MS. NISBET: I'd like to welcome the Small Business Administrator Hector Barreto. He’s here today to talk about a lot of crucial things happening right now, especially loans -- the increased loans that have been given to victims of Hurricane Katrina, also minority loans, which have gone up 175 percent since 2001 -- correct me if I'm wrong on that number, but I believe that was right -- and expanding free trade agreements. All things that support the small business owner and contribute to the success of these entrepreneurs trying to get back on their feet.

With that said, I will go ahead and hand it over to you. We'll start out with opening remarks and follow with questions and answers. If you can please state your name and affiliation before asking your question. Thank you. Mr. Administrator.

MR. BARRETO: Good morning. And thank you, Kim. I want to start off by thanking Kim Nisbet for helping us to arrange this. We're looking forward to doing this and we finally were able to get a time that worked for all of us. Let me make a couple of brief comments and then I'd be happy to answer any of your questions. As Kim said, one of the things that SBA has been involved with is the disaster response of last year. This has been the largest disaster in United States history, definitely the largest disaster the SBA's ever been involved in.

So far, we have approved $9.5 billion worth of loans to small businesses, homeowners and renters, about 146,000 individual loans. And we have now processed 98 percent of all the applications that we have received. In fact, I'll be going back down to New Orleans next week to kind of do an assessment of where we're at and speak to some of the small business groups and meet with some of the leaders down there.

A lot of times people don’t realize that whenever there is a disaster, the SBA provides these kinds of services. And what's different about this is that these loans are direct loans that the SBA makes. There's nobody else in between the SBA or, in this case, the federal government and the end recipient. But normally, we do loans every single day. And SBA, Small Business Administration, has been around for 53 years. And over that time, the things that SBA's been known for is capital and we do that through loan guarantees to small businesses. We also do counseling and we also help small businesses get contracts from the federal government. So those are what we call the "Three C's."

And as Kim said, last year was the -- well, it was the best year in our history in terms of number in all of those areas. We did close to 100,000 loans, almost $20 billion worth of loan guarantees and we did those in all sizes, in all communities. We doubled the loans to minorities. Loans to women have gone up. The average loan size has gone down, which allows us to reach many more micro-business. We've trained in the last year, about 2.5 million small businesses. That's about 10 percent of all the businesses in the United States -- everything from how do you put a business plan together, to how do you market your product, how do you use technology and even how do you do international trade, because international trade is also something very important to us.

We have an office that dedicates itself to that and a lot of times people forget that 97 percent of all the exporters in the United States are small businesses. They do about a billion dollars worth of trade every single day, but they only represent about 30 percent of all the trade dollars. So there's a lot more that we can do there and we work with countries every day to open up markets and to help identify opportunities for small businesses on both sides.

And then lastly, the other thing that SBA is known for is facilitating contract opportunities with the federal government. We don't stop there. We just don't do the federal government. We can also help the Fortune 500 companies as well. But to give you an example, the regulation, the goal if you will, for the federal government is to do 23 percent of all of its purchases from small businesses and last year that translated to about $70 billion worth of goods and services that were bought from small businesses by the federal government.

Remember that the federal government here in the United States buys everything. We buy food and we buy services, we buy manufactured goods, consulting. If you can imagine it, the federal government may buy it. And so this is a very important for small business. But we also help small business get access to procurement opportunities with the corporate sector, with corporate America. So those are the things that SBA does. We've been very proud of what we've been able to accomplish. And we're not resting on our laurels.

Last thing I will mention -- and Kim and I were talking about this at the beginning -- was the fact that I have now been the SBA Administrator for about five years. I have the second-longest tenure of any SBA Administrator in the history of the SBA. But recently, I announced that I have submitted my notice to the President. I will be leaving government in the next couple of months and I will be chairing a nonprofit organization called the Latino Coalition, and I will also be re-entering the private sector. But I was very grateful and am very grateful to the President for giving me this opportunity and I look forward to continue working with the small business community in my new responsibilities. And with that, I'd be happy to open it up to any questions that you may have.

QUESTION: I'm Jose De Haro with Spain’s Cadena Cope newspaper which is a daily business paper. And how is small business and (inaudible) economies (inaudible) United States (inaudible)?

