[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                        SUBCOMMITTEE HEARING ON 
                        LEGISLATIVE INITIATIVES 
        TO MODERNIZE SBA'S ENTREPRENEURIAL DEVELOPMENT PROGRAMS 

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             APRIL 2, 2009

                               __________

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 111-015
Available via the GPO Website: http://www.access.gpo.gov/congress/house

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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)

  


     Subcommittee on Rural Development, Entrepreneurship and Trade

                  HEATH SHULER, Pennsylvania, Chairman


MICHAEL MICHAUD, Maine               BLAINE LUETKEMEYER, Missouri, 
BOBBY BRIGHT, Alabama                Ranking
KATHY DAHLKEMPER, Pennsylvania       STEVE KING, Iowa
ANN KIRKPATRICK, Arizona             AARON SCHOCK, Illinois
YVETTE CLARKE, New York              GLENN THOMPSON, Pennsylvania

                                 (iii)

  


















                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page

Shuler, Hon. Heath...............................................     1
Luetkemeyer, Hon. Blaine.........................................     2

                               WITNESSES

Klotz, Mr. Ken, Director, Illinois SBDC, Bradley University, 
  Peoria, IL.....................................................     3
Watling-Mills, Ms. Janette, Chairperson, Manasota Score, 
  Sarasota, FL...................................................     5
Kilhoffer, Ms. Donna, Program Manager, Community Education 
  Council........................................................     7
Rackley, Ms. Barbara, WBC Coordinator, Rural Enterprises of 
  Oklahoma, Inc.,Durant, OK......................................    10
Gray-Proctor, Ms. Margo, Chairwoman, Board of Directors, The 
  National Center for American Indian Enterprise Development, 
  Mesa, AZ.......................................................    13
Celli, Jr., Mr. Louis J., CEO, Northeast Veterans Business 
  Resource Center Inc., Boston, MA, Vice Chairman, American 
  Legion Small Business Task Force...............................    16

                                APPENDIX


Prepared Statements:
Shuler, Hon. Heath...............................................    32
Klotz, Mr. Ken, Director, Illinois SBDC, Bradley University, 
  Peoria, IL.....................................................    33
Watling-Mills, Ms. Janette, Chairperson, Manasota Score, 
  Sarasota, FL...................................................    38
Kilhoffer, Ms. Donna, Program Manager, Community Education 
  Council........................................................    49
Rackley, Ms. Barbara, WBC Coordinator, Rural Enterprises of 
  Oklahoma, Inc.,Durant, OK......................................    52
Gray-Proctor, Ms. Margo, Chairwoman, Board of Directors, The 
  National Center for American Indian Enterprise Development, 
  Mesa, AZ.......................................................    56
Celli, Jr., Mr. Louis J., Ceo, Northeast Veterans Business 
  Resource Center Inc., Boston, MA, Vice Chairman, American 
  Legion Small Business Task Force...............................    68

                                  (v)

  


     SUBCOMMITTEE ON RURAL DEVELOPMENT, ENTREPRENEURSHIP AND TRADE
 HEARING ON LEGISLATIVE INITIATIVES TO MODERNIZE SBA'S ENTREPRENEURIAL
                          DEVELOPMENT PROGRAMS

                        Thursday, April 2, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:30 a.m., in Room 
2360 Rayburn House Office Building, Hon. Heath Shuler [chairman 
of the Subcommittee] presiding.
    Present: Representatives Shuler, Dahlkemper, Clarke, 
Fallin, Buchanan, Luetkemeyer and Thompson.
    Chairman Shuler. The Subcommittee will now come to order.
    There is a reason so much of our recovery effort has 
focused on small business. It is simple reality--jobs. 
Entrepreneurs generate between 60 and 80 percent of all new 
positions, and are the most effective driver of economic 
growth.
    At a time when big businesses are slashing their workforce, 
we need to invest in businesses that are creating jobs, not 
cutting them. Entrepreneurial development programs, or ED, do 
just that. From small business training networks to veterans' 
initiatives, ED programs have helped countless entrepreneurs 
get off the ground. In fact, startups that receive this kind of 
assistance are twice as likely to succeed.
    It is just common sense. For new entrepreneurs, starting 
and running businesses is a heavy lift. This is particularly 
true during a recession. In 2008 alone, ED programs pumped $7.2 
billion into the communities across this country. They also 
laid the groundwork for 73,000 new jobs. With unemployment at 
its highest point in 25 years, we could use that kind of job 
creation now.
    The seven bills that we are examining today will help those 
efforts. This morning we will discuss legislation on 
modernizing the ED programs. These initiatives will help small 
business owners survive the recession and spark a recovery. 
Last year the SBA enacted a handful of new ED provisions, but 
outside of that the program has changed very little since 1999. 
Since then, the economic landscape has changed considerably.
    We are now facing a crippling recession and historic small 
business declines. In the coming year, the ED initiatives are 
going to have to adapt. As a part of this process, many 
programs will have to be streamlined and revitalized.
    It is no secret that the last year has been tough on small 
business owners. Entrepreneurs need all of the tools that they 
can get to pave a path back to prosperity. Investing in ED goes 
a long way to helping entrepreneurs, and the benefits don't 
stop at small business communities. Every dollar spent on these 
initiatives drives another $2.87 back into the economy.
    Those small business dollars are the kind of capital that 
we need to turn things around, especially in rural and 
underserved communities. But regardless of where they live, 
entrepreneurs everywhere have the ability to restart our 
economy. With a new emphasis on small business resources, they 
can help bring our country back on track.
    I would like to thank all of the Committee staff for their 
hard work on this legislation, as well as all my colleagues 
have done to support this legislation.
    With that, I will yield to the Ranking Member, Mr. 
Luetkemeyer, for his opening statement.
    Mr. Luetkemeyer. Good morning, and thank you, Mr. Chairman, 
for holding a hearing on strengthening the Small Business 
Administration's portfolio of entrepreneurial and technical 
assistance programs. At a time when small businesses are 
struggling to stay afloat, we must work to be ever vigilant in 
improving the efficiency of these initiatives.
    Rather than relying so heavily on the government to spend 
our way out of this recession, we need to focus on ensuring our 
small businesses-- truly the engines of job creation --are able 
to adequately utilize all of the resources readily available. 
As a small businessman myself, I am pleased to introduce a bill 
that will assist my many fellow small business owners and 
employees throughout my district in Missouri, and all 
throughout the country.
    Two out of every three jobs created in the U.S. are created 
by a small business. And like every recession before, small 
business will lead the way to economic growth through 
determination and innovation. Yesterday I introduced a bill--
the Expanding Entrepreneurship Act of 2009--that would make 
several changes to SBA's entrepreneurial development programs.
    The bill aims to expand entrepreneurial job growth by 
pulling resources for duplicative government programs into a 
streamlined and effective program to help emphasize job 
creation and retention. Specifically, this bill requires the 
SBA to develop a job creation strategy for 2009/2010, including 
the agency's intent toward using existing programs to create 
and retain jobs throughout the United States.
    The SBA Administrator would collect measures related to the 
program performance and job creation, ensuring that existing 
programs are being used effectively and duplicative government 
programs are done away with. And to ensure easy access for 
entrepreneurs, a database of providers of entrepreneurial 
development services would be established. To be sure, the 
House Small Business Committee and this Subcommittee recognize 
how critical small business is to the economic health of this 
country.
    The Office of Entrepreneurial Development at SBA assists 
entrepreneurs with practical and technical skills needed to 
start and help grow their businesses. The office carries out 
this mission through a network of educational resource 
partners, including Small Business Development Centers, Women's 
Business Centers, the Service Corps of Retired Executives, and 
the Small Business Training Network.
    Additionally, programs run by the Office of Native American 
Affairs and the Office of Veterans Business Development work to 
bolster entrepreneurship in the Native American and veterans 
communities.
    I am interested in hearing more about the current state of 
entrepreneurial development programs at the SBA in today's 
economic climate. I look forward to examining other pieces of 
legislation my colleagues have introduced aimed at improving 
the entrepreneurial development programs at SBA.
    And with that, I yield back, Mr. Chairman.
    Chairman Shuler. Thank you, sir.
    I yield to Mr. Schock for introducing our first witness. 
And if our first witness would read their testimony, and then 
we will break for votes, and then we will come right back. So 
at this time I will yield to Mr. Schock for introduction of our 
next witness.
    Mr. Schock. Thank you, Mr. Chairman. I am pleased to 
introduce to you Mr. Ken Klotz from my district in Peoria, 
Illinois. Mr. Klotz is the director of the small business 
development center at Bradley University. Ken was recognized 
recently as the Illinois State Star at the annual conference of 
the Association of Small Business Development Centers.
    This award was presented to Ken for his outstanding service 
as an SBDC director, his commitment to serving Illinois' small 
businesses, and his tremendous support of the Illinois 
entrepreneurship network and the Illinois SBDC. He has been 
with Bradley University's SBDC for over 10 years.
    Ken has assisted more than 200 individuals and business 
owners in the preparation of their business plans, resulting in 
the start up of 143 new businesses in the Peoria area.
    Thank you.

