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Small Business Administration (SBA) Administrator Karen Mills was in San Antonio Monday to discuss ways both the agency and the Obama administration are working on to further encourage lending to small businesses.

Mills spoke at the annual International Franchise Association convention.

These efforts, Mills says, include asking Congress for additional funding for its loan programs.

In February of 2009, the SBA received $730 million in federal stimulus funding as part of the American Recovery and Reinvestment Act. However, this wasn’t enough to meet the loan demand and in December, the SBA received an additional $125 million from Congress.

“We immediately were able to get that out as well. (But) it will run out at the end of this month,” Mills says, adding that the president has asked Congress for another extension in funding.

SBA spokesman Jonathan Swain says the president called for extending the recovery act provisions for the SBA’s 7a and 504 Certified Development Company loan programs through Sept. 30, 2010. The House passed legislation that would do so and it included $323 million to fund the extension. The U.S. Senate has not yet acted on the proposal.

“We are continuing to discuss it with the Senate and are hopeful we will see the extension move forward soon,” Swain says.

If granted, Mills says, the additional funds will be used to increase the loan limit for its 7(a) and 504 loan programs from $2 million to $5 million. Mills says about 10 percent or 12 percent of the loans made with recovery funds have gone to franchisees. Many of these franchisees, she says, have expressed the need for larger loan limits in order to purchase buildings or to make acquisitions.

“So, we’ve proposed to Congress that we increase these loans,” she says.

Other things the SBA is looking to do is extend the 90 percent guarantee on its 7(a) loan program.

The Recovery Act, among other things, temporarily raised the guarantee on the 7(a) loan program up to 90 percent through the end of the calendar year 2009, or until funds set aside for the program were exhausted.

Prior to the enactment of the law, the guarantee on the 7(a) loan program was between 75 percent and 85 percent.

The act also temporarily eliminated fees for borrowers on the 7(a) loans as well as fees for both borrowers and lenders on the 504 loans through the end of the year or until funding for the enhanced programs are exhausted.

The 504 CDC loans are principally used for land, new building construction, acquisition and rehab of existing buildings, long-term machinery and equipment purchases, and debt refinancing.

Interestingly, Mills says, the agency is also seeking to use its 504 loan program to refinance owner-occupied commercial real estate mortgages.

Mills says that in this present economic environment, in an effort to get commercial mortgages off their books, some banks may be unwilling to renew commercial real estate mortgages even if the owners have never missed a payment.

Using the 504 loan program in this capacity temporarily, she says, could benefit these business owners.

Mills says the agency has been meeting with small and large banks as well as small businesses and community leaders around the country to develop the measures that it is seeking from Congress. And, she says she believes these measures are ones that will be easy to implement.

“We can do those things quickly within the programmatic structure that we already have (in place) at very cost-effective rates,” she says.

To entice security researchers to look for holes in the Chrome browser, Google has announced it will pay $500 for bugs found in the code. But several experts say that’s not enough money to motivate skilled vulnerability researchers.

“I think it’s ridiculous,” Charlie Miller, a senior security researcher at Independent Security Evaluators, said when asked Monday for his opinion of Google’s new bug bounty program. “It’s insulting. It’s so low.”

Under Google’s new “experimental” incentive program announced last week people will get paid $500 for select interesting and original security vulnerabilities discovered in Chrome, or $1,337 for particularly severe or clever bugs. That figure refers to the geek term for elite, or “leet,” which can be spelled out using the numbers.

Mozilla pays $500 to researchers who find valid security bugs in the Firefox browser, the Thunderbird e-mail client or the Mozilla suite.

You would think Google would be roundly praised for offering to pay researchers for work they often do for free. But not everyone is impressed.

“It’s probably better to pay professional QA [quality assurance] people and pen [penetration] testers than to expect the public to do your testing for you on the cheap,” said Gary McGraw, chief technology officer at Cigital and a specialist in secure code writing processes. “No excellent professional tester I know would be attracted by a bounty like that–perhaps adolescents would do it for beer money (or rather red bull and vodka money).”

Miller’s criticism might be particularly stinging, given that he announced a campaign called “No More Free Bugs,” about a year ago. He argued that vendors should pay when outside researchers discover vulnerabilities in their commercial software instead of freeloading on the efforts of volunteer bug hunters whose work ends up making the products safer.

“In some senses this is my dream come true,” Miller said. “I’ve been begging vendors for this. And then when it happens I’m bitter and critical,” because it’s so much lower than what researchers can make from bounty programs at VeriSign iDefense’s Vulnerability Contributor Program and the Zero Day Initiative run by 3Com’s TippingPoint.

“If I did find a bug in Chrome, I could sell it to the Zero Day Initiative and make $2,000 and it still gets reported to Google eventually, so why would I give it to Google for $500? It doesn’t make sense,” he said.

Pedram Amini, who runs the Zero Day Initiative, wouldn’t say how much the program pays for bugs but said “on average it’s over 10 times what Google’s offering.”

“Google is the first huge company to create a bug bounty. I’m happy they’re doing it. It’s a step in the right direction,” he said. “But pricing-wise, they’re not going to be able to compete with other bug bounty programs.”

Granted, it might be easier to find bugs in beta software, than in products that have been released to the public, which the Zero Day Initiative focuses on, according to Amini. And it’s wise for Google to do something to attract the attention of researchers to its browser, which is much newer and has fewer users than the other major browsers, he said.

“I think there is going to be a subset of people who will use the Google program,” he said. “One thing that is certain–vulnerabilities do have value.”

Google’s pay scheme is at the low end of what iDefense pays, according to Rick Howard, director of iDefense Intelligence.

“Google has always shown that it is willing to take on large and complex projects for which it has no past experience and make a success of it. I see no reason why they should not succeed in this one,” Howard said.

Jeremiah Grossman, chief technology officer and co-founder of WhiteHat Security, said Google’s plan could be the start of an interesting trend.

“If a researcher is purely interested in the dollar reward, then by all means he should go where the dollar is highest. But if you happen to find one because it’s fun and interesting to you, then you’ll get paid too,” he said. “I’ve been suggesting Microsoft should do this for a long time but they have a moral issue with it.” Microsoft is sticking with its no-bounty stance.

“Microsoft does not offer compensation for information regarding security vulnerabilities. We do not believe that offering compensation for vulnerability information is the best way we can help protect our customers,” said Dave Forstrom, group manager of Microsoft Trustworthy Computing. “We also do not think it fosters the growth of a healthy ecosystem.”

Last July, Google paid more than $8,000 to a team of researchers that won a Native Client Security Contest.

Asked to comment on complaints that $500 is too little compensation for bug hunters, Chris Evans of the Google Security Team wrote in an e-mail: “We took care to design the program to allow for a wide variety of bugs to qualify for payment and to make it easier for researchers to participate–for example, we don’t necessarily need a working exploit (which is often much more difficult than finding a bug) and we’re interested in bugs even if they manifest within the Chromium sandbox.”

Chromium is the open-source project for Google’s Chrome browser and unreleased Chrome operating system. Evans said it was too early to say whether Chrome OS would be included in the bounty program after it launches.

“Chromium has already benefited from collaboration with security researchers, and we expect they will continue to scrutinize the Chromium code and help us improve it regardless of any action we take,” he said. “To them, this reward can be seen as a token of appreciation. To others, we hope the addition of a reward may encourage new people to participate beyond how they might have otherwise.”