MR. BARRETO: Well, my boss, the President, says that there's nothing small about small business. And he's right, you know. There's 25 million small businesses in the United States. Those small businesses generate 52 percent of the gross output in the economy and they also create somewhere around 70 percent of the net new jobs and they are also the place that most of the new technology and innovation comes from that makes our economy so productive. So they really are the engine that fuels the economy and the programs that the SBA provides them is kind of the fuel for that engine. And so the responsibility of the SBA has only grown over those last 53 years. But small business is critically important to the economy of the United States.

QUESTION: My name is David Barroux. I work for the French newspaper Les Echos business daily. Can you tell us how the small companies have been doing for the last few months? And you said they are very important, but how are they doing right now? The economy is booming. Have they played a role?

MR. BARRETO: Well, they're definitely playing a role. You know, one of the reasons that we've doubled the number of loans is because small businesses, we believe, are more optimistic about the future. You know, when I started five years ago, we were doing about 45,000 loans a year. Last year we did 100,000. We were guaranteeing under $10 billion in loans. Last year we did $20 billion in loans. So we believe small businesses are doing well. They are confident.

You know, there's a poll that is taken by the National Federation of Independent Business Owners every month that tracks the confidence of these small businesses and it asks them questions like, will you be hiring people, will you be stocking inventories, do you believe that your business is going to grow in the future, what do you see as the major challenges to your business. And most of the feedback over the last couple years has been pretty positive. It can always be better, but it's been very positive and there are a number of reasons why.

One is we see the unemployment rate in the United States now down to 4.7 percent. That is historical lows in terms of average. It used to be -- in the United States we used to think full employment was six percent. Well, we're down to 4.7 percent. We've created about 3 million jobs in the economy in the last 18 months. The economy continues to be very productive. Interest rates are still low on average. I mean, they've been turning up a little bit, but they're still pretty low. So a lot of the elements that underpin a strong economy are there. The stock market has come back from where it was after 9/11. The real estate boom has grown. So there's been a lot of positive things there.

Now, one of the things that the President also says is that, you know, the role of the government of the United States is to create an environment so those small businesses don't just get started, but that they grow over the long term. And we've done that over the last five years by reducing their taxes, by reducing the regulations that they have to pay, by working on initiatives to reduce their health care costs, by opening up new markets, international markets for them. So those are some of the things that we also work on to make sure that the conditions are positive for these small businesses.

In the United States, one of the statistics that we're not too happy with is that 50 percent of the small businesses don't make it past four years. So 50 percent go out of business within four years. And the reason is because of these things that we've been talking about. They don't have capital. They don't know what they don't know. They don't have the necessary business that their company needs to grow. And so the SBA programs can help them with that. But the other things that they need are these elements of the small business agenda of the President to make sure that once they do open the business that they can exist and grow over the long term.

QUESTION: Emmanuel Saint-Martin, Le Point, France. (Inaudible) components of immigration about legal or illegal about the small business, it is different from the rest of the economy?

MR. BARRETO: Well, it depends. I mean, obviously immigration is a key issue that we're debating in this country right now. And one of the things that we know is that our country requires workers to keep our businesses strong and to keep them growing. When you have an unemployment rate as low as ours -- 4.7 percent -- it means there's going to be a need to continue to identify workers for not just the jobs that we have today, but the jobs that we're creating.

Now one of the large employers of immigrants are small businesses. You know, there's a lot of small businesses in the construction area and we've talked about the construction boom, so that's an area. There's a lot of small businesses in the retail industry, restaurants and other kinds of service businesses that require those. There's a lot of small businesses who are manufacturers who require employees. There's a lot of small businesses in the agricultural area and so that requires a lot of workers.

And so one of the things that we're -- what the President's saying with regards to his immigration reform is that we need to do several things. One of them is we've got to do a better job of fortifying our border. We've got to confront the reality that we have 11 million people that are working here that don't have legal status and we've got to find a way to give them a legal way to work here in the United States.

And so what the President has said is that he does not favor amnesty which allows somebody basically to get in the front of the line. So anything that we do with regards to immigration reform needs to be comprehensive and it needs to include a number of different steps that need to be taken before that individual can have complete legal status in this country.

