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



 
                       FULL COMMITTEE HEARING ON

                        HEROES OF SMALL BUSINESS

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

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                              MAY 26, 2010

                               __________

                               [GRAPHIC] [TIFF OMITTED] TONGRESS.#13
                               

            Small Business Committee Document Number 111-070
Available via the GPO Website: http://www.access.gpo.gov/congress/house



                  U.S. GOVERNMENT PRINTING OFFICE
56-755                    WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001



                   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

                        MARK CRITZ, Pennsylvania

                         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

                      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)



                         STANDING SUBCOMMITTEES

                                 ______

               Subcommittee on Contracting and Technology

                     GLENN NYE, Virginia, Chairman


YVETTE CLARKE, New York              AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana              ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon                W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
MARK CRITZ, Pennsylvania

                                 ______

                    Subcommittee on Finance and Tax

                    KURT SCHRADER, Oregon, Chairman


DENNIS MOORE, Kansas                 VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona             STEVE KING, Iowa
MELISSA BEAN, Illinois               W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania             BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois          MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, Texas

                                 (iii)

  
?

               Subcommittee on Regulations and Healthcare

               KATHY DAHLKEMPER, Pennsylvania, Chairwoman


DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia, 
MELISSA BEAN, Illinois               Ranking
JASON ALTMIRE, Pennsylvania          STEVE KING, Iowa
JOE SESTAK, Pennsylvania             VERN BUCHANAN, Florida
BOBBY BRIGHT, Alabama                GLENN THOMPSON, Pennsylvania
MARK CRITZ, Pennsylvania             MIKE COFFMAN, Colorado

                                 ______

     Subcommittee on Rural Development, Entrepreneurship and Trade

                 HEATH SHULER, North Carolina, 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

                                  (iv)

  
?

                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Luetkemeyer, Hon. Blaine.........................................     2

                               WITNESSES

Dippold, Mr. John, Co-Owner, Innovative Sintered Metals, Inc., 
  St. Mary's, PA.................................................     4
Nelson, Ms. Michelle, President/CEO, Blue Strategy and Creative 
  Intl, LLC, Sarasota, FL........................................     5
Gay, Mr. Will, Diamond Brand, Fletcher, NC.......................     7
Norman, Mr. Time, President, STL Technology Partners. 
  Bloomington, IL................................................    10
Eiffert, Mr. Brad, Owner and Manager, Boone County Lumber 
  Company, Columbia, MO..........................................    13
Kuknyo, Mr. Chris, Owner, Patriot disposal, Prescott Valley, AZ..    29
Hach, Mr. Robert II, President, Anemometry Specialists, Inc., 
  Alta, IA.......................................................    32
Martin, Ms. Wendy, Corporate Officer, Martin Publishing Company, 
  Havana, IL.....................................................    34
Martinez, Ms. Maria E., Naturally Green Products LLC, Orlando, FL    36
Biddulph-Krentar, Mr. Brian, President, HIT Consulting Solutions, 
  Inc. & HIT Application Solutions LLC, Exton PA.................    39
Wallace, Mr. Daniel, Wallace and Pancher, Inc., Hermitage, PA....    48
Greenley, Mr. Brian, President, Greenley Enterprises Corporation 
  DBA Maaco Collision Repair and Auto Painting, Littleton, CO....    50
Kottke, Ms. Cindy, President, C You at the Movies, INC. McHenry, 
  IL.............................................................    52
Flynn, Mr. Dan, CEO, Accipter Systems, Wexford PA................    54
Bailes, Mr. Lea, Chief Executive Officer, Guier Fence Company and 
  Guier Franchising Concepts, LLC, Blue Springs, MO..............    56

                                  (v)

  
?

                                APPENDIX


                                     Prepared Statements:
Dippold, Mr. John, Co-Owner, Innovative Sintered Metals, Inc., 
  St. Mary's, PA.................................................    67
Nelson, Ms. Michelle, President/CEO, Blue Strategy and Creative 
  Intl, LLC, Sarasota, FL........................................    72
Gay, Mr. Will, Diamond Brand, Fletcher, NC.......................    75
Norman, Mr. Time, President, STL Technology Partners. 
  Bloomington, IL................................................    81
Eiffert, Mr. Brad, Owner and Manager, Boone County Lumber 
  Company, Columbia, MO..........................................    83
Kuknyo, Mr. Chris, Owner, Patriot disposal, Prescott Valley, AZ..    85
Hach, Mr. Robert II, President, Anemometry Specialists, Inc., 
  Alta, IA.......................................................    83
Martin, Ms. Wendy, Corporate Officer, Martin Publishing Company, 
  Havana, IL.....................................................    91
Martinez, Ms. Maria E., Naturally Green Products LLC, Orlando, FL    92
Biddulph-Krentar, Mr. Brian, President, HIT Consulting Solutions, 
  Inc. & HIT Application Solutions LLC, Exton PA.................    96
Wallace, Mr. Daniel, Wallace and Pancher, Inc., Hermitage, PA....    98
Greenley, Mr. Brian, President, Greenley Enterprises Corporation 
  DBA Maaco Collision Repair and Auto Painting, Littleton, CO....   103
Kottke, Ms. Cindy, President, C You at the Movies, INC. McHenry, 
  IL.............................................................   107
Flynn, Mr. Dan, CEO, Accipter Systems, Wexford PA................   110
Bailes, Mr. Lea, Chief Executive Officer, Guier Fence Company and 
  Guier Franchising Concepts, LLC, Blue Springs, MO..............   111
Luetkemeyer, Hon. Blaine.........................................   115
Heckman, Mr. Kurt, President, Sycamore.US, Inc., Frederick, MD...   117
Tamny, Mr. David, Owner, Professional Property Inspection 
  Consultants, Columbus, OH......................................   119

                                  (vi)




                       FULL COMMITTEE HEARING ON


                        HEROES OF SMALL BUSINESS

                              ----------                              


                        Wednesday, May 26, 2010

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
2360 Rayburn House Office Building, Hon. Nydia Vel zquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Vel zquez, Shuler, Dahlkemper, 
Kirkpatrick, Critz, Bean, Altmire, Sestak, Halvorson, King, 
Buchanan, Luetkemeyer, Schock, Thompson and Coffman.
    Chairwoman Velazquez. The Committee will come to order.
    Today we observe National Small Business Week, a salute to 
the hardworking entrepreneurs that make our nation great.
    In large cities, small towns, and everywhere in between, 
small business owners serve as the backbone of our economy. 
Most Americans get their first job at a small business, and 
studies consistently show that these firms create the most new 
jobs. Equally important, they generate jobs here in the United 
States that will not be exported later.
    Today our economy is showing encouraging signs of recovery. 
Last month we saw 290,000 new jobs, the largest increase in 
four years. To sustain that momentum, we are going to need 
further growth in the small business sector. Running a small 
business is never easy. It means working long hours and 
sacrificing time away from friends and family. Often 
entrepreneurs have to risk personal income to get their 
enterprise off the ground.
    Entrepreneurship means going against the grain, taking a 
chance, and building something new. When entrepreneurs do well, 
our country, as a whole, prospers. During the downturn of the 
mid-1990s, small businesses created 3.8 million new jobs. As we 
work our way out of this recession, we are going to need that 
job-creating power. In addition to generating jobs, small 
businesses are our best innovators, developing new products and 
pioneering high-tech fields like green energy and biomedicine.
    But beyond simply providing the fuel that makes the economy 
go, main street businesses are the anchors of our local 
communities. Whether it is contributing to the local church, 
sponsoring a Little League team, or raising money for 
charitable causes, small businesses may our neighborhood 
stronger and better.
    We have before us today companies engaged in everything 
from publishing to lumber to developing next-generation data 
systems for the Defense Department. You have all come from 
every corner of the nation to be with us today, and thank you 
for being here.
    You may be in different industries and represent diverse 
parts of the country, but there is no denying that your 
ingenuity and hard work are common bonds that unite all 
entrepreneurs. These characteristics are part of our national 
fabric. Indeed, they are part of the American story.
    Today we are looking forward to hearing your personal 
stories, as well as your perspective on what it means to be an 
entrepreneur. As Americans look beyond the current recession 
and toward a stronger, brighter future, they are increasingly 
looking to small firms for answers, men and women like all of 
you.
    So, again, thank you for being here to offer us your 
insight.
    With that, I yield to Ranking Member, Mr. Luetkemeyer, for 
an opening statement.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman, and thank you 
for calling this hearing to honor entrepreneurs during Small 
Business Week.
    A special thanks to our witnesses who have traveled from 
all over the country and taken time from their businesses to be 
with us today.
    It is no secret that small businesses are our nation's 
economic powerhouse. Small businesses excel at innovation, 
creativity, and filling a needed niche in the marketplace. As 
our economy fights to stabilize and recover, we are counting on 
small companies to put our country back on the path to 
prosperity.
    However, the economic climate remains uncertain. Many small 
businesses are struggling. Last week the Labor Department 
announced that new claims for unemployment benefits rose 
despite previous predictions to the contrary. The weak economy 
is putting pressure on prices, and sales are lackluster.
    According to the National Federation of Independent 
Business, more small businesses plan to eliminate jobs than 
create them over the next three months. At the same time, a 
flood of mandates, regulations, and additional taxes threaten 
small businesses' ability to grow or even survive.
    The new health care law, proposed climate change 
legislation, stricter environmental regulations, and a 
ballooning deficit are all economic roadblocks. These obstacles 
make it increasingly difficult for small businesses to help 
turn our economy around.
    We need to get government out of the way and allow small 
businesses to flourish. Congress should end job-killing taxes, 
reduce regulatory barriers, and pass the three pending free 
trade agreements to help increase small business exports. Each 
of these steps would help create jobs and reinvigorate the 
economy.
    Madam Chairwoman, thank you for calling this hearing. I 
look forward to hearing from this impressive group of witnesses 
about how they have overcome the difficult economy and become 
models for success.
    Thank you. I yield back.
    Mr. Luetkemeyer. Now the chair recognizes Mr. Thompson for 
the purpose of introducing our first witness.
    Mr. Thompson. Thank you, Madam Chair, Ranking Member. It is 
my distinct honor to present to the Committee Mr. John Dippold, 
President and Co-Owner of Innovative Sintered Metals, 
Incorporated, located in Pennsylvania's 5th congressional 
district, in St. Mary's, Elk County, Pennsylvania.
    The powdered metals industry, for those unfamiliar, 
involves the production of a hard solid metal starting from 
powder. A much wider range of production can be attained from 
powder processes and direct alloying of fused materials. 
Powdered metal products are utilized by a variety--a wide array 
of industries, from automotive and aerospace applications to 
power tools and household appliances.
    Innovative Sintered Metals is a diversified organization 
serving the commercial construction, pump, automotive, 
appliance, and lock industries. Mr. Dippold began with 
Innovative Sintered Metals in 2003 as the Vice President of 
Marketing and Sales, where he was able to assist with the 
company's growth from $1.1 million in sales to over $4 million 
in sales in 2009.
    Mr. Dippold holds a bachelor's degree in business 
administration from the University of Pennsylvania-Indiana, is 
a member of several professional business and volunteer 
organizations, including, but not limited to, the Metal Powder 
Industry Federation, the American Powdered Metal International, 
and the Boy Scouts of America.
    As a member of Congress, I am honored to have the privilege 
to represent the hardworking and innovative people of 
northwestern and central Pennsylvania. Mr. Dippold is a true 
testament to the resourcefulness that is so prevalent in the 
5th congressional district, and I want to welcome Mr. Dippold 
to the Small Business Committee and look forward to his 
testimony today.
    Chairwoman Velazquez. And the chair now recognizes Mr. 
Buchanan.
    Mr. Buchanan. Thank you, Madam Chair. I would like to 
welcome Michelle Nelson, a small business owner from Sarasota, 
Florida, with 15 years of experience. I was talking to her a 
little earlier, and her and her husband, like many, have come 
from, as I did, Michigan, settle in our district. They are from 
Chicago.
    Michelle Nelson is the CEO of Blue Strategy + Creative 
International and many other companies. Her companies are 
headquartered in my home district of Sarasota, Florida. 
Michelle has served on the Board of Directors and been Chairman 
of the Small Business Council for the Greater Sarasota Chamber. 
She is the recipient of countless local small business awards, 
including the 2004 Excellence in Industry Award.
    We were talking a few minutes earlier, and she was 
telling--we were talking about this tough economy all over the 
country, but in our area we have had a great run for a lot of 
years, but it has been tough the last couple of years. It has 
been just their hard work and vision that kept them going and 
continue to build their business every day.
    Michelle is a passionate business owner with a tremendous 
vision. I am proud to have her as a witness with us today.
    Chairwoman Velazquez. Mr. Dippold and Ms. Nelson, you both 
will have five minutes to make your remarks. Go ahead.

                   STATEMENT OF JOHN DIPPOLD

    Mr. Dippold. Madam Chair and Ranking Member Luetkemeyer, 
thank you, and members of the Committee. My name is John 
Dippold, and I am the President and Co-Owner of Innovative 
Sintered Metals.
    Powder metallurgy is a very interesting industry. It begins 
with metal powders, which are produced from recycled metal 
scrap, pressed at high pressures into a variety of shapes. 
These parts are then sintered in continuous furnaces just below 
their melting point. Our technology facilitates the manufacture 
of high strength, complex shapes, which are impractical or 
impossible with other metal-working processes.
    Our company sales this year will be $4-1/2 million, an 
increase almost 100 percent over last year. Our workforce has 
doubled since 2004 when we took over the business.
    I certainly appreciate the opportunity to testify about the 
state of small business in America, particularly as it relates 
to manufacturing, which has been, and continues to be, a huge 
part of the economy throughout Pennsylvania's 5th district.
    I am certainly not a hero in any sense of the word. I am 
reacting to very real and powerful forces throughout our 
economy. Twenty years ago, at the local level, my industry was 
dominated by several large family-owned operations. Many have 
since been acquired by multi-national corporations seeking 
efficiency and economies of scale.
    To be frank, this has been a very painful process for many 
in the region. But in crises there are always opportunities. I 
am just one of many entrepreneurs in the industry that saw a 
niche for nimbler firms that could react quickly in the global 
marketplace. Today that niche is growing. Once dominated by a 
few firms employing 500, 800, or 1,000 workers, we are now 
seeing companies that employ 10, 20, and 50.
    Again, this has not been an easy transition, but I see real 
optimism for American manufacturing. People often ask, ``How 
long is American manufacturing going to be a superpower?'' My 
answer is, ``It depends on tax structures, wage disparities, 
health care reform, and regulatory hurdles.''
    Don't believe everything you read, though. When my partner 
and I purchased the business in 2004, the company did very 
little work for the auto industry. We had 10 employees, and the 
company was in the red financially. Since we had a lot of 
experience in this field, automotive became a big part of our 
business, growing to 40 percent.
    So why didn't we collapse when the auto industry tanked? 
The answer has a lot to do with our size, the way we approached 
the marketplace, and our steady growth. Rather than scale, our 
competitive advantage is service. My partner, an engineer by 
trade, works with clients on a personal basis. There is no 
administrative people between he and our customers. Customers 
are working right with the key people and decision-makers in 
our business.
    We have a small operation with tight margins. Every account 
is vitally important. I can tell you from experience, 20 years 
ago major automotive suppliers would have serious reservations 
working with a company our size. But today people are operating 
leaner and looking for the best service and the best value.
    We change with the demands in the marketplace. Powerful 
component design software and our focus on niche marketing has 
given us a real advantage. In some lucrative market segments, 
such as stainless steel, very few players have installed 
stainless technology, and it allows us to actually charge a 
premium for those services.
    With that, American manufacturing is changing, and small 
businesses have a increasing important role in its future. I 
thank the Committee for all it does to make it possible for 
companies like Innovative Sintered Metals not only to survive 
in hard times but to thrive in hard times.
    With that, I would be happy to answer any questions that 
you may have.
    [The prepared statement of Mr. Dippold is included in the 
appendix.]
    Chairwoman Velazquez. Thank you. Very impressive.
    Ms. Nelson.

                  STATEMENT OF MICHELLE NELSON

    Ms. Nelson. Madam Chairwoman, Ranking Member, Congressman 
Buchanan, thank you for inviting me here today. My name is 
Michelle Nelson. I am the CEO of Blue Strategy + Creative 
International, located in Sarasota, Florida. I am also the 
owner of Anexio, a technology and managed service provider also 
located in Sarasota, Florida.
    I own and run these companies with my husband, Jeffrey 
Nelson. Our companies are B2B, serving the Gulf Coast as well 
as globally.
    I would like to thank the Greater Sarasota Chamber of 
Commerce for getting me here. They play a powerful role in 
supporting small business in Sarasota County.
    Your request was to testify with regards to how we have 
been successful despite the tough economic times. Our nation's 
economic crisis brought significant obstacles for small 
businesses, for our small businesses--decreased consumer 
confidence, long-term clients closing their doors, increased 
costs of goods, staffing concerns, and, of course, our number 
one obstacle was credit.
    As savvy business owners, we built strong credit, 
maintaining the strength and financial agility for our company. 
In good economic times, we planned for cyclical down times of 
the economy. We had seen it before, and in a booming economy we 
knew that it would shift. What we did not anticipate was that 
the banks would take back our credit lines and double our 
interest rates.
    As we watched our nation bail out our financial 
institutions, these same institutions turned their backs on us. 
What did we do? We rolled up our sleeves and we worked harder. 
Fueled by the insanity of the credit crisis and committed to 
survival, we pioneered new ways to do business.
    It was obvious that, if we were to make it through, we had 
to take complete responsibility for the survival of our 
companies and take immediate action. We pleaded with our banks 
and vendors to keep our credit lines open and negotiated 
interest rates. We never received any financial assistance or 
tolerance from our bank, despite our strong financial history.
    Instead, our vendors and other private banks--or other 
private industries were the most generous, maintaining and in 
some cases extending our credit lines. We extended credit to 
our clients, so their businesses could continue to thrive. We 
shouldered the burden of our clients' financial limitations by 
allowing them to make payments over long periods. We, in 
essence, became a bank funding the commerce that we desperately 
needed.
    We did not look for government assistance or SBA loans. Our 
experience with these programs showed that they can be costly. 
The time and investment needed make it through--make it through 
the bureaucracy can be sometimes devastating for a small 
company. So we developed new programs and services to keep our 
global business communities moving.
    One of those programs, our technology support company 
created our own T.A.R.P. program, Technology Assistance Relief 
Program, for small business. We understood that leveraging 
proper technology was critical to our clients' survival. So we 
provided technology support through managed services at fees 
that our clients could afford.
    Our marketing agency created small business marketing 
assistance. History tells us that marketing in a down economy 
brings great financial gains to the economy--or brings great 
financial gains when the economy returns. We knew that 
businesses needed to be clearer and more direct with delivering 
their message to their consumer. So we provided marketing 
products and services with extended payment plans and empowered 
our clients with market-ready products.
    We created these programs by retooling our product lines. 
We met with each of our clients to understand what they could 
pay, and we created services to fit those budgets. We had less 
revenue, we had less profit, and we had a huge risk. We also 
had new businesses joining us and new revenue streams.
    We were sustaining, growing our client base, while watching 
our clients succeed as well. Over 75 percent of the businesses 
in our community that joined our programs are still in business 
today, and are still using our programs.
    In closing, we are surviving in this economy because we are 
pioneers, and, quite honestly, because the calculated risks we 
took are paying off. I can tell you that my businesses are the 
fortunate ones. A number of our brethren in the small business 
community, our relatives and professional cohorts, are not so 
lucky, most of them devastated by the condition of our nation, 
largely due to the credit crisis and the billions of dollars 
that never reached the small business community.
    We need Congress to identify and implement small business 
relief programs that are direct to the pioneers of our great 
economic stimulus engine--small business. No trickle-down, 
start with the small businesses, those opportunities already 
exist.
    I implore Congress to bring the fortitude of the pioneer 
back to our country. You can do that by directly financing, 
financially assisting the pioneers and the innovators of small 
business--those who are willing to do whatever it takes to keep 
their vision alive, those who are willing to risk everything to 
create enterprise.
    It is the embodiment of our forefathers for this nation. I 
learned these ideals from my parents, my father a craftsman and 
stair builder in New England. Further generations have the 
opportunity to learn these ideals as well, to experience what 
it truly takes to succeed--hard work and the determination to 
create something with permanence.
    Thank you for the opportunity to testify. I will be happy 
to take any questions.
    [The prepared statement of Ms. Nelson is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Ms. Nelson.
    Before the chair recognizes Mr. Shuler, I would like to 
introduce and present to the members of the Committee our 
newest member, Mr. Mark Critz. Welcome.
    And he has been appointed to the Small Business Committee 
this week. Congressman Critz represents the 12th district of 
Pennsylvania in Congress. He comes to the Committee having 
worked a number of years for small businesses. Congressman 
Critz also brings his expertise on economic development issues, 
so he will be a great addition to this Committee.
    He spent the past 12 years focusing on those matters for 
the Pennsylvanians he now represents. Congressman Critz has 
received the Patrick Henry Award from the National Guard, which 
is the highest honor given to a civilian by the National Guard.
    Welcome to the Committee.
    Mr. Critz. Thank you very much.
    Chairwoman Velazquez. And now the chair recognizes Mr. 
Shuler.
    Mr. Shuler. Madam Chair, thank you so much for holding this 
very important hearing today and listening to our small 
business owners throughout most of our districts.
    Today it is an honor for me to introduce one of our great 
employers of the 11th district, who is not only able to 
participate in developing great technologies for the sporting 
industry such as, sports gear, and outdoor gear, but also be 
able to manufacture tents, for our military and for our Boy 
Scouts. It is impressive to go through their facility to see 
their technology and the way they are able to gain market 
share.
    Will Gay and his entire staff has done an incredible job of 
maintaining market share, but also being innovative through 
their technology and the ways they have conducted their 
business. In tough times, they have been able to cut back in 
areas, look at their overall business portfolio, and understand 
how they can be a true competitor in this industry.
    And so, Madam Chair, without further ado, I would like to 
welcome Mr. Will Gay to the Committee.