                     STATEMENT OF KEN KLOTZ

    Mr. Klotz. Thank you, Mr. Chairman, and all the members of 
the panel. And a special thanks to my Congressman, Aaron 
Schock, for inviting me today.
    SBDC clients come in all flavors, from the individual who 
wishes to start a business to the company that has been in 
business for generations. Our services run from the very basic 
to the very complex, from guiding people through the startup 
steps necessary to launch a business correctly to helping a 
company owner diagnose cashflow difficulties and bottlenecks. 
All of our clients need advice on business plans, marketing, HR 
issues, and a whole host of other issues.
    With the situation we are faced with today, I know 
government resources are stretched painfully thin. So it 
becomes incumbent upon government to fund those programs that 
have proven to provide a reliable, measurable, and even a 
predictable return on investment of taxpayer dollars. The SBDC 
program historically has met that standard above and beyond, 
every year producing a positive return on investment for the 
taxpayer dollar.
    And that is just not my opinion; it is backed up by data. 
Every year our nationwide association, the Association of Small 
Business Development Centers, commissions a study of ROI of the 
SBDC program. This past year Dr. James Chrisman, a professor at 
Mississippi State University, provided that research for us and 
found that for every one dollar of taxpayer investment in the 
program, there is a return of $2.87. And that has been reliably 
proven year after year after year.
    For calendar year 2008, the type of economic impact 
produced by the SBDC program has been dramatic. Just a few 
examples for you--80,000 new jobs created by clients assisted 
by SBDCs, more than 95,000 existing jobs saved in an 
environment where we are losing jobs daily, and more than 
13,000 new businesses launched nationwide.
    Since January of 2009, my center, as well as other SBDCs 
around the country, have experienced a huge increase in demand 
for their services. I have attributed that increase, at least 
at my center, to job losses, some early retirement buyouts, and 
then, most distressingly, an increase in the number of small 
businesses that are facing financial difficulties.
    The SBDC program and its subcenters really are already 
stretched very thin in terms of their resources. So handling 
this influx of additional clients is very difficult to deal 
with without additional funding resources. So I wholeheartedly 
support this legislation.
    Job losses, it is no surprise, is at an epidemic proportion 
today. And I know we see a lot of national media about large 
companies losing workers and proposed loss of jobs at the Big 3 
automakers, but for me and where I live every day, it is small 
businesses that have experienced the job loss.
    The payroll processing giant ADP, recently just completed a 
study for the January to February 2009 time period, and they 
found that 697,000 jobs were lost in the country, but a 
staggering 82.6 percent of those were among companies with 
fewer than 500 workers. We need to stop that now, and SBDCs are 
uniquely situated to provide the type of assistance that will 
allow business owners to squeeze more dollars out of their 
balance sheet to stem the tide of job losses.
    For me, the real impact of our services is in the client 
success stories, and I wanted to take a brief moment to share 
one with you today, my client Valerie Lilley and her company, 
Sofi's Stitches. In 2001, Valerie started this business from 
her kitchen table with a sewing machine borrowed from her 
grandmother, and what she would do is sew authentic replicas of 
Medieval era clothing. When she had enough of it, she would 
load it in her van, drive to a Renaissance Fair in some state, 
sit in the parking lot and sell her garments, and then drive 
back home.
    But she really wanted to grow her business; that was her 
dream. So after dozens of meetings with her, on everything from 
business plans to growth strategies to financial management, by 
2007 she had reached--she had grown her company to employ 12 
people, and she crossed the $1 million mark in sales annually. 
She had a vibrant catalog and web sales arm to her business, 
and she owned Renaissance Fair booths in 14 states. No more 
parking lots for her.
    Now, if the story stopped there, it would be a great story. 
But it doesn't stop there. Early in 2008, a custom men's suit 
manufacturer closed, putting 80 people out of work without any 
notice whatsoever. I recall a conversation Valerie and I had 
where she was looking for a complementary arm or product, and 
so I suggested that she purchase the assets, which she did. She 
started back--started up the business again, hiring back 20 of 
the displaced workers, and now is on the cusp of hiring 80 more 
within the next six months when she lands a U.S. Army contract.
    That is the face of small business development centers, and 
I certainly urge the initiatives put forth by this Committee 
today.
    Thank you very much.
    [The statement of Mr. Klotz is included in the appendix at 
page 33.]
    Chairman Shuler. Thank you, sir. Thank you for your 
testimony.
    At this time, I would like to yield to my good friend Mr. 
Buchanan for introduction of the next witness. We will go ahead 
and do that and the witness will give her testimony.
    Mr. Buchanan. Thank you, Mr. Chairman. It is my pleasure to 
introduce one of my constituents from my area. Janette Mills is 
chairwoman of the Manasota SCORE chapter in our Congressional 
District 13 in Florida. And SCORE has, as many people know or 
might not know, 389 chapters in the country, 10,500 volunteers, 
and her SCORE chapter that she oversees has about 50 volunteer 
consultants that assist up-and-coming entrepreneurs by 
mentoring them on a wide range of business issues.
    I know as chairman of the Florida Chamber four years ago we 
represented 137,000 businesses. Many of them were--95 percent 
of them were small businesses of 50 or 30 employees or less. 
And one of the things that was interesting in talking to Ms. 
Mills was the idea of how they help in business planning, and I 
know business planning is one of the big keys to success.
    She also is an entrepreneur in her own right. She has a 
commercial window cleaning business that serves Sarasota, 
Manatee Counties, in my district. I am thrilled to have her 
today and looking forward to her testimony.
    Thank you.

               STATEMENT OF JANETTE WATLING-MILLS

    Ms. Watling- Mills. Chairman Shuler, Ranking Member 
Luetkemeyer, and Committee members, my name is Janette Watling-
Mills. I am chapter chair of Manasota SCORE in Sarasota, 
Florida. Thank you for this opportunity to testify.
    I am here to represent SCORE and the 11,200 SCORE volunteer 
counselors who donate their time and expertise to serve 
America's entrepreneurs. As you know, SCORE volunteers are 
working or retired business owners, corporate executives, 
teachers, civil servants, and military leaders who share their 
wisdom and lessons learned during their careers.
    I am a born entrepreneur, having started my first business 
making and selling seashell earrings at age 8. My background 
and education are in interior design. In addition to my role as 
chapter chair, I own a commercial window cleaning company 
serving Sarasota and Manatee Counties in Florida. I have also 
owned several other successful small businesses.
    Like most of my SCORE colleagues, I am active in other 
volunteer organizations and in my community. I joined SCORE in 
2007 and became chapter chair in 2008. SCORE offers free 
business counseling and low-cost workshops. Since its founding 
in 1964, SCORE has helped more than eight million businesses. 
Our volunteers donated more than 1.3 million hours of service 
last year.
    By helping small businesses both start up and make it 
through the recession, SCORE helps in creating jobs and saving 
jobs. Today SCORE has 370 offices across the country, plus 800 
branches. Last year, SCORE volunteers helped more than 357,000 
entrepreneurs.
    My SCORE volunteer team in Sarasota includes 53 dedicated 
men and women who provide SCORE services locally. In the last 
five years, more than 2,500 clients received personalized 
service for starting their businesses. More than 1,000 clients 
who owned existing businesses sought our help, and more than 
1,100 individuals attended one of our workshops. In all, 
Manasota's SCORE volunteers donated more than 22,000 hours of 
service.
    Nationally, SCORE offers free information resources online. 
Last year more than 2.8 million people visited www.score.org. 
SCORE offers resources specifically for women, minorities, 
young entrepreneurs, babyboomers, and veterans. More than half 
of our clients and 25 percent of our volunteers are women and 
minorities. SCORE fulfills a vital role for America's small 
businesses by providing much- needed technical assistance.
    Many small businesses continue to struggle with layoffs, 
access to capital, cashflow, and management issues. SCORE has a 
proven track record of both creating and saving jobs by 
improving small business survival rates and accelerating small 
business formation.
    Research shows that small businesses are five times more 
likely to start if they get assistance from a government-
supported program like SCORE. SCORE mentors themselves have 
faced economic opportunities and difficult times. They know how 
important it is to make a payroll, repay a line of credit, 
anticipate a down economy, and, most importantly, what to do 
next.
    All of us at SCORE want to help small businesses hire more 
people and keep current employees working and their jobs safe. 
To achieve these goals, SCORE continues to rely on the federal 
grant for operational funds to support our infrastructure 
needs, public outreach, and volunteer recruiting and training.
    In a difficult budget year, we appreciate the Committee's 
support of SCORE and the budget authorization of $7 million in 
2010 and 2011. Given the economic challenges our country 
currently faces, an additional investment in SCORE would allow 
us to serve more businesses and individuals that are struggling 
or have lost jobs due to layoffs or business failure.
    We request that the Committee consider authorizing SCORE at 
$10 million in 2010 and 2011. Additional funding will allow us 
to implement our modernization plan, including updating our 
website, improving service quality through training and 
certification of volunteers, and developing a new service model 
to guide our clients through the many resources offered by 
SCORE.
    Chairman Shuler, Ranking Member Luetkemeyer, and Committee 
members, every entrepreneur SCORE helps is a company, a job, 
and a contributor to the economy. Every small business matters, 
and SCORE mentors make a difference.
    We appreciate the support of this Committee and your 
personal support of SCORE. I would be pleased to answer any 
questions you may have, and thank you again for this 
opportunity to testify.
    [The statement of Ms. Watling-Mills is included in the 
appendix at page 38.]
    Chairman Shuler. Thank you so much.
    At this time, we will be in recess until after votes.
    [Recess.]
    Chairman Shuler. I would like to call this hearing back to 
order.
    I would like to thank both the members and our witnesses 
for their patience during our vote.
    At this point in time, I would like to yield to Mr. 
Thompson for the introduction of our next witness. Our next 
witness will have five minutes.
    Mr. Thompson. Well, Mr. Chairman, Ranking Member, thank you 
for holding this hearing today to focus on entrepreneurial 
development programs that will strengthen the Small Business 
Administration's capacity to continue to spur economic growth 
in hard-to-reach and underserved areas.
    For many entrepreneurs in my district, in order to access 
resources provided by the SBA and the small business 
development centers, they have to drive long distances through 
often harsh Pennsylvania winters. In my rural district, we have 
learned to use our limited resources wisely. A person who knows 
how to use those limited resources is Ms. Donna Kilhoffer, who 
I am happy to have here today.
    Donna is a lifelong resident of Ridgway, Pennsylvania, and 
since 1990 Donna has been the program manager for the Community 
Education Council of Elk and Cameron Counties, which provides 
affordable academic and professional development by partnering 
with institutions of higher learning, such as the University of 
Pittsburgh, Clarion University, Lock Haven University, and, my 
alma mater, Penn State University, along with the countless 
additional partnerships with regional businesses and industry.
    Donna has worked in the past with the North Central 
Regional Planning and Development Commission and is a member of 
the Elk County Women's Association, and I welcome Donna today 
to speak on behalf of the Committee's proposals, including my 
bill, H.R. 1807, a bill to provide distance learning to 
potential and existing entrepreneurs that was introduced on 
Tuesday of this week.
    And with that, I look forward to Donna's testimony to 
address the needs and the goals of cooperatives such as the 
Community Education Council and how the SBA can create further 
access for our rural neighbors.
    Donna, welcome.

