The SBA steps to the plate amid midwest flooding

Nation's Business, June, 1997 by James Worsham

As flood waters ravaged the Midwest this spring, the U.S. Small Business Administration undertook one of its major responsibilities: providing assistance to victims of natural disasters.

"Our role is that of a disaster banker," says the agency's newly installed administrator, Aide Alvarez. "We give disaster victims a down payment on the future."

The SBA makes disaster loans directly to homeowners and renters as well as to businesses of all sizes to help them repair damage or rebuild--and return to normal.

In the four months through April, the SBA had made nearly 10,000 disaster loans in 10 states, totaling $127.3 million. Only a relative few of those loans stemmed from the recent flooding in the Dakotas and Minnesota; more flood-related disaster loans are ex-: pected to be made later in the year.

Alvarez is the third SBA administrator appointed by President Clinton. The first was Erskine Bowles, now White House chief of staff. The second, Philip Lader, resigned this year.

Alvarez comes to the SBA at a politically peaceful time for the agency. Although it is facing reauthorization this year, there appears to be little if any talk of abolishing it, as there was two years ago when the Republicans took control of Congress following their sweep in the 1994 elections. "Luckily, I'm taking over an agency that's in fairly good shape," she says.

Before joining the SBA, Alvarez was director of the Office of Federal Housing Enterprise Oversight. The agency oversees the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac).

Alvarez was an investment banker with First Boston Corp. and Bear Stearns and also had been a newspaper and television reporter in New York City.

She worked for Vice President Al Gore's 1988 presidential bid as well as in President Clinton's 1992 campaign.

"The SBA is a financial agency," she says, "and I want it to be a leading-edge financial agency." She is seeking funding to upgrade computer hardware and software and to improve the agency's oversight of its loan programs.

Alvarez hopes to use the SBA's Cabinet-level status to work with other top officials to "broker outcomes that will help the small-business community."

--James Worsham