                     STATEMENT OF WILL GAY

    Mr. Gay. Thank you. Madam Chairwoman, Ranking Member 
Luetkemeyer, and members of the Committee, Congressman Shuler, 
thank you for the opportunity to testify before you today. It 
is truly a great honor to me and my company.
    My name is Will Gay. I live in Asheville, North Carolina. I 
am the Chief Executive Officer of Diamond Brand Canvas Products 
and Diamond Brand Outdoors. Diamond Brand was originally 
established in Philadelphia in 1881. We have been involved in 
the sewn products industry since 1920 when we first began to 
manufacture tarpaulins and other heavy canvas items. We are the 
oldest, continuously operating sewn product manufacturer in the 
country.
    In 1931, Diamond Brand manufactured the very first backpack 
for the Boy Scouts. Throughout the years, we have manufactured 
outdoor equipment for other well-known organizations and 
companies, including the Girl Scouts, L.L. Bean, and Eddie 
Bauer.
    A little over 45 years ago, our foray into the outdoor 
retail market began in a small garage connected to our 
manufacturing facility, and it has now grown to three stores 
with more than 40,000 square feet of retail floor space. We are 
currently exploring expansion opportunities, both within and 
outside the current local markets that we serve.
    Diamond Brand has received many local and national awards, 
including Best Outdoor Outfitter in western North Carolina for 
the past six years in a row; the DLA Top Supplier Award, 
presented by the United States Department of Defense; and the 
Export Achievement Award, presented by the United States 
Commerce Department.
    Asheville is nestled in the beautiful Blue Ridge Mountains 
of western North Carolina, an area with countless resources for 
being outdoors. We conduct regular in-store educational 
programs that are free to our community, to help them begin 
their own outdoor pursuits. Our employees contribute hundreds 
of volunteer hours annually to trail maintenance and river 
cleanup initiatives. We are also active members on many of the 
local environmental organizations.
    Diamond Brand prides itself on its mission of being an 
outwardly community-focused organization. We give back more 
than $100,000 per year to organizations that share our values 
and beliefs. We have partnered with the YMCA of western North 
Carolina at the highest level of financial support in its 
Strong Kids Campaign, an initiative focused on activity and 
exercise for kids.
    We also provide in-kind gifts and services and further 
support at summer camp initiatives for underprivileged children 
in our area. During World War II, Diamond Brand manufactured 
products for over 144 different government contracts to support 
the United States war effort. During the past 25 years, we have 
refocused our efforts to manufacture many products for the 
Department of Defense and have made government contracting a 
significant part of our area of expertise.
    Diamond Brand currently holds two multi-year contracts to 
produce the soldier crew tent for the United States Army and 
the two-man combat tent currently being fielded by the United 
States Marine Corps, Army, and Air Force. This tent has also 
gained favor and recognition with several allied foreign 
militaries and is being evaluated for a number of large 
contract tenders overseas.
    Diamond Brand is currently involved in several technology 
development initiatives for new tents and shelters for the 
United States Special Forces, the Marine Corps, and the Army. 
Diamond Brand is also manufacturing a platform of proprietary 
anti-corrosion operational weapons and shipping covers for most 
of the Department of Defense's rotary winged aircraft 
platforms, as well as the MRAP, Mine-Resistant Vehicles, and 
the Patriot Missile Systems that are deployed worldwide.
    Over the last decade, our regional economy in western North 
Carolina has suffered greatly from the loss of manufacturing 
jobs. Diamond Brand currently employs more than 140 people in 
our manufacturing and retail business platforms. We are 
fortunate that through our planning efforts and growth 
initiatives Diamond Brand has continued to aggressively hire 
and provide jobs and benefits for our employees.
    Our employees come from many diverse backgrounds and 
nationalities and cultures, with each one making a unique 
contribution on our business. As a small business, we know our 
employees, and we know that without their talent and dedication 
we would not be standing here before you to talk about the 
success we have enjoyed.
    I would like to tell you about a few of these special 
people whose contributions have made Diamond Brand what it is 
today. Wanda Hensley is 61 years old and has worked at Diamond 
Brand in our Boy Scout of America and military tent line for 14 
years. Both her husband and son are currently laid off from 
other manufacturers in our area, so this job is crucial to the 
well being of her family.
    She takes advantage of our benefits package and 401(k), 
because her husband, who worked for his former employer for 24 
years, lost all of his benefits that the company had committed 
to provide before they closed their doors.
    Marcus Wick is 29 years old and recently married with a 
young child. He graduated from Cal State with a degree in 
geography but has not been able to find a job in his field of 
interest. His last employer laid him off during the economic 
downturn. And although he had no experience in industrial 
sewing, Diamond Brand was the only company hiring, so he 
accepted our job offer. And today he is one of our top-
producing employees.
    In conclusion, I would like to thank you for the 
opportunity to testify before this Committee today. I continue 
to ask each of you to be mindful that our ability to operate as 
a successful small business, remaining financially viable and 
nimble to respond to the needs of the marketplace, relies 
directly on our ability to run our business profitably.
    In doing so, we need to have the opportunity to reinvest 
our resources and capital into new technology that makes us 
more efficient in what we do, as well as invest in the ongoing 
training, hiring, and retention of our employees who make what 
we do possible.
    I want my company to continue to be a place where people 
want to work, knowing that they will be provided for and thus 
be able to provide for their families. I want to continue to 
dream big for the future of my family, company, and my 
community, in an area and an industry that has been hard hit 
during the past year.
    And I want to be reassured that the laws and policies that 
are currently being crafted and implemented today will offer us 
the ability to be the leaders of the entrepreneurial spirit and 
the engine of growth that this country has depended on for so 
many years.
    Thank you again for this opportunity.
    [The prepared statement of Mr. Gay is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Mr. Gay.
    The chair recognizes Ms. Halvorson.
    Ms. Halvorson. Thank you, Madam Chair. I am pleased to be 
able to be joined today by Mr. Tim Norman of Bloomington, 
Illinois, which I have the honor to represent here in Congress. 
Tim is President of STL, a technology services company based in 
Bloomington. Tim started the company with his wife Katie, who 
also is with us today, and currently serves as CEO of STL.
    This week we are celebrating National Small Business Week, 
and the title of our hearing today is Heroes of Small Business. 
And Tim and Katie certainly merit that recognition as heroes of 
small business.
    Tim and Katie both had good jobs at large companies when 
they decided to take a risk and start their own small business. 
Today, after nearly two decades of hard work and perseverance, 
Tim and Katie have grown STL into a thriving business that is a 
major employer in Bloomington-Normal metro area, and as well as 
throughout Illinois.
    They have navigated their business through tough economic 
times and are taking the lead in putting people back to work. 
Tim and Katie are also both active members in their community. 
Tim and Katie are members of the McLean County Chamber of 
Commerce and active supporters of Easter Seals and the American 
Red Cross, for which Tim served on the local Board of 
Directors.
    As a member of this Committee, I am so proud of the work 
that we have done to empower small businesses like Tim and 
Katie Norman, and we need to continue to ensure that our 
nation's small businesses have access to capital that they need 
to grow and put people back to work, such as all of those on 
our panel today. And I am eager to work with my colleagues to 
do so.
    Once again, on behalf of this Committee, I welcome Tim to 
Washington, D.C., and look forward to his testimony.
    Thank you, Madam Chair, and I look forward to their 
testimony.

                    STATEMENT OF TIM NORMAN

    Mr. Norman. Thank you, Madam Chairwoman, Small Business 
Committee, and Congresswoman Halvorson. As Congresswoman 
Halvorson said, Katie and I started the business about 18 years 
ago, and really what that means is we spend about 24 hours a 
day together.
    Some of those hours are pleasurable, some of those hours 
can be difficult at times, because the businesses are basically 
operated along with the children that we have. We have three 
children--our daughter Nicki who is 17, our daughter Cassie who 
is 15, and our son TJ who is seven. And they pretty much run 
the house. And when we are not chasing them around to softball 
games and everything else, we run our business.
    We have been very fortunate in the last 18 years. I say 
that because we are still standing. We are still moving 
forward. And one of the things, as the economy has had its ups 
and downs, the one thing that I can honestly tell you is that 
the passion still survives. And we are very proud to be a small 
business owner and slugging it out, being in the one-armed 
knife fight in a phone booth, and trying to figure this thing 
out.
    One thing I will say is that some of the stimulus plans 
that you have enacted have made a difference. We are living 
proof. What I mean by that is we just recently built a hardened 
data center, Tier 3, to the Tier 3 specifications, which means 
everything--it is designed not to break. And it is below grade. 
It is a true bunker.
    And I don't know if anyone has tried to get money during a 
time when there is a recession and the banks are collapsing, 
but it can be difficult. But the SBA, using the 504 loan 
program, with the refinance option, allowed us to recapitalize 
our business, get our data center built, and I think the main 
thing to focus in on there is to get it built, because our bank 
was failing.
    And so midstream the SBA was able to make the bank whole, 
actually move us to a bank that was able to get this thing 
stood up and get this thing moving, because to build a special 
use building at a time of a recession, at the point in time 
that it was happening, you know, I think that we were 
scratching our heads thinking this is the worst time to ever be 
thinking about doing this. But I can honestly tell you getting 
a 4.83 percent interest rate for 20 years turned into one of 
the best times to build.
    With that, we have been able to really drive our business. 
In driving our business, you know, there is really four 
different ones there. We are about a $14 million services 
business, so we are people and we are managed services. What I 
mean by that is we focus on leverage managed services, we focus 
on dollars that are recurring in nature.
    We do work with the Federal Government through the 
Department of Defense. We have some people onsite as 
contractors, but we have a Professional Services Division that 
focuses around IT. We have a Commercial Staffing Division that 
focuses around more of the manufacturing trades. Then, we have 
our Data Center that is, again, special use. And I am 
forgetting one. And then, we have BTS, which is more an IT 
managed services business, that focus on the small business.
    As we have grown and evolved our businesses, the diversity 
across the board helped immensely, because when one was up the 
other one was down. At this point in time, again, getting back 
to that SBA 504 loan program, it has allowed us to recapitalize 
our business, or allowed us to recapitalize our business, 
because our payroll has gone up $80,000 a week over the last 
three months.
    And if that money was to be invested into our data center, 
cash would be tight right now, but the money is becoming more 
available within the markets, and it is working. We have put to 
work over 150 people over the last two and a half months, and 
that is throughout the Midwest. We have got offices in Green 
Bay, Wisconsin; Appleton, Wisconsin; Bloomington, Illinois; 
East Peoria; Springfield, Illinois; and O'Fallon, Illinois.
    So we are trying to make it--use it as an advantage to get 
moving and to get growing, because now is the time to grow.
    One of my good friends who went to the military, upon his 
leaving he said--I said to him I said, ``You know, I feel like 
we need to do something. I respect you for what you are doing 
and the services that you are offering our nation.'' And he 
looked at me and he said, ``Tim, I want to tell you something. 
We will defend this country; you create jobs.'' And that is 
what we are doing.
    And one of the things that can help, as we are growing and 
we are putting people to work, there has been a recurring theme 
that a lot of people find it more--find it better to stay on 
unemployment than to allow us to put them back to work. And if 
we were to shrink some of those benefits, it will force some 
people to get back into the labor force, to start paying some 
taxes versus putting it back upon some of the employers.
    With that, thank you very much for allowing us to be here 
and speak on our behalf. Our people appreciate what you have 
done, and for the work that you do as well.
    Thank you.
    [The prepared statement of Mr. Norman is included in the 
appendix.]
    Chairwoman Velazquez. Thank you. And the chair recognizes 
Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman. It is a 
pleasure this morning to welcome Brad Eiffert to the Committee. 
Brad is from Columbia, Missouri. He is Vice President and 
General Manager of Boone County Lumber Company there in 
Columbia.
    In 1965, Brad's father, Howard Eiffert, established Boone 
County Lumber in Columbia, which is the county seat and which 
was named after Nathan and Morgan Boone, two sons of the famed 
pioneer Daniel Boone. Fittingly, two sons now co-manage the 
business that their father began 45 years ago and at which both 
brothers worked during high school.
    Brad obtained a bachelor's degree in economics and a 
master's degree in business administration from Mizzou's home 
campus there in Columbia. He also served as a U.S. Air Force 
pilot for eight years and is a veteran of Operation Desert 
Shield. Brad worked for a lumber company in Chicago and later 
for International Paper there in Columbia, before joining his 
brother in 1993.
    Over the years, Boone County Lumber has grown to three 
locations, 34 employees, and four part-time employees, 
supplying building materials to contractors and customers 
across much of central Missouri. Boone County Lumber is the 
2006 winner of Pro Sales Magazine Marketing and Customer 
Service Award, and the 2004 Columbia Chamber of Commerce's 
Outstanding Small Business of the Year.
    Brad is also active in his community and serves as a member 
of the Columbia Salvation Army Advisory Board and the Calloway 
Bank Board of Directors. He has served on the National 
Federation of Independent Business Board of Directors since 
2003, serving as National Chairman of the NFIB from 2006 to 
2008.
    Brad, thank you for being here with us today, and I also 
might mention that Ryan, your son, is with us today, perhaps 
the third generation in the family business. And I look forward 
to your testimony.
    Welcome.