                  STATEMENT OF DONNA KILHOFFER

    Ms. Kilhoffer. Thank you, Congressman Thompson.
    Chairman Shuler, Ranking Member Luetkemeyer, it is my 
pleasure to be here. As defined by the Pennsylvania Department 
of Education, the community education councils are nonprofit 
organizations that will bring higher education opportunities to 
rural and educationally underserved communities.
    The community education councils serve as a vehicle for 
employment opportunities which meet the community's current and 
future economic development needs. The Community Education 
Council of Elk and Cameron Counties was formed in 1992 to fill 
the educational void in those two counties.
    As the economic situation in our area has changed and we 
have grown, we have taken on many different situations and 
projects that could be described as support services or 
auxiliary educational services. The facilitation of financial 
and entrepreneurial education in our area is one such service. 
It is our role as a post-secondary facilitator to find the most 
appropriate and cost effective way to bring training and 
education to Elk and Cameron Counties.
    The CEC is available to partner with and facilitate new 
programs, classes, training opportunities, that are pertinent 
to the economic growth and a prepared workforce for our region. 
We are flexible, and we look at any means possible for the 
presentation of those programs. Distance technology has been a 
platform for providing education, training, seminars and 
workshops on a variety of levels and a variety of topics. Not 
only credit courses, but continuing education units for various 
fields such as financial and legal entities and child care 
developers are all means of obtaining information through our 
facility.
    Our local high schools use distance technology for dual 
enrollment and advanced placement courses. Our local hospital 
uses distance technology in the area of telemedicine and rural 
health and home care. Our county itself and Cameron County are 
situated in north central Pennsylvania; north of Interstate 80, 
75 miles south of the New York State border. We are in the 
heart of the Allegheny National Forest at the center of the 
Pennsylvania Wilds Initiative, just south of the Route 6 
corridor and the hub of the Lumber Heritage Initiative.
    We have just under 50,000 residents. We have approximately 
12 percent unemployment rate in Elk County and 15 percent 
unemployment rate in Cameron County. We are looking, in our 
future, to use the tourist trade and the natural resources of 
the Allegheny National Forest, the Clarion River, and the 
assets of the Pennsylvania wilds in our ability to rethink, 
retool, and rebuild our economic base.
    With the growth of tourism as an economic base, we will 
have many small businesses that will be centered on that trade. 
We will need to grow new entrepreneurs and new entrepreneurial 
ventures. What I would like to do is introduce you, through my 
testimony, to a couple of the residents of our communities.
    Doug is the founder and owner of a small powdered metal 
business that employs under 20 individuals. He received his MBA 
from Penn State University by attending classes through 
interactive television at the CEC. Now Doug needs to be aware 
of the new legislative initiatives and the new OSHA 
requirements regarding taxes, the new insurance regulations, 
all kinds of things. An association with the Small Business 
Administration and the CEC that provides information such as 
this through distance technology would benefit him greatly.
    Nate, an Elk County native, graduate of the local high 
school, is a young man in his early twenties with a dream of 
running a canoe livery along the Clarion River. Nate has been 
canoeing the river since he was a toddler. He has knowledge of 
the local area. He has the desire to put in the long hours and 
the hard work that running a small business would require.
    What Nate does not have is the knowledge needed to get 
started. He needs to know how to write a business plan. He 
needs marketing data. He needs marketing opportunities. He 
needs access to information and experts relating to the legal, 
tax, and financial issues he will encounter.
    One other young man in our community, Kurt, is a family man 
who, in the mid-'90s when the local brake producing company 
shut down, was forced to find a new means of supporting his 
wife and young child. Kurt turned to his love for fishing, 
something that fits very well into our tourist-type, 
recreational area.
    Kurt started a fishing guide business. Now Kurt uses the 
small business development center as a resource for anything 
that is happening that could relate to his business.
    The most telling would be Angela. Angela sent me this e-
mail last week. ``The purpose of this e-mail is to obtain 
information regarding upcoming courses that will inform us and 
other small business owners on a small business tax. Second, a 
course for small business financing and insurance information 
would help.''
    ``So what I am saying is that I am looking for any school 
in the surrounding area that is offering courses pertaining to 
this subject. We are willing to travel to Bradford, DuBois, 
Ridgway, Clearfield, Clarion, if needed, but of course we would 
prefer to keep it local.''
    I am still looking for a course for Angela. I am sure the 
Small Business Administration has something that could help.
    The entrepreneurial spirit is alive and well in our area. 
The resources of the Small Business Administration, married 
with distance education technology, appears to be one of the 
most logical, timely, and cost- effective ways to bridge the 
gap that would allow the CEC to have answers for Angela and the 
questions she has posed, as well as allow Nate to fulfill his 
dream and open his canoe livery.
    It would appear to me that the legislative initiatives 
presented, in particular H.R. 1807 regarding entrepreneurial 
development, would be a win-win situation for all involved.
    Thank you.
    [The statement of Ms. Kilhoffer is included in the appendix 
at page 49.]
    Chairman Shuler. Thank you.
    At this time, I would like to yield to the gentlewoman from 
Oklahoma to both give her introduction to our next witness, and 
also to introduce her bill.
    Ms. Fallin. Thank you, Mr. Chairman. I appreciate that, and 
I want to thank all of our panelists for being here today to 
enlighten us on your areas of expertise. We appreciate your 
time.
    And I want to thank you, Mr. Chairman, for having this, and 
our Ranking Member for having this hearing today. I would like 
to elaborate for a few moments on H.R. 1838, the SBA Women's 
Business Centers Improvement Act, which is going to be 
discussed by Dr. Rackley's testimony in just a few moments.
    The women's business centers are an important part of our 
grant programs that are funded by the Small Business 
Administration, and today women's business centers all across 
the country are providing women entrepreneurs with much- needed 
technical assistance in starting and operating their small 
businesses.
    In the mid-1990s, the federal government began awarding 
grants to women business centers that were operating as 
nonprofit organizations in conjunction with institutions of 
higher learning. Originally, these grants were intended to be 
awarded to small business centers in their first five years, 
with the understanding that after the five-year period had 
ended the center would be financially self-sustaining.
    Although many of the women's business centers did meet this 
goal, some actually have not, and for a variety of reasons. 
And, as a result, a greater percentage of the funding of this 
program has actually been consumed by operating costs, 
potentially at viable centers rather than the intended purpose 
of establishing the new business centers.
    The result is a drag on the system, and viable business 
centers that are not truly serving an unmet need in their 
communities. And this jeopardizes the effectiveness and the 
viability of the entire program.
    So the SBA Women's Business Programs Act of 2009 restores 
the original priorities held by the Federal Government when 
this program was created, and it will offer a three-tiered 
system of funding and lower caps on spending for older business 
centers. And with that, we can ensure a balanced percentage of 
the funding is used to support both the new and the existing 
business centers.
    And so, Mr. Chairman, we have prepared that bill and have 
filed it, and we are looking forward to having the testimony on 
it today.
    And I have a great pleasure of introducing Dr. Barbara 
Rackley, who is here from my home State. And we are glad to 
have you here, and Margo is here, too, from Oklahoma. Good to 
see you, too. Glad to have you here.
    Dr. Rackley serves as the coordinator of the REI's Women's 
Business Center in Durant, Oklahoma. After spending 21 years as 
an educator, Dr. Rackley has led Oklahoma's REI women's 
business centers and has helped over 10,000 women entrepreneurs 
through training and professional development.
    Dr. Rackley holds a degree in home economics from Oklahoma 
State University, which is my alma mater, and Southeastern 
Oklahoma State University, and a Ph.D. from Oklahoma State 
University also. She is currently very active in local 
organizations and advisory boards for the women's center at the 
Medical Center at Southeastern Oklahoma and the small business 
management program at Kiamichi Technology Center.
    She was actually named the SBA Woman of the Year and the 
Business Champion of the Year in 2004. So, Dr. Rackley, we are 
very proud to have you here today representing our state, and 
we welcome your testimony.

