[Senate Hearing 113-310]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-310
 
     STRENGTHENING THE ENTREPRENEURIAL ECOSYSTEM FOR MINORITY WOMEN 

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

                                HEARING

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 8, 2013

                               __________

    Printed for the Committee on Small Business and Entrepreneurship

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED THIRTEENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                 JAMES E. RISCH, Idaho, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     MARCO RUBIO, Florida
MARIA CANTWELL, Washington           RAND PAUL, Kentucky
MARK L. PRYOR, Arkansas              TIM SCOTT, South Caarolina
BENJAMIN L. CARDIN, Maryland         DEB FISCHER, Nebraska
JEANNE SHAHEEN, New Hampshire        MICHAEL B. ENZI, Wyoming
KAY R. HAGAN, North Carolina         RON JOHNSON, Wisconsin
HEIDI HEITKAMP, North Dakota
WILLIAM M. COWAN, Massachusetts
                Jane Campbell, Democratic Staff Director
           Skiffington Holderness, Republican Staff Director



                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Risch, Hon. James E., Ranking Member, and a U.S. Senator from 
  Idaho..........................................................     3

                           Witness Testimony
                                Panel 1

Johns, Marie C., Deputy Administrator, U.S. Small Business 
  Administration, Washington, DC.................................     3
Castillo, Alejandra Y., National Deputy Director, Minority 
  Business Development Agency, U.S. Department of Commerce, 
  Washington, DC.................................................    10

                                Panel 2

Longoria, Eva, Founder, Eva Longoria Foundation, Los Angeles, CA.    26
Morial, Marc H., President and Chief Executive Officer, National 
  Urban Leage, New York, NY......................................    34
Parker, Sophia, Founder and Chief Executive Officer, DSFederal, 
  Inc., Gaithersburg, MD.........................................    53
Lancaster, Marianne, President and Chief Executive Officer, 
  Lancaster Packaging, Inc., Hudson, MA..........................    60
Kolditz, Baatseba Dixie, Owner, Brighton Enterprises, Inc., and 
  Open-Box Creations, LLC, Battle Ground, WA.....................    66

          Alphabetical Listing and Appendix Material Submitted

Association of Women's Business Centers
    Letter dated May 8, 2013, to Chair Landrieu..................   112
Castillo, Alejandra Y.
    Testimony....................................................    10
    Prepared statement...........................................    12
Fairlie, Robert W.
    Report titled ``Wealth Inequality, Business Success, and 
      Minority Women''...........................................   100
Johns, Marie C.
    Testimony....................................................     3
    Prepared statement...........................................     6
Kolditz, Baatseba Dixie
    Testimony....................................................    66
    Prepared statement...........................................    68
Lancaster, Marianne
    Testimony....................................................    60
    Prepared statement...........................................    63
Landrieu, Hon. Mary L.
    Opening statement............................................     1
    Public Law 100-533...........................................    80
Longoria, Eva
    Testimony....................................................    26
    Prepared statement...........................................    29
Morial, Marc H.
    Testimony....................................................    34
    Prepared statement...........................................    36
Palomarez, Javier
    Prepared statement...........................................   107
Parker, Sophia
    Testimony....................................................    53
    Prepared statement...........................................    55
Risch, Hon. James E.
    Opening statement............................................     3
    Post-hearing questions posed to:
        Alejandra Y. Castillo....................................    94
        Marie C. Johns...........................................    96
Women's Economic Ventures
    Company profile..............................................   114


     STRENGTHENING THE ENTREPRENEURIAL ECOSYSTEM FOR MINORITY WOMEN

                              ----------                              


                         WEDNESDAY, MAY 8, 2013

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:03 a.m., in 
Room 106, Dirksen Senate Office Building, Hon. Mary L. Landrieu 
(Chair of the Committee) presiding.
    Present: Senators Landrieu, Heitkamp, Cowan, and Risch.

 OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chair Landrieu. Good morning, and if the witnesses and 
staff would take their seats, welcome to our hearing this 
morning on minority women in business and the challenges facing 
them and the success that they have achieved. I am happy to be 
joined by my Ranking Member, Senator Risch. I am going to start 
with an opening statement and then turn it over to our first 
panel.
    Today's hearing will focus specifically on identifying what 
Federal, State, local, private, and nonprofit solutions work 
best to strengthen women business ownership opportunities for 
minority women.
    Today's hearing is timely, because this year marks the 25th 
anniversary of the enactment of the Women's Business Ownership 
Act of 1988, a landmark piece of legislation that laid the 
foundation for increased Federal support of one of the largest 
and most important segments of our nation's economy, women-
owned businesses.
    Specifically, the Act extended Equal Credit Opportunity of 
1974 to include business credit. It may be a surprise to the 
young women in the room that prior to 1974 and into the 1960s 
in some States, women could get no credit, personal or 
business. It was not protected by the law, and it took acts of 
Congress to make sure that women could get credit personally 
and in business on their own credit, not having to go through a 
male partner or a husband.
    It required the Census Bureau to more completely count 
women-owned business enterprises. If you cannot count, then you 
cannot measure, and the United States has a great interest in 
measuring the extraordinary contribution that women business 
owners make to our economy.
    And we established the National Women's Business Council, 
and most significantly to today's hearing, initiated a pilot 
program of entrepreneurship training that led to the 
establishment of the U.S. Small Business Administration's 
Women's Business Centers, which have been widely supported by 
men and women in Congress.
    Since the law's enactment, women-owned firms have grown and 
continue to grow in number and economic stature. Broadly, 
women-owned firms are holding their own, meeting or exceeding 
average revenue and employment growth when compared to all 
privately-held firms. According to a recent report by American 
Express OPEN, from 1997 to 2012, when a number of businesses in 
the United States increased by 37 percent, the number of women-
owned firms amazingly increased by 54 percent, a rate of one-
and-a-half times the national average, which is, indeed, 
impressive.
    According to that same report, in 2012, these firms had 
revenues of nearly $1.3 trillion, employed 7.7 million workers. 
In that year, the number of women-owned companies increased by 
200,000, which if you think about that, that is 550 new 
businesses a day.
    For minority women, the rates of business starts are just 
as impressive. Since the SBA Women's Business Centers program 
was formally authorized in 1991, entrepreneurship and small 
business ownership among women of color has increased 
significantly. According to estimates by the Center for Women 
Business Research, between 1997 and 2004, the number of 
privately-held firms that are 51 percent or more owned by women 
of color grew by 55 percent, while all privately-held firms in 
the United States grew by only nine percent. Today, women of 
color own 1.9 million of the 7.2 million firms with a majority 
female ownership, generating $165 billion in revenue and 
employing 1.2 million people.
    Among minority women, Latina-owned businesses are the 
fastest-growing segment of this group. Currently, one in ten of 
all women-owned businesses are owned by Latinas, with total 
receipts of $555 billion.
    Additionally, according to the Center for Women Business 
Research, African American women are starting businesses at 
three to five times the rate of all businesses, despite facing 
financial obstacles. Companies owned by African American women 
grew by 67 percent by 2002 to 2007.
    So while this hearing is specifically focused on minority 
women's business enterprise and entrepreneurship, addressing 
these issues is a win for all business owners in America.
    As I mentioned earlier, women-owned businesses are growing 
at extraordinary rates, but women business owners, like all 
business owners, are still struggling, with limited access to 
capital and credit. Access to Federal contracts is sometimes 
difficult, and local and State contracts. Limited funding for 
technical assistance and counseling programs, sometimes it is 
difficult to access. And, I would say, regulations at the 
local, State, and Federal level also inhibit--unnecessary 
regulations--the growth of some businesses. So there are 
challenges out there and our committee would like to review 
them.
    As we examine ways to solve these problems, we will have 
opportunities to find ways to grow our economy, and that is our 
overall goal. In addition, any time small business owners 
achieve success, it leads to more job creation, which boosts 
our overall economy. As President Kennedy once said, and has 
been often repeated, a rising tide lifts all boats. We would 
like to see small businesses grow and expand and accelerate, 
creating the jobs that Americans need and opportunities for 
entrepreneurship to really boost our economy and push our 
economy forward.
    In closing, it is critical to the nation's economic future 
that we create more of these success stories, not less. The 
more direct way to achieve this goal is to adequately invest in 
programs that work, that harness the entrepreneurial potential 
of minority women that are such a tremendous untapped, 
unrealized asset in this nation.
    I look forward to hearing from our committee members on 
both sides of the aisle as well as our witnesses today, from 
the administration. We have Marie Johns, Deputy Administrator 
of the Small Business Administration. Marie, I know you have 
announced that you are retiring. We are sorry to see you go, 
but we thank you so much for the years that you have spent 
after an extraordinary career in the private sector helping the 
Small Business Administration reshape and refocus its 
entrepreneurship endeavors. You have done that on behalf of the 
28 million small businesses in our country and we are very, 
very grateful.
    We also have Alejandra Castillo, National Deputy Director 
of the Minority Business Development Agency within the 
Department of Commerce, and then I will introduce our second 
panel at the time that they come forward.
    Let me recognize my Ranking Member, who is going to have to 
leave for a Joint Meeting of Congress, very important, but I 
thank him for attending this morning.