                   STATEMENT OF BRAD EIFFERT

    Mr. Eiffert. Madam Chairwoman, Ranking Member Luetkemeyer, 
and distinguished members of this Committee, thank you for 
inviting me to testify today.
    My name is Brad Eiffert, and I co-own and operate Boone 
County Lumber Company in Columbia, Missouri. And I am 
accompanied by my 15-year-old son, Ryan, a ninth grader at West 
Junior High.
    Boone County Lumber is a family-owned company celebrating 
its 45th anniversary this year. In 1965, four men provided 
startup capital of $2,500 each, and this, combined with the 
$100 my father, Howard, had to invest, began the company that 
now operates in three locations and employs 34 full-time and 
four part-time employees.
    Today, my brother Greg manages our Boone County Millwork 
location, while I manage the lumberyard. Together, we serve the 
professional home builder, remodeler, and commercial contractor 
by providing a variety of forest products, doors, windows, and 
moldings.
    Thank you for inviting me to share some of the challenges 
and successes of the last four years and our situation today.
    This July 2010 will mark the end of four full years since 
the housing market slump started a deep recession from which it 
has yet to recover. New single-family home permits in our 
community went from rates as high as just over 1,000 in 2005 to 
as low as 230 in 2008. While the demand for our products 
plummeted, the market values of many forest products dropped 
accordingly. This combination of factors has crushed our 
revenue for the duration of the slowdown.
    One of the biggest challenges early on was answering the 
constantly begging question of when things might turn around. 
We have since moved on from that question to asking how we can 
most effectively adapt to what we call ``the new reality.''
    There have been two sets of heroes in our story. One is the 
professional builder and remodeler we serve on a daily basis, 
who did not participate in the excesses of the housing boom. We 
have been fortunate to serve some customers for two generations 
and are proud to stand beside this group of resilient 
survivors.
    This leads me to the second group of heroes of the last 
four years--our people. The personal sacrifice made by everyone 
in our company is the only reason I am before you today. We not 
only cut hours and overtime, but every salaried person took a 
pay cut as well.
    While doing this, we asked our employees to perform 
services we used to be able to afford from outside companies. 
We became our own custodians, Ryan is now our lawn service, and 
we decided to live without water coolers, newspaper 
subscriptions, coffee and vending machine services, weekly 
entry rug cleaning, and learning to live with changes like high 
deductible HSA health plans and reduced employer contributions 
to 401(k) accounts.
    We have not purchased a new truck in four years, and 
oftentimes will park a vehicle rather than fix it, based on 
seasonal needs.
    Ironically, the office building we constructed with our own 
employees during the housing slump in 1981-'82, in order to 
keep them busy and productive, is the same building we have 
completely remodeled on the exterior in order to provide 
productive activity for our staff during the last three years. 
We completely remodeled the exterior of our building using our 
truck drivers, lumber yard, and office staff.
    While facing the severe slowdown, we never stopped asking 
what we can do during this time to take advantage of untapped 
opportunities. Two years ago, despite the recession, we opened 
a new showroom in the central Missouri area of Lake of the 
Ozarks to display windows, doors, and moldings. Our 
geographical service area is expanded and, so far this year, 
almost 10 percent of our total sales have come from this new 
market area.
    In March of this year, another opportunity presented 
itself, and we took aggressive action. Our primary local 
competitor in the commercial door and hardware market went 
bankrupt. We assumed the completion of several ongoing 
projects, purchased much of their equipment and inventory, and 
offered four employees employment with us in our commercial 
door division.
    This effectively doubled the size of our commercial door 
operations in the last 60 days and increased our commercial 
sales exposure to new vendors and to new customers. While it is 
early in the process, we are excited to continue to diversify 
ourselves beyond the residential housing market.
    Our latest challenge today remains moving beyond break 
even. We need to continue to find efficiencies and sales 
opportunities and become more profitable. We need to be able to 
make money and retain it in our business in order to fully 
restore the incomes of our committed employees and reinvest in 
our business.
    While we remain cautious regarding the current situation, 
we are optimistic that the worst of the crisis is behind us, 
and we are well positioned to move into the new reality of 
today's housing and commercial construction market for another 
45 years.
    Thank you for the opportunity to testify before you here 
today, and I will be glad to answer any questions.
    [The prepared statement of Mr. Eiffert is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Mr. Eiffert.
    And now the chair recognizes Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman.
    Congratulations to each of you. As I listened to the 
testimony this morning, you have managed to take lemons and 
make lemonade out of it. You have each looked at opportunities 
in a difficult time, in a difficult period here, and look at 
from the standpoint of how can we, you know, pull up our 
bootstraps and make something work here. So congratulations, 
and I continue to applaud you.
    And I can tell you we are adamant about trying to continue 
to keep you in business and make sure that you continue to be 
able to take advantage of those opportunities.
    Along that line, I would just like to start out, Mr. 
Eiffert, with you. I know that there is a couple of things I 
would like to talk to you about this morning with regards--one 
of them is the new home buyer's tax credit being in the 
construction business, which has been hammered over the last 
several years here.
    Can you tell me the impact that it has had? Has it been 
positive, negative? Would you like to see it extended? Have you 
had enough of it? Can you just give me an overview of what you 
feel in your area, what it would be? Is it something that would 
be beneficial, or time to move on?
    Mr. Eiffert. Overall, I have heard some of the criticisms 
that it perhaps moved demand and concentrated the demand into a 
narrower timeframe. But at the same time, a lot of my new home 
builder-oriented customers, the ones that predominantly build 
new spec homes, have seen their inventories turn.
    And I think that an aspect of the most recent credit that 
was very effective was that there was also an incentive for the 
not first time home buyer, the $6,500 for those that had 
already purchased a home in the past. But what we saw with the 
tax credit overall was I think it increased the liquidity in 
the housing market.
    We had heard a number of people that said, ``I could sell 
my home if my prospective buyer could sell their home.'' And so 
what we saw was that the tax credit put some liquidity in the 
housing market, and we saw more transactions taking place 
across not only the new home but the existing home spectrum. 
And so in our community I think it did make an impact, and I 
think it was directly related to overall liquidity and 
transaction volume in the market at large.
    So I would say it has been quite effective, and it has been 
something that certainly I have seen an on-the-streets impact 
from it.
    Mr. Luetkemeyer. I notice that, Mr. Norman and Ms. Nelson, 
you guys talked about access to credit this morning and your 
experiences with it. And, Mr. Norman, you have a bank failure 
in the middle of a loan process. That is a rather stressful 
situation. Can you elaborate on that just a little bit?
    Mr. Norman. Yes. When it is good, it is great. When it is 
bad, it is pretty darn bad.
    [Laughter.]
    We were pretty fortunate in the fact that we have got a 
pretty good banking relationship with the banks that were 
failing and the banks that weren't failing. And our loan 
officer was acting a little squirrelly at one point, and I 
said, ``Sir, if at any point in time you don't have faith in 
the bank to be able to deliver the services that we need, and 
the capital that we need, I want to know.''
    And he made a call one day and he said, ``I will do 
everything I possibly can to get you landed in a bank,'' and he 
said, ``This is no reflection upon your business. This is a 
reflection upon ours. And I can't service you.'' And so he 
literally had me in another bank in about an hour, but it felt 
like about three months.
    Mr. Luetkemeyer. Ms. Nelson?
    Ms. Nelson. My experience with the SBA loans, both through 
my chair position with the Greater Sarasota Chamber, as well as 
my own due diligence, was that it was a very cumbersome 
process. I think a lot can be done to not only assist the small 
business owner in making their way through all that paperwork, 
but streamlining the process so that it is easy.
    There is not a lot of time. We already wear a lot of hats. 
So to take time away from the business, the limited time that 
we already have, it is really hard to take on a process like 
that, make your way through it. And typically the process, from 
the initial paperwork to funding, is long, and typically that 
doesn't work.
    Mr. Luetkemeyer. I know that a couple of things that were 
in the health care bill, one of them was with regards to if you 
have $600 worth of economic or, you know, some transactions 
with individuals, that you have got to send them a 1099. Does 
that affect any of your businesses? Mr. Dippold, yours?
    Mr. Dippold. Yes. We have several contractors that we 
utilize that, yes, that does affect our business.
    Chairwoman Velazquez. Is your mic on?
    Mr. Dippold. I will bring it closer. How is that?
    Mr. Luetkemeyer. There you go.
    Mr. Dippold. Yes, that does affect our business somewhat, 
that $600. Certainly, the 1099, we must pass those on, and we, 
you know, follow those areas. So, yes, it certainly does make a 
difference for our business.
    Mr. Luetkemeyer. Mr. Eiffert?
    Mr. Eiffert. Absolutely. I mean, I look at something like 
that and I say, ``Okay. What is the personal impact of this?'' 
Well, the personal impact in my business is it will land on a 
lady's desk named Vicki Mansfield, who has been with me just 
over 30 years. And she will have to go through the process of 
now trying to find taxpayer ID information on all the vendors 
that we have done business with.
    And I can't even imagine the number of hours that this is 
going to take, to try to get the information that is going to 
be required to fill those out. But I would think that we would 
probably have to do 100 to 200 1099s.
    Mr. Luetkemeyer. Okay. Just very quickly, have each of you 
looked at the health care bill? And is it going to be a good 
deal for you? Is it going to cost you money? Are the provisions 
in there about mandatory insurance, is that a problem for any 
of you?
    Mr. Norman. With our business, on our core employees, we 
already have carry a health plan for them. On the staffing side 
of our business, to where, you know, it can grow by the 
hundreds in a couple weeks, I have no clue how it is going to 
affect us. And I don't know how to really dissect it. So yes 
and no.
    Mr. Luetkemeyer. Ms. Nelson, I see you--
    Ms. Nelson. Yes. I haven't had a chance to dissect it 
either. I am not familiar enough with it to know. We do offer 
health insurance currently, and it is working. So I am half-
tempted, with all the other hats we have, to, you know, 
continue to hold on to that while we focus on other fires. But 
rumor has it from my business partner and husband that there is 
some grumbling that there will be some difficulties. I just 
don't know what those are at this point.
    Mr. Luetkemeyer. Okay. I see my time expired. Thank you, 
Madam Chair.
    Chairwoman Velazquez. Ms. Halvorson.
    Ms. Halvorson. Thank you, Madam Chair. I know that Mr. 
Norman has had some good experiences with the 504 loan 
programs, and, Ms. Nelson, you say it is cumbersome. Tim, did 
you find that it was cumbersome when you were put into an other 
loan in an hour?
    Mr. Norman. Well, I think there is two different pieces and 
parts to it. We actually used--I would have to defer to Katie 
on the actual name.
    Ms. Halvorson. But I guess my point is--you are right. And 
Katie probably worked on that, too. But we are trying to make 
this process not cumbersome, you know, the application is 
smaller, the process has gotten less, the fees have been taken 
off. I mean, we are doing everything in our power to make it 
not cumbersome.
    And, you know, some of the problems lie with the perception 
of being cumbersome. So we would like your input in writing to 
our offices or to the chairwoman, but everything we have done 
since we have reauthorized the SBA process has been to 
eliminate that cumbersome process.
    You know, we have increased the government--the part that 
the government backs, so everything we have done is to try to 
make that process not cumbersome. So, you know, and I would 
like the other people to give their inputs, because if it has 
still got the perception that it is cumbersome, we still have 
our work cut out for us, because we are doing everything to 
make sure it is not.
    So I would like to make sure that we are doing whatever it 
takes to make sure it is not. Mr. Norman?
    Mr. Norman. We used a third party, and they actually did--
    Ms. Halvorson. Oh, that is right.
    Mr. Norman. --the whole process. I think it was called 
the--
    Ms. Halvorson. Yes.
    Mr. Norman. --Small Business Growth.
    Ms. Halvorson. Right. We talked about that yesterday. You 
are right.
    Mr. Norman. So they did all of the paperwork, and they 
actually knew the new regs coming out before the SBA did.
    Ms. Halvorson. Right, right. And there are other things. 
But does anyone else want to share some of the processes, if 
they have used the 504 loan program or some of the other 
programs that the SBA offers?
    Mr. Dippold. We have used the programs considerably over 
the last two years. We moved into a new facility. We are now in 
the process of putting on--a new addition onto our 
manufacturing. In our region--I can only speak at that, and it 
is North Central Economic Development--whether or not--I can't 
comment on how complex and cumbersome it is, because they take 
care of everything. They do a wonderful job. They make it easy 
for me.
    Ms. Halvorson. Correct.
    Mr. Dippold. And have made it very easy for me. And they 
are very quick to react, they are very quick to get the loans 
through to committee, get approval, and I see very little. I am 
called to come down and sign documents.
    Ms. Halvorson. Right.
    Mr. Dippold. --to make signatures. So I am not sure how 
complicated--
    Ms. Halvorson. Okay.
    Mr. Dippold. --the system is, but they certainly handle--do 
a great job of handling that very quickly.
    Ms. Halvorson. So then maybe it is the region or we need--
so does anybody have any other comments about--because the only 
other thing I would like to hear from any of you is maybe your 
input on some of the thoughts of the $30 billion lending that 
is being proposed by the administration that is currently 
working its way through Congress about believing that this 
infusion of capital into community banks will help the lending 
to all of you, because the number one thing I hear from every 
small business that I talk to is the lack of capital that you 
are able to get.
    And everybody is trying to point fingers somewhere. And do 
you think that this infusion into the community banks somehow, 
or the banks, are going to help you get your loans any easier? 
I don't know, Mr. Eiffert, if you have heard of this going to 
Congress, or if you think that that is going to help at all.
    Mr. Eiffert. You know, kind of with my bank board hat on 
now, we just haven't seen a lot of loan demand out there. And 
some of the loan demand that is out there is because it is 
coming from some place where they don't want it any more, just 
because of the lack of liquidity or it is just not that good of 
credit.
    So, overall, I think most of the lenders that I speak with 
just haven't seen a robust demand for loans.
    Ms. Halvorson. Okay.
    Mr. Eiffert. That is what I hear oftentimes.
    Ms. Halvorson. Mr. Gay?
    Mr. Gay. I would echo--our banking relationships have 
traditionally been with some of the larger banks, those that 
received help from the government. And after 10 years that my 
wife and I have owned the business, and run it profitably and 
successfully, we were told that we would have about a 50/50 
chance of seeing our line of credit renewal. We have paid back 
all of the term debt. All we had was basically a line for 
working capital left. And they came back and told us 50/50.
    Ms. Halvorson. Okay.
    Mr. Gay. So we have started looking at the community banks, 
because what we are looking for is a relationship. And I do 
believe that that can help.
    Ms. Halvorson. Okay. And I--my time is up. I yield back to 
the chairman.
    Chairwoman Velazquez. Mr. Thompson.
    Mr. Thompson. Thank you, Madam Chairwoman, and thanks to 
the panel for what you do in your communities, for jobs, and 
how you are involved in the communities, too, beyond your 
businesses, just as being active members of the community.
    Mr. Dippold, I wanted to come back to the--I mean, the 
powdered--as I follow the powdered metals industry, 2008 and 
2009 tied a lot to the meltdown of the auto industry, there 
were just a lot of powdered metal industries that--or 
businesses that were just suffering tremendously with business 
loss.
    That was not your story, though. I mean, your record is one 
of really just a remarkable record during a very, very 
difficult time. And so I wanted to come back and ask you, what 
were the differences? What did you do during very difficult 
economic times to make sure that your business was successful, 
that your employees had that security that came working for a 
successful small business?
    Mr. Dippold. Yes, thank you. Really it was. Our area--we 
are in Elk County in Pennsylvania, and it is very 
industrialized, very automotive-based. And we have always had 
the pleasure of having one of the lowest unemployment rates in 
the State of Pennsylvania. And, unfortunately, over the last 
couple of years we have had the distinct honor or dishonor of 
having the highest unemployment. So we live and die with the 
automotive industry, like it or not like it.
    In our situation, we are a rather small company. We have 
been able to really get into some niche markets and niche 
technologies that allowed us steady growth. And we were 
successful in years prior to the recession of having 
opportunities lined up that our sales continued to grow.
    We did see a 10 percent reduction in sales in 2009. We 
actually grew from '07 to '08 and saw a reduction of 10 percent 
in '09. At one point, the early part of '09, we were down about 
30 percent, but some of our new programs started hitting and 
really made a huge difference for us personally.
    Our area, I can say that people are busy again. Things are 
starting to look good. I certainly think our economy is still 
fragile. I think any large disruption could certainly knock us 
off the rail. But I see opportunity, and I see opportunity for 
small business.
    And we continue to work with our employees. We did rotating 
layoffs. We did schedule changes. We accommodated, we worked 
with our employees, and our big thing is to keep our employees 
with us. We implemented gain-sharing opportunities with them, 
and we work for ways to keep not just their base compensation 
but be part of the business and be part of the business 
success.
    Mr. Thompson. Great. Thank you. A question to throw out to 
the panel. If you had the opportunity to have--what one 
program, what one program could--or policy change that Congress 
could make that would help your business grow? What would that 
one policy change be?
    Mr. Norman. Less tax.
    Mr. Thompson. Okay.
    Ms. Nelson. No surprise there.
    Mr. Gay. I will echo that, but I would also say further 
support to help get people off the unemployment rolls. Where we 
currently stand in double digit unemployment in our area, we 
are still having a terrible time getting people to come back to 
work. And while we want to be sympathetic and understand that 
there is a lot of difficulty with people losing their jobs, 
they also have to have some incentive to go back to work.
    Mr. Thompson. Very good.
    Mr. Eiffert. I am also concerned about the tax environment, 
because I see as the economy recovers, and we have tax cuts 
expire, I think they are going to be expiring at a critical 
time when capital is needed in our companies.
    As I said, it has been a long time since we purchased new 
delivery equipment, and I think that as we recover, keeping 
funds in the hands of entrepreneurs so that they can reinvest 
in their companies, in equipment, that will help the economic 
activity of, you know, truck dealers, car dealers, equipment 
manufacturers, and just keep more money out there in the 
private economy. But I think otherwise we will be providing a 
little bit of a headwind to the recovery, if you will.
    Mr. Dippold. In our industry, there is a bit of a 
disparity. Certainly, I am a bit biased, but I certainly feel 
small business is where it is at. And we have made significant 
strides in service and bringing opportunities and great 
quality, great delivery, to our customers. Where I see a 
problem in our business is if there was some way that we could 
get some sort of funding, industry funding for an R&D 
development that would allow smaller businesses to create jobs 
and advance the technology.
    Multi-national companies have the financial wherewithal to 
spend a lot of money on R&D and development and creating new 
products, materials, and processes, where as a small business 
owner financially we are a bit bootstrapped in order to do 
that.
    Chairwoman Velazquez. Will you yield, Mr. Thompson?
    Mr. Thompson. Please.
    Chairwoman Velazquez. Mr. Dippold, are you referring to 
debt financing or equity investment?
    Mr. Dippold. Creating, yes.
    Chairwoman Velazquez. Okay. Thank you. Thank you for 
yielding.
    Mr. Thompson. Okay. I think I have expired my time. Thank 
you, Madam Chairwoman.
    Chairwoman Velazquez. Mr. Critz.
    Mr. Critz. Thank you. You know, I actually come from the 
small business economic development era. I did that for 
Congressman Murtha for many years. And one of the things that I 
have always seen is small businesses and trying to get access 
to capital, and I am curious, because in traveling throughout 
our district, small businesses many times when they are going 
to bigger banks don't have as much success as they do with 
going to local community banks.
    And I am curious for the panel, where you have received 
your financing, if it has been better going to the local 
community bank, and what role the SBA played, if it was helpful 
or if the SBA led you to a certain bank, or what you see as a 
winning strategy.
    Mr. Norman. What I have found is that your bigger banks 
have people that focus on SBA loans. Your community banks don't 
have the resources necessarily to have a person who is an SBA 
expert. And so if you were to inject some cash into a community 
bank to get them an SBA education, I think that you would see 
some SBA loans probably get freed up.
    But it is such a complex process at times, you know, and 
when you are in the foxhole, and you are not really working 
from a strategic position, you need help.
    Mr. Eiffert. I have not used the SBA loan process, but we 
do maintain a line of credit, and it is with a local bank. But 
overall I have found the value of having a relationship--I 
mean, I have got a relationship with people on the Board of 
Directors of my local bank. I know the leadership of the local 
bank.
    I have got a long-term personal relationship with the 
commercial banker that I bank with. And I think the 
communications and the consistency of our relationship and the 
trust and the--we know one another's character. To me, just the 
value of that local relationship and local ties has been 
critical to maintaining a confidence in each other, actually, 
you know, the reassurance that they will be there for me, and 
my communication with them of what I am doing and proactive 
steps that I am taking to be a good customer.
    But I have a hard time understanding how anybody really 
operates without just that personal kind of contact and 
relationship with someone that knows your business and that you 
know them.
    Mr. Dippold. From our standpoint, when we purchased the 
business in 2004, it was also necessary for us to move out of 
our current location and into a new facility. The larger banks 
really didn't want anything to do with any piece of that. We 
ended up with two smaller banks who took the risk on us, but 
they knew us personally. They knew our backgrounds, and they 
did take the risk and they worked with us, and everything 
turned out very well.
    So certainly my standpoint is the smaller banks were there 
for me when I needed them, and I will continue to utilize them 
moving forward.
    Mr. Critz. Well, thank you. Thank you. I appreciate that. 
One thing, actually, for Mr. Dippold. I was wondering if--you 
had mentioned that your business is starting--and you are the 
only Pennsylvania company that--so I know sort of the 
Pennsylvania geography.
    I am curious. You said your business is picking up, and you 
have weathered the storm quite well. I am wondering, does that 
mean that the auto industry is buying more from you now? Have 
you seen an increase in orders from out of the--like the GMs 
and the Chryslers and the Fords?
    Mr. Dippold. Yes. And, you know, the old adage of sometimes 
it is better to be lucky than good, a lot of our new programs 
that we launched over the past six months, and for the next 18 
months, are Ford-related products that are on their new diesel 
engine. They are on their new F-150s, engines that are coming 
out, and the new designed F-150.
    So we have aligned ourselves as a Tier 3 supplier through 
Ford. That has been very successful for us. So, yes, we are 
seeing those definite business increase, but a lot of our 
products are new applications for the industry, for that 
automotive supplier.
    Chairwoman Velazquez. Mr. Buchanan.
    Mr. Buchanan. Thank you, Madam Chair. And I want to thank 
you for doing this, recognizing the heroes, because as someone 
that has been an entrepreneur for 30 years and not a career 
politician, I understand what you go through, and appreciate 
Ms. Nelson being here today, because she has been very active 
in our chamber and all that you have done.
    Let me just say, and as you know this, that 99 percent of 
all the businesses in Florida, in Tallahassee, our capital, are 
small- and medium-sized businesses. They create 70 percent of 
the jobs.
    I don't think we celebrate small business enough in this 
country. I think it is what makes this country great, 
fundamentally. So I just want to--I can't say enough to applaud 
you, and that I--I have been through two tough cycles, in the 
'80s where we had 20 percent interest rates, in the '90s where 
we had the S&L banking crisis. But this is the worst I have 
ever seen--in the last 30 years that I have seen in business, 
or the last 35 years. You would have to probably go back to the 
'30s.
    But, again, I applaud your success. I will give you one 
other statistic, just to tell you how great you are. They have 
said--the U.S. Chamber said that eight percent out of 
businesses that start up, out of 100 succeed, in five years are 
still standing, let alone in this environment. So, again, I 
applaud your efforts.
    Ms. Nelson, again, I am glad to have you here today 
representing my district. What are the keys, a couple of keys 
that you think are the keys for you to survive through this 
struggling time? Because I have got to tell you, most of the 
businesses in our area, there are some niches, are down 
probably 30 percent. And many of them, unfortunately, are in 
the bubble or been out of business. What has been the key to 
your success, you and your husband?
    Ms. Nelson. Well, I think--as we talked about before, I 
think the most important piece of being a business owner--and I 
think we have all talked about it--is pioneering new ways to do 
business. I mean, in tough times like this, you just learn to 
roll up your sleeves and get the work done, to innovate, to be 
a pioneer, and we have all done that.
    And you have to do things that are uncomfortable. You have 
to change your staffing, you change your health care benefits. 
There is a ton of things that you have to do in order to 
survive. It is not comfortable, it is not what you like, and, 
quite frankly, I think we get a little comfortable when things 
are good. And we are used to, you know, enjoying those times. 
And then, when times get tough, we complain about it a little 
bit, but ultimately we turn around and we make it happen, 
because that is what small business owners do.
    So that has been our success. You know, as a husband and 
wife team, it is a little tough. We spend a lot of time 
together, and we balance work and life. But we all do that. 
Everybody on this panel and everybody watching would tell you 
the same thing, but that is what we sign on for when we come 
on. So I think success is just that fortitude and that hard 
work that gets it done, be willing to do what you have to.
    Mr. Buchanan. Well, you definitely have that attitude, and 
that is the reason you are successful.
    Mr. Eiffert, I wanted to ask you, because you brought up 
taxes, you know, the mentality up in Washington is tax the 
rich. The rich I know, most of them are small business people, 
medium-sized companies, with pass-through income. Either they 
have got an LLC or a Subchapter S or a partnership or a sole 
proprietorship.
    What is your thoughts on that? You touched on that, because 
what happens--if you make $750, you know you don't take home 
$750. And if you have got to pay another 10 percent in taxes, 
it is a couple more jobs that you are not going to be able to 
hire somebody. But I would like to just have you add on, if you 
think I am right on that.
    Mr. Eiffert. Well, I think you are very right on that. And, 
you know, one of the things--small companies, sometimes the 
quickest cash that we have available in a small company is what 
we don't take home as owners. You know, we have had periods of 
time where you just didn't take any income home, because you 
wanted to leave the money in the business.
    So certainly, you know, to the extent that that--you know, 
that taxes would affect the livelihood of any entrepreneur, and 
what they take out of the business, versus being able to leave 
the funds in the company, it certainly makes a difference, 
because I know recently we have only been taking out of it what 
we need to live on. And, you know, having the tax rates minimal 
gives us more liquidity that we need to support our families.
    So to that--
    Mr. Buchanan. Thank you for that, because I have limited 
time. I wanted to get one more question to the panel, because 
this is something I wasn't planning on talking about, but it 
has been brought up twice here today, and I heard it in a town 
hall meeting a week ago Saturday.
    And I am as passionate as anybody. All of us--working 
families in the country are clearly hurting. But a gentleman 
stood up at the town hall and he says, ``I have run ads in our 
community for some time. I can't get anybody to come in and 
look for a job.'' You know, you guys have got to be very 
careful about the unemployment benefits, what we are doing 
here, the extension. Some people need them. Some people are 
taking advantage of the system.
    So I talked to him after that was his comment, and I said, 
``Well, tell me, you know, how are they surviving? They can't 
survive.'' He said, ``Well, they are taking the check, and they 
are working under-the-table side jobs.'' And he can't get 
anybody to take a job there locally in his community. That is 
what he claims.
    Does anybody want to add on to that? Or is it just one 
incident? Because I just had this come up recently. Or do you 
think that is pretty widespread in your communities?
    Mr. Norman. Well, I think, coming from the staffing side, 
with my staffing hat, there is a consistent message each and 
every week, probably two out of 15 people that we interview or 
we offer jobs to, that--around our area Caterpillar is a main 
supplier or a manufacturer in Peoria, and so there is a lot of 
labor that was laid off there. A lot of it was union labor.
    But the unemployment benefits are about break-even to what 
they could be making otherwise, and a lot of them are just 
saying, ``I have got about six weeks left. I am just going to 
coast for the next six weeks, and give me a call back then.''
    Mr. Buchanan. Thank you, Mr. Norman. I yield back.
    Chairwoman Velazquez. Time has expired. Mr.--Ms. 
Kirkpatrick. Sorry.
    Ms. Kirkpatrick. Thank you, Madam Speaker, and thank you, 
panel. I represent a very large rural district in Arizona, and 
most of the businesses are small business. And by ``small 
business'' I mean Mom and Pop to less than 50 employees. And 
one of the things that--we know the survival rate is low, as 
Mr. Buchanan said. One of the things that we experienced 
overnight, lines of credit just disappeared.
    And I want to hear from you if you had similar experiences. 
So it didn't seem to matter whether it was a large bank or a 
community bank. The lines of credit just disappeared. So I 
would question the entire panel. If you would just give me an 
idea of your experience with that. Ms. Nelson.
    Ms. Nelson. Yes, thank you. We bank at a large bank and had 
a history with that bank. It was not a community bank, and they 
immediately came in and took away a good portion of that. We 
also had a credit line on our home that we used when we needed 
to, hadn't tapped into it, actually was in the process of doing 
a few things to our home when we realized--we got notice that 
they had taken out a number of the funds while we were under 
construction.
    Same thing--you know, as small business owners, there is 
times we tap into our corporate credit cards and personal 
credit cards. The interest rates on those changed. So it was a 
quick shock to realize there was actions we needed to take in 
order to secure keeping the availability of the funds that we 
need in order to deliver the supplies and the goods to our 
clients.
    So it was not a local bank, it was a large bank for the 
most part, that we had that struggle with.
    Ms. Kirkpatrick. Has that been restored? Has your line of 
credit been restored?
    Ms. Nelson. We actually went--we called them and negotiated 
pretty heavily. It did not go away, but it was significantly 
reduced. And keep in mind, we rarely tapped into them. So they 
should have--you know, we anticipated that they would always be 
there.
    Probably the biggest place where we got the resources was 
from major suppliers, Dell being one of them for instance. When 
we went back to them and said, ``Look, we have been a major 
provider of equipment for you in this area, and we need help,'' 
they stepped up and actually significantly increased our credit 
line. It was things like that. It was those industries that 
really came to bat and said, ``We are just going to have to 
band together and get this taken care of.''
    Ms. Kirkpatrick. So it was business, not the banks, that 
came to your rescue.
    Ms. Nelson. Yes. For the most part, yes.
    Ms. Kirkpatrick. Anyone else have experience with that?
    Mr. Gay. I think what Mr. Eiffert said earlier about 
relationships is the key to our future going forward, because 
we--as we went through our renewal process, a big part of our 
business is government contracting. We get paid every 28 days 
by the government, which is pretty good.
    And their comment back to us is, ``Well, we don't think we 
can perfect the receivable, the guarantee on the receivable,'' 
which to me is absolutely ludicrous. The smaller banks, the 
community banks, the folks that take the time to get to know 
you, to really understand what your business looks like, what 
your cashflow needs are, and the like, I think are going to be 
the ones that are going to help us go forward.
    Ms. Kirkpatrick. Now, there is--did you want to speak to 
it? Go ahead, please.
    Mr. Dippold. Just quickly, on the small bank side, we 
utilize the small banks. And there were conversations about 
negotiations of tailoring back our lines of credit. We have 
some new opportunities coming through--convince them that we 
needed that line of credit, because we had new business we were 
launching. And as a result, we were successful in keeping that 
line of credit, and only had to negotiate a floor on the 
percentage rate.
    Ms. Kirkpatrick. Now, in the SBA loan package, there is a 
provision for a small line of credit. We wanted it to be easily 
accessible to small businesses. Have any of you tapped into 
that?
    Ms. Nelson. No.
    Mr. Dippold. No.
    Ms. Kirkpatrick. Okay. So you are sticking with your 
existing banking. Well, I applaud your survival, your efforts. 
You know, I agree--I am a former small business owner myself, 
and through the hard times is when you--you know, you really 
look at those efficiencies, and, if you can survive, you come 
out that much stronger. So, again, thank you very much for 
being here today.
    I yield back.
    Chairwoman Velazquez. Thank you. Mr. King.
    Mr. King. Thank you, Madam Chairman. Madam Chair, I 
appreciate you holding this hearing today, and this is 
fascinating, to hear the panel talk. I really am having a hard 
time deciding where to start.
    But one of the things that I think wasn't developed to its 
fullest extent was the questions that were being asked by Mr. 
Buchanan with regard to how difficult it is to hire someone who 
is being paid not to work. And is there anybody on the panel 
that has actually hired somebody that was drawing unemployment 
and known that they have gone off of unemployment to go to 
work? Have you experienced that in the last year or two or 
three, anyone?
    Mr. Gay. Very rare.
    Mr. King. But has it actually happened to any of you?
    Mr. Dippold. It has not happened to me.
    Ms. Nelson. No, we have hired a number, and they all went 
off unemployment. They were very--I had one employee walk in 
with his first paycheck crying, saying, ``You have no idea what 
this does for me.'' So I have not had the experience of them, 
you know, trying to do otherwise at all.
    Mr. King. So I hear you clearly that people that were 
drawing unemployment, it hadn't expired yet but you hired them 
while--
    Ms. Nelson. Yes.
    Mr. King. --and they took the job rather than the 
unemployment check.
    Ms. Nelson. Yes.
    Mr. King. Thank you.
    Ms. Nelson. Absolutely.
    Mr. King. Anyone else have that experience?
    Mr. Eiffert. No, sir.
    Mr. King. So I think Mr. Buchanan has illustrated that in a 
way that we need to think about, is he said some need it and 
some don't. Some game the system, and some don't.
    Ms. Nelson. Yes.
    Mr. King. It is hard to have a universal approach to this I 
just think I have had people in the wintertime in my 
construction office open the door, stick their head in, and 
say, ``You don't need any help, do you?'' and they close the 
door and walk away. And I realize that they are going to put me 
down as somebody they applied for a job with, and so now I say, 
``Yes, here is the application. Come on in, sit down.'' And 
they don't come back if they are not looking for work. But that 
is an interesting observation.
    And I noticed that Mr. Norman has an employee base that 
goes up to roughly 200 additional, that you are concerned about 
how that might be affected by the health care program. But I 
would ask you: is there anybody on the panel that uses eVerify 
to verify legal employees?
    Mr. Norman. Yes.
    Mr. King. Two of you do? Mr. Gay?
    Mr. Gay. Yes, sir.
    Mr. King. And Mr. Norman?
    Mr. Norman. Yes.
    Mr. King. Do you find it a system that works well for you, 
Mr. Gay?
    Mr. Gay. I think the system works well. The thing that is 
difficult with eVerify is you have to hire the employee first 
before you do eVerify. So if they kick out, now you have 
essentially hired that person, and they go back into the 
unemployment ranks. And I know there are some discrimination 
issues around that, but--
    Mr. King. What do you--I mean, I am going to put it in a 
little bit of a way--I would characterize it this way, that you 
have to hire someone who is working illegally, you have to 
break the law in order to find out if they are breaking the 
law. And then, if you find out that they aren't legal, then you 
have to let them go.
    Mr. Gay. Yes, I think that is a fair statement. And being a 
federal contractor, that is something that we have to take very 
seriously.
    Mr. King. As a federal contractor, do you ever see a 
contract that requires you to certify a drug-free workplace?
    Mr. Gay. Yes.
    Mr. King. How do you comply with that in your state? Can 
you do that within your state laws?
    Mr. Gay. Yes, we do. We do drug pre-screening before 
everybody is hired, and then random drug tests over the 
lifetime of their employment.
    Mr. King. That is good business. Thank you.
    Mr. Norman?
    Mr. Norman. We do the same. Our people go through drug 
tests, drug screening. A lot of times, too, when you get into 
the volume staffing, it is part of the deal that you have to 
show proof of citizenship. You have to show proof of no drug 
use and everything else. So it is a--it is just part of the 
process.
    Mr. King. And you would be happy if we amended eVerify so 
that it can be with a bona fide job offer as opposed to having 
to actually put them on the payroll and then find out?
    Mr. Norman. Right. You know, and there is always--what we 
do, too, is we put an employment--basically, an offer letter 
together that makes it contingent upon passing the drug 
screening and all of the citizenship stuff.
    Mr. King. I hope that line is fine enough.
    Mr. Eiffert, you were the one that actually spoke to me in 
a way when you talked about how you had to pinch pennies and 
squeeze things down and get rid of the clean rug service and 
Ryan mows the lawn. If he was the son of one of your employees, 
could he do that for you?
    Mr. Eiffert. No, sir.
    Mr. King. And I bring that up because I think they would 
have to be 18 years old to ride the riding lawnmower around to 
cut the grass around your place, but they would have the keys 
to the car two years earlier. That seems like a child labor law 
that we ought to take a look at.
    But you also have--you have 34 employees and four part-
time, as I read in your testimony. And have you given thought 
to what you might do with an employee base if you are bumping 
up against the 50-person cap that would put mandated health 
insurance on you? Has that crossed your mind, that a 50-
employee threshold might be something you would want to back 
away from, if you reach that point?
    Mr. Eiffert. I expect that we would become multiple 
entities. Instead of just two locations, we will be two 
companies.
    Mr. King. I expect that is the case with all of the 
witnesses. Thank you, Madam Chair. I would like to find the 
answer to that question.
    Chairwoman Velazquez. Mr. Altmire.
    Mr. Altmire. Thank you, Madam Chair. I wanted to I think 
close out this first panel by just getting some clarification 
on the issue that has come up multiple times about 
unemployment, because you are here at a very important time. As 
you know, the Congress is debating that very issue, maybe as 
soon as today, on whether or not to extend unemployment 
benefits. And Mr. Gay and Ms. Nelson both addressed this.
    But I wanted to ask the question in a little bit different 
way and just start at Mr. Eiffert and go across. Two things. Do 
you--have you seen specific examples--I am not asking you to 
name names, but just, you know, have you seen a person who you 
believe could work, there is a job available for that person, 
but because they are on unemployment they choose not to, they 
choose to stay on unemployment rather than take a job? I know, 
rhetorically, we hear that is what happens, and there are 
people who do that. But have each of you seen a specific person 
who has done that?
    Mr. Eiffert. No, sir. I am not available--I am not aware of 
anyone that has specifically done that.
    Mr. Altmire. Well, thank you. The second question was--and 
then you can go down--is if we were taking up this vote about 
whether or not to extend unemployment, if you had that vote, 
what would you recommend that we do? Given where we are in the 
economy, given what you see in your regions, the impacts that 
the recession has had on your businesses and those around you, 
do you think it is an appropriate action to take?
    Mr. Eiffert. Again, I am not aware of anyone specifically 
in that circumstance. And I think it is going to be a difficult 
vote, because I know it is a difficult economy. But, overall, I 
think that--you know, I was always kind of raised under the 
mantra that there are jobs out there for people that, you know, 
are productive. And I know that might be naive in some 
economies, but I would probably go with the unemployment system 
that we have now, thinking that it provides the cushion and the 
time that it should to be able to provide someone a chance to 
find employment.
    Mr. Altmire. Thanks.
    Mr. Norman. I can give you a list. You know, it is--I think 
it is--if you are hiring, you will run into it. Or if you have 
got accelerated growth, you will run into it. If you are not 
hiring, I don't think you will see it, but the fact is that I 
have seen the people, I have spoken to the people, and our 
people have spoken to the people, and it happens weekly. And I 
would vote to repeal it.
    Mr. Altmire. Okay.
    Ms. Nelson. Wow, it is tough. We have had a lot of growth, 
so we have not run into a lot of that, or we haven't run into 
any of that for the most part. The people--when we have hired--
we have made a good probably half a dozen hires this year, and 
have had no problem finding the people we need and have had no 
problem in them accepting the jobs. So that has not been an 
issue.
    What my vote would be, that is tough. It is hard to sit in 
this position and be employed and to make that decision, to 
make that call. I will tell you that, from a philosophical 
perspective, I think that we need to push people to start 
working, to move past their comfort zones, to take whatever 
they can. So I can understand both arguments.
    Mr. Altmire. Okay. Mr. Gay?
    Mr. Gay. Yes, sir. I think we are now approaching I believe 
it is 99 weeks that unemployment has been extended, coming up 
on two years. That is a long time. And, clearly, we have been 
through some challenging times in the economy, and I think 
people need to know that there is a safety net.
    I think what we see is we had a Volvo manufacturer close in 
our area. These people were making, you know, $35, $40 an hour 
perhaps, and they don't want to come take the $15 or $20 an 
hour job. But what they will do is come in, apply, and then go 
back to the Employment Security Commission and say, ``We went 
and tried. We didn't get the job.'' And then, that just allows 
them to continue to stay on there.
    So somewhere at the Employment Security Commission level 
things I think also need to be broken, because it seems like 
they are enabling a lot of that to continue to go on.
    Mr. Altmire. Okay. Thank you.
    Mr. Dippold. Thank you. I have not personally had the 
experience. We hired only three people in the past six months, 
none of which were in that situation. So I can't comment there. 
But I personally believe it is time to push those individuals 
out into the marketplace. What we are seeing when people are 
interviewing and are coming through the system, we are seeing 
much younger people. We are not seeing the 30-, 40-year-old 
people that are coming in for those interviews. So that tells 
me, at least in my situation, that there are people taking 
advantage of the system.
    Mr. Altmire. Thank you, all. No further questions, Madam 
Chair.
    Chairwoman Velazquez. Thank you. We are finished here, 
right? Yes. Let me take this opportunity to thank all of you, 
and I hope that--well, it is important that in order to get 
this economy growing again we need to create jobs. We lost 11 
million jobs. So it is hard to believe that people are--when 
you are hiring, that people do not want to get back to work. In 
fact, we have only been creating 250,000 in the last month, and 
previous to that 159,000.
    So, but the intent of this hearing is to listen to the 
stories, to see what is working in terms of small businesses, 
getting your businesses growing, and hiring again. Thank you 
for the contributions that you make to our economy, and for 
your ingenuity. You have been able to adapt and make the 
changes necessary to be able to come here to us--to the 
Committee and talk to your successes and the positive stories 
that you all represent.
    So with that, I want to thank all of you on behalf of this 
Committee. And you are all excused. Thank you.
    I will ask the second panel to please come forward and take 
your seats.
    [Recess.]
    Chairwoman Velazquez. The Committee will come to order, and 
the chair recognizes Ms. Kirkpatrick for the purpose of 
introducing our first witness.
    Ms. Kirkpatrick. Thank you, Madam Chairwoman, and thank you 
for adjusting the order of the witnesses.
    I am very pleased to introduce Chris Kuknyo of Patriot 
Disposal in Prescott Valley, Arizona. Chris helped found 
Patriot Disposal 10 years ago, fighting the odds to build a 
business that now serves thousands of residential and 
commercial customers throughout Yavapai County.
    Patriot is a local company serving local communities, and 
the business gives back by contributing to local organizations 
and events, including the local food bank, Little League, the 
Prescott Valley Team Up to Clean Up, and the company was the 
first to bring recycling services to the area.
    Chris is equally involved serving as Vice Chair of the 
Prescott Valley Chamber of Commerce, as well as on the Board of 
Directors for the Prescott Valley Economic Development 
Foundation.
    Chris, welcome to our committee.