                  STATEMENT OF BARBARA RACKLEY

    Ms. Rackley. Thank you, Congresswoman Fallin.
    Mr. Chairman, distinguished members of the Rural 
Development, Entrepreneurship and Trade Subcommittee. I am Dr. 
Barbara Rackley, coordinator of the Women's Business Center of 
Rural Enterprises of Oklahoma. I appreciate your invitation to 
appear before you to discuss H.R. 1838, the Small Business 
Administration's Women's Business Programs Act of 2009, 
sponsored by Congresswoman Mary Fallin of Oklahoma.
    On behalf of REI, I am pleased to offer positive insight on 
important legislation to reauthorize the women's 
entrepreneurial development programs of the SBA.
    REI is a statewide nonprofit economic development 
organization that has assisted Oklahoma businesses and 
communities for more than 25 years. We partner with state and 
local governments and local communities to create jobs and 
promote economic growth across Oklahoma. One of our most 
successful initiatives is the women's business center, which 
provides training and professional development services for 
women entrepreneurs.
    The services of our women's business center are available 
from two locations, Durant and Oklahoma City. The mission of 
our center is to assist Oklahoma's enterprising women who want 
to start a business or expand an existing one. To date, we have 
assisted over 10,000 women to help them reach business 
ownership goals. It is safe to say that we would not be in a 
position to provide these essential services without the 
support and partnership of SBA's Office of Women Business 
Ownership.
    Our center was first funded in 2001 to serve the 
southeastern quadrant of Oklahoma. At that time, two other 
centers in Oklahoma City were active but failed to complete 
their initial five-year contract. This illustrates the 
importance of establishing the centers within an organization 
such as REI. Our Board of Directors views the WBC as an 
integral part of our organization, and state funding is secured 
for our matching funds.
    At the end of the first five years, REI applied for another 
contract to extend services statewide so that entrepreneurs 
across Oklahoma would have access to all resources offered by 
our WBC. REI was successful in securing such an additional 
contract, and ultimately opened its second center in Oklahoma 
City.
    I would like to share some real-life stories with you. We 
always talk numbers, but for a few minutes please indulge me to 
talk about some of our wonderful women we have in Oklahoma, and 
how we have been able to assist them in their businesses.
    We call one of our clients the ``fudge lady'' because she 
makes the best fudge ever tested. Her fudge must be purchased 
online, because she is located in Battiest, Oklahoma, in the 
middle of the Ouachita mountain range. It is almost on the 
Oklahoma-Arkansas border, and you must know exactly how to get 
there to be able to find her.
    When she first contacted us, she was already making fudge, 
but she did not have a commercial kitchen. We were able to help 
direct her to the proper resources to help her correctly 
establish a food business.
    Her husband built a commercial kitchen next to their house, 
and she attended our e-commerce class to learn more about doing 
business online. Now her business is established, she operates 
by all of the standard health codes, and she ships her fudge to 
anyone who shops online.
    Another client started her company at her kitchen table as 
an independent software sales rep. She partnered her company 
with other major publishers to provide research- based software 
to schools in southeastern Oklahoma. At the time the women's 
business center was opening, she was moving into one of our 
business incubators. She and her staff always take advantage of 
programs offered by the WBC. With an expanded staff for 
research and development, her first software program took shape 
in 2006. Now, three years later, over 10,000 students in four 
states use this program every day.
    When she started, she had one employee. Now she has 17 
sales reps working in five states. Tonight, at the Durant Area 
Chamber of Commerce banquet, this incredible lady's company 
will be recognized as the Small Business of the Year.
    Training workshops and networking opportunities are held in 
locations convenient to the women entrepreneurs, saving them 
both time and money. Some of our business owners are beginning 
to feel the impact of the economic downturn. Although they need 
training, they will not have the extra money to pay for 
training workshops away from home.
    That puts even more value on the services of our women's 
business center. The majority of our training workshops are 
absolutely free, with an occasional minimal charge. These 
include small business basics, marketing, financing, business 
plan development, doing business with the government, and e-
commerce.
    One of the concerns being voiced by business owners and by 
lenders was the lack of accurate record keeping. We listened, 
took action and started teaching Quickbooks classes. This 
training is provided for about one-third the cost of other 
Quickbook training classes.
    The ladies we talked about, and everyone who attends our 
training workshops and networking events, are the reasons we 
need continued funding for women's business centers. Many are 
starting businesses with limited funds or sizeable loans. They 
don't have the extra resources to pay for consultants to assist 
in developing a business plan, developing a marketing strategy, 
or getting information for building a website.
    There is not a greater return on investment than seeing an 
entrepreneur start a business, develop it, expand it, create 
jobs, and ultimately celebrate success. When they succeed, we 
all succeed.
    For the past eight years, I have been privileged to have a 
job that can be both fun and challenging, but the greatest 
reward is meeting Oklahoma's enterprising women.
    Thank you for the opportunity to speak on behalf of women's 
business centers.
    [The statement of Ms. Rackley is included in the appendix 
at page 52.]
    Chairman Shuler. Thank you, Dr. Rackley. It sounds like we 
need to get the lady who makes the fudge to--we probably need 
to sample some of that.
    [Laughter.]
    Ms. Fallin, I know that is from your district. That is--
    Ms. Rackley. I can give you her--
    Chairman Shuler. We can get the website address.
    Ms. Rackley. I can give you the website.
    [Laughter.]
    Chairman Shuler. Very good.
    Ms. Rackley. And she would love to ship it to D.C.
    Chairman Shuler. Absolutely.
    I would like to yield back to Ms. Fallin to introduce our 
next witness.
    Ms. Fallin. Thank you, Mr. Chairman, and I know how small 
of a town Battiest is. I can't remember exactly, but it is a 
couple hundred probably--
    Ms. Rackley. Not many.
    Ms. Fallin. --people. So that is--it is a remote, rural 
area, so we are very proud of that lady.
    Well, I am very pleased today to have two Oklahomans that 
are on our panel, and the next lady--I actually know both of 
these ladies, but I have worked with Margo on past boards and 
commissions when I was in the State as Lieutenant Governor. So 
thanks for coming up here today.
    Ms. Gray-Proctor is the chairwoman of the National Center 
for American Indian Enterprise Development. The center is the 
first national organization that is solely dedicated to 
developing American Indian economic self- sufficiency through 
business ownership.
    Ms. Gray-Proctor is also the owner of the Horizon 
Engineering Service Company and has received many 
entrepreneurial awards in her own right, including an award for 
her operation of the State Business of the Year from the 
American Indian Chamber of Commerce in Oklahoma.
    So we are glad to have you here today, and we welcome your 
expertise.

                STATEMENT OF MARGO GRAY- PROCTOR

    Ms. Gray-Proctor. Thank you. Chairman Shuler and Ranking 
Member Luetkemeyer, I am Margo Gray-Proctor of Tulsa, Oklahoma. 
I am a tribal member of the Osage Nation, President of the 
Horizon Companies and a third-generation entrepreneur.
    My small business provides engineering and other services 
to federal, state, tribal, and local governments, and private 
sector customers. I was recently elected Chairman of the Board 
of Directors for the National Center for American Indian 
Enterprise Development. This year we celebrated our 40th 
anniversary of servicing Indian country.
    The National Center is pleased to testify on the new Native 
American Business Development Enhancement Act of 2009, H.R. 
1834. Here are our thoughts on this new proposal. First, we are 
delighted that H.R. 1834 would authorize the SBA's Office of 
Native American Affairs with $2 million annually, and install 
an Associate Administrator so that this office can continue to 
do outreach efforts and oversee a new grant program proposed.
    We recommend that this office also coordinate Native 
American participation in SBA's 8(a) program, generally, and 
specifically the SBA's ongoing 8(a) reform agenda to improve 
the accountability, transparency, efficiencies, and success of 
the 8(a) program as it applies to Alaska Native and tribal 
enterprises, in their joint venture and other partnering 
arrangements.
    The new Associate Administrator should also work with other 
SBA divisions to improve the access of tribes, Alaska Native 
corporations, and other Native entrepreneurs to procurement 
assistance, small business loans, innovative research support, 
and other SBA programs.
    Second, the National Center and the other national Native 
organizations support substantial funding increases for 
existing programs that have a proven track record of 
effectively targeting business management, financial 
assistance, and procurement technical assistance to tribes, 
Alaska Native corporations, and enterprises owned by them and 
Native entrepreneurs.
    We support Section 2 of H.R. 1834 and applaud the sponsor's 
recent decision to increase the authorization to $15 million 
for FY2010, and $17 million for FY2011, for a new program of 
grants to entities designated for funding.
    We like the flexibility in designating entities for grant 
support as long as existing NABECs, AIPTACs, and Native CDFIs 
qualify for designation. If grant funding is made available 
before SBA finalizes new regulations to designate future grant 
recipients, we recommend that the Associate Administrator 
distribute those grant funds pro rated to existing Native 
business and procurement assistance centers.
    Section 3 of H.R. 1834 would authorize $7 million in each 
of the fiscal years, 2010 and 2011, for additional grants for 
which only existing SBDCs would be eligible if they operate in 
states with a Native American population of at least one 
percent. So SBDCs in 15 states would qualify.
    Ultimately, we would like to see more partnering between 
the SBDCs, the NABECS, and AIPTACs, to cross-fertilize their 
respective capabilities and training. Therefore, we think it 
would make sense to require or encourage an eligible SBDC to 
partner with the NABEC or AIPTAC, in applying for a grant under 
Section 3.
    The National Center speaks from experience. We are the 
longest-serving Native business development assistance provider 
in the United States. The National Center has evolved into a 
national organization with nonprofit business and procurement 
technical assistance centers nationwide that support our 
mission--to develop the American Indian private sector as a 
means to help our native communities become self-sufficient.
    Our Board of Directors consists of tribal business and 
political leaders who have always played a pivotal role in 
spurring small business growth and breaking down barriers 
impeding Native companies' success. The National Center 
operates three NABECs, and several offices function as American 
Indian Procurement Technical Assistance Centers.
    All our offices are staffed primarily by Native American 
business and procurement consultants with experience and 
training to deal with business challenges unique to Indian 
country, as noted in my written statement.
    We have a great track record of having assisted 80 percent 
of the tribes in the lower 48 states and more than 25,000 
native enterprises and trained over 10,000 tribal members. Over 
the last four years alone, the National Center has helped its 
clients capture $2.5 billion in contract awards and financing, 
translating to over 50,000 jobs.
    The National Center was the first Indian business 
enterprise funded by the Minority Business Development Agency 
after it was created in 1971. The MBDA now funds 30 minority 
business centers nationwide and has supported eight NABECs 
until last year.
    Now there are only six NABECs, and we operate three of them 
in Arizona, California, and Washington State. There used to be 
NABECs in Minnesota and North Carolina.
    Mr. Chairman, the first North Carolina NABEC was operated 
by the Eastern Band of Cherokees, but the funding was very low 
and they did not seek renewal when MBDA re-advertised it. The 
National Center bid to operate the NABEC, and we won, but we 
soon realized why the Eastern Band lost interest.
    You see, under the Bush Administration, MBDA instituted a 
strategic growth initiative and directed its centers to help 
larger companies that were capable of winning larger contracts 
and business financing, presumably so that there would be more 
bang for the federal buck invested in its centers. This 
approach can work in more urban areas, but it is unrealistic 
for rural areas where mostly small businesses operate in Indian 
country.
    We hope that MBDA goes back to the drawing board and 
decides to open another NABEC in its Southeast Region soon. 
Native American business development was flatlined during the 
Bush administration, and so we are looking at more additional 
millions to support the minority centers.
    By comparison, the SBA has received substantial increases 
in recent years for its small business development centers. 
This funding disparity is what prompted the National Center to 
make the case for the need to elevate Native American business 
development issues within the Commerce Department and at the 
SBA.
    At our RES conference this year, we had over 25,000 
individuals, 320 exhibitors, for two days of business 
workshops, a day-long procurement pavilion with hundreds of 
bid-matching meetings. Several national Native organizations 
recommended that Congress: one, authorize and adequately fund 
SBA's Office of Native American Affairs, and, two, provide 
substantially more funding for business assistance centers 
devoted specifically to the business development needs of 
Indian country.
    We are delighted that Congress is responding so quickly. In 
closing, I want to thank the Subcommittee for inviting the 
views of the National Center as the longest-serving small 
business assistance provider with the broadest reach in Indian 
country. We look forward to working with you and your staff on 
this important Native American entrepreneurial development 
proposal as it proceeds through the legislative process.
    [The statement of Ms. Gray-Proctor is included in the 
appendix at page 56.]
    Chairman Shuler. Thank you for your testimony. As you can 
see, my gavel actually is from--
    [Laughter.]
    Our next witness is Louis Celli, founder and CEO of the 
Northeast Veterans Business Resource Center in Boston, which 
trains veterans to strengthen and grow small businesses.
    Mr. Celli, you will be recognized for five minutes.