QUESTION: Do you have any figures of how many immigrants on the small business?

MR. BARRETO: Well, you know, the figures are all over the place. I mean, you know, if you listen to the news reports, you'll have somebody say, you know, there could be10 million illegal immigrants and if you listen to somebody else, they could say, no, it's probably 15 to 25 million, so we don't know. That's one of the reasons that we're having this debate is because that's really kind of an underground economy sometimes that we need to -- the President says bring them out of the shadows so that they can engage in the work that our country needs. But also gives us more security in knowing who's in this country and why they're in this country. So SBA doesn't track those numbers. We don't know.

And for that matter, I would think that there was a lot of leaders and a lot of organizations that are weighing in on this issue that really don't know how many folks are here. We know there's a lot. And again, depending on who you listen to, it could be anywhere from 10 to 11 million. That's the number that you hear most often. Now, I don't know also how many of those folks work for small businesses. I will tell you that we believe that small businesses employ at least 50 percent of all the workers in the United States. So if you took that figure, you know, maybe as many as many as 50 percent of some of these immigrants could be employed by the small businesses.

QUESTION: My name is Olli Herrala. I come from Helsinki, Finland Business Daily. I have a question about the definition of a small business. How do you define a small business?

MR. BARRETO: That's a very good question. We have a couple of different definitions. Most small businesses in the United States don't have a lot of employees. Most small businesses probably have somewhere around 10, 20 employees would be an average number for some of these small businesses. But we also take into consideration that you could be a small business, have a manufacturing company and have lot of employees, but it doesn't' mean that you're necessarily a big business. It doesn't mean that you're not necessarily a wealthy business, because in manufacturing so much of the money that you make goes right back into the manufacturing and the employees and the very capital-intensive businesses.

So we say if you are a small business and especially if you manufacture, you could have up to 500 employees for us, 500 employees. If you don't manufacture something, then we have a revenue size standard, and that means depending on what industry that you're in, we're going to determine a revenue size standard. The average revenue size standard is around $5 or $6 million a year in revenue. Most small businesses are nowhere near that.

But if you take those two definitions, 500 and less employees, and a revenue size standard of approximately 5 to 6 million, you have now covered 99 percent of all of the businesses in the United States. And those businesses would be considered small businesses for the purpose of receiving benefit from an SBA program.

QUESTION: (J. De Haro, Cadena Cope) What do you think are the main difference between starting a new business in Europe and starting a new business here in the States?

MR. BARRETO: I've had the opportunity to travel to many countries around the world and one of the things that many of the governments have told me is they're very interested in developing the small business market, because they see how important it is to us in the United States, how that has really created an upwardly mobile middle class in the United States. And many countries will -- are very much in their early stages of creating their small business programs.

In fact, the SBA has helped many countries to develop their own small business administrations. They may not call it small business administration, but they're doing lending to small businesses or they're doing training to small businesses or they're trying to help small businesses get access to business.

So one of the things I would think is that -- you know, in the United States, we've been doing this now for five decades, you know, since 1953. So we've learned a lot. The programs have evolved. And there's been a continuous focus on the importance of small business. And that would probably be one big difference, because many countries may not have been doing it as long. Maybe they don't have an SBA. Maybe their programs aren't as differentiated as many of the programs that we have.

For example, we do a lot of different kinds of lending programs. We don't just have one lending program. We have many, many different kinds of training programs. We don't have just one training program. We have many different programs that allow small business to get access to procurement or contracting of some sort. So I think just in terms of experience with these programs that might be one of the major differences.

The other difference is the priority. You know, I've gone to some countries that have said to me, "We never thought this was important before, but now we do and now we really want to focus more energy on it," but they've said, "We've got to -- we have some work to do, because we have to get the private sector involved. We have to get government to support it across the board. We have to get other parts of society to treat this as a top priority for our country."

And so they will say we're not there yet, because in the United States all of this is integrated. There's nobody in the United States in government, at any level of government or in corporate America or with centers of influence who are going to say -- at least not a credible voice say -- we don't need small businesses. We don't care about them. They're not important. We don't care if they're here or not here. Nobody is going to say that here.