                   STATEMENT OF CHRIS KUKNYO

    Mr. Kuknyo. Thank you very much. Thank you, Madam Chair, 
for allowing me to speak with you on behalf of the small 
business folks of Arizona's 1st congressional district. And I 
also want to thank Representative Kirkpatrick for the 
invitation to do the same.
    My name is Chris Kuknyo, and I am one of the co-founders of 
Patriot Disposal. We are a small trash and recycling company 
that just celebrated our tenth anniversary. You see, 10 years 
ago, I and another gentleman took hold of the American dream. 
We knew that the dream wasn't entitlement, but opportunity, 
that if we believed in ourselves and worked hard there was 
nothing we couldn't accomplish.
    My partner knew the trash business and was a whiz at 
financing and administration. I knew how to fix trucks, and I 
had a knack for marketing. We developed a rock solid business 
plan and took it to the service corps of retired executives in 
the Small Business Administration. They said, ``Don't do it. 
You will never make it. Waste Management will crush you.'' We 
took our plan to the banks where one loan officer laughed and 
said, ``Come back when you don't need the money.''
    So we did what so many small business people do, we went 
all in, we put everything we owned and worked for on the table. 
I took out a mortgage on my home, we purchased a garbage truck 
and 300 garbage cans. Today the banks visit us on a regular 
basis wanting to help us manage the cashflow of our 16,000 
residential and 800 commercial accounts.
    The journey from zero employees to 29 employees has not 
been without its challenges, as represented by my graying hair. 
I looked at a photo the other day of these two young guys 
standing so proudly in front of their first garbage truck, and 
the guy on the right does not resemble what I see in the mirror 
in the morning.
    We had to swim with the sharks to get the capital to keep 
us up with the growth that we had. I am talking about non-
traditional lenders that charge 14 to 21 percent. I have to 
compete with the largest disposal company in the world, who 
happens to own the only landfill in the county that accepts 
household trash. They charge over double the rate that is 
offered in Phoenix, because they are the only game in town.
    We have to contend with our own government that seems bent 
on our destruction. I remember the first quarter of 2006. We 
only had so much money, and it was two weeks until our billing 
was going to be coming in. We had a choice to make. We could 
miss payroll and lose our employees, not make a fuel payment 
and have our gas pumps turned off, not pay the landfill bill 
and have Waste Management put us out of business, or miss a tax 
bill and take a hit from the IRS.
    The tax we missed for the quarter was $44,000, but after 
penalties, fines, and interest, it is now $88,000. I know that 
figure is not much to you folks, but for a small business that 
could be just devastating. If I was to open a business that 
charged that much, and acted in that manner, I would be 
arrested and tossed in prison for loan sharking.
    The frustration is amplified when you open up the paper and 
you see the same government that is holding your feet to the 
fire for thousands is giving billions to help the foreign 
nation of Haiti, or giving out gigantic loans to huge 
corporations because they are too big to fail.
    We have been under attack from the big box stores and giant 
corporations, who can weather this economy and use it to 
further gain market share by eliminating the pesky small 
businessman.
    As small business people, we are so busy getting the kids 
to ball practice or helping at the school that we don't have 
the time or energy at the end of the day to lobby Congress to 
let you folks know what needs to be done. That is why I am so 
honored, and I truly am thankful for this opportunity to share 
with you folks today.
    When I found out I was making this trip, I went to the 
Chamber members and small storefronts around my town and asked 
a simple question. Is there anything you would like me to 
convey on your behalf? They didn't take long to answer. ``Tell 
them the banks still aren't lending. Stop trying to be my 
partner. No more spending. And they are taxing us to death.''
    I am sure you hear that last one a lot, but do you ever 
take into consideration the big picture? It is not just the 
Feds that want to profit from any success we may have, but the 
state, county, and city are also lined up.
    Let me give you a quick example of Patriot's purchase of a 
used trash truck we bought in California. After paying 
California sales tax, we had to pay a temporary tax to drive it 
home to Arizona where we were informed that, because we did not 
pay city sales tax in California, we owed sales tax to the town 
of Prescott Valley, Arizona.
    Filling the tank with diesel, we also paid more taxes to 
get the fuel to get it home, and then we were taxed to license 
the truck and transfer the title, and the county wants to tax 
you to inspect the truck. And if over a specific gross vehicle 
weight, the IRS wants a form filled out and more federal tax 
paid. Now the truck can go to work picking up trash for $16.75 
a month.
    When you consider any future legislation, please consider 
that even the smallest impact has an effect on small business. 
In this town, it seems like a million dollars is hardly ever 
mentioned anymore unless it is $5-, $6-, or $700 million. For 
the most part, you seem to speak in billions and now even 
trillions. These are unfathomable amounts. To a small 
businessman in this economy, $1,000 is a lot of money. A 
thousand dollars is what it will take to cover rent on the 
store. A thousand dollars will allow me to keep my home and 
make the car payment this month. A thousand dollars separates 
me from bankruptcy.
    I have never seen so many dreams shattered as I have in the 
past year. Folks that had been doing their best to hang on 
until the economy improves have lost their businesses, their 
homes, their savings, their dignity. If you don't believe in 
God, you have never been in business, because over this last 
year I guarantee we have all been hitting our knees and asking, 
``Lord, please keep the wolves at bay for just one more day.''
    And should you survive the attacks from the big box stores, 
and get out from under the mountain of taxation, if the clouds 
part and God looks down and smiles on your business, and what 
do you hear from your national leaders? You hear, ``You are a 
fat cat, you are the rich, you need to spread the wealth 
around.''
    I tell you, that is not the way to start a bonding session. 
But my message is a message of hope. Small business really is 
the backbone of this country, and proof of that is that we have 
not failed completely. I know it is not a popular thing to say, 
but I really am proud of this country, and I still believe in 
her and the way we do business.
    Folks from around the world are knocking our door down to 
get in, because we are, and always have been, the land of 
opportunity. I think to summarize what the folks back home 
wanted me to express is that we really don't need you to do 
anything for us, just don't do anything to harm us, consider 
the impact of any legislation.''
    Thank you.
    [The prepared statement of Mr. Kuknyo is included in the 
appendix.]
    Chairwoman Velazquez. Thank you. And the chair recognizes 
now Mr. King. The chair recognizes Mr. King.
    Mr. King. Sorry, Madam Chair. Thank you. I was focused on 
the witness' testimony. It was so interesting, I was writing a 
quote down. I will be reviewing that. This is very fascinating 
to me, and that is so much packed into five minutes. Thank you.
    I have the privilege to introduce the next witness, who is 
Rob Hach. And he and his wife Tara are the owners of a company 
called Anemometry Specialists, Incorporated, that is 
established in Alta, Iowa, a small community.
    They set the business up in 2002, and they have seen 
expansion since that period of time. What it is, anemometry is 
the study of wind. And they set up sensing devices to determine 
if a wind-generating field can be an effective producing field. 
They consult on that and establish and install and construct 
the small wind generators that we see around places here in 
this capital, as a matter of fact. And that kind of growth has 
set up a branch in Texas as well.
    I am quite impressed with what they have done as--and they 
are the Iowa Small Business Persons of the Year Award winners, 
but also it doesn't take very long to find out that Rob is not 
alone in this partnership, that if you visit their business and 
make only eye contact with Rob, you will soon find that Tara, 
who is seated behind him, is as much a partner as Rob is.
    I am very pleased to introduce him today, and I am looking 
forward to Rob's testimony.
    Thank you, Madam Chair. I yield back.

                  STATEMENT OF ROBERT HACH, II

    Mr. Hach. Madam Chairman, Ranking Member Luet--Luet--thank 
you, and Congressman King, thank you.
    [Laughter.]
    Thank you for the invitation to address this Committee 
today. My name is Rob Hach. Behind me, the good-looking lady 
behind me is my wife and business partner, Tara. We own and 
operate Anemometry Specialists, Inc., in a rural northwest Iowa 
town.
    For eight years, our company has been powered by the winds 
that sweep across the plains of the Midwest and throughout the 
United States. This wind turns thousands of wind turbines 
across the landscape today. In recent years, we have been able 
to travel to other countries, to several South American 
countries, as well as South Africa, to capture the winds in the 
other countries.
    It is an honor to present the--that our company resides in 
the 5th district of Iowa represented by Congressman King. Our 
district has a larger number of wind turbines than any district 
in the United States. This means our district is a leader in 
renewable energy and renewable fuels.
    Our clients in the wind industry understand our name, and 
it defines what we do. Anemometry means the study of wind. What 
we do for our clients is specialize in the study of wind. We 
study to determine the feasibility and the success of a wind 
farm. We install what is called a meteorological tower. It is a 
200-foot tower with sensors up and down that measure the wind 
speeds and wind direction.
    The data is transmitted back to our office. A meteorologist 
analyzes and processes the data, and then provides a report to 
our developers and our clients. These reports are then used to 
finance a wind farm.
    Recently, our company, as Congressman King said, received 
an award from the United States Small Business Administration 
for the Business Persons of the Year for the State of Iowa. 
From 2004 through 2008, we have doubled our revenues and our 
employees each consecutive year. Even in the tough economy of 
2009, we were able to show a profit and expand the company.
    We have been able to add an office in Texas, an office in 
New Mexico. We have been able to bring on four more employees 
during 2009, and we continue to hire. It brings our total to 
30. We were able to avoid layoffs, maintain benefits, and we 
have been able to take care of the families that made our 
company successful and grow.
    We continue our growth in 2010. We are looking to add two 
more regional offices and an additional 10 more employees. We 
have added a new division to our company which installs and 
services small wind turbines like the ones that you see on 
the--in the Botanical Center here in D.C.
    Today, I would like to highlight some of the programs that 
are in place that we have been able to take advantage of at 
Anemometry Specialists, despite today's economy.
    The Business Association--the Small Business Association 
has been the best program that we have seen to be able to help 
our company. Tara and I started our company in our twenties, 
and, as you have heard numerous times today, getting credit has 
been difficult. We did not have the cash or the assets the 
banks needed in order to secure a loan.
    We were able to access an SBA 504 loan, and be able to 
get--receive a $150,000 line of credit from the SBA. We were 
able to work hard and build our company during our early years 
when we weren't able to secure funds through conventional 
banking or fund-raising.
    We paid our debt off early, and just recently secured 
another note with the SBA for the purchase of our building. 
Last year we were able to secure a $184,000 loan to purchase a 
17,000 square foot building, backed by the SBA. The SBA is 
offering small businesses confidence in an uncertain economy.
    Through the SBA, we have been able to work with programs 
like SCORE, Counselors of American Small Business, and the 
Small Business Development Centers, where we are able to access 
experience through support services and business advice.
    Business guidance and mentoring is just as important as 
company finance. It is vital for a new business owner to know 
how to manage the company and its growth, especially with the 
changing regulations and global competition.
    A state loan--I am going to skip that one.
    The funds that allowed Tara and me to work continuously 
with a CEO coach over the last two years has been vitally 
important. We have been able to work with a CEO coach, and it 
has been able to take our management team even higher and grow 
our company even more, and, especially with our five years of 
growth, we have been needing that CEO coach.
    It is kindly that I ask the Committee to continue to 
support the Small Business Administration and its 
revitalization of the small business workforce. As business 
owners, we would like to see more offered in training funds, so 
that our workforce might be able to continue to change and 
adapt in an ever-changing world economy.
    Business incubators and low-income housing type of office 
and warehouse spaces will be also nice for consideration.
    Thank you again for the opportunity to address the 
Committee and testify on the small business heroes. I would be 
pleased to accept any questions.
    [The prepared statement of Mr. Hach is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Mr. Hach.
    And the chair recognizes Mr. Schock.
    Mr. Schock. Thank you, Chairwoman Velazquez. Appreciate you 
having this Committee hearing and allowing us to bring members 
from our districts back home with relevant experience.
    Ranking Member Graves, fellow Committee members, I am 
honored to welcome today Ms. Wendy Martin, who is the Corporate 
Officer for Martin Publishing in Havana, Illinois. Wendy, along 
with her husband Bob, who joins her here today, own two local 
newspapers, a printing company, and a basement dewatering 
business.
    The Mason County Democrat is Mason County's oldest 
established business, having observed its 160th year in 2009. 
Their other newspaper, The Fulton Democrat, recently celebrated 
its 155th anniversary, and is the oldest established business 
in Fulton County.
    Wendy's family newspaper history can be traced to her 
grandfather, Dr. Morris Fishbean, who was editor of The Journal 
of American Medical Association for 25 years, and was the 
author of the first syndicated column that we have all come to 
know, ``Ask the Doctor.''
    Wendy has seen a lot of changes to the newspaper industry 
is her 25-plus years with the company. And as the former 
President of the Havana Chamber of Commerce, Wendy has helped 
to revitalize a depressed community in her county.
    I am pleased to introduce Ms. Wendy Martin of Morton 
Publishing--of Martin Publishing from Havana, Illinois. 
Welcome, Wendy.