                    STATEMENT OF LOUIS CELLI

    Mr. Celli. Thank you, Chairman Shuler, Ranking Member 
Luetkemeyer, and members of this Committee. Thank you for the 
opportunity to present my views on the SBA and their 
entrepreneurship development programs as it applies to the 
veteran community.
    As CEO of the Northeast Veterans Business Resource Center, 
I have been able to gather data, case histories, and research 
important to veterans' entrepreneurship. Our network of veteran 
business owners, state, federal, and community-based leaders 
totals more than 12,000 stakeholders that we maintain contact 
with on an annual basis. My testimony today is a reflection of 
this work as I represent this community.
    The United States has brought freedom to more people than 
any other country in history. That freedom was bought and paid 
for with the sacrifices of our veterans. In his book The 
American Patriots Almanac, William J. Bennett describes 
patriotism in this way. ``Patriotism brings an obligation. It 
involves actions, not just feelings. Occasionally, being a 
patriot means putting national interests before self. Here is 
when patriotism can be a hard virtue to live up to: when it 
involves sacrifice.''
    The signers of the Declaration of Independence, for 
example, put their fortunes, their safety, and their sacred 
honor on the line for something greater than themselves.
    September 11 reminds us that there will always be tyrants, 
madmen, and bullies who hate American ideal. And President 
Harry Truman once said, ``Freedom calls for courage and 
endurance, not only in soldiers but in every man and woman who 
is free and determined to remain free.''
    We ask the patriots of this Committee, our Congress, and 
our government to make the hard choices necessary to support, 
defend, and enable our nation of veterans and their families 
who, according to the U.S. Census Bureau, represent more than 
10 percent of the total U.S. population.
    In 1945 and '46, millions of Americans took off their 
uniforms after World War II and came home to a job market that 
was shrinking because the war no longer provided economic 
stimuli. In 1953, the Small Business Act created the Small 
Business Administration. The Act was created to encourage and 
promote small business growth and free competition, but, still, 
large firms which grew powerful as a result of war production 
had a tremendous advantage over smaller startup companies, and 
the SBA was supposed to help level that playing field.
    While small businesses collectively represent 97 percent of 
all employers, and are responsible for the majority of all 
corporate tax deposits, we are still just a community of 
individuals. Big businesses have an unequal ability to 
immediately influence opinion, whether legislatively, through 
public advertising, or private investment in the political 
process.
    To give you an idea of just how unbalanced this divide 
really is, when we talk about small businesses we think about 
micro enterprises--the local landscaper, barber, hardware 
store. But what many Americans don't realize is that by federal 
standards a business is small if they have less than 500 
employees, and in some industries it can be as high as 1,500.
    Where does the voice of the micro enterprise or startup 
venture fit in? More often than not, it doesn't. Despite all of 
the programs and money dedicated for entrepreneurial outreach 
and development, veterans have consistently remained the most 
historically under-maximized and overlooked socioeconomic group 
by SBA. Veteran entrepreneurship programs only started 
receiving funding in 1999, and have lost federal appropriations 
every year since. In 2009, the appropriations gave us a total 
of $1.2 million to fund a national network of veterans business 
center programs, which is down from $2.1 million the year 
prior.
    The SBA Office of Veterans Business Development, which is 
responsible for supporting five business outreach centers, 
received less than $750,000 for the fifth year in a row to 
support these centers.
    Veterans face a unique set of challenges when starting or 
growing small businesses or micro enterprises. Due to the 
multiple transfers and relocations that occur during a military 
enlistment, veterans commonly leave the military as renters, 
never really having the opportunity to purchase a home. Since 
most new ventures are financed based on personal credit backed 
by assets, veterans face a major disadvantage trying to start a 
new business.
    Military members commonly live in military communities. 
Their interaction with the civilian economy is usually reduced 
to consumer spending. They don't have the opportunity to 
network or acquire industry-specific skills, knowledge, or 
experience that might be leveraged when starting a new 
business. Guard and Reserve members, as you well know, are 
always subject to extended and multiple deployments, which can 
render any business of nearly any size bankrupt and destitute.
    Military members are trained with a can't fail/ won't fail 
attitude, and often have a false sense of security regarding 
the level of assistance available as they depart the active 
military support system. While considering post-military 
operations, veterans are told that there are entrepreneurial 
programs and business financial assistance programs out there 
to assist them once they leave the military. We mistakenly 
believe this to be true.
    I also would like to share a story. Two friends graduate 
the same class of 2001. Both have similar grades, both are from 
minority descent, one goes to a trade school for heating and 
air conditioning, and the other one joins the military, trained 
in heating and air conditioning, and deploys to Iraq.
    The first guy who went to trade school works as an 
apprentice for four years, starts a small business. That 
business then is accepted into the 8(a) program, business 
development program, and by 2008 he is servicing multiple 
federal and state contracts.
    His counterpart, in 2008, leaves the military, tries to 
start a business using SBA programs available for veterans, and 
after two years he is frustrated with marginal support, and the 
soldier ends up working for the other classmate as a 
technician, because his bills become so far behind that his 
credit has started to suffer.
    We are not asking for anything out of the ordinary or 
special, just a fair and equitable allocation of resources and 
protections with which to grow, survive, and thrive in the 
nation that we took times out of our lives to defend. Every 
veteran in this room, every veteran in the United States, past, 
present, and future, signed over a blank check payable on 
demand to the United States of America for an amount up to and 
including my life.
    The veterans who were never called upon to cash that check 
come before this Committee today and ask: will you support us 
now and invest in us as we continue to serve and strengthen 
this nation as corporate taxpayers?
    I thank you for allowing me to be here with my comments 
today, and I welcome any questions that you may have.
    [The statement of Mr. Celli is included in the appendix at 
page 68.]
    Chairman Shuler. Mr. Celli, that was great testimony.
    Mr. Klotz, how can the SBDC utilize new legislation to help 
small firms secure financing? That is typically the most 
difficult thing for small firms, small businesses, startups 
securing that initial financing.
    Mr. Klotz. I think through harnessing the existing network 
of small business development center counselors that have 
already been in place doing very similar things with their 
clients, additional funding for those types of initiatives can 
only improve upon and expand what they offer.
    I could see new micro lending programs perhaps starting. I 
know one of the gaps that I see in my own community are those 
who might have less-than- perfect credit, have great business 
skills, and an outstanding idea for a business, but just can't 
get through that banker's door. So maybe some sort of program 
like a second-chance financing program, something like that, 
would be very beneficial.
    Chairman Shuler. Okay. Dr. Rackley, how do you think the 
rules for increasing transparency in the Women's Business 
Center Act will affect the WBC's ability to provide their 
services?
    Ms. Rackley. We welcome the transparency. We think that 
will improve the ability for us to--and all women's business 
centers to be more transparent, to know more about what we 
should be doing, and for the local communities to know what we 
do.
    Chairman Shuler. Mr. Celli, the Veterans Business Center 
Act shifts the veterans business outreach facility's 
administration by the Veterans Corporation to the SBA. Is this 
a better model for long-term stability for the centers or not?
    Mr. Celli. As one of the centers that was previously funded 
through the Veterans Corporation, we feel it is a much better 
model for a couple of different reasons. For one thing, it 
really brings legitimacy to our program. It allows us to report 
our successes. We love to brag about what we do. We love to 
brag about our clients.
    And in our experience with the Veterans Corporation, while 
it has been troubled getting funding out of them, in addition 
it has been even more of a struggle getting our successes 
processed through them and up to the people who have given them 
money, which is this Congress.
    Chairman Shuler. Ms. Kilhoffer, how do you think the small 
businesses will respond to the online education and distance 
learning programs contained in the education of entrepreneurs 
through today's Technology Act?
    Ms. Kilhoffer. The initial response would depend on their 
age. I would like to first state that. What we typically find, 
though, is that as opposed to traveling the distances involved 
to attend a small business development center or a seminar at a 
college or a university, they will choose distance training 
over the travel any time.
    And so putting them together in a situation where they can 
take advantage of the training with a group, and have the 
advantage of multi-generational--you know, older/ younger 
together--the technology becomes less intimidating, and the 
benefit is there for gaining the knowledge.
    Chairman Shuler. I am sure you get the assistance from some 
of the younger students in the class--
    Ms. Kilhoffer. Right.
    Chairman Shuler. --to assist the more senior members of the 
class.
    Ms. Kilhoffer. That is very typical of what happens in our 
adult classes. Yes, sir.
    Chairman Shuler. It is kind of amazing how for the young 
students, their whole lives depend upon the technology today. 
And I think the BlackBerrys run this Congress, so--
    [Laughter.]
    Ms. Kilhoffer. I have noticed that.
    Chairman Shuler. We find ourselves constantly on the 
BlackBerry.
    Ms. Watling-Mills, what is your opinion on the applications 
of benchmarks to the SCOREs program?
    Ms. Watling-Mills. I really don't have an adequate answer 
to that.
    Chairman Shuler. Okay.
    Ms. Watling-Mills. I would have to research it and respond 
to you at a later date.
    Chairman Shuler. Sure. No, that is perfectly fine--will the 
SCOREs legislation strengthen the network capabilities for 
local entrepreneurs?
    Ms. Watling-Mills. Yes, very much so. I mean, that is where 
we shine in working one on one with local individuals and 
helping them, often with multiple SCORE counselors, with 
multiple expertise in whatever they need to get their 
businesses up and going, or, if they are existing businesses, 
to help them through these difficult economic times.
    Chairman Shuler. Very good.
    Ms. Gray-Proctor, you talked about the Eastern Band. Why do 
you think one of the most important--what do you think is the 
biggest factor for the Eastern Band basically not wanting to 
re-up in the program?
    Ms. Gray-Proctor. Well, you know, if you even take that one 
tribe and you add the other 540, you know, to get into the 
entrepreneurial, to where they can go and help, it takes 
adequate funding, no matter what we do. Like we said, we have 