But sometimes in other countries, you may hear that. You may hear -- ah, do we really want to spend time with the little ones? But for us, in this country, we know that all businesses start off small, but they don't all stay small. Clients of the SBA, over our history, have been companies by the names of Federal Express, Intel, Compaq Computer, Apple Computer, America Online, Nike, Callaway Golf, Sun Microsystems. Those are some of the examples of companies that came to the SBA very early on, received help from us, and now are huge international conglomerates. It doesn't mean every company is going to turn into that, but some companies can if they have the right kind of help when they're growing. And so that's part of our legacy as well.

QUESTION: My name is Huaiqian Le from Xinhua News, China. You forgot to mention Microsoft (inaudible) and I know (inaudible) play an important role in help small business -- I mean, high-tech (inaudible) into a giant companies like Microsoft. Is it -- the SBA have some commissions with venture company?

MR. BARRETO: Right. Well, yes, and that is one of the things that the SBA developed very early on is a venture capital portfolio. You're right, some of these companies came to us and they were already started and they were already starting to grow. They already had some technology, but they needed some help getting to the next level and the kind of help that they needed, we weren't going to be able to provide them in a working capital loan. What they needed was a venture capital infusion, maybe, you know, $5 million or $10 million.

And so the SBA has a venture capital program that has invested in some of those technology companies. Now the SBA doesn't invest directly into the company. What we do is we license the venture capital funds and we leverage their dollars two or three to one. So what that means is a company comes to us and says we got a great idea, we want to invest in technology companies and we want to do it in this sector. And we've already raised $10 million. We'll look at that and if it meets all of our requirements, we’ll approve that and we may put $20 million on top of that. Now it's a $30 million fund. And that $30 million fund can go out and look for the next Microsoft or Intel or et cetera. So we do have a history of doing that.

A lot of the programs that the SBA developed, we developed them in our history because nobody else was doing it and there was a need. And so we were filling a void. But in many of the programs that we used to do, we don't do as much anymore because there's a lot of other people that are doing it now. For example, when the SBA created its venture capital program, there was hardly anybody that was investing venture capital to small businesses. Now there are tens of billions of dollars that are going into small businesses that have nothing to do with SBA. The same thing with lending; when we started our lending programs very few banks would do loans to small businesses. Now hundreds of billions of dollars are going into small businesses and they're not all coming through the SBA program.

So I just mentioned that to you is that, that's been also one of our parts to our business model is that we will develop programs to fill a gap, a need. And once that gap is filled, we either will do less of it or stop doing it altogether and look for another gap where we can be involved with. So yes, that is what is happening. In some of the countries that we've talked to, they are beginning the process of developing their own venture capital programs for small businesses. In fact, you may be aware of this, Lee, is that we have a relationship with CCPIT, the China Council Promoting International Trade. We have a memorandum of understanding with them. We share some best practices and we're starting to work with them to develop their own programs for small businesses. They have been very supportive of our events here in the United States and we visited with them in China and so that's been a good relationship for us.

QUESTION: (Inaudible) on small business, like for example, the health savings accounts, the (inaudible) tax, things like that. And aren't you feeling -- don't you have the feedback from some of the small business companies that actually the Bush Administration has promised a lot but has not accomplished a lot directly for the -- on those points specifically?

MR. BARRETO: Well --

QUESTION: Is there's some kind of disappointment in a sense?

MR. BARRETO: Well, let me just tell you this way. The President was just at our small business week that we had a month ago and we had hundreds of small businesses from all across the United States. And the message that they gave to the President was gratitude, thanking them for everything that the Bush Administration has done. I've mentioned to you already, we've done more loans for small businesses during our administration than any other administration in history. We have purchased more from small business from the government than any other administration in history. We've created health savings accounts for them. Millions of small businesses now have health savings account because of the President. We are saving small business about $75 billion a year by reducing their tax burden and the President just signed a tax bill last week to extend those tax cuts. So any way that you look at it, the Administration has done more for small business than any other presidential administration in history.

