New SBA regional chief to focus on lending, job growth
Elizabeth Echols is bringing the Obama administration’s efforts to spur small-business lending to Southern California.
The new head of the U.S. Small Business Administration for California, Nevada, Arizona, Hawaii and Guam said that her top priority would be to shake capital loose for businesses and help jump-start job growth.
“The biggest issue for small businesses is access to credit so they can retain and create jobs,” Echols said. “In California, we have higher unemployment than in most states, which might be an indication that California was harder hit” in the economic downturn.
Historically, small businesses have created nearly 70% of the nation’s new jobs, government statistics show. From 2005 to 2007, employers with fewer than 20 workers added 2 million jobs, while companies with 1,000 or more workers increased their payrolls by only 699,000 jobs, according to the Census Bureau.
Unlike the previous three economic recoveries, however, this time small businesses have yet to lead the charge in hiring. This may partly stem from sharply reduced levels of lending by banks but also reflects reluctance by small businesses to borrow when consumer spending is drastically down, said Scott Hauge, president of advocacy group Small Business California.
“While it is important, I hope she doesn’t use her position for getting loans to small businesses only,” Hauge said. “We have a major crisis going on in California.”
Because of the state’s budget problems, about $12 million in federal funding for small-business development in California may soon be cut because the state cannot put up matching funds, Hauge said. That would force small-business development centers, which dispense advice, to return federal money already received.
Echols said she would focus the regional SBA effort on what she calls the three Cs: capital, counseling and contracts.
Among the services that the SBA offers, counseling is among the most important, Echols said.
“A lot of small businesses don’t know how to write a business plan and how to grow effectively. That kind of help is especially useful to entrepreneurial folks,” she said.
Echols has some personal experience. Her husband took advantage of SBA’s mentoring and training services when he started a small consulting company, she said. “They helped him with everything — with creating a small business — so I know how important this is.”
For the region’s future, Echols plans to nurture “high-impact, high-growth businesses.” These include clean technology, medical devices and information technology and are prime industries for increasing job opportunities in the region, she said.
“We have an opportunity to grow a green economy,” Echols said. “There’s a particular opportunity for high growth in emerging markets like green technology and green business.”
Echols comes from a wide background in government, nonprofits, technology and business. She is the current director of the U.S. Green Building Council’s Northern California chapter. From 2001 to 2004, she was chief executive of OpNet Community Ventures Inc., an education and technology nonprofit, before becoming Google Inc.’s policy director.
As executive director of the White House Electronic Commerce Working Group during the Clinton administration, Echols developed strategy for internet and e-commerce issues.
She may need all her experience to oversee a region especially hard hit by the recession.
“Frankly, I have seen administrators come and go, and most have not been very effective or visible,” Hauge said. “I hope she takes a broader perspective and is out there promoting small business, and what small businesses can do for the economy.”