                   STATEMENT OF WENDY MARTIN

    Ms. Martin. Thank you. Madam Chairwoman, Ranking Member 
Graves, and Congressman Schock, thank you so much for the 
opportunity to talk to you here today.
    Our company, Martin Publishing of Havana, has two 
newspapers and a printing company, as he said. And I guess I am 
repeating myself, but we are--both of them are over 150 years 
old, and we are very excited. The paper that is 155 years old 
has always been in my husband's family.
    My husband Bob here, he and I have been working together 
for 36 years, although he has got a few more years' seniority 
on me. He started at the newspaper when he was seven sweeping 
floors. He says that is indentured servitude. When I started, 
we had a linotype operator, and we cast the headlines in hot 
lead.
    In 1974, who could have imagined personal home computers, 
Google, Yahoo, and news aggregators? For those reasons, and a 
variety of others, the newspaper industry has changed 
dramatically. For once, it is to our advantage to be the small 
hometown newspaper. Our news is all local, and our readers 
depend on us to cover the schools, the city councils, 4H clubs, 
and the things that matter to them.
    Industry-wide, circulation has taken a nosedive, but we are 
kind of holding our own. Bob says we are kind of like you. You 
get elected every two years, and our readers vote on us every 
year when we send out the subscription renewal forms.
    To stay competitive, it is always critical to keep your 
equipment and processes up to date. In the next few weeks, we 
will complete the launch of new Internet editions of our 
newspapers. Our mission is to provide the best local news 
coverage that we can, but the success of our business really 
depends on other small businesses. The majority of our 
customers are just like us--small, local entrepreneurs catering 
to the local communities that we serve.
    Thanks to a federal USDA RCDI grant, we were able to be 
part of a program called Shop Havana that supports our 
community of 3,800. The goal was to raise community awareness 
regarding the difference people could make by doing just a 
little more shopping at home.
    We calculated that if each resident spent just $12 a week 
more in town that they could make a million dollar difference 
in Havana at the end of a year. This wasn't spend $12 more, 
just spend $12 that they might have spent out of town at home.
    In addition to promoting it in the newspaper, our printing 
company helped by designing decals for the doors of every 
business in town, and table tents that were placed by the cash 
registers, and they were there to remind shoppers that the best 
reasons to shop Havana were that local businesses were there to 
serve them with personal service, high-quality goods. They 
created local jobs, and it kept tax dollars at home.
    While we are only six months into the program, we know 
already that the benefits have been incalculable. Members of 
our community have become keenly aware of the difference that 
they can make and of the importance of shopping locally. I 
think that is why my successor at the Chamber of Commerce 
opened up a new business in town this year, and why the owner 
of a restaurant that burned to the ground last year reinvested 
all of his money back in the community and has reopened. He 
named the bar The Phoenix. We have another business downtown 
that has expanded, and we even attracted a new restaurant.
    I have talked mostly about the newspaper side of our 
business and what we have done to try to ensure that the 
tradition of local news continues. Our printing company 
weathered the storm of desktop publishing, but the overall 
crash of the newspaper industry has taken its toll.
    At one time, we had 50 employees, and we printed more than 
two dozen different newspapers. Today, we do about half that. 
In the past year, we have taken a sideway step, and we 
diversified by opening a new business, Basement Rescue, which 
provides solutions to wet basements. We have five employees, 
and we were able to launch this company with the help of a low-
interest USDA loan.
    It has been especially rainy in our neck of the woods, so 
the timing was really good for this. And we are hoping that 
maybe by the time things start to dry out that the economy will 
have gained back its strength.
    In my roles as one-time chairman of a group we call Hav-A-
Vision, which is an ac hoc economic and community development 
organization, my work with the Chamber, and as a local 
newspaper reporter, I am probably more aware than most people 
about the many different programs that are available, the 
federally-funded programs that can benefit or have benefitted 
the businesses in our area.
    The Small Business Administration has a fellow who helps 
folks write business plans. He helped us with ours. In addition 
to Shop Havana, we have a brand-spanking new national scenic 
byway, and it is expected to open new vistas as--for businesses 
as well as tourists. Congress' continued support for these 
programs and others like them is essential.
    We are very excited about our proposal, the proposal by 
Congressman Schock, and Representative Walt Minnick, to provide 
payroll tax relief. Talk about stimulus. Employees will have 
more money in their pocket, and employers will have a much-
needed revenue source to invest in their businesses. We love 
it.
    Thank you for your attention today. I am humbled and 
honored to have had this opportunity to address you, and we are 
grateful that we live in a country where freedom of the press 
is cherished, and where small businesses are valued.
    Thank you very much.
    [The prepared statement of Ms. Martin is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Ms. Martin.
    Our next witness is Maria Martinez. She is the President 
and CEO of Naturally Green Products, headquartered in Orlando, 
Florida. Naturally Green Products manufactures and distributes 
cleaning and maintenance products. Ms. Martinez previously 
owned a janitorial company for 20 years before she started 
Naturally Green Products.
    Welcome.

                 STATEMENT OF MARIA E. MARTINEZ

    Ms. Martinez. Thank you. Chairwoman Velazquez, Ranking 
Member Graves, and members of the Committee, I am here today as 
a member of the U.S. Women's Chamber of Commerce, representing 
our 500,000 members, three-quarters of whom are American small 
business leaders and heroes.
    I am Maria Martinez, founder of Naturally Green Products. I 
have three decades of entrepreneurial experience. Naturally 
Green Products manufactures and distributes the most 
comprehensive line of DfE, designed for the environment, green 
formulated cleaning products, and EPA-registered disinfectants 
for all cleaning requirements, facilities, and industries in 
the commercial marketplace.
    In 1993, with an SBA-backed loan, I purchased a commercial 
janitorial company. I certified my business as a woman minority 
business enterprise, with the National Minority Supplier 
Development Council, which made it possible to network with 
prime contractors to the government, and large corporations 
with minority initiatives.
    My company possessed a Secret clearance, which allowed me 
to bid on projects of the caliber I desired. Within a few 
years, my company had grown to employ 400-plus individuals and 
a varied customer base. During the growth years, I purchased a 
small office building with a 7(a)--SBA 7(a) program loan.
    In 2003, I was 8(a) and SDB certified through the SBA. I 
also became HUB zone certified, which, when added to the 
already existing certifications, I became an asset of great 
value to my customers. What distressed me in business was that 
a woman business owner received no consideration unless they 
were a minority. The SBA didn't have any programs for women, 
unless you were within the acceptable minority categories. 
Needless to say, I am grateful that I am a minority woman.
    After the disaster of September 11, 2001, my business took 
a downturn. I applied and was granted an SBA disaster relief 
loan, which helped stabilize my company. From 1999 to 2006, my 
company serviced the janitorial, relocation, and CAD design 
needs of Northrup Grumman in Florida.
    During the hurricane disasters of 2003 and 2004, their 
facility was devastated. My company relocated all furniture, 
equipment, and files to a dry facility, and dried out their 
building. Our rapid response saved important files, and the 
staff was able to return to their offices within two weeks.
    In 2004, I was honored with two prestigious awards from 
Northrup Grumman, which opened doors for my company. In 2005, I 
was invited to bid on a janitorial contract worth $17 million 
per year. I partnered with a larger firm. Out of 11 bidders, we 
were chosen for the final three. Although the incumbent won 
that award, it was a milestone for my company.
    Talk had begun on cleaning for a healthier environment. I 
searched for cleaning products and equipment that would help in 
this effort, but to no avail. In late 2007, I experienced a 
Leadership in Energy and Environmental Design green building, 
which had indoor air quality sensors and alarms. These sensors 
picked up volatile organic compounds in the air and set off an 
alarm.
    Again, I searched for products that would meet such 
cleaning and indoor air quality requirements. I used various 
products that laid claim to being green, as well as those that 
were certified with a popular third party certifier, but all of 
them set off the alarms.
    Out of sheer frustration, I found a chemical engineer that 
could help me create a line of cleaning products that could be 
used in these buildings, products that were truly green. The 
process of creating, formulating, testing, and certifying these 
products took two years. We chose the EPA's program for green 
chemistry, the DfE, because we found that they have the 
strictest requirements with regard to solvents.
    I formed a new company with new challenges to face and 
overcome, such as the EPA's DfE program for green chemistry is 
not recognized within the U.S. as a viable certifying entity 
among large institutions, including government agencies.
    The nonprofit organization, Green Seal, has a significant 
market share among large institutional purchasers and 
government agencies. Green Seal has a strong marketing arm that 
is actively promoting their certifications. Green Seal is not 
small business friendly. Their fees are $3,500 per product for 
the entry-level pricing.
    The economic crisis has made it impossible to obtain 
banking support, even with an SBA backing. Companies claiming 
to be green, but aren't--we call that green-washing.
    This adventure of Naturally Green Products is a blessing in 
my life, and I am grateful to have these challenges to address.
    Thank you, ladies and gentlemen, for allowing me to speak.
    [The prepared statement of Ms. Martinez is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Ms. Martinez.
    The chair recognizes Mr. Sestak.
    Mr. Sestak. Good morning, Madam Chairwoman, and the rest of 
my colleagues on the Committee. It is an honor to introduce my 
constituent today, Mr. Brian Biddulph-Krentar, President of HIT 
Consulting Services & Application Solutions of West Chester, 
Pennsylvania.
    HIT is a small business, Madam Chair, dedicated to helping 
the health care community reduce cost and medical errors, 
improving patient outcomes through technology. In 2008, HIT was 
ranked 21st on the Philadelphia 100, the list of the 100 
fastest-growing, privately-held companies in the greater 
Philadelphia region.
    When Mr. Biddulph-Krentar contacted my office in March of 
2009, HIT had 25 employees and was looking for additional 
capital to help launch two new health care information 
technology software programs. With the tightening of the credit 
market, especially to small businesses, he was faced with the 
difficult choice of either laying off eight to 10 employees or 
dipping into his personal savings to avoid any job cuts.
    My office connected Mr. Biddulph-Krentar with the Small 
Business Administration's Philadelphia Regional Office, which 
provided him with the information about the SBA loan programs 
available for small businesses. On the one-year anniversary of 
the passage of the American Recovery and Reinvestment Act, he 
contacted my office to announce that HIT had closed on a 7(a) 
loan backed by the SBA, with a community bank that participated 
in its lending programs.
    Knowing the success of HIT and the jobs of employees were 
at stake, Mr. Biddulph-Krentar worked hard to find a bank that 
partnered with him and the SBA to meet the company's needs. As 
a result of his perseverance, and the continued efforts of 
Congress and this administration, to support America's small 
businesses, he now reports that HIT will hire additional 
supporters.
    Their SBA guaranteed 7(a) loan has given them the 
confidence of knowing that they can continue to grow. And at 
the same time, the SBA's lending volume has dropped to less 
than half of what it was prior to the recession setting in. At 
the end of 2007 this occurred.
    Moreover, small businesses are finding affordable credit 
difficult to come by. More than 40 percent of small businesses 
have credit limits put on their company credit cards, and 60 
percent have experienced an interest rate increase on their 
card.
    I believe we have to do more to remove the barriers to 
success our nation's small businesses face. We should either 
ensure--we should ensure continued access to capital for these 
vitally important entrepreneurs by increasing SBA lending 
limits and improving terms for community banks to encourage 
investment in small businesses.
    And, in closing, I think it is important to note, Madam 
Chair, that over the past decade small businesses create as 
much as 80 percent of new American jobs.
    And I wish you, sir, continued success, and thank you for 
being part of the great entrepreneurial engine that powers this 
wonderful nation.
    Thank you.

