partnerships will help to reach more small businesses.”
For businesses pursuing opportunities overseas, SBA’s Office of International Trade will be busy. Of all the companies involved in exporting U.S. goods and services, says Barreto, 97 percent are small businesses, but they account for only 30 percent of export trade. “That means we can grow the pie. A lot of people don’t realize we do international loans. International is a big opportunity,” Barreto says. Already “very active” in Latin America, the SBA last year opened a women’s business center in Nigeria and one in Egypt the year before. And, it’s partnering with other agencies to help small businesses expand overseas. Under an agreement with the U.S. Export-Import Bank, for example, it will now handle the larger loans to small business for global transactions.
“We’re proud of what we’ve done, but we’re not resting on our laurels. We’ve barely scratched the surface,” says Barreto.