Now having said that, the President can promote all kinds of different legislation and we do, but the President doesn't get to create the legislation. It's Congress that actually has to vote on this legislation. What the President has said is, if you give me a tax bill, I will sign it and Congress did. If you create health savings account legislation, I will sign it and he did. If you give me the ability to create trade legislation with a different country, a trade pact, I will sign it and he has. And what he's also asked them is to do other things as well. For example, he asked Congress and he's been asking them for five years, to give him a plan that allows small businesses to create their own pools just the way that large corporations do, just the way that unions do, just the way the government employees do. But the Congress has not been able to come back and give him that. So again, you know, small businesses understand this. They understand that the President is their advocate. They understand that the President has accomplished more under his administration than any other President in history. But they also understand that the President can't do it by himself and he's got to work with Congress to create some of this legislation as well. But they also know that the President is fighting for them and that was the message that they gave him during small business week about a month ago. By the way, that was the second year in a row that the President has spoken to these small businesses, so I wish you could have been there to see their reaction. But they understand that this President is a warrior for them on issues that are important to them.

QUESTION: How easy is it for some of these homeless Katrina victims to actually go out there and navigate the process of applying for the small business loan?

MR. BARETTO: Well, so far, as I mentioned today, we've approved 145,000 loans. We've done close to $10 billion in loan guarantees. And to put this into perspective, the biggest disaster before this was the North Ridge earthquake where we did four billion. We've done almost 10 billion now and we did it in half the time. So the thing that has been challenging is that this disaster is not like any other disaster in history. You know usually, for example, I remember one of the first things I dealt with when I became SBA administrator was coming up here to New York and dealing with the small businesses after 9/11. And we used to measure that disaster in square blocks. Well, the Katrina disaster, we measure it in square miles -- 90,000 square miles of affected area, five different states, millions of people and in certain areas, for example, New Orleans where I'll be at next week, 50 percent of the people haven't even come back yet. So it has been very, very challenging.

Another thing that's been challenging for us is that usually when we're working with somebody on approving a loan, they have evacuated from a certain area, but they're still nearby. In our case, we're dealing with disaster victims that are spread out over 40 different states. So it's not like you can set up an appointment and they come in and see you. We're doing some of this stuff by mail and Federal Express, et cetera. So it has been challenging. And you know, if you lost your house and you lost your business and your kids don't have a school to go to, you don't want to hear any reason why it's going to be challenging. You just want it to go back to the way it was. So there has been a lot of frustration. We've done everything that we can to streamline our process, to make it quicker, make it easier, make it more -- less of an onerous process. But there's still a lot of people that are hurting and it's going to take awhile. I mean, it's not something where the Gulf can go back to normal in a period of weeks or months. It's going to take years.

QUESTION: (Inaudible) high energy prices to small businesses?

MR. BARETTO: Well, they affect small businesses as they affect everybody in this country because their cost of doing business goes up. And especially if you're in a kind of business where your employees have to travel a lot, drive a lot or if you're in some kind of a delivery business, et cetera, any cost in energy is going to cut into your bottom line and it's very difficult to pass those costs onto your consumers. So it's really putting a lot of pressure on them and that's why, you know, the President has also been working very diligently on an energy policy that can lower the cost of energy by doing a number of different things -- by creating new opportunities for energy, by creating new opportunities for exploration, by being much more efficient in how we use energy, try to preserve energy as much as possible. And again, just like a lot of these other issues, you know, we didn't get to this place overnight. We're not going to lower the cost of energy overnight either. But it is something that affects the small businesses.

QUESTION: And do you have any specific plan for helping this with this issue?

MR. BARETTO: Well, again, what the President's plan is a national energy policy and we can get you information on the specifics -- on national energy policy -- but it incorporates a number of different elements. Some of it is conservation. Some of it is additional exploration. Some of it is incentives, certain incentives for industry, but also for individuals, so a number of different things that can help them. You know, we're hopefully seeing kind of a leveling off in some of these energy prices. Some economists will say that even with all -- one thing that shows you how resilient the U.S. economy is, is that even after Katrina, which affected our economy, even after high gas prices, you know, and some of the other challenges that we've had, the economy still keeps going along. It keeps chugging along. And that's something I think that it sometimes surprised people because they thought, uh-oh, now the economy is going to slow down and it hasn't slowed down and it's just one of the things that shows you how strong our economy is. And it doesn't mean that we ignore these issues. We can't ignore them. We have to deal with them. And the President is dealing with them, with his, you know, energy policies and some of these other policies that we've talked about.

