SBA Chief, in L.A., Expects an Earful--and He Gets It : Government: Erskine Bowles hears complaints from an audience of small-business owners after a year of turmoil.

Given the suffering of small businesses in Los Angeles in the wake of riots and recession, Erskine Bowles, director of the Small Business Administration, probably was braced for an earful of complaints when he met face to face with its business people on Tuesday.

On that score, the audience of 270 gathered at the Davidson Conference Center on the campus of the University of Southern California did not disappoint the former North Carolina investment banker.

One by one, audience members complained that the SBA has not been very helpful to Los Angeles’ struggling small businesses. They cited poor management, an onerous bureaucracy devouring gobs of paperwork and agency programs that fail to adequately address the specific problems of businesses here.

“The problem we’re seeing is that people who lost their entire businesses are having trouble amassing the capital” to rebuild after the 1992 riot, said Cynthia Robbins, a directing attorney for Urban Recovery Legal Assistance, which was formed to advise businesses and individuals on recovering from the riot.

In response to audience complaints, Bowles did not make excuses for the agency’s past problems but said he is committed to bringing the changes small-business owners want to see.

“If you look at the organization structure of the SBA, it looks like the snake that swallowed the rat,” Bowles said. “What I need is for you all to tell us how we can do it better.”

One measure, Bowles said, will see the agency shift, by Sept. 1, more of the staff providing services to local district offices from Washington and regional offices.

Bowles, who has no previous experience heading a government agency, said his top priority is to make the organization “user-friendly.”

Bowles said his planned restructuring of the SBA will particularly benefit the post-riot Los Angeles rebuilding efforts. He said the agency is considering moving its Wilshire Boulevard small-business information center to South-Central Los Angeles.

In a press conference after the public forum, Bowles said President Clinton’s proposal to create enterprise zones to encourage businesses to locate in distressed areas will help Los Angeles. He also said a revamping and better funding of the Small Business Investment Co., an SBA-backed venture capital fund for small businesses, will also help.

Bowles said he has his own ideas about how to restructure the SBA but invited the audience to write to him with their suggestions.

“It’s really going to be keen that they reduce the (SBA) red tape,” said Robbins. But, she said, future changes will not help the many businesses that are having trouble today just making ends meet.

Maxine Weinman, owner of a Culver City catering business, said she hopes the SBA will encourage banks to make loans based more on the borrower’s character than his or her collateral. Access to capital is a major problem for women-owned businesses, she added. Bowles said he plans to meet with local bankers today to discuss his proposals for the SBA and to hear their recommendations for change.

However, he said, his first priority is to respond to the needs of the small-business community.

“I want to be held accountable,” he said.