U.S. SBA Administrator talks small business investment, PPP fraud, and supply chains

U.S. SBA Administrator Isabella Guzman joins Yahoo Finance Live to discuss the importance of small businesses in the economy and communities, recovering funds from cases of pandemic aid fraud, businesses adapting to supply chain conditions, and loans.

Video Transcript

DANI ROMERO: So in regards to the president's State of the Union address, what is your response? Do you believe that the administration really addressed the current concerns that small business owners are really up against?

ISABELLA GUZMAN: From an overarching perspective, I think the president's plan and his hope for the future is strong and resonates with small business from the perspective of they want to seek those opportunities into the future and see more competition and opportunities for them to plug in to the global economy.

And I think investing in America and believing that with those investments, we can spur the economy further. I think that's what small businesses are all about, is taking action to continue to deliver for their communities, as well as the economy. And we know how strong their contributions continue to be.

As the president outlined, the economy has grown tremendously. And that includes around entrepreneurship. And we saw 5.4 million business applications last year. And that means more Americans are taking that leap into the American dream of business ownership. And the SBA is here as part of the president's plan to make sure that businesses have the capital and the resources and the connections to be able to leverage those opportunities.

DANI ROMERO: And I wanted to play a clip from yesterday's address for you. We're going to play it right now.

JOE BIDEN: And in my administration, the watchdogs are back.

[APPLAUSE]

We're going to go after the criminals who stole billions of relief money meant for small business and millions of Americans. Tonight, I'm announcing that the Justice Department will soon name a chief prosecutor for pandemic fraud.

DANI ROMERO: And Isabella, what is your response to that? Is it too late?

ISABELLA GUZMAN: The SBA continues to collaborate with the Inspector General of the SBA, as well as through the Department of Justice, to continue to prosecute fraud that was perpetrated as part of PPP. And the president's stance is firm and strong that we want to make sure that those funds got into the hands of the businesses that it was intended to serve. And so we're always completely cooperative and collaborative to make sure that those efforts continue.

DANI ROMERO: And realistically, how much stolen money can be recovered now that so much time has passed and the Department of Justice is understaffed and has a lot on their plate?

ISABELLA GUZMAN: Well, the efforts have been ongoing throughout. And with the Inspector General collaborating internally with SBA and our data and our teams, we continue to uncover challenges and-- excuse me-- uncover some of the perpetrators. And so they will continue to pursue them. And so I think that's something that's ongoing. And I don't think it's too late to continue to investigate and explore those cases of fraud.

DANI ROMERO: I wanted to shift gears a little bit on the Russia-Ukraine crisis. You know, there's a lot of discussion around the global impacts on food. What are you hearing from small business owners on what they're anticipating on that front? And how is the SBA helping them navigate that as well?

ISABELLA GUZMAN: I mean, I think throughout the pandemic, the global pandemic, our supply chains have been impacted. And small businesses have had to adapt, sometimes changing their whole business models to make sure that they could survive and continue to serve their customers and succeed in the marketplace.

And so, you know, the SBA has, of course, throughout this pandemic, provided over a trillion dollars in relief to small businesses to help them survive this time, as we continue to administer and deploy the final funding around the COVID Economic Injury Disaster Loan, as well as pivot to some of our core programs in capital loans to small businesses, as well as technical assistance. We're just here to advise them and help them, make sure that they can be agile and take what the marketplace challenges are and be able to strategically overcome.

DANI ROMERO: And administrator, just to wrap this all up, you know, Fed Chairman Jerome Powell told Congress today that the Fed plans to raise interest rates. How would the Fed's rate hikes affect SBA or other government-backed loans?

ISABELLA GUZMAN: The SBA's affordable capital for small businesses, if anything, we need to continue to try to fortify our programs and make sure that we have strong lending networks that we can distribute our loans to and better meet businesses where they are with products that fit their needs, and with simple processes and strong technology, which is how businesses are expecting for us to serve them these days, alongside some of the relief programs we've been able to administer.

So if anything, we just need to make sure that the SBA stands ready to support them with affordable capital to continue to help them leverage those opportunities, like those in the bipartisan infrastructure law, where there are contract opportunities for our small businesses to participate in or through the president's plan around making more in America. Small businesses make the products and services that we depend on every day along our main streets and along our manufacturing centers. So we want to make sure that all of those businesses are positioned with capitalists to succeed and affordable capital.