QUESTION: (Inaudible.) Could you discuss more about the impact influenced by recent high rise in interest rate and also the latest on Chapter 11 (inaudible)?

MR. BARETTO: Well, let me deal with -- a little bit with the first one. I'm not sure how much I can help you on the second one. I'm not as familiar with all the provisions of that new legislation. I know that it's more difficult for businesses to declare bankruptcy and that's going to affect, you know, some small businesses. But with regards to the former one, the interest rate, we haven't seen any major impact with regards to our loan volume. You know, there's always this fear that as interest rates go up, people will stop borrowing money. But we haven't seen that because interest rates are still, by and large, relatively low, in comparison to what they been in different times.

I remember in the 1980s I was in business and the interest rates were in the high teens. You know, you saw interest rates of 15, 18, 19 percent, while interest rates now are 6 percent. And even when they increase a little bit, a quarter of a point or whatever, you may see some changes in the housing market, real estate market. But even there we haven't seen a big change in our portfolio.

For example, one of our most important portfolios is the real estate and fixed asset portfolio of the SBA. These are the larger loans that we can do. We can do a loan up to $4 million for small business, if they want to purchase a building, if they want to purchase some heavy equipment. That loan portfolio was up over 20 percent last year. And it's up over 20 percent this year. We'll probably do over $5 billion worth of those kinds of loans. And so again, when interest rates spike up, you know, that can affect people going out and getting these kinds of loans. It hasn't affected the small businesses. And one of the reasons why is because their businesses are doing better. They're more

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small businesses. And one of the reasons why is because their businesses are doing better. They're more optimistic about the future and they also see that real estate continues to go up. It may go up less high than it was going up last year, but it's still going up. And so small businesses are interested in making those investment, you know, fixing that interest rate because they believe the interest rates are going to go up, so they want to fix it where it is right now and they also believe that the real estate values are going to go up. So for many small businesses, these kinds of investments have been very, very good for the small business.

Yeah.

QUESTION: (Inaudible) so can you tell you what is the average interest rate (inaudible?)

MR. BARETTO: The average interest rate of our loan is the prime interest rate, the prime interest rate, and oftentimes the lender, depending on the bank, depending on the loan program will put on there some additional fees and those fees could be one or two percent additional. So a small business is going to pay prime , which is going to be around 6 percent prime plus one or two. Now some people will say, well, you know, will small businesses still get those loans, you know, because it's prime interest rate, plus one or two and the answer is yes.

I have already mentioned we're making more loans now than ever before. Why? Well, number one, what SBA is does is we guarantee the loan. In other words, we don't make these loans directly. We make them through the banks. So the small business goes to the bank and the bank when they can, will make the loan by themselves. When they can, they'll come to us and say, will you guarantee 70, 80 percent of this loan? And if it goes bad, SBA has to pay the bank 70, 80 percent of what that loan value was. But the reason they do that is because sometimes the small business doesn't have a long track record or maybe has a small problem with their credit history or maybe is looking for some terms that the bank can't provide, for example, a longer term loan than the bank is willing to make and that's why the loan comes to the SBA. I think of it as the SBA loan gets that small business over the finish loan if they couldn’t get over the finish line by themselves. And so that's what the SBA loan does.

QUESTION: Can you explain (inaudible) Katrina this year. You helped also homeowners? Is this something you do typically or was it an exception?

MR. BARETTO: The Disaster Loan Program is kind of unique. SBA only helps small businesses, but during times of disasters, these disaster loans can go to homeowner who lost their home or renters. We are SBA in that sense, is the disaster bank for the United States Government. And the ironic thing is that 90 percent of the applications that we received for Katrina were for homeowners and renters, not for small businesses, so most of the loans that we're approving right now are for homeowners and renters.

QUESTION: Of the (Inaudible) loans you mentioned do you include those disaster loans or they are not included in the total SBA loans you set for the year?