              STATEMENT OF BRIAN BIDDULPH-KRENTAR

    Mr. Biddulph-Krentar. Thank you. Thank you to the Committee 
as well for this opportunity, and to the other panelists for 
sharing their stories. They are familiar and comforting as 
well.
    I started HIT about six years ago. I was the only employee. 
I did all the work, managed, went to the hospitals. What we do 
at HIT in both companies is we go in the hospitals, and we help 
them implement software, improve patient workflow, and redesign 
their departments.
    I wanted to start a company that was dedicated to improving 
health care through the use of information technology, started 
out doing only services, so that did not require a lot of 
initial startup capital. So we were lucky in that aspect.
    I was able to fund the company with a little bit of my 
savings and just continue to grow as we received more business. 
It did require an enormous risk, because I left a stable job 
and a well-paying job, and the patience of my wife, while, like 
a lot of other people have said, I was working 20-hour days, so 
she was taking care of the kids and the house and all the 
errands and all that stuff.
    We had to work very hard to attract our clients, build a 
solid reputation, and we had to find the right employees. We 
had to find employees who wanted to share in our vision, and 
also who could accept the risk of working for a small startup 
company. So we got lucky and found a good group of employees, 
and we have continued to be able to do that.
    Not long after we started the services industry, services 
company, we actually became a leading partner of Siemens, which 
is the number--which is one of the top three largest global 
health care companies in the world. And three years after 
inception, like Congressman Sestak said, we became the 21st 
fastest-growing company in the Philadelphia region as ranked by 
Philly 100, which is part of the Wharton School. And then, in 
2009, we were the 42nd company.
    Through our work in hospitals, in the United States and 
Canada, we saw a need for better communication of critical test 
results, so that kind of led us to a new path. We started to 
develop our own software. That requires a very different type 
of funding. You need a lot of upfront capital with the hope 
that you have some revenue coming in down the road.
    So I liquidated a lot of my retirement savings, which I am 
sure is not uncommon, and we have partnered with a small 
community bank, after some failures with large banks. That got 
us to a certain point, and then, as Congressman Sestak said, we 
tapped into the SBA program. That was a pretty long process for 
us until we found the right bank, and I think it was a long 
process, because the banks that we looked at initially weren't 
well educated on the SBA program.
    Once we found the right bank, Conestoga Bank, who had an 
SBA team, including Morgan Johns, the program worked really 
well for us. We had to provide a lot of initial paperwork, but 
they, the bank, and Morgan and his team, took care of most of 
the process, and that got us to where we are today, which is on 
the precipice of a lot of work coming in, and also with that 
the need for more capital.
    So we find it important to balance equity and debt, so we 
will probably look to get a little bit more investment. We also 
have received some investment from friends and family, about 
$1.5 million to this point. So we are at the point where we 
need to grow, we can grow, we have the work, we need employees. 
We just need to find the capital and the funding to support our 
growth.
    Thank you.
    [The prepared statement of Mr. Biddulph-Krentar is included 
in the appendix.]
    Chairwoman Velazquez. Thank you. And I know that most of 
you were sitting here when the previous witnesses were 
testifying, and the members posed basically one of--the 
question about access to capital. And I know that you either 
faced that obstacle or you have heard from other small 
businesses that they are facing difficult times in terms of 
accessing capital. Can you talk about your own experience 
regarding that?
    I hear what you are saying, that some of the SBA programs 
have been instrumental, have been good to you. So do you see a 
role for the Federal Government in providing access to capital 
facilitating? Because the loans that you get you get it through 
the local banks, they are guaranteed by the Federal Government. 
In fact, we increased the loan guarantee from 75 to 90 percent. 
And through the economic stimulus package, we lowered the fees 
that you pay to the Federal Government.
    So we incentivize borrowers by reducing the fee, and we 
incentive the banks to lend by reducing the fees that they pay. 
So do you feel that in the very difficult economic times that 
we are in that there is a role for the Federal Government to 
help small businesses access capital? Yes, Ms. Martin, you can 
start.
    Ms. Martin. Well, I know that my point of view is going to 
be a little different than everyone else's, but I think it is 
spot-on for this particular Committee. The loan that we got, 
one of the things that is important is, besides that it gave us 
capital to get ours going, when it gets paid back, it will go 
back into our community, and they will be able to loan it again 
to other businesses. And we think there is a lot of value in 
that. You know, we know it was good for us, but we are glad 
that it is going to be good for our whole community.
    Mr. Hach. As far as stimulus funds that are available out 
there, I would say that the SBA funding would be the best way 
to get people back to work. So I am in favor of continuing to 
support the SBA with the President's support of the $30 billion 
that he is earmarking for the SBA. And maybe ``earmark'' is not 
the right word, but that he is proposing for the SBA.
    I see that as a tremendous amount of stimulus for the 
economy, helping the small businesses continue to hire more 
employees.
    Mr. Kuknyo. We have been kind of insulated from it, because 
the nature of our business of trash isn't stopping, and it is 
something people still want to pay for. We have actually caught 
up on a lot of bills, because we haven't had to pay for this 
massive growth that we have had for the last eight years. But 
at the same time, the recurring monthly revenue keeps coming 
in, so we have actually caught up. But I am ready for it to 
start again, though.
    Chairwoman Velazquez. Very good. Ms. Martinez.
    Ms. Martinez. I had a little different experience in the 
last business, the janitorial company. As you heard in my 
statement, I was able to acquire four separate SBA loans, and 
they were rather easy to get. I was using a small community 
bank, which they had a wonderful person there who was very 
knowledgeable about the SBA, and she was able to move things 
quickly.
    But in this new company that I have, and with the times 
being as difficult as they are, I have been to three separate 
banks with an SBA backing to get loans, and haven't been able 
to acquire one. So I see it so differently now than it was for 
me back 10 years ago.
    Mr. Biddulph-Krentar. And I think we shared a similar story 
earlier where the reason you didn't get past the banks, you 
didn't get to the SBA, so I think I had the same issue. It took 
me a year to get an SBA loan, because I was going to the wrong 
banks that weren't well educated about the SBA program. So I 
think the Small Business Administration playing a role in 
educating banks and helping them to facilitate the program 
would help people like us.
    Chairwoman Velazquez. Mr. Kuknyo, I know that you compete 
against one of the largest, if not the largest, waste--
    Mr. Kuknyo. Biggest in the world.
    Chairwoman Velazquez. Right. So what are some of the 
challenges that you face in competing against such a large 
firm? And what benefits are you able to offer your customers 
that large firms cannot?
    Mr. Kuknyo. We put into the community like no other garbage 
company I have seen. You know, we sponsor the Boy Scouts, the 
food bank, not only with our money but with our time. And, you 
know, we get totally involved in the community, the community I 
have lived in since 1978, so it is something that we are all 
about.
    This biggest garbage company in the world just--they are 
trying to use these economically troubling times, in my 
personal opinion, to crush the small buys, because they are 
offering my residential customers three free months of garbage 
disposal if they make a switch from my service to theirs. A 
small businessman, I cannot work for free for three months. 
They can do that.
    Oddly enough, they didn't offer that to their customers; 
they offered that to my customers. So that is--I hope that 
answers your question.
    Chairwoman Velazquez. Thank you. Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Madam Chair. I know two of you 
mentioned SCORE, that you had worked with SCORE. We have a very 
active SCORE chapter in my district, and I was just curious 
about your experiences, and if you could elaborate on it just a 
little bit, make sure everybody understands what SCORE is and 
how they were able to impact your businesses.
    Mr. Hach. Score, for our company, was beneficial. The 
mentoring and the training was helpful, and we did get a point 
that we were--exceeded the level of experience of our SCORE 
members. And we have been in a conference for the last three 
days with the SBA and learning about the opportunities that the 
SBA offers. And so there is a SCORE online, and you can go 
online and be able to access more SCORE counselors.
    And we have a new SCORE chapter president, and he has been 
able to talk us into becoming SCORE members. So we are going to 
be able to go out and counsel other small businesses, my wife 
and I.
    Mr. Luetkemeyer. Very good.
    Mr. Kuknyo. They were a nice asset to have to ask questions 
about. But like I said, they told us not to go into business. 
And, by the way, they were right. There is a couple of times 
where, you know, we were not in the good shape like we should 
have been. But they are a good resource that way, but we didn't 
have much luck, they told us not to do that.
    Mr. Luetkemeyer. Have you checked back with them since 
then? Are you using--
    Mr. Kuknyo. No, sir. You know what we have done? We have 
kind of developed our own SCORE. We found other guys that have 
retired from the business, and we asked them questions, and we 
take from--we have a huge retired population in my city, and 
there is so much knowledge, so much experience that you can get 
from these people. And they would love to share it with you, 
too.
    Mr. Luetkemeyer. Fantastic. Ms. Martin, I asked this 
question of one of the other panelists a while ago with regards 
to the new 1099 requirement on vendors that you have $600 worth 
or more of expenses with. Is that going to be a problem for 
you? Because I know in your business you have lots and lots of 
people you deal with.
    Ms. Martin. No.
    Mr. Luetkemeyer. No?
    Ms. Martin. No.
    Mr. Luetkemeyer. Your bookkeeper said it is not a problem, 
the 1099s?
    Ms. Martin. No.
    Mr. Luetkemeyer. I know it is one of the concerns I get. I 
get tons of mail on this from my constituents, my small 
business folks. They just really--it is just another layer of 
regulation, another layer of cost that is being put on these 
folks.
    Ms. Martinez, I see you shaking your head. You are familiar 
with the situation. Is it a problem?
    Ms. Martinez. Well, in the janitorial company that I had, I 
had a lot of small contractors that would come in to do a small 
job, you know, that maybe it would be $5-, $6-, $7-, $800, less 
than $1,000 let us say. So, in my case, it probably would 
have--with such a turnover of employees when you are just 
hiring them for one job here or one job there, it would be 
pretty burdensome.
    Mr. Luetkemeyer. Very good. I just want to thank all of you 
for being here this morning. I will wind up my questions here, 
and allow somebody else some extra time. But thank you for all 
that you do. You are anchors in your communities. You are 
anchors not just from the standpoint of employment, an economic 
generation of activity that you produce there, but also for the 
support you give to the local folks. Thank you for all that you 
do.
    Ms. Martinez. Thank you.
    Ms. Martin. Thank you.
    Mr. Luetkemeyer. Madam Chair, I yield back.
    Chairwoman Velazquez. Thank you. Mr. King.
    Mr. King. Thank you, Madam Chair. Yes, first, I want to go 
back to Mr. Kuknyo. Your testimony is fascinating to me, 
because you came up with a business plan, and people advised 
you that it wasn't a very good business plan, come back when 
you don't need the money, your banker said.
    I listened to Mr.--Congressman Hall from Texas say one day 
that he--he said his banker said to him, ``I have listened to 
your idiotic idea with an open mind,'' and you went ahead and 
defied that anyway, and you made this work in the face of the 
toughest competition that you could ask for. And now they are 
working to push a monopoly by providing a free service until 
they can squeeze you out, 14 to 21 percent interest.
    And then, getting down to the really interesting stuff 
where you said, ``Stop trying to be my partner, government. We 
really don't need you to do anything for us, just don't do 
anything to harm us.''
    I will give you just an opportunity to embellish that a 
little bit. That is a pretty powerful statement, and it 
resonates with me.
    Mr. Kuknyo. Well, you know, I think when it comes--like the 
legislation we were just talking about, if we have to do more 
paperwork, we have to pay somebody to do that paperwork. We 
have to do that--the accounting.
    Take the taxation off. When I was testifying about the 
stuff that we go--the county wants to inspect my trucks to make 
sure that they are flight tight. None of them are. There isn't 
a garbage truck in this country that is. But you have to say, 
yes, it is, and then they write their little slip, they get 
their check for $88, and they are happy. You know, take that 
stuff away. It is just taxation to generate revenue. Let us 
handle that money. We will bring this economy back.
    Mr. King. What do you think would happen if you or any 
other business in America would put a notice up on their 
website that said, ``We are here to announce that we are in 
compliance with all government regulations''?
    Mr. Kuknyo. I don't even understand that question.
    Mr. King. Okay. Do you believe that there is a business in 
America that is complying--there is a--let us see, there is a 
website called Constitution Daily that posted a couple of years 
ago that there are 682 federal agencies. Now, I counted 43 that 
regulated my business, but 682.
    Do you believe that there is a business in America that is 
in compliance with all federal regulations that could open 
their doors and be inspected and pass the test?
    Mr. Kuknyo. No.
    Mr. King. Is there anybody on the panel that believes that 
there is a business in America that could be in compliance with 
all of the federal regulations? Mr. Hach?
    Mr. Hach. I am sorry. DOT was one that loves us, and we are 
on the road all the time. And we inspect all of the trucks 
before they leave our shop, and we can go 16 miles down the 
road to Early, Iowa, and the DOT weigh scale can find something 
that needed to be addressed. And we inspect all of our trucks, 
and we are a very safe and secure company. But they can find 
something.
    Mr. King. And that is just one state regulatory agency that 
you couldn't--well, I suppose it is possible that you could be 
in compliance with that. I want to make this statement and ask 
if the rest of you might agree with me. When I started a 
business in 1975, my biggest concern was that I didn't know all 
these regulators were, I didn't know how I could find out what 
the regulations were, and I feared that I could not be in 
compliance and I couldn't meet all of the government 
regulations.
    I thought I can do the work, I can fix the trucks, I can 
sell the business, or sell the service of the business, but I 
didn't believe that I could figure out how to comply with all 
of the regulations that are there. Did that fear exist in Mr. 
Hach and on down the line when you established your business?
    Mr. Hach. Absolutely. And we found with--again, back to the 
DOT, great friends with them, or at least our checkbook. We 
found out through--oops, we missed a scale coming in through 
Walcott, Iowa, and we didn't know we had to pull in. And they 
flagged us down and said, ``You need to go through a scale.'' 
We did not know we needed to go through a scale. We had been--I 
had been doing this work for 12 years prior, previous, before 
getting pulled over. And so, yes, we were not in compliance and 
not notified that there were these new regulations that we 
needed to follow.
    Mr. King. Mr. Kuknyo.
    Mr. Kuknyo. And I reflect that with his DOT statement as 
well, because they can find something wrong with a brand-new 
truck, you know? And it seems like when they want to generate 
revenue that stop checkpoints go up more and more. But, yes, 
anything you can do to back out would help.
    Mr. King. Why don't you open your own landfill?
    Mr. Kuknyo. Would you write the check to help me do that? I 
would love to do that. Like as you remember, the banks aren't 
talking to me, and that is many millions of dollars. Matter of 
fact, Waste Management has the only landfill in my county. That 
is why we pay double what they do 100 miles away in Phoenix.
    Mr. King. I thought you might tell me it would be the 
regulations that keep you from doing that.
    Madam Chair, I appreciate the attention. And if that is a 
yes, I would be happy to hear that. I saw a nod. And I yield 
back the balance of my time.
    Chairwoman Velazquez. Mr. Schock.
    Mr. Schock. Thank you, Madam Chairwoman, and, again, I 
appreciate the testimony, and so many good questions have 
already been asked. So I won't be repetitive.
    First, to my witness, Ms. Martin, you talked about some of 
the creativity you have had to enlist. Havana has had very high 
unemployment. Your county especially, in my congressional 
district, has one of the highest unemployment rates, or 
actually has the highest unemployment rate of the 20 counties 
that I represent.
    Maybe you could talk a little bit about how the above 
average unemployment rate in that area has affected your 
company, and specifically the customers, obviously, who 
ultimately buy your publications. You mentioned you do sheet 
fed printing. Maybe you can talk a little bit about how that 
benefits your customers and how you have had to become stronger 
or more creative, given the tough economic times we are all 
facing, but especially in your part of the world.
    Ms. Martin. Thank you. Well, you have asked a couple of 
different questions. One of them was about, you know, our low 
unemployment and how that has affected us, and--
    Mr. Schock. High unemployment.
    Ms. Martin. I am sorry, the high unemployment, yes. You 
know, I mentioned about newspaper circulation taking a 
nosedive. And, you know, we have tried to hold our own, but 
what happens is, as far as our circulation is concerned, is 
people find ways to cut costs and share newspapers. So that 
cuts into our circulation. But, you know, we understand that 
that is what people have to do until they can get back to work 
again.
    And, of course, Havana has worked on--the different 
organizations that I have been involved in, we have worked on 
lots of different programs trying to shore up businesses, so 
that there can be continued employment. You know, there was a 
federal grant that helped us go to Fairfield, Iowa, to see what 
they are doing with small business incubators, you know, 
because you have got to get--I mean, I believe the gentleman 
over here had said 80 percent of the--as many as 80 percent of 
the jobs are created by small businesses.
    So we have done a lot to try and work on that. With us 
personally, with our business, with our sheet fed--we have 
newspaper presses and we have what they call sheet fed presses. 
So what we were able to do is show some of our customers how 
they could do their products more economically by marrying both 
newspaper and sheet fed work together.
    So we will do a real nice, fancy cover for a magazine, for 
example, and we will have a little less expensive printing 
process for the inside paper. You can still have nice paper and 
still do it on a newspaper press. So that is one of the things 
we have done.
    Thank you.
    Mr. Schock. I just give the opportunity to any of the panel 
members--you know, we obviously asked you all to come here to 
highlight your respective businesses and how successful you 
have been, in spite of the storm. But are there any specific 
things, other than not hurting you--I am reminded of the 
Hippocratic Oath in medicine, ``Do no harm,'' which seems 
pretty simple to ask of your representatives in Congress.
    But perhaps there are things that we could be doing 
proactively that you would like to see if you were sitting in 
Congress or if you were the Speaker of the House. What 
legislation or what initiatives would you like to see us 
advance here in the nation's capital that you think would be 
most beneficial to entrepreneurs and small business people in 
America? Any of you.
    Ms. Martinez. Well, I would like to address the EPA, which 
is something that I have come across recently. You know, the 
EPA is government, and their design for the environment program 
is sponsored, you know, by the government.
    And it is amazing to me that government entities cite prime 
contracts to the government, etcetera, like the Northrup 
Grummans and the Lockheeds and the Boeings, etcetera, don't 
recognize the EPA's program. You would think that that would be 
the first program they would want to support, because they get 
their funding, they get contracts from the government, 
etcetera.
    But what I have found out lately is that the EPA has not 
been marketing themselves at all, and they have made a 
statement just recently about that. What would be wonderful to 
see, and I don't know if this has to do with legislation, 
giving more money to the EPA for the Design for the Environment 
Program, whatever, but the green issue is supposed to be big.
    The Federal Government is pushing green. Everyone is trying 
their best to do the green thing. And I am a green company, 
completely, with my products. But not only does the EPA not get 
any support, and that is who I have got my product certified 
by, but there is also no help, no funding, nothing, even though 
I am spending all of this money and time in producing something 
that I know the Federal Government wants to see.
    So that might be an issue there that might have to be 
discussed in Congress. I don't know. But these are two very 
important aspects that I deal with on a day-in and day-out 
basis right now.
    Mr. Schock. Well, certainly the EPA is one of the favorite 
agencies that gets a lot of attention from business people in 
my district as being more of a hindrance than a help.
    But my time is expired. I thank the panel again, and Madam 
Chairwoman, for your indulgence.
    Chairwoman Velazquez. Sure. Mr. King.
    Mr. King. Thank you, Madam Chair. I appreciate being 
recognized. I want to keep it really brief, but I saw something 
that was very, very ironic, that I wanted to make sure I could 
express to the Committee. And that is Mr. Kuknyo's testimony 
that shows the tax billing he missed for that quarter was 
$44,000, but after the interest and the penalties and fines 
that is now $88,000.
    It happens to be an ironic coincidence that a baby born in 
America today's share of the national debt is $44,000. And by 
the time they start fifth grade it will be $88,000. I hope that 
makes you feel better. You are like a newborn, so start again.
    Thank you, Madam Chair, and I yield back.
    Chairwoman Velazquez. Thank you. Any other member that 
wishes to make--any other questions? If not--yes, Mr. Hach.
    Mr. Hach. Yes, I am sorry. The question was asked to the 
previous panel, and Mr. Schock had led to legislation that 
would have an impact on small business. And one of the ones 
that would significantly have an impact on our company, that 
could benefit our company, is a non-renewal of the blanket 
unemployment funding in six weeks or when it comes up again. In 
northwest Iowa, it is very difficult to find employees, and so 
we were actually, I would have to admit, kind of excited about 
the recession. And that would mean that we would have more 
employees to draw from.
    We have gone to a number of different job fairs where the 
people will walk through, and we are interested, and they will 
not take an application, because their unemployment hasn't run 
out. We had a tenant that I offered--actually helped him find a 
job and he said, ``I have $16,000 worth of unemployment coming 
to me. I don't need to go and apply for this job.''
    So the unemployment, I think you, by not renewing it with a 
blanket renewal, would be beneficial to small business owners. 
I think everyone who sat on the panel stated that, that 
unemployment is hurting the unemployment rate in America. And 
by--if we can hold off for a month before renewing it, some 
other plan besides just a blanket renewal is going to be 
hindering--is hindering companies, and we need employees. We 
need employees.
    Chairwoman Velazquez. Time has expired.
    Mr. Hach. Thank you.
    Chairwoman Velazquez. Mr. Coffman, the chair will recognize 
you at this point.
    Mr. Coffman. Thank you, Madam Chairman. I apologize for not 
being here earlier. I came from another committee that was 
talking about the oil spill in the Gulf of Mexico.
    I am just wondering if you could just maybe individually 
just tell me what you see going forward, just in a nutshell. 
Are you optimistic or pessimistic about the next six months?
    Mr. Hach. I am optimistic. I am absolutely optimistic. I 
was able to hear a comment last night from a recitation of Sam 
Walton's comment that he refuses to participate in a recession. 
And we feel the same way; we are not going to participate in 
the recession.
    Mr. Kuknyo. One thing that has been good is it has forced 
us to get our processes down pat. It has forced us to run 
smooth and to run lean, and I think that is going to benefit us 
coming out of this thing, where when things were growing so 
fast we just got lazy on a lot of things, where we could have 
trimmed budgets or what not. And this has made us become sharp 
again.
    Ms. Martin. I am always optimistic, so, you know, 
everything that we do--we try to do is to help our community 
and help the businesses in it, because they are our customers. 
And so I am--if it is not working, then we look for something 
else to do.
    Ms. Martinez. I am very optimistic, and in the State of 
Florida where I live the State is doing--they have a lot of 
programs to try to help small business either exporting or 
improve their importing or their services and all. And I am 
taking part in a few of those opportunities, so I am very 
optimistic.
    Mr. Biddulph-Krentar. I am optimistic as well. With a 
little more certainty around health care reform, it is evident 
that hospitals are starting to spend more money, which is a big 
help to our business.
    Mr. Coffman. Thank you, Madam Chairman. I yield back.
    Chairwoman Velazquez. Thank you. And let me thank all of 
the witnesses for your participation here today. We are really 
very, very grateful, and we wish you all the best. We need you 
more than ever. Thank you.
    [Recess.]
    Ms. Dahlkemper. [presiding] The hearing now resumes.
    I am very pleased today to introduce Dan Wallace of Wallace 
and Pancher, Incorporated, from Hermitage, Pennsylvania. Mr. 
Wallace, a civil engineer, is here today with his business 
partner, biologist Brian Pancher, to share the story of their 
environmental, engineering, and construction firm.
    Dan and Brian's story is an incredible small business 
success. They have built their company from the ground up, 
literally. Their business, which they started in October of 
2001, expanded from the two partners working out of Mr. 
Wallace's basement to 80 employees among three separate offices 
in 2010.
    They built their company from scratch, working year after 
year to develop a strong client base and refine their business 
to one that could weather the current recession and turn 2008 
into a breakout year--or 2009 into a breakout year. Wallace and 
Pancher demonstrate the strong work ethic and can-do attitude 
that makes western Pennsylvania a great place to do business.
    I am very proud to have Dan and Brian here to represent our 
region's small businesses before this Committee. And I 
appreciate, Mr. Wallace, your being here today. You now have 
five minutes for your testimony.

                  STATEMENT OF DANIEL WALLACE

    Mr. Wallace. Representative Dahlkemper, other members of 
Congress, thank you very much for giving us a chance to be here 
today and tell you the story of our company. It is at times 
like this that we get to reflect back--Brian and I get to 
reflect back and think about all of the things or the path that 
has taken--that we have had to take to get to where we are 
today. And it doesn't happen too often, because we are too busy 
trying to manage the business and manage the growth, but it is, 
nevertheless, a fun story to tell.
    Well, Brian and I are a fairly unlikely pair to get 
together, let alone to start a new business. And Brian being a 
wildlife and fisheries biologist, and myself a civil engineer, 
often those two disciplines within the industry of consulting 
engineering butt heads, and they don't really work together so 
well a lot of times.
    But Brian and I became good friends. We met at a big 
engineering firm where I was already working. Brian was coming 
into that company, coming in from working for environmental 
agencies around the country as a biologist, and he and I just 
became friends. And, you know, after a few years we decided 
that, you know, it was time, we want to do this for ourselves.
    So we decided to incorporate our business just two weeks 
before September 11, 2001. And as everybody knows, that was, 
you know, a day that has changed our country and changed the 
world. And, you know, a lot of people told us that we were 
crazy for starting our business. We had good jobs at this big 
engineering firm, and, you know, we really could have had our 
life pretty much set at that company doing projects all over 
the country for, you know, large and small projects.
    But we didn't listen to them. We went ahead and we gave our 
notice at that company, and we left, we stepped out on our own. 
Well, we had nowhere to step to, so we went into my basement. 
And we had one old computer and two desks, kind of makeshift 
desks, and we had a big idea. And from there it becomes a 
pretty interesting story.
    Through our network of contacts that we had at this big 
engineering firm, we thought that we were going to be able to, 
you know, contact them, get work, that type of thing. And so we 
started making those phone calls, and one by one they told us 
that they didn't have any work for us. So our strategy had to 
change pretty quickly.
    And so we had to start putting ourselves out in front of 
anybody we could to get our name out, and what we could do for 
clients. Our company started off doing environmental 
consulting, stream and wetland issues, getting projects through 
that process to get the permits to fill in wetlands. We 
designed new stream corridors and wetland replacement or 
mitigation sites.
    And, you know, one by one we got the chance, the 
opportunity, to do work for different clients, and they loved 
that we were able to do that for them. And they started telling 
other people, and soon the word of mouth really started to 
spread, but we still kept doing presentations at conferences, 
any place we can go to get our name out. We have done free 
work. We have done all kinds of things.
    But, you know, so we kept--we got to the point at the end 
of 2003--now, this is our second full year in business, and we 
realized that we couldn't do any more work than humanly 
possible, and so we hired our first employee November 3, 2003.
    By the end of 2004, we had to hire one more person, and we 
knew that we were quickly running out of room in my basement, 
and we had to make some move to get out to a bigger space. So 
we purchased a small home, and we remodeled it into an office.
    We moved into that place in August of 2005, and at that 
point, again, we only had four people. So just about I guess it 
is four and a half years ago that we moved out of my basement, 
and now we have about 80 people. And as of this week, we may 
have more because we continue to keep hiring to meet the needs 
of our clients.
    During those years, we have added a construction division, 
and it really started off with myself renting a little mini-
excavator, because I couldn't get across to the contractors to 
build those natural environments the way we knew they needed to 
be built. So we now have full service construction crews, and 
we have been very blessed to experience the growth.
    Last year we hired about 31 people. This year already we 
have hired over 20 people. And we see a continuing demand for 
the services we provide to our clients, and we will continue to 
hire people to meet that demand and give those clients more 
than what they expect. And that is our belief.
    Thank you very much.
    [The prepared statement of Mr. Wallace is included in the 
appendix.]
    Ms. Dahlkemper. Thank you, Mr. Wallace.
    I would now like to yield to the gentleman from Colorado, 
Mr. Coffman, to introduce the next witness.
    Mr. Coffman. Thank you, Madam Chairman. It is a pleasure to 
welcome a fellow Coloradan and constituent, Brian Greenley, to 
the Committee.
    Mr. Greenley is the President of Greenley Enterprises 
Corporation, DBA Maaco Collision Repair and Auto Painting, in 
Littleton, Colorado. He has established the most successfully--
the most successful Maaco franchise in history, growing his 
business from a humble beginning of six employees in a 9,000 
square foot location, with $400,000 in annual revenue, to his 
current business of over 30 employees with 17,000 feet of work 
space, and $4 million in revenues.
    Mr. Greenley has received several industry awards, 
including the International Franchise Association's Franchisee 
of the Year Award. He became the first inductee of the Maaco 
Hall of Fame Award, which was established in memory of Maaco's 
founder, Anthony Martino.
    Outside of the workplace, Mr. Greenley enjoys traveling 
with his wife and daughter, along with various recreational 
activities, such as gardening and sports.
    Welcome to the Committee, Mr. Greenley. We look forward to 
hearing your testimony.