nationwide over 540 different tribes. Alaska Native 
Corporations--I mean, Alaska Natives, Native Hawaiians.
    So that is why we are asking for that increase in net 
funding, because if we don't have enough to do our job we are 
not able to provide the procurement. We, as Native Americans, 
wanted to help our Indian community. So we have the training, 
we are the experts in Indian business, so we--that is what we 
have there with the Eastern Band.
    And, you know, so it is a difficult thing to do when you 
don't have enough funds.
    Chairman Shuler. Sure.
    Ms. Gray-Proctor. And so in order to do it right and help 
your entrepreneurs, and help them with the procurement centers, 
and to go after government contracts, if we don't have enough 
money--and I think it is the same if--you know, with the 
women's, the veterans, the rural--we all share the same goal, 
is that we want to help the people in our communities that we 
represent.
    Chairman Shuler. Absolutely.
    Ms. Gray-Proctor. And that is why we are here.
    Chairman Shuler. At this time, I would like to yield to the 
Ranking Member for his series of questions.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    Ms. Watling-Mills, I have one of the larger SCORE chapters 
in the country, just outside my district. And, in fact, I have 
part of the county in my district, so I know the folks very 
well. And they are from the Camdenton, Missouri, area, and they 
have a very, very large SCORE chapter, and they are very 
active. I know all of those folks very well, but I--just now 
and for myself, everybody else on the Committee here, what are 
the qualifications, or how do you become certified to be a 
volunteer, to be able to do the work of a SCORE volunteer?
    Ms. Watling-Mills. To become a SCORE volunteer, we have a 
training process currently that is called a five-step program 
that--the people who come to be SCORE volunteers are people who 
have great business backgrounds, great business knowledge, and 
we help them learn to be able to counsel and use that knowledge 
better.
    One of the things, of course, we are hoping for is more 
funding, the same as everyone else is looking for, which would 
enable us to expand our training processes to make our--our 
very dedicated volunteers, to make them even better counselors, 
to--because, as I say, they have the business knowledge, it is 
helping them to understand the counseling process.
    Mr. Luetkemeyer. Just a follow up to that. What qualifies 
them as a business person that has the kind of knowledge you 
are looking for? I mean, is it somebody who has just been in 
business a long time? Or is it somebody who has an educational 
background in business as well? Or somebody who has just been 
successful? Or, I mean, Joe the Plumber, is he somebody that 
could be in your program?
    Ms. Watling-Mills. Yes. Because we have small businesses 
coming to us, as--if a plumber needs to start up a business, he 
can certainly use the expertise of someone who ran a successful 
plumbing business. So while in the past SCORE was made up very 
largely of executives, it is more and more people like myself 
who run small businesses, who have that hands-on day-to-day 
experience and can hopefully prevent or help startups by 
keeping them from making some of the mistakes that I made or 
that other small entrepreneurs made in their startup process.
    Mr. Luetkemeyer. That is quite an interesting statistic. 
You said five times more likely to succeed if they have been 
mentored by a SCORE volunteer?
    Ms. Watling- Mills. Yes.
    Mr. Luetkemeyer. Wow.
    Ms. Watling-Mills. Yes.
    Mr. Luetkemeyer. That is very impressive. Thank you.
    Ms. Watling-Mills. Yes.
    Mr. Luetkemeyer. Thank you for your testimony today.
    Ms. Kilhoffer?
    Ms. Kilhoffer. Yes.
    Mr. Luetkemeyer. You discussed the need for and the--I 
guess your experience with long distance technology and how it 
can be helpful. What is the demand in your area for that? And 
what do you see on a statewide and nationwide basis? Or can you 
elaborate a little bit more on what your comments were a while 
ago?
    Ms. Kilhoffer. Well, distance technology has become a 
platform for the presentation of a lot of the credit courses 
that the state system of higher education presents, and they 
have a reciprocal agreement between colleges and universities, 
within the system and community colleges.
    The distance education is cost effective, whether it be 
online or through interactive television. In our area, in the 
beginning, people were very, very skeptical, but we have had 
acceptance of distance technology to the point where we now 
have a nurse practitioner in our area who through distance 
technology is presenting. She is the instructor to a course in 
the master's of family nurse practitioner program at Penn 
State, main campus.
    So our clientele, our folks, have become much more 
accepting. The demand, the use of it [distance learning], we 
see approximately 2,000 go through our facility in a year's 
time, whether it be for credit courses, training on any 
subject, CEUs. We have had our distance technology used to 
conduct interviews, present deposition in legal cases, and so 
the use of the equipment itself has broadened, the topics that 
are covered through that method have broadened.
    And as we have the economic downturn and a whole gamut of 
new problems and a new population that is going to need to 
find--like Kurt in the story, new employment, there will be a 
need to provide the services of the Small Business 
Administration to our folks.
    Mr. Luetkemeyer. Do you find that it works better for 
certain business types versus others?
    Ms. Kilhoffer. Most definitely. You are not going to get a 
technical education strictly online. You are not going to learn 
to adjust air conditioners or be a plumber. That will not work. 
But if you combine the classroom side of that type of education 
with work with existing plumbers, air conditioning folks, who 
are in our region, getting up there in years and will need to 
be replaced, then you have a chance to produce that kind of 
training.
    Mr. Luetkemeyer. So even for some--practically everybody, 
there probably is some kind of educational process that can be 
utilized like that, not necessarily all of it, but certain 
types of training can still be like that, even though the 
heating and air conditioning folks can't do the hands-on stuff.
    Ms. Kilhoffer. That is correct.
    Mr. Luetkemeyer. Very good. Thank you. Great testimony.
    Ms. Kilhoffer. Thank you.
    Mr. Luetkemeyer. Dr. Rackley, that was great testimony with 
regards to the work that you do with the ladies' councils 
there. And I am just curious, do you have a lot of other 
statistics about other chapters around the country that--or 
groups like yours that work, how successful they are, and how 
many there are?
    Ms. Rackley. There are over 114 women's business centers 
in--I think it is 114, there are over 100--114 women's business 
centers in the United States. We all have similar programs. Our 
programs can be flexible, according to the clientele, the 
region in which we live, in which we work. But we all have 
similar programs. We come from different kinds of 
organizations.
    I am fortunate to be in an organization, REI, that has 
other resources to help us. So we are able to--we cover a lot 
of territory. We are rural. I travel out, because technology is 
great, but many of our women are not where they have the 
technology available to them, or they want face to face. And so 
we are able to do that.
    But there are statistics on--I don't have them with me 
right now. The only statistic I can quote is women-owned 
businesses are growing at twice the rate of all businesses 
nationwide, so women are out there starting businesses.
    Mr. Luetkemeyer. Fantastic. Fantastic.
    You mentioned something there that you got outside funding. 
Do you partner with local public entities or private entities, 
or both?
    Ms. Rackley. Rural Enterprises works with state and private 
entities, and we are part of that organization, for our state--
for our matching funds. But we do rely on federal funds for our 
women's business centers. It is very important for us to be 
able to have that funding for our women's business centers.
    Mr. Luetkemeyer. Very good. Thank you.
    Mr. Celli, thank you for your service, and thank all of 
those men and women who you represent for their service as 
well. That is why we are here today to--as a result of their 
efforts, and we thank you for that.
    Mr. Celli. Thank you very much.
    Mr. Luetkemeyer. Where do you think we can help, or where 
are we failing with regards to the veterans groups here? How 
can we best--I know that the Chairman asked a great question a 
minute ago with regards to--
    Mr. Celli. The Veterans Corporation.
    Mr. Luetkemeyer. --Veterans Corporation and the SBA. Is 
there something else you want to elaborate on that perhaps, and 
enlighten us a little bit more how we can do a better job?
    Mr. Celli. Well, I want to thank the Chairman and Ranking 
Member. These are excellent questions, and they really do get 
to the heart of the matter, not only with the questions 
specifically with regard that you have asked me, but the other 
panelists as well, because, let us face it, an entrepreneur 
really is an entrepreneur at heart. And we all face the same 
issues.
    The distance learning I think is a critical piece. Last 
year, or two years ago, I did a Boston to Baghdad class, where 
I had soldiers down range that obviously couldn't come to 
class, and we broadcast over the internet through a 
teleconferencing system.
    I am a SCORE counselor, and the way I was recruited to 
become a SCORE counselor is because when I started my 
counseling program in Boston I went to SCORE and I said, ``Hey, 
can you send me, you know, four or five counselors over the 
course of a couple of weeks, so that I can, you know, start my 
programs?'' And they said, ``We are really not built that 
way.''
    And I said, ``Gee, I am sorry. I didn't understand, you 
know, the dynamics of your organization. How can I help you?'' 
They gave me an application.
    So, you know, I think that the most important thing to take 
away from testimony or from hearings such as this and the laws 
and the proposed regulations that are being introduced here is 
that we all operate in a very cooperative society. And we want 
to work together, we want to leverage each other's resources, 
we want to be able to work not independently but as a team 
through these federal appropriations, so that we are not 
spending the same dollars on the same services on the same 
client in many cases, so that we can work together.
    So, again, I--
    Mr. Luetkemeyer. You just framed my bill. Thank you very 
much.
    [Laughter.]
    Mr. Celli. Thank you.
    Mr. Luetkemeyer. I didn't mean to interrupt, but I couldn't 
resist.
    Mr. Celli. That is okay.
    Mr. Luetkemeyer. Go ahead.
    Mr. Celli. Well, I just think that it is our responsibility 
as responsible grantees to make sure that we make the best use 
of our money and of your intentions. And I think that this 
Committee, the overall Committee, this Subcommittee, has 
exactly the right focus, and that is to start to interweave 
these programs together and really force everybody to play in 
the same sandbox.
    Mr. Luetkemeyer. Two thumbs up, sir. Again, thank you. You 
just made my case. I am going to have you do my briefings from 
now on, how is that?
    [Laughter.]
    Mr. Klotz, very briefly, return on investment, three to 
one, wow, that is impressive. That is a great number, and it is 
a great story to tell for small business development centers, 
for what they can do and the value that they have.
    What do you think the--Mr. Celli probably put it more 
succinctly than even I can do that with regards to the 
entrepreneurial development programs, how do you think we can 
better fit them together? Where do you see some cracks here 
that things are falling through?
    Mr. Klotz. I think Mr. Celli put that very well--have 
cooperative agreements between service providers, and maybe 