MR. BARETTO: They're separate. We did $20 billion last year and regular loans to small businesses. And so far this year, we've done $10 billion for Katrina. So if you put both of those numbers together, it'd be $30 billion -- 20 for small businesses, 10 billion for Katrina.

QUESTION: Of the 10 (inaudible).

MR. BARETTO: Ninety percent of the applications had been for -- and of the 10 you could say that about 8 billion is for the homeowners and 2 billion is for the businesses.

QUESTION: (J. De Haro, Cadena Cope) Could you tell me a little bit about the interest about Latino community in the small businesses?

MR. BARETTO: Very important. The Latino community is the fastest-growing segment of small business, and for that matter, the fastest-growing segment of the population in the United States. We believe there are two million Latino-owned businesses. Those businesses are generating $300 billion in sales and those numbers are doubling every five years. Within 10 years we believe there will be eight million Hispanic-owned businesses. The fastest growing part of the fastest-growing part are Latina-owned businesses, women-owned businesses is the biggest part of that. They're in every sector in every industry in every state. And so that's another difference is that a lot of times people think well, Latinos are only in the big states, but they're in every state now in the United States.

QUESTION: (Inaudible) first start a small businesses?

MR. BARRETO: Well, I think what we see is across the board growth in a small business community, so I mean, I think you can go almost anyplace in the United States and you could find small businesses that were doing well because the economy is doing well. But, you know, that's a very good question because one of the things that you can look at is what states are business-friendly because some states don't have the reputation of being business friendly. And part of being business friendly is incorporating some of these things that I mentioned were in the President's agenda. For example, what are the tax rates for small businesses in those states? How heavily regulated are the businesses inside those states? What are the opportunities to get health care inside those states? How easy is it to start a business? How much process? How long is it going to take in those states? What kind of incentives is the state providing to attract businesses there and to help them grow? How does the state help small businesses get access to contracts at the state level but also international trade opportunities?

And so you know, some states do really well in some of those issues and some don't do well on those issues. So I'm not going to pick winners and losers right now, but I would say to you that you know, a good indicator would be business formation and business longevity and you could take that on a case-by-case basis.

MS. NISBET: And then we have two questions.

QUESTION: Yeah. But what about the Indian community because most of the candy stores and small business are owned by an Indian community and also every (inaudible) more tailors owned by them. So do you have any statistics about what they're doing? What are contributions to the U.S. economy and the business?

MR. BARETTO: Well, I think it's an important contribution. We have a large incident of SBA clients from the Indian community and especially in those industries that you're talking about. We have a lot of individuals in the community who own hotels and motels and restaurants and retail stores, et cetera. And we've also recently developed a relationship with the Indian government. We had the Indian government come to us at the SBA to talk about how to create small business administration programs in India. In fact, when the new -- well, he wasn't new; he's the new head of OMB, but before then he was the U.S. Trade Representative -- went to India with the President recently. They signed a letter of intent between the Indian government and the Small Business Administration to collaborate and share best practices. So I think that they are definitely an important part of the economy. The Indian community is very entrepreneurial and obviously that's what we deal with is entrepreneurs.

We could probably get you some specific information. And Herb Austin is here. Herb is my Deputy Director right here. Herb, raise your hand. Herb is my Deputy Director here in New York and he could probably get you some information locally on what we do with the Indian community here.

MS. NISBET: Would it be okay to receive Mr. Austin's email address?

MR. BARETTO: Sure.

MS. NISBET: In case anyone wanted to do a follow up.

MR. AUSTIN: Herbert.austin@sba.gov. The telephone number is 212/264-1082.

MS. NISBET: I hope that was okay to send out to the press. (Laughter.) All right. I know we have to wrap it up because the Administrator has a meeting on the other side of town. Again, if you have any addition questions that relate to New York, you can refer them to Mr. Austin. Any other questions, I know that the Administrator's Special Assistant is here and you can ask questions as well.

MR. BARETTO: Charlie Hudson.

MS. NISBET: And I really thank you so much for being here.

MR. BARETTO: Thank you, Kim. Thanks for the invitation.