Hector Barreto faced with local concerns when he become first SBA administrator to visit Spokane

Barreto urged to reconsider decisions being made to make Spokane SBA a branch office

Tom Sowa
Staff writer

Hector Barreto is the first administrator of the federal Small Business Administration to visit Spokane. Instead of good cheer and handshakes, his four-hour visit here produced a slew of tough questions about the future direction of Spokane’s SBA office.

For 40 years, Spokane’s office has helped arrange loans and technical assistance for small businesses across Eastern Washington and North Idaho.

But Barreto, named by President Bush to head the SBA two years ago, said it’s time for Spokane’s office to become more efficient and reach more people with its resources.

A step in that direction, said Barreto, is making the SBA’s Spokane district office a branch of the Seattle SBA office.

No date has been set for that consolidation. Federal officials have said the shift might take 12 or more months of planning.

Opposing that consolidation Thursday were several members of Idaho’s and Washington’s congressional delegation.

Chris Marr, the chairman of the Spokane Regional Chamber of Commerce, presented Barreto with a two-page letter urging delays on the consolidation.

The shift to Seattle, Marr said, would impact budgeting decisions, hinder regional planning and potentially lead to closing the SBA’s regional information center, based in downtown Spokane.

Barreto also received a letter from Washington Sen. Maria Cantwell, who urged him to halt the plan to make Spokane a branch SBA office.

Barreto tried throughout the visit to counter those concerns. "I think there’s some confusion here," he said after a Thursday afternoon meeting saluting four area small businesses that have prospered with the help of SBA loans and assistance.

No jobs from the Spokane center will be eliminated once it becomes part of the Seattle office, said Barreto, a Kansas City native and former business owner.

The goal is making the SBA more effective through eliminating duplicated effort and streamlining operations, he said.

The SBA has shrunk in recent years from 4,000 to 2,800 employees. And it’s doing that by eliminating duplication and getting more of its workers out of their offices, meeting with small-business owners and entrepreneurs, he said.

Those statements didn’t convince Rich Hadley, president and CEO of the Spokane Chamber. Hadley told Barreto that bankers and others feel the loss of local control would result in longer loan deals for small-business owners.

One banker who does SBA loans told Hadley the process could change from one- or two-day approvals to as long as five to 15 days. "The difficulty (for loan applicants) is not in the yes or no part," Hadley said. "It’s the waits that cause the concern."

An added issue, he said, is having budget and administrative responsibility shifted to Seattle, to people not well connected to this area’s economy.

The proposed consolidation would likely mean the 20 counties of Eastern Washington served by Spokane’s SBA office would answer to Seattle. It’s unclear how the consolidation would affect the North Idaho counties.

Spokane’s office last year helped 10,004 clients, providing 310 SBA loans totaling more than $82 million, according to federal data.

The businesses honored Thursday were the Cathay Inn, Pasta USA, Northwest Designs and Luigi’s Restaurant.

http://www.spokesmanreview.com/news-story.asp?date=091203&ID=s1409079&cat=section.business