within a geographic area, not to have five or six or eight 
programs, all of which seem to have a similar function, but 
maybe carve out specialties and work together.
    You know, at our particular small business development 
center, we have a close relationship with our SCORE chapter. 
What SCORE will do for their very first-time clients is to tell 
them they need to go through our SBDC "How To Start a Business" 
seminar first. And also, we then have access to their list of 
volunteers and expertise, so that when we find that 
entrepreneur with a particular business type or industry, we 
can match them up with a counselor there as well.
    So I think we should utilize the resources that, in large 
part, are already there, but just coordinating them.
    Mr. Luetkemeyer. Fantastic. Thank you very much.
    Ms. Gray- Proctor, thank you for your testimony today. How 
many other--or how much underfunded do you believe you are with 
regards to the different tribal groups that have needs? I know 
you mentioned the ones in North Carolina. Of course, that is 
pretty near and dear to the Chairman's heart here.
    Ms. Gray-Proctor. Yes.
    Mr. Luetkemeyer. But are there other groups out there that 
have dropped their services as a result of funding?
    Ms. Gray-Proctor. Exactly. And that is why, you know, the 
disparity of the funding, some of the programs we lost, weren't 
refunded, because what we serve is nationwide. I mean, it is in 
the lower 48, and, of course, up in Alaska as well. And, you 
know, we can't be all things to all people.
    But you know what? I really got a lot of good ideas about 
long distance learning, and we have Native American veterans. 
Of course, I am a woman entrepreneur myself, and have had my 
company for 11 years. So, you know, the funding issue is that, 
you know, our voice hasn't always been heard, because our 
differences, as different from what--my panelists here, is that 
the social needs have to come with the economic needs in our 
Indian communities.
    We have of course, you know--I am just going to throw out 
some statistics. We have the highest rate of teenage suicide 
dropout. So if we look at helping our economic needs in Indian 
country, which is all over the United States in our Indian 
communities, we will be able to help those needs if we help 
give them the hope of the entrepreneurial spirit, which is--
historically, that is where Native Americans--we reformed.
    We were tribe to tribe. If they had corn over here, and we 
had beans, we traded. It was a trade that we have done 
historically for years--2-, 3-, 400 years prior to us being a 
country. We did it--we had commerce way before. So we do need 
to have that money infused, because we have, you know, our 
reservations, our needing that help for entrepreneurs--Pine 
Ridge.
    And also, you can get me started on doing tax credits on 
Indian land and everything else that we can think of. But it is 
having these centers funded and having them spread out across 
the United States that we are able to help--to do a far-
reaching.
    And I am just glad that I have gotten to be able to be up 
here with them, because I am going to call on them, you know, 
for the veterans and for--I want to know more about SCORE, you 
know, and the long distance learning, it is just great. So 
anyway--
    Mr. Luetkemeyer. Thank you. Thank you for your testimony.
    Ms. Gray-Proctor. Thank you for the opportunity.
    Mr. Luetkemeyer. Thank you.
    And for those of you who can't pronounce my name, don't 
worry about it. Nobody else can either. Our press secretary 
still hasn't gotten it right, so--
    [Laughter.]
    Thank you.
    Chairman Shuler. Thank you, Ranking Member.
    [Laughter.]
    At this time, I would like to yield to Ms. Dahlkemper for 
her questions.
    Ms. Dahlkemper. Thank you very much, Mr. Chairman. Thank 
you, panel, for being here. I appreciate your holding this 
hearing today.
    Small business is a critical component of our economy. And 
as we focus on ways to restore the economic growth and end this 
downturn, we must keep small business in the forefront of our 
efforts.
    As small business owners experience tightened credit and 
lower sales in this difficult economic environment, it is 
crucial for us to ensure that there are assistance programs 
available to help them meet their challenges. Entrepreneurial 
development assistance programs have a proven record of helping 
our businesses grow, yet the last time these programs were 
reauthorized was a decade ago.
    Since then, these programs have not modernized to meet 
today's small business needs. We must provide programs with 
adequate funding in order for them to revamp their programs 
towards guiding small businesses through these new financial 
obstacles.
    I just have a few questions. First, I want to say hello to 
Ms. Kilhoffer. I am from Erie, Pennsylvania, so we are 
neighbors. And I have been to St. Mary's many times. It is a 
beautiful area of the country. I did have a question for you 
regarding the long distance learning and wondering what 
obstacles you see for economically disadvantaged individuals to 
have access to this technology and benefit.
    Ms. Kilhoffer. Well, working for a community education 
council that is to be the hub of those [long distance learning 
options], the only obstacle would be that they--any 
individual-- who do not have access within their home to a 
computer or whatever is tied to our hours. But our hours are 
anywhere from 7:00 in the morning until 10:30 in the evening. 
So they have to come to us, yes, to access online through 
computers the distance education technology. In regard to 
interactive television, that is, again, tied to our hours and 
whether or not the equipment is in use.
    But for the individual to do it from their home, if they 
have access to a computer that is great. Not everyone in our 
county does.
    Ms. Dahlkemper. Right. And broadband.
    Ms. Kilhoffer. It has gotten much better, I am pleased to 
say. So that is not necessarily a problem any longer.
    Ms. Dahlkemper. Okay. And the distances, how far do people 
have to travel to get to the center? I mean, how far out-
reaching are you?
    Ms. Kilhoffer. Our service area is defined as Elk and 
Cameron Counties, but we are finding that we have a large 
increase in the last two years of people from surrounding 
counties who are willing to come to our facility, because it is 
easier, shorter. I don't know if it is better roads, whatever, 
than going elsewhere. State College is an hour and a half, 
Clarion is an hour and a half, Erie is two hours away, and 
those are hubs of education that--and learning.
    Even the Small Business Administration--the small business 
development centers that are in our area are those distances 
away. What happens is they come to us. The representatives come 
to our facility and meet with the clients there. We find that 
we are centrally located for the people that we serve.
    Ms. Dahlkemper. So you think it is adequate in terms of--
    Ms. Kilhoffer. Adequate.
    Ms. Dahlkemper. Okay. Appreciate that.
    Mr. Celli, I have question for you. H.R. 1803 will create a 
special service disabled veterans grant program. As compared to 
soldiers who fought in previous wars, what do you see as any 
new needs, if any, that these brave men and women might need to 
have dealt with before starting a business, or while starting a 
business?
    Mr. Celli. Thank you very much. That is an excellent 
question. And one of the biggest problems and disparities with 
regard to these conflicts as opposed to earlier conflicts is 
really the enormous call-up of our Guard and Reserve forces. 
Our Guard and Reserve forces have--and it is very difficult to 
get the exact numbers out of the Department of Defense, but 
anywhere from 15 to 25 percent small business ownership.
    And what is going to happen is small business owners who 
wanted to dedicate part of their patriotic time to serving 
their country are going to stop doing it when they realize that 
they are not being supported with their small business efforts 
when they come back, or before they leave.
    If I get hold of a Guard or Reserve member who is a 
business owner before they leave, 12, 14, 18 months before they 
leave, I can help them put in place certain safeguards and 
plans that can help keep their business viable, maybe not as 
profitable as it would have been, but at least viable while 
they are gone. the money for these types of programs absolutely 
just doesn't exist.
    And earlier we were--we heard some testimony with regard to 
how these grants are sustained over many years, and some of the 
centers may be becoming a little stale over years. The truth is 
that I have been doing this for almost six years now, and 
getting matching funds is hard enough, but getting funds to 
completely support an entrepreneurial outreach center is very, 
very difficult in today's nonprofit community, because 
philanthropic organizations really want to put their money 
toward disease or children or literacy.
    So we are really far down on the pecking order. These 
grants are absolutely critical to keep a viable economy moving, 
because, as we spend money on these TARP programs and bailing 
out the big businesses, the big businesses are failing because 
the little businesses are failing. Big business absolutely 
can't survive if little business isn't there to support them.
    They are some of the major purchasers, some of the major 
suppliers, so if we start to support the small businesses it 
will just by nature support the larger businesses who will then 
have more food to eat. So these programs are critical.
    Ms. Dahlkemper. Do you have any statistics on veterans who 
have had, you know, small businesses? Or I want to say maybe 
they aren't veterans yet, they are in the Guard--
    Mr. Celli. Sure.
    Ms. Dahlkemper. --possibly Reserves, and then go serve and 
come back and their businesses have failed?
    Mr. Celli. I can tell you that based on my client base, one 
of two things happens. When they leave, they either put their 
business on ice or they sell it. When they come back, if their 
business has been on ice, it is almost like starting over 
again.
    And the veterans and the Guard and Reserve members who face 
the biggest challenges are those who have purchased franchises. 
And while franchises are trying to be as compassionate as 
possible, they are in business in well, and they need their 
franchise money. And the other thing is, with loans, 
outstanding loans with regard to large equipment, the USERRA 
Act and the Soldiers and Sailors Relief Act, that protects 
veterans who deploy and come back with personal loans, but not 
for business loans, so--
    Ms. Dahlkemper. Thank you very much.
    And one last question for Mr. Klotz. I just wanted to ask 
you for some specifics, because one of the key programs in H.R. 
1845 calls for establishing a green entrepreneurs training 
program. However, this is kind of short on details, and I was 
wondering, what would qualify as a green program?
    Mr. Klotz. That is a question we have been struggling with 
for about six months in our center trying to define that very 
thing, because almost anything a company does or intends to do 
can be done greener. I think we are looking at startup 
companies that are looking to retrofit businesses or homes to 
use less energy. I think that is going to be a growth area. We 
will have a significant bump in number of solar and wind-
powered startup companies. We will see some of that.
    It is a difficult question, but an important question you 
ask. And I think all of us at SBDC are still trying to define 
what that is.
    Ms. Dahlkemper. I appreciate it. Thank you.
    I yield back.
    Chairman Shuler. Thank you.
    At this time, we will yield to Mr. Thompson.
    Mr. Thompson. Well, thank you, Chairman.
    I want to thank the panel for your testimony, and also, way 
more importantly, your service to small business entrepreneurs. 
We all know how important that is, and just really appreciate 
how you each in your own respect are providing that service.
    Just a couple of questions. Ms. Kilhoffer, you know, the 