                  STATEMENT OF BRIAN GREENLEY

    Mr. Greenley. Thank you, Mr. Coffman, and Ranking Member 
Luetkemeyer, for inviting me here today. My name is Brian 
Greenley, and I do own the Maaco Auto Painting and Collision 
Repair in Littleton Colorado.
    Maaco itself has 475 stores nationwide and is the largest 
chain of its kind. My franchise provides an economical choice 
to customers for auto painting and collision repair. When I 
purchased my franchise in 1991, I was the young age of 21. I am 
proud to say that my company has grown every year, except for 
one, over the past 20 years.
    I started my business with six employees, as Mr. Coffman 
told you about. Today I do employ 31 full-time employees.
    Nationwide there are 900,000 franchised small businesses 
employing nearly 21 million workers. It is not my position 
today to convince you of the importance of small business, but 
to explain what makes my small business successful. It did not 
take me long to understand that my service competes for 
discretionary income. My customers have a choice of how and 
where they spend their money. One key factor was to maintain a 
cost-effective service that delivers quality, convenience, and, 
most importantly, value.
    Positioning value over the years has been difficult, with 
rising labor costs, payroll taxes, costs of goods, utilities, 
property and personal income taxes. One way I have overcome 
these obstacles has been to increase productivity levels 
through streamline production methods and a strong emphasis on 
advertising and customer retention. I have always reinvested my 
profits into my business for additional advertising, expansion, 
and quality staffing.
    Early in my career, I purchased a plot of land and 
constructed a state-of-the-art facility. This was done with the 
assistance of a SBA 504 in 1997. With this assistance, I was 
able to achieve my goals to increase revenues, while expanding 
my staff and adding new products and services, at this time 
striving to control costs.
    I believe the SBA is a crucial source of funds necessary in 
maintaining, growing the small business community to continue 
to add jobs, which is crucial to the economy, especially today. 
As I have expanded my business, I have learned the importance 
of positioning and leveraging my brand, personal relationships, 
and buying power, to maintain costs.
    One area of concern is the rising costs of labor, which has 
more than doubled over the past 20 years. Along with labor 
costs, higher payroll taxes and workers' comp insurance, it has 
made it difficult to maintain healthy gross margins.
    As a retailer of a most competitively priced product and 
service, I have to lower my gross margins in order to increase 
revenue. One example is maintaining the lowest advertised price 
for an entry-level paint service. In 1991, this advertised 
price was $199. Today, it is $249. That is only a 25 percent 
increase.
    Advertising and promoting my business is essential in the 
success I have achieved year after year. I have increased my 
advertising budget by more than 10 percent and managed to 
increase gross sales by five percent following a record year in 
2009. It is only through my ability to aggressively increase 
customer count that I keep my business successful, but 
constantly rising costs make it more difficult to provide value 
for customers.
    I would, therefore, respectively ask legislators to 
understand the impact that any legislation has on the job-
creating small business community, for example, higher taxes, 
national health care reform, and such legislation as the 
Employee Free Act--or Free Act Choice--Free Choice Act.
    Even with increased sales, profit margins remain a 
challenge to maintain. With small businesses tax incentives, we 
would able to invest in our own companies. I have made that 
choice, to keep my employees who have invested many years of 
their time. It is not my intention to reduce costs by cutting 
jobs. Even during the economic slowdown, I have not had to 
reduce my workforce by even one person.
    I strive to be--I strive to find competitive advantages and 
share ideas with employees, fellow franchise owners, and look 
forward to continued growth. I ask Congress to embrace those of 
us willing to invest everything that we have to make our 
companies successful and grow our businesses.
    I believe the administration has not placed enough focus on 
making life a little easier for small business owners, such as 
myself. A bailout or handout is not what we are looking for. 
But policies recently enacted, still being debated, from health 
care reform to climate change and financial reform, do not, 
from my perspective, help small business.
    Thank you, members of Congress, for allowing me to speak 
today. And if you have any questions, I would like to answer 
them, please.
    [The prepared statement of Mr. Greenley is included in the 
appendix.]
    Ms. Dahlkemper. Thank you, Mr. Greenley.
    I would now like to recognize Ms. Bean from Illinois to 
introduce the next witness.
    Ms. Bean. Thank you, Madam Chairwoman, for convening this 
hearing to recognize National Small Business Week, and thank 
you to all of our panelists for taking the time away from your 
businesses. We know how demanding and costly it is for you to 
separate yourself from the day to day, and we really appreciate 
having you here today.
    For you, and for so many small business owners, every week 
is Small Business Week, and we understand that your success is 
the key to our economic growth as a nation and the jobs that 
you create as part of that growth. That is why we have been 
very supportive in the stimulus that we did to make sure that 
we addressed issues like access to capital, that we provided 
bonus depreciation, the NOL carryback, and a variety of other 
tax cuts as well.
    The 7(a) and 504 loan programs--I don't know if all of you 
have participated, but we have someone who is going to talk 
about her own experience in a second, telling about how it has 
helped her. But $25 billion has gone into the hands of small 
businesses through the SBA lending program, after we increased 
the guarantees and reduced the feeds in the stimulus package.
    But we recognize that that alone isn't enough, and many 
small businesses are still facing a credit crunch, and it will 
be a top priority for when we return from the Memorial Day 
weeks that we will be spending in our district.
    But it is my privilege today to welcome Cindy Kottke from 
McHenry, Illinois. She operates a successful chain of movie 
theaters, including four indoor theaters, two of which she 
owns, and one outdoor theater. C You at the Movies is an 
example of how a dedicated and resourceful individual can 
transform a dream into a profitable business.
    You have joined me in the past at a federal forum that I 
did for small businesses in the district, and you were very 
well received by the other business owners, who heard your 
story then, and I appreciate you being here in Washington to 
share it with my colleagues.

                   STATEMENT OF CINDY KOTTKE

    Ms. Kottke. Representative Dahlkemper and Ms. Bean, and 
distinguished Committee members, thank you. I am honored and 
humbled to be here today.
    Ms. Dahlkemper. Can you turn on your mic, or get closer 
maybe?
    Ms. Kottke. Like many, I love the movies. At times my life 
seems like a movie. In fact, I feel a strong kinship with 
Forrest Gump, in that you never know what you are capable of 
until you try.
    At 14, I created a neighborhood carnival. It was a fun-
filled day of wheelbarrow rides, downhill barrel rolls, bucket 
tosses, and more. My Dad watched as I worked as hard as I 
could, and at the end of the day, and after I invested all of 
my babysitting money, he asked how much money I had made. I was 
embarrassed to tell him nothing, but I enthusiastically told 
him how much fun it was, the kids loved the day, and that it 
really didn't matter, everyone had fun.
    He paused and looked as he pulled a $20 bill out of his 
wall, and with his huge smile and a twinkle in his eye said, 
``Cindy, there are times in life when business isn't only about 
profits or yourself.'' I saw that day the importance of fun and 
creating memories. I used that $20 to contribute to my next 
venture.
    I believe that is the first day I understood how business 
could build a community. Like many small communities, McHenry's 
downtown had been impacted by the new big box stores. 
Storefronts were struggling and beginning to look rundown. Many 
had closed. I saw an opportunity. My mothers, sisters, and I 
became purveyors of resale home furnishing, opening our first 
retail venture. This allowed me to purchase and renovate the 
building, which sits proudly on the corner of Main Street and 
Route 31 in McHenry.
    Customers flocked. I received a facade grant towards the 
improvements, and the building was featured on the city sticker 
for the year. This is when I understood how a community could 
help build a business. My entrepreneurial spirit got the best 
of me once again when one day I saw a sign ``For Sale or 
Lease'' on the closed downtown movie theater.
    I drove the building owner crazy, but finally convinced him 
to let us host an Oscar party at the theater. More importantly, 
it would be an opportunity to possibly reopen the theater, 
which could act as a linchpin to help bring families into the 
downtown. Families downtown meant money spent in our downtown. 
McHenry was ready, and I was willing.
    Both the city and the community has supported me throughout 
this journey. With the help of the SBA, we were able to 
purchase the McHenry downtown theater, and then the Antioch 
downtown theater. Today, C You at the Movies operates four 
indoor locations and one of the 12 remaining drive-ins in 
Illinois.
    We may not have the newest equipment, or the latest 
innovation, and 3-D at this time is just a dream, but our 
customers are loyal. We have watched children grow. Families 
come back because we offer a fun, safe, family-friendly and 
affordable movie-going experience, affordable fun that builds 
memories.
    We offer the C Team, employees committed to exceptional 
customer service. Our company is a growing family of over 50 
employees from within our communities. These are the hardest 
working, most loyal young men and women which I am proud to say 
are part of our team. They are learning skills--public 
speaking, cash handling, conflict resolution, and customer 
service--that will serve them throughout their lives.
    In recent years, I have faced a family health crisis, the 
economic turn, and the steep learning curve of the movie 
industry. Maneuvering through the challenges of operating a 
small business in today's unique and different environment is 
difficult. Banks are reluctant to lend, cashflow is growing 
tighter.
    Last year I realized I needed some help. Never one to shy 
away from learning what I don't know, I went to the McHenry 
County College's Small Business Development Center. I met with 
the director, Mary Margaret Maule, who very politely but 
directly told me I needed to improve my skills and put 
processes in place in order to keep up with a growing company.
    We have learned to improve our cashflow by reducing the 
waste within our company and to make decisions using metrics 
that mattered. My work with the ISBDC has helped me to 
establish better business practices, processes to increase the 
efficiency, and communication tools to work with my employees, 
suppliers, and banks.
    We have and will continue to attend several classes, 
workshops, meet one on one with experts and mentors, and grow 
our business. Today we are looking towards the next great 
cinematic event for our company. We once again are entering a 
growth phase, and hope to acquire another small downtown 
theater, and are working with two communities on projects to 
expand our properties and part of a larger downtown 
revitalization.
    Being a small business owner can often be a lonely role, 
but I have found my success has been due to the help of many--
my husband Danny, my family, my friend, general operations 
director, and partner, Scott Dean, the SBA, the economic 
development teams of the communities we operate in, and the 
resources of the SBDC.
    My company is built on the premise that if you make things 
fun, affordable, and from the heart, the customers will come.
    And back to one of my favorite movies--life is like a box 
of chocolate. But I say go for the popcorn, and I will see you 
at the movies.
    Thank you.
    [The prepared statement of Ms. Kottke is included in the 
appendix.]
    Ms. Dahlkemper. Thank you, Ms. Kottke.
    I would now like to yield to the gentleman from 
Pennsylvania, Mr. Altmire, to introduce the next witness.
    Mr. Altmire. Thank you, Madam Chair. I am pleased to 
introduce Dan Flynn, my friend and constituent. Dan Flynn is 
President, CEO, and Co-Founder of Accipiter Systems in Wexford, 
Pennsylvania, and is truly a small business hero in my 
district. He has 13 years of experience developing and 
supporting commercial and military data communications. He has 
successfully grown Accipiter Systems through contract 
engineering and a focus on product development.
    Among other accomplishments, Accipiter Systems has 
developed unique approaches to signaling and security and 
designed secure network and storage systems for the Joint 
Strike Fighter Flight Trainers Program. Dan is a member of my 
Small Business Advisory Board, and a valuable resource to me, 
and I look forward to hear more about ways that he would 
improve small business in western Pennsylvania.
    Thank you, Dan, for making the trip to testify, and welcome 
to the Committee.

                     STATEMENT OF DAN FLYNN

    Mr. Flynn. Thank you, Congressman Altmire, Congresswoman 
Dahlkemper, and the Committee. It is an honor to be here.
    My name is Dan Flynn. I am President and CEO of Accipiter 
Systems. Accipiter Systems is in its eighth year building 
computer networking products for the networks of the future. 
The products we build connect your computers to those of others 
with greater energy efficiency than is possible today.
    When I lost my job nearly eight years ago in 2002 during 
the downturn in the telecom industry, I was the Director of 
Engineering at Marconi Communications. I knew employment 
opportunities were sparse, but I needed to find employment to 
continue to provide for my wife and three children. But the 
problem was bigger than just me becoming unemployed. As a 
director, nearly my entire staff of 75 people was permanently 
laid off.
    This was not one family that was affected; it was many 
families. I knew the people that worked for me were talented 
and hard-working. Although I was confident that each 
individually could find a job, even in a difficult market, the 
layoff probably meant many families would be uprooted. I 
thought there had to be a better way. Rather than solve the 
employment problem as individuals, why not form ourselves into 
a team, attract business, and create our own jobs?
    The days of Edison where lone innovators created ideas and 
associated wealth are in the past. Today, innovation and 
incomes are the product of teams. If we were willing to form 
ourselves into a team, this team with its talents could compete 
nationally and even internationally. We have that kind of 
talent in this country. The team is the catalyst.
    Rather than uproot the families, let us uproot the revenues 
and bring the revenues to this team and their families. This 
was the thinking. This team became Accipiter Systems. But we 
had to think even more creatively than this, as 2002 was not 
like the years past.
    Venture capital money was scarce. The founders were not 
wealthy. How could we start a business without funding? Rather 
than strike a product idea, attract venture capital, and 
explode onto the center stage, we instead chose to build the 
company one contract, one grant, at a time. We needed to first 
sell ourselves based on our engineering skills and grow through 
contract engineering services.
    We wrote proposals to win grants. When our early proposals 
were rejected, we regrouped and tried again until we were 
successful. We augmented existing companies with our unique 
expertise and helped them increase their revenues. Soon we were 
helping Lockheed Martin, Ericsson, Marconi Communications, and 
other large companies win $15 million and $22 million 
contracts.
    It was now their insight and their willingness to team with 
small business that allowed them to win. But we were not done 
growing by teaming yet. From the contract engineering services 
business, we were able to discover new product ideas. Rather 
than brainstorm product ideas in isolation at the often 
referred to ``kitchen table,'' we worked with real customers 
who had real problems that needed to be solved. Through this 
process, the product ideas emerged. This was a different way of 
thinking from the 1990s. We chose to go to the customer and 
listen to their needs.
    In 2006, with the Army, the Penn State Electro-Optics 
Center, the government, and others working together, and each 
performing their respective roles, we began the development of 
a new technology that connects computers with much greater 
efficiency than that which is possible today. This new 
technology has attracted contracts from the Army, DARPA, and 
NAVAIR.
    In a difficult economy, we have doubled the number of 
people we employ, and have a promising future as a team. 
Accipiter Systems' employees have believed as a team, have 
worked as a team, and are succeeding as a team. I am confident 
that this team will grow, continue to add jobs, and will meet 
tomorrow's challenges in building computer networking products 
that will compete worldwide.
    To conclude, I would like to thank the Committee and 
Congressman Altmire for this opportunity to tell our story.
    Thank you.
    [The prepared statement of Mr. Flynn is included in the 
appendix.]
    Ms. Dahlkemper. Thank you, Flynn.
    I would now like to yield to Mr. Luetkemeyer to introduce 
our last witness.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman. It is my 
pleasure to introduce Lea Bailes, Chief Executive officer of 
Guier Fence in Blue Springs, Missouri. Lea began his career 
practicing law in the areas of business and estate planning. He 
joined Guier Fence in 2005. In 2009, he and his wife purchased 
the company. They now employ 60 people with three company-owned 
locations in the Kansas City area, and two franchise locations 
in Omaha, Nebraska.
    Lea is a graduate of Baylor University and the Baylor 
University School of Law. We welcome him to the Committee as 
one of our small business heroes of the week.
    Lea?