remote area, you know, I am very familiar with how remote--how 
rural the area is. The area that you are in there is--you know, 
that is home to the area--the congressional district is the 
only elk herd in Pennsylvania.
    Ms. Kilhoffer. Yes, sir.
    Mr. Thompson. And that is how rural we are. If a student in 
that area, the student that you served, did not receive 
education from your institution, or through your institution, 
where else--what other options do they have? Where else could 
they go locally for education?
    Ms. Kilhoffer. Locally? They would have to drive an hour 
and a half, two hours, over 60 miles--well, excuse me, 40 miles 
to the one institution. Would they be likely to go? No. We are 
talking about adults who have families and roots, and they 
would just as soon stay where they are at as make a twice-a-
week, three-times-a-week drive to a facility that is that far 
away.
    So where would they go? They could go to Clarion 
University, they could go to Penn State University, they could 
go to--
    Mr. Thompson. Quite a distance, though.
    Ms. Kilhoffer. They wouldn't. Would they do it? Not likely.
    Mr. Thompson. Not likely. The folks that are there, what is 
kind of the breakdown between currently entrepreneurs, you 
know, people that are looking at a new start, second career, 
third career, being laid off, versus someone--a young person 
just coming out of high school, and the differences in their 
needs?
    Ms. Kilhoffer. We have--traditionally, our clientele, our 
population that we serve, are returning adults. We have seen an 
increase in the number of students fresh out of high school who 
are choosing to remain at home and get their education through 
the opportunities at our facility.
    As for the entrepreneurs, we have just this past month--our 
facility is used by what they call the rapid response teams who 
address immediately the needs and the information sessions that 
are available for current--recently laid off employees. We have 
seen in the past month over eight sessions, each session 
numbering between 50 and 60 people, people attending rapid 
response teams.
    These people could have--will be potential candidates for 
new ventures. Some will choose to pursue education. Some will 
choose to take the talents that they have and start their own 
businesses.
    Typically, one half--50 percent of our companies only have 
one to four employees, and what will happen is that folks will 
choose to start something new on their own as opposed to going 
back and starting a new education, because they know work best. 
They don't know education best. So we are going to see a lot 
more entrepreneurs that are going to need services coming out 
of this new round of eight sessions of 50 or 60 people a 
session who no longer have employment because of forced 
layoffs, permanent forced layoffs in our area.
    Mr. Thompson. Great. Thank you.
    My last question, Mr. Klotz, what would you say is--the 
number one problem is for small businesses right now? And what 
strategies are you seeing being used to assist small businesses 
with that problem?
    Mr. Klotz. The largest problem that I have seen among my 
clients is in the access to capital area. There are some 
exciting new programs with the SBA as far as increasing the 
guarantee to 90 percent, waiving fees for loans, and one of the 
newer programs of stabilizing businesses. That is exciting.
    However, as great as those programs are, the lending is 
done at the local bank. And unless they sign on, it all stops 
there. And I have seen an extremely conservative local lending 
environment, to the point where I saw deals that were no-
brainers before, I mean hands down easily fundable, where my 
clients are either getting nos or you have to try to piece 
together multiple financing sources to make the deal happen. So 
every single deal is like pulling teeth.
    So I see that as the largest area of concern, especially in 
a time when companies are seeing their sales drop, they might 
need that extra boost on their line of credit to make payroll 
next month. And the local lenders are very conservative and 
scared.
    Mr. Thompson. Thank you.
    Mr. Chairman, I yield back.
    Chairman Shuler. Thank you, sir.
    I now yield to the gentlewoman from New York, Ms. Clarke.
    Ms. Clarke. Thank you very much, Chairman Shuler, and 
Ranking Member Luetkemeyer. Was that good? All right. We are 
getting there. We are getting there.
    I want to also thank today's witnesses for their valuable 
contribution to the American entrepreneur and small business.
    Today's hearing gives us an opportunity to enhance the SBA 
programs that are vital in helping small business during our 
economic downturn. One program that I am a strong advocate for 
is the women's business center. As you are aware, this program 
was designed to address problems that women face being 
competitive entrepreneurs through counseling, training, and 
mentoring. By increasing access to resources for these 
entrepreneurs, it also increases the viability of that 
business.
    This is especially true for women-owned businesses in 
socio-economically disadvantaged communities. And it should be 
a collective goal to find ways to strengthen the women business 
centers. One area of improvement is in the area of grant 
disbursements to women business centers. Women business centers 
experienced delays that were so extreme that they were forced 
to seek funding elsewhere while attempting to resolve matters 
with the SBA.
    Also, these same delays caused some women's business 
centers to lay off staff, abandon vendors, and curtail 
operations to stay in business.
    I hope that we can modernize the women's business centers 
which are essential for our economic recovery. So I would like 
to ask Dr. Rackley, as you stated in your written testimony, 
small business owners are beginning to feel the impact of the 
economic downturn, in particular women-owned businesses. What 
is great about the women business centers are that they provide 
free training workshops to entrepreneurs who need it most, but 
I know that it can be costly for women business centers.
    Can you tell me if you are aware of any women business 
centers that experienced problems receiving grant 
disbursements, which may be helpful in funding these great 
workshops?
    Ms. Rackley. I know that there was a problem. There was a 
backlog in getting reimbursements. But the Office of Women 
Business Ownership is implementing a new program with--so there 
is not that delay in getting their reimbursements. But it is a 
problem. I mean, we are trying to provide the training, and we 
try to provide it at free or low cost, because there is just 
not a lot of money out there. That is what I think is great 
about our women's business center program.
    And I have to say that we--our women's business center at 
REI, we partner with a lot of other organizations, because we 
partner with the SBDCs, SCORE chapters where they are 
available--they are not always available in my rural area--and 
with the Native American community, so that we can all use our 
resources. We have limited resources. But if we can pool our 
resources and work together, we can provide training.
    I want to just give an example of a training program we had 
last week with the Citizen Potawatomi Nation. We were doing a 
minority business summit, because with all the stimulus package 
and all the contracting, there is a great need to find out how 
to do business with the contractors, with the government, with 
the tribes.
    And so we had 65 at our program last week in Shawnee. So we 
are great partners with other organizations, and we are always 
looking--because we can't do it on our own, but we can work 
together. We don't always have SBDCs. And we are two business 
centers, and we cover the entire state. So we must make the 
most of our resources.
    Ms. Clarke. Very well. Let me ask you about the 
communication between the SBA offices and the women business 
centers and the processing of payment requests. The inability 
of these offices to work in an integrated fashion, combined 
with flaws in the payment process, largely cause paperwork to 
be rejected or lost.
    Do you believe that a simple checklist can ensure that 
payment requests are adequately reviewed?
    Ms. Rackley. I think that would help. As I said, they are 
implementing new procedures that are speeding up the process 
and not causing that delay. But there is always other methods 
that could be tried, could be improved on. It is important.
    I know that there are some stand-alone women's business 
centers. When they didn't get the funding, they were not able 
to operate. Like I said, we are fortunate to be in an 
organization that helps us, but not all women's business 
centers are in organizations--a strong organization like REI. 
And so they really did suffer from not being able to get the 
funding.
    Ms. Clarke. And what would you say creates that level of 
strength within your organization versus the stand-alones? Is 
it the collaborative process? Is it the type of relationship or 
partnership that is established at the outset with the SBA? 
What would you say has been your pathway to creating, you know, 
this visibility to get response?
    Ms. Rackley. We have great leadership. We have a great 
board of directors. And we are an economic development 
organization. We have other resources. We have SBA loans, we 
have the micro loans within our own organization. We work with 
our Finance Division to help our clients know how to go about 
securing loans, get the information before they go to a bank.
    So we have those other resources. We have business 
incubators. The woman I talked about --that is getting the 
award tonight-- is in one of our business incubators. We have 
housing programs to help small employers, small businesses, to 
retain employees. So there is just a multitude of services, and 
we have great leadership.
    Ms. Clarke. Dr. Rackley, would you say on average most of 
the women business centers are at your level? Or, you know, how 
would you describe it? You know, what I am trying to get at is 
how we build capacity.
    Ms. Rackley. I don't think they are at the level that we 
are, because many of them are stand-alone, there are several 
that are organizations the size of ours that have that other 
support, but many are not there yet, they are in stand- alones. 
I think that is what happened to the two in Oklahoma that 
failed. They were in a stand-alone and getting those matching 
funds is--can sometimes be difficult.
    Ms. Clarke. Very well.
    Ms. Rackley. But if we don't have the federal funding, we 
cannot operate. And it is important--I notice that the funding 
level that is written into the legislation, that would be great 
for all women's business centers.
    Ms. Clarke. Wonderful. Well, thank you very much for your 
candid responses.
    And, again, to each of the witnesses, thank you for the 
work that you do. It is so critical and vital to all of our 
communities, particularly those that are in the rural parts of 
our nation or that may be struggling economically in 
disadvantaged communities. Your work is really greatly 
appreciated by this Committee and by the communities that we 
serve.
    And I yield back, Mr. Chairman.
    Chairman Shuler. Thank you, Ms. Clark.
    I also want to thank you for your testimony today. I think 
we have already seen several instances of ways that we feel 
that we can help, and that is the part of the process that we 
enjoy. This is due process which starts in the Subcommittee and 
goes to the Committee. Now we have found some holes and some 
gaps, and we hope that we can fill those gaps.
    So thank you for your participation. Thanks to all of my 
colleagues. I look forward to continuing to work with them on 
this legislation.
    I ask unanimous consent that the record be open for five 
days, additional days, for members to submit their testimony. 
Hearing no objection, so ordered.
    This hearing is adjourned.
    [Whereupon, at 1:36 p.m., the Subcommittee was adjourned.]

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