                    STATEMENT OF LEA BAILES

    Mr. Bailes. Thank you very much, and thank you, Committee, 
for inviting me here to testify today.
    As you said, my company, Guier Fence, is a 31-year-old 
family-owned business. It specializes in fence installations in 
the Kansas City area, and now we are offering franchise 
opportunities based on what we think is a perfected business 
model and our years of experience.
    In our $10.1 billion fence industry, there is over 20,000 
fence companies. Most of these companies are small with few 
employees, but with revenues in the neighborhood of $10 
million, and with us having 60 employees, that puts us in the 
top one percent of fence companies in the United States.
    Despite the economic downturn, and especially the hard 
effect it has had on the construction industry, our company has 
remained financially solid and profitable. Our success comes 
directly through the individual effort, talent, and commitment 
of each of our employees, who contributes to our reputation for 
excellence not only in our market area but in our industry.
    Unfortunately, last year our employee count dropped from 74 
to 50. Many of these wonderful people, who no longer work for 
us, worked for Guier Fence for over 20 years. I knew each of 
them personally. I also knew that the decisions that we had to 
make were going to affect their families, and I knew their 
families as well.
    But as a company, we had to make these decisions to allow 
us to survive in turbulent times. Fortunately, this year we 
have been able to hire additional people due to an increase in 
welcomed demand. We received no government funding in order to 
do this, but it was through our own marketing efforts and 
financing alone.
    There are many other exciting events that are happening at 
Guier Fence. Our revenue is trending upward, and we just signed 
our first franchisee in Omaha with several more on the way. 
Although our company is stable, our employee count is 
increasing, and we are growing again, our challenges remain. 
Banking regulations have disabled the banking system's ability 
to loan money toward commercial and industrial projects.
    Without these projects, companies such as ours who have 
relied on these streams of income as a strong percentage of our 
revenue, and a large percentage of our revenue, are being hurt. 
Without big commercial and industrial projects that are 
privately funded and not government funded, we are unable to 
employ additional workers.
    In addition, the tightening of lending is making it more 
and more difficult for our potential franchisees to start 
businesses that would employ more people. In fact, Guier Fence 
started providing financing for our franchisees in order to 
assist them get started in their own business. The loosening of 
these regulations as they relate to small businesses is 
critical.
    Additionally, per employee costs are rising that reduce our 
margins. These costs include costs related to health insurance 
benefits, worker's compensation, employment taxes, and other 
compliance costs. Federal regulations continue to increase the 
financial burden on small businesses, especially on small 
businesses like us with greater than 50 employees.
    The arbitrary number of 50 will do more harm than good when 
it comes to employing people. By placing such standards on 
businesses like ours, we will be forced to make decisions 
unfairly on our head count. You are punishing us. If at under 
50 employees our costs for employees substantially lower, we 
will have to scale our business or change the way we do 
business in order to continue to operate.
    We cannot price our products higher and tell our customers 
that our prices are higher because we have over 50 employees 
when our competitor doesn't. If legislation continues down this 
path, you will create a flux of 49-employee businesses.
    I am unclear on what effect certain new laws will have on 
my business. I do think our health care costs at this point are 
going to rise. I have no idea whether our taxes are going up 
and down. I do know that if you pass a value added tax it is 
going to hurt the construction industry and a lot of other 
industries.
    But the biggest concern I have is that all of this 
uncertainty affects us in our way we make decisions. It is hard 
to make a decision when you are very uncertain on what the 
impact of this legislation or potential legislation is going to 
have. We don't know whether we should grow, we don't know if we 
should grow, we don't know if we should shrink, and we don't 
know what decisions to make at this point.
    In order to assist small businesses, please do not increase 
the number of rules and regulations, just enforce the ones you 
already have. Work with us and inform us, educate us, help us 
to comply with a lot of regulations that are out there. Don't 
raise our taxes, don't impose a value added tax, and I would 
also ask that you repeal the health care bill.
    I am not asking for a handout. I am asking that you stop 
creating additional obstacles for Guier Fence and other 
companies like ours to be and remain successful.
    Again, I thank you for this opportunity to testify today.
    [The prepared statement of Mr. Bailes is included in the 
appendix.]
    Ms. Dahlkemper. Thank you, Mr. Bailes. Thank you to all of 
the witnesses. I think the diversity of the businesses in front 
of us is one of the great things about today and recognizing 
small business heroes throughout the country.
    I will now recognize myself for five minutes. Mr. Wallace, 
thank you again. As a constituent--and all of you, really, 
thank you for taking the time out of your busy schedule. As a 
small business owner myself, my husband is now running it all 
by himself and he misses me, but--and I do miss the business 
often. There is many days when I miss being that small business 
owner and the challenges and the excitement that goes along 
with that.
    One of the things I wanted to ask you, Mr. Wallace, as you 
added--how many employees again last year?
    Mr. Wallace. About 31.
    Ms. Dahlkemper. And this year over 20?
    Mr. Wallace. Yes, over 20.
    Ms. Dahlkemper. What do you think has made that possible, 
considering the economic times we are in right now and the deep 
recession, has made it possible for your company to grow by 
such large numbers? Because prior to 2009 you had less than--
    Mr. Wallace. About 30 employees total.
    Ms. Dahlkemper. Okay. That is pretty large increases.
    Mr. Wallace. It was a big jump. Like I said, Brian and I, 
we continue to put ourselves in front of the people that may 
turn out to be new clients. And, you know, I guess our 
philosophy is simple: give them more than what they expect, 
meaning our clients. And we try to instill that within all of 
our employees, and we have a great group of employees that feel 
that passion also.
    And diversification is a big part of what Brian and I talk 
about all the time, because we know that as a small business 
that you are always one step away from some kind of a major 
setback in your company. And so we keep very focused, we keep 
very attentive to our clients' needs, and they continue to come 
at us and give us more work and more work, and we just continue 
to hire the people to meet the needs.
    Ms. Dahlkemper. Thank you. Appreciate that.
    Mr. Flynn, you also added a number of employees during this 
recession. Is that correct?
    Mr. Flynn. Yes. We have grown from eight employees to 15 
employees. And I think what has contributed to that growth is 
having us think and work as a team. And it really goes down to 
the individual. So when I am asking the individuals to act as a 
team, what do I mean by that?
    I need them, when they come to work, to not just bring all 
of their skills and all of their tools and all of their 
wherewithal, but all of the skills of people that they know to 
bring to bear on what it is that we are doing. We need to get 
leverage. We are a small company.
    And for us to compete with large companies it requires us 
to have a larger footprint, and we get that through leverage 
and we get that through each person thinking of themselves as a 
team and assembling the people that they know and asking those 
people questions and how we could do better. That is how we are 
adding those jobs.
    Ms. Dahlkemper. Thank you. Did either of the other three 
want to express anything about this particular time and whether 
adding employees or not and what has been your success at this 
particular point in the recession?
    Mr. Bailes. For us, we have had to change the mixture of 
our revenue more from commercial to residential, so we have 
been able to hire employees on one side but decrease on the 
other side. So we are kind of mixed on--
    Ms. Dahlkemper. And your numbers are down, though?
    Mr. Bailes. We are down overall, but we have been able to 
hire some this year and hope to hire more.
    Ms. Dahlkemper. Thank you. I guess I just wanted to ask 
each of you what you think has been the one thing--if you could 
pick one thing that has maybe been the best thing you have done 
in your business to help you be successful today. And I will 
start with Mr. Bailes.
    Mr. Bailes. Unfortunately, it has been reducing our head 
count, because we had some unprofitable divisions within our 
company that, because of the way some of the market shifted, we 
had to get rid of. But that--making those really tough 
decisions that I really didn't want to make are what kept us 
strong and stable and profitable. And so, unfortunately, that 
is one of the better decisions, and then also starting the 
franchise program has been very beneficial for us.
    Ms. Dahlkemper. Thank you. Ms. Kottke.
    Ms. Kottke. Mine would have to be going to the Small 
Business Development Center, because I kind of outgrew my 
skills, and they have been extremely helpful in showing me 
different ways to improve myself.
    Ms. Dahlkemper. Did you go to them in the beginning or--
    Ms. Kottke. No.
    Ms. Dahlkemper. How far into your business model?
    Ms. Kottke. Oh, last year.
    Ms. Dahlkemper. And you have been in business--
    Ms. Kottke. Since 2003.
    Ms. Dahlkemper. Okay. Thank you. Do you wish you had gone 
to them earlier?
    Ms. Kottke. Yes, I do.
    [Laughter.]
    Ms. Dahlkemper. Mr. Wallace.
    Mr. Wallace. Well, I am trying to think of the one thing, 
there are so many, but I would have to say, you know, moving 
out of my basement.
    [Laughter.]
    And that sounds funny, but when you--Brian and I had a hard 
time trying to figure out how to take that step, how to even 
hire our first employee, because, you know, starting with 
nothing, we literally had nothing, no money, nothing. And to 
learn how to spend the money to help our company make money was 
a difficult hurdle for us to jump.
    And so we took that step and moved out of our--out of my 
basement into a house, a small house, and within eight months 
we were already planning our expansion of 4,800 square feet. 
And, you know, we moved in in '08, and we are already out of 
space. So, again, which is a good thing, and, you know, we have 
two other locations now, and those are starting to fill up, and 
it has been really interesting. But, again, moving out of our 
basement was probably a key component.
    Ms. Dahlkemper. Thank you. Mr. Greenley.
    Mr. Greenley. Mine has just been the concentration on 
reinvesting in my business and my employees, growing the 
business constantly, never looking back, learning from my 
mistakes of what works good and compounding that. That is just 
my foundation.
    Ms. Dahlkemper. Thank you. Mr. Flynn.
    Mr. Flynn. I would answer that with the word 
``relationships.'' We highly value the relationships we have 
built in industry. That includes the Penn State Electro-Optics 
Center, the Innovation Works Technology Collaborative, with our 
customers, the Army, the large contractors like Lockheed. To 
us, a very important part of our success has been our 
relationships.
    Ms. Dahlkemper. Thank you. And now I yield to Mr. 
Luetkemeyer for five minutes.
    Mr. Luetkemeyer. Thank you, Madam Chairman.
    Mr. Greenley, in your testimony you indicated that you had 
a 504 SBA loan. Can you--I assume you have been satisfied with 
that? Can you see some places where we could streamline the 
program, improve the program? What has your experience been?
    Mr. Greenley. I originally took that loan out in 1997. I 
was 27 years old, and it was difficult. I went to the bank and 
needed to borrow a million dollars. I had only operated my 
business at that time for seven years. It seemed very 
cumbersome then. I did go to several banks.
    One of the things I remember was the larger banks felt more 
secure underwriting one of those loans. The smaller banks were 
very fearful of those loans. Proudly, today I have paid that 
loan off, and I am not in the situation where it is as 
important to--or I would need the funding from SBA, but I have 
taken personal funds out to secure my business and grow it 
forward today. And it is just something I found you have to do.
    Mr. Luetkemeyer. Very good. Mr. Bailes, you had a number of 
comments with regards to some concerns you had with the 
regulations, especially the health insurance one at 50, and the 
VAT tax. Would you like to elaborate on that just a little bit?
    Mr. Bailes. Sure.
    Mr. Luetkemeyer. Because those are important things that 
are out there right now that are affecting a lot of small 
businesses we have heard about today as well.
    Mr. Bailes. Well, with the health care bill, one of my 
biggest concerns is the mandatory opt-in. Right now, we provide 
health insurance coverage for our employees and pay for most of 
it. With the mandatory opt-in, they automatically have to 
enroll, and then de-enroll, and then we pay a penalty. And 
there is nothing saying that once this is passed that you can 
amend that and raise that penalty.
    And so right now the way it looks is that it would actually 
be less expensive for us to just pay the penalties and not 
offer any health care coverage, which I don't really want to 
do. I don't think that is the right thing to do. But we have to 
do what makes economic sense.
    And so from my, honestly, limited understanding of the 
bill, I just don't think--I am concerned with what could happen 
in the future with amendment to it or raising penalties or 
changes that--like I said, amendments within the bill in the 
future. It is easier to chance what is passed.
    Mr. Luetkemeyer. How would the VAT tax affect your 
business? Or what do you see as the problems are--the pluses or 
minuses with it?
    Mr. Bailes. Well, if you take a commercial construction 
job, you have so many different layers of value added tax. You 
have a raw material supplier, you have somebody who converts it 
into another type of material, you have somebody who 
distributes it, you have somebody who retails it, and you have 
somebody who is, let us say, a general contractor.
    And if there is a tax on every level of value that is added 
in seven or eight steps, that is going to make the cost of a 
commercial project outrageous, and probably not even a feasible 
way of doing business. So if you are going to have commercial 
construction in the future, you are going to either have to 
completely change the way that you do business and vertically 
integrate a business, or you are going to have to figure out 
other ways to reduce costs, and take lower margins or whatever 
it happens to be. But I think that would be detrimental to 
large projects.
    Mr. Luetkemeyer. Something that a lot of small business 
people, especially farmers as well as small business folks, 
have talked to me about concern with is extension of the estate 
tax. And we haven't heard one question on that yet today.
    You know, this year the estate tax fell off, but next year 
it is supposed to go back, unless we extend it to a million and 
55 percent of everything over that. Most of all of you are 
young enough that it may not be something that you are 
considering yet, but is that starting to enter into your plans 
as you start getting down the road here and your company starts 
building?
    I know most of you don't look like you are as gray-headed 
as I am, so it is probably not a problem for you yet. But I 
know as we age a little bit, and we start looking a little bit 
down the road, what our families may have to do or what our 
business partners may have to do with this entity that we have 
created here, this wonderful business that we have, have you 
started looking at that? Is that a concern at all?
    Mr. Bailes. Coming from an estate planning background, I 
know it is a concern for a lot of people. I know it is a 
concern for me. And being young, it is a good time to start 
planning. Since I am out of practice, I can say that everybody 
should do an estate plan. But it is something that, if you are 
not concerned with, you should be concerned with, but, yes, 
that would--the levels do concern me, because that affects how 
you have to plan. So, yes, that has crossed my mind.
    Mr. Luetkemeyer. Anybody else? Have you guys thought about 
it at all, or you are still trying to figure out how to make a 
buck and grow the company? And, you know, Mr. Greenley, he says 
I am barely 40 years old here. He has still got a lot of years 
ahead of him. But anybody else have any concerns about it, or 
have you thought about it at all, or is it not something you 
are working on?
    Mr. Wallace. Well, maybe I could just jump in real quickly. 
I just turned 46 last week, so I start to, as I get older and I 
get more gray hair, when I look in the mirror I start to think 
about those things.
    And, specifically, on what you are talking about, the 
estate planning part of it, I haven't really, because I have 
been so focused on building our business and addressing the 
needs from day to day. But I haven't really thought about it in 
any great detail, but I know that is something I will need to 
do shortly.
    Mr. Luetkemeyer. Okay.
    Ms. Kottke. Actually, I probably am your age. I have 
grandchildren and children over 30. We are currently working on 
it with our legal counsel, so yes.
    Mr. Luetkemeyer. Okay. Mr. Greenley.
    Mr. Greenley. I have. Currently, I have advisors, financial 
guys, that work with me on that planning, and we have addressed 
the issue of how that has changed over the past five years and 
how it is an ongoing basis and we have to account for that in 
the future.
    Mr. Luetkemeyer. And you incur new attorney costs and new 
accounting costs every year just to try and comply with and try 
and make sure that you don't wind up getting, you know, caught 
here with the law changing and--
    Mr. Greenley. We do, yes.
    Mr. Luetkemeyer. --certainty of it.
    Mr. Greenley. I do.
    Mr. Luetkemeyer. Mr. Flynn, any comment?
    Mr. Flynn. We are concerned about these issues and other 
issues like it, insurance in the event of an untimely death. 
These are additional costs on the business where we have to 
ensure an orderly transfer if something like that were to 
happen. It is another impact of growing older is concerns along 
those lines, to make sure that insurance is in place to cover 
that should that happen.
    But, yes, we are also very much focused on our current 
situation, and we will look at that issue, along with other 
issues, as we are advised to do so.
    Mr. Luetkemeyer. Okay. Thank you. Thank you, Madam Chair.
    Chairwoman Velazquez. [presiding] Ms. Bean.
    Ms. Bean. Thank you, Madam Chair. I had a question for 
Cindy. You had mentioned that you had an SBA loan to help you 
buy your first theater. Had you applied for other loans before 
the SBA loan? Or is that the first venue that you pursued?
    Ms. Kottke. When I applied at a couple of banks, they 
wouldn't even talk to me unless it was an SBA guaranteed loan. 
But that was the only way I was able to acquire the first 
location, and a year later the second location.
    Ms. Bean. So it did make the difference on whether you--
    Ms. Kottke. Absolutely.
    Ms. Bean. --could start your business.
    Ms. Kottke. Yes, it did.
    Ms. Bean. And how many employees do you now have?
    Ms. Kottke. We have 57 today. We have--about 20 of them are 
seasonal, because of the drive-in. And the 30 throughout the 
year then.
    Ms. Bean. And you also mentioned that you had a positive 
experience with the SBDC that provided other consulting 
services. Have any of the other businesses participated in any 
of the programs available through community colleges, SBDCs, or 
some of the workforce development training that we provide 
funding to at the community college level? Yes?
    Mr. Flynn. We, in Pennsylvania, work with a number of 
economic development entities. Some of these have been the 
reason that we are--I am here today. So the technology 
collaborative is in an early stage. They are very 
deterministic. Their money is made available on a very 
deterministic schedule. If it is not deterministic, we have to 
treat that as a windfall.
    There are other entities like Innovation Works that steps 
in with larger dollar amounts that can help us grow our 
business, so these have been some of the key reasons why we are 
here. And as tax bases shrink, to see those organizations after 
they have had such a big impact, are making small business 
possible, that is disconcerting. So we value--and because we 
can't afford to have CFOs and VPs of HR on our staff, these are 
the people that we are turning to.
    We still have the issues. So those are a very important 
part of our success.
    Ms. Bean. Have you worked with SCORE at all? Some of the 
retired--
    Mr. Flynn. We have been in touch with SCORE. Our business 
is a high-tech business, so we looked for groups, development 
centers, that are more attune to our--
    Ms. Bean. The technology--
    Mr. Flynn. --industry.
    Ms. Bean. That makes sense. Anybody else who worked with 
any workforce development training in their communities? No. It 
is good to hear the feedback about some of the programs that we 
have initiated, of where it is working and how many folks are 
participating in it.
    Access to capital--how much of a challenge is that for all 
of you right now, particularly if you are working with 
community banks? Many of them are overly exposed to commercial 
real estate on their books, and that has constrained their 
balance sheet and limited their ability to lend. Is that an 
issue for any of you? No? All right. That is--
    Ms. Kottke. Can I answer that?
    Ms. Bean. Sure.
    Ms. Kottke. I have been talking about expanding for the 
last couple of years, and about a year and a half ago the banks 
are telling me, ``You know what? Lay low right--just wait.'' 
And about three months ago, I was approached by one of my 
community banks saying that there was this new program going to 
be available through the SBA.
    Ms. Bean. Good.
    Ms. Kottke. And that they would definitely be interested in 
looking at the project then.
    Ms. Bean. Wonderful. That is good to hear.
    Mr. Bailes. I would like to say one thing if I could.
    Ms. Bean. Sure.
    Mr. Bailes. Since we have two sides of our business, the 
established Guier Fence side, we haven't had any problem 
getting financing. But for our new franchisees, like I said in 
my testimony, they are. And they are SBA-backed loans, but they 
still--they can do an express loan program with our minimum 
entry-level fee, but they are still difficult to get.
    And I don't know really why that is. You would think that 
those would be fairly straightforward, and these are even 
people with good credit scores, with plenty of assets, even 
cash to back a pretty simple $50,000 loan. I think the SBA is a 
little--or the community banks are a little timid on giving 
money to a new business.
    Ms. Bean. Right.
    Mr. Bailes. Because a lot of the franchise is still--you 
are still investing in a little bit of blue sky there. You are 
not buying--
    Ms. Bean. Yes. Even though the model works, they have never 
run it before.
    Mr. Bailes. That is correct. And so, you know, you are 
investing in intangible assets, and that is where we are seeing 
a little trouble.
    Ms. Bean. Absolutely. And someone else had a comment. Yes.
    Mr. Flynn. Just real quick. One of the observations about 
the loans is if they require a personal guarantee, and we are 
talking millions of dollars, what we are asking the small 
business owner to do is face down personal financial ruin in 
the event that the business--the gamble it took did not work 
out.
    So those personal guarantees, we go through all of this 
effort to incorporate these companies, so that they are an 
entity unto themselves, but then we are asking the small 
business owner to still back up the loan.
    Ms. Bean. Okay. Thank you. I yield back.
    Chairwoman Velazquez. Ms. Kottke, I read in your testimony 
that you are in the process of acquiring another theater?
    Ms. Kottke. Yes, ma'am.
    Chairwoman Velazquez. And so I was wondering, every time 
families in America are facing budgetary constraints, they cut 
recreational money. So how is it that your business is doing so 
well, that in a business like that that could be impacted by 
the economic downturn you are succeeding to the point that you 
will acquire another theater?
    Ms. Kottke. Well, the movie industry is having record-
breaking years, and that is mostly because of the 3-D 
technology, which we do not have. Our ticket prices are $4 and 
$6 at our indoors, and they are like $8 and--it is $8 at the 
drive-in because you get a double feature, and $4, again, for 
children.
    We just offer customer service, good, old-fashioned 
customer service. And that is what brings our customers. In 
order to obtain this next one, we are negotiating a rent with 
option, and then we will see how well that takes off. The 
expansion of the two projects, one in Zion, one in McHenry, are 
in TIFF districts, and we are talking several million dollars. 
Of course, we have got to do it controlled, because we know 
what happens when I don't do that. And in order to get--
possibly even get the equipment, the 3-D equipment.
    Chairwoman Velazquez. Mr. Flynn, if you go to a traditional 
bank, financial institution, to apply for a loan, what 
requirements will they ask of you in order to get that loan?
    Mr. Flynn. So we have a line of credit through a major 
bank. We also have credit cards for the employee, so they can 
make small purchases to facilitate their day. To get that line 
of credit, we had to show up with our personal tax statements 
for the bank to review my tax statement, personal tax 
statement, and my co-founder's tax statement.
    Chairwoman Velazquez. But in a traditional loan that is not 
guaranteed by the Federal Government, will the bank require 
collateral?
    Mr. Flynn. Yes, they--in our case, we may be purchasing 
tools for the business, and those tools would be the 
collateral. But, again, ultimately it could be your home that 
is the collateral for that loan.
    Chairwoman Velazquez. Yes. Well, the difference in terms of 
those loans that are backed by the Federal Government is that 
we incentivize financial institutions who are participating 
with the SBA to provide or make those loans by reducing the 
risk--
    Mr. Flynn. Right.
    Chairwoman Velazquez. --for the financial institutions that 
are participating in those programs. The government will 
guarantee we increase it from 75 to 90 percent, and then to 
also get small businesses off the side lines and incentivize 
for them to go to the bank and apply. We reduce the fees that 
the borrowers have to pay.
    So I guess that some of those programs have worked for some 
of the small businesses that have been testifying here today, 
and what we want to make sure is what else we can do in order 
to facilitate access to capital for small businesses.
    Mr. Flynn. One suggestion I would give there is education, 
and there are a number of entities that help educate us what 
the process is and what the tradeoffs are.
    Chairwoman Velazquez. Okay. Yes, Mr. Greenley.
    Mr. Greenley. One of the things that I am aware of is the 
90 percent backing is due to expire today. Am I right? And it 
is going to go back to the 70 percent backing.
    Chairwoman Velazquez. No. Well, we are going to extend it.
    Mr. Greenley. Okay.
    Chairwoman Velazquez. Yes.
    Mr. Greenley. I mean, that is one of the--you know, the 
factors.
    Chairwoman Velazquez. Sure.
    Mr. Greenley. If banks are going to loan money, it is how 
much their guaranteed portion is.
    Chairwoman Velazquez. No, it has been 90 percent, and it 
will continue to be 90 percent.
    Mr. Greenley. You know, you talk about incentives for the 
lending, I wish there was an incentive for us that are 
investing in our own business. For those of us that, you know, 
decide not to lay somebody off and to keep them on the payroll, 
there is no incentive for that right now. There is a lot of 
incentive. I mean, the one incentive to us is to minimize our 
exposure, so that we stay in business, but over 20 years of 
experience, every time I cut back I find myself--it is not 
healthy for the business.
    Mr. Wallace. Yes, I have a comment.
    Chairwoman Velazquez. Mr. Wallace.
    Mr. Wallace. Access to capital has been challenging for 
Brian and I, and the need for personal collateral, that type of 
thing, backing of the loans.
    But one area that really bothers us every year is the fact 
that when we have a good year, at December 31 our accountant 
shows us that we made--we have so much of a profit, and we have 
to pay tax on that profit as it gets split down to--and comes 
to our personal income taxes.
    We don't take that money in pay, but we still have to pay 
tax on that money. And by the time, you know, April 15 rolls 
around when we have to pay our tax bill, that money is long 
gone, been used into the business. And just last year on the 
amount of money that we had to pay tax on, that we never 
personally received in distributions or pay or whatever, we 
could have bought at least five vehicles and probably hired 
three additional employees.
    Chairwoman Velazquez. Well, that is why in the economic 
recovery package we, the Federal Government, reduced taxes for 
small businesses, especially in the manufacturing sector.
    Mr. Wallace. Well, then, that will be great.
    Chairwoman Velazquez. Any other questions? If not, I ask 
unanimous--thank you. Thank you for all the witnesses who have 
been able to be with us today. This has been an incredible 
experience, and it is great to know the incredible 
contributions that you are making to help get this economy back 
on track.
    I ask unanimous consent that members will have five days to 
submit statements and supporting materials for the record. 
Without objection, so ordered.
    This hearing is now adjourned.
    [Whereupon, at 1:36 p.m., the Committee was adjourned.]
    [GRAPHIC] [TIFF OMITTED] 56755.001
    
    [GRAPHIC] [TIFF OMITTED] 56755.002
    
    [GRAPHIC] [TIFF OMITTED] 56755.003
    
    [GRAPHIC] [TIFF OMITTED] 56755.004
    
    [GRAPHIC] [TIFF OMITTED] 56755.005
    
    [GRAPHIC] [TIFF OMITTED] 56755.006
    
    [GRAPHIC] [TIFF OMITTED] 56755.007
    
    [GRAPHIC] [TIFF OMITTED] 56755.008
    
    [GRAPHIC] [TIFF OMITTED] 56755.009
    
    [GRAPHIC] [TIFF OMITTED] 56755.010
    
    [GRAPHIC] [TIFF OMITTED] 56755.011
    
    [GRAPHIC] [TIFF OMITTED] 56755.012
    
    [GRAPHIC] [TIFF OMITTED] 56755.013
    
    [GRAPHIC] [TIFF OMITTED] 56755.014
    
    [GRAPHIC] [TIFF OMITTED] 56755.015
    
    [GRAPHIC] [TIFF OMITTED] 56755.016
    
    [GRAPHIC] [TIFF OMITTED] 56755.017
    
    [GRAPHIC] [TIFF OMITTED] 56755.018
    
    [GRAPHIC] [TIFF OMITTED] 56755.019
    
    [GRAPHIC] [TIFF OMITTED] 56755.020
    
    [GRAPHIC] [TIFF OMITTED] 56755.021
    
    [GRAPHIC] [TIFF OMITTED] 56755.022
    
    [GRAPHIC] [TIFF OMITTED] 56755.023
    
    [GRAPHIC] [TIFF OMITTED] 56755.024
    
    [GRAPHIC] [TIFF OMITTED] 56755.025
    
    [GRAPHIC] [TIFF OMITTED] 56755.026
    
    [GRAPHIC] [TIFF OMITTED] 56755.027
    
    [GRAPHIC] [TIFF OMITTED] 56755.028
    
    [GRAPHIC] [TIFF OMITTED] 56755.029
    
    [GRAPHIC] [TIFF OMITTED] 56755.030
    
    [GRAPHIC] [TIFF OMITTED] 56755.031
    
    [GRAPHIC] [TIFF OMITTED] 56755.032
    
    [GRAPHIC] [TIFF OMITTED] 56755.033
    
    [GRAPHIC] [TIFF OMITTED] 56755.034
    
    [GRAPHIC] [TIFF OMITTED] 56755.035
    
    [GRAPHIC] [TIFF OMITTED] 56755.036
    
    [GRAPHIC] [TIFF OMITTED] 56755.037
    
    [GRAPHIC] [TIFF OMITTED] 56755.038
    
    [GRAPHIC] [TIFF OMITTED] 56755.039
    
    [GRAPHIC] [TIFF OMITTED] 56755.040
    
    [GRAPHIC] [TIFF OMITTED] 56755.041
    
    [GRAPHIC] [TIFF OMITTED] 56755.042
    
    [GRAPHIC] [TIFF OMITTED] 56755.043
    
    [GRAPHIC] [TIFF OMITTED] 56755.044
    
    [GRAPHIC] [TIFF OMITTED] 56755.045
    
    [GRAPHIC] [TIFF OMITTED] 56755.046
    
    [GRAPHIC] [TIFF OMITTED] 56755.047
    
    [GRAPHIC] [TIFF OMITTED] 56755.048
    
    [GRAPHIC] [TIFF OMITTED] 56755.049
    
    [GRAPHIC] [TIFF OMITTED] 56755.050
    
    [GRAPHIC] [TIFF OMITTED] 56755.051
    
    [GRAPHIC] [TIFF OMITTED] 56755.052
    
    [GRAPHIC] [TIFF OMITTED] 56755.053
    
    [GRAPHIC] [TIFF OMITTED] 56755.054
    
                                 