OPENING STATEMENT OF HON. JAMES E. RISCH, RANKING MEMBER, AND A 
                    U.S. SENATOR FROM IDAHO

    Senator Risch. Well, Madam Chairman, thank you very much, 
and thank you for holding this hearing. I think everyone 
certainly agrees with you that the rising tide lifts all boats 
and it is important that we focus on that. When we do have a 
rising tide, every single member of our community has more 
opportunities than they would otherwise. So it is important 
that we do focus on that and look at all aspects of the 
community, including the one we are going to focus on today.
    Thank you so much for the hearing.
    Chair Landrieu. Thank you very much.
    Ms. Johns, you can begin.

 STATEMENT OF MARIE C. JOHNS, DEPUTY ADMINISTRATOR, U.S. SMALL 
            BUSINESS ADMINISTRATION, WASHINGTON, DC

    Ms. Johns. Thank you, Chair Landrieu. Thank you, Ranking 
Member Risch. I am very pleased to be here today.
    Twenty-five years after the enactment of the Women's 
Business Ownership Act, women-owned and minority-owned 
businesses are two of the fastest growing segments of new 
businesses in today's economy. Recent estimates show the number 
of women-owned businesses alone have grown 59 percent since 
1997, nearly double the rate of men-owned firms during that 
period.
    We know that minority women-owned firms are leading the 
charge in growth in terms of business creation. For example, 
from 1997 to 2007, the number of African American women-owned 
firms increased by more than 191 percent, and Hispanic women-
owned firms increased by more than 133 percent. However, we 
know that gaps remain. While women today own 30 percent of 
businesses, they are still receiving only about ten percent of 
revenues.
    And while the nation's economic recovery is moving forward, 
that recovery has been uneven, particularly for small business 
owners in traditionally underserved communities. As Deputy 
Administrator, I have had the opportunity to visit many of 
these communities and to work with small businesses to access 
the tools and resources they need to succeed.
    To further our efforts, SBA convened our Council on 
Underserved Communities in 2011 to create a more comprehensive 
approach to addressing the needs of small businesses in 
underserved communities. And the following year, we led an 
administration-wide effort in conjunction with the White House 
Business Council to hold a series of urban economic forums 
across the country.
    Building on these conversations, SBA has tailored programs 
to improve access and opportunity in underserved communities 
through our ``three Cs'': Counseling, contracts, and capital.
    As you know, the Women's Business Ownership Act helped pave 
the way for the Women's Business Centers program. Today, SBA 
oversees a national network of more than 100 Women's Business 
Centers that support women who want to start or grow their 
business. In the last year alone, we provided counseling to 
more than 500,000 women entrepreneurs and small business owners 
with the help of our resource partners and successful education 
programs, such as Start Young, which leverages our Federal and 
resource partner network to educate young Job Corps 
participants about small business opportunities.
    Across its programs, SBA has also learned that intensive 
entrepreneurship education for existing business owners, 
especially in underserved communities, has a powerful positive 
impact, filling gaps in training and access. And research 
suggests individuals in underserved communities are 50 percent 
more likely to become business owners and business growth in 
underserved communities equals job growth closer to home.
    Building on our current efforts, President Obama's fiscal 
year 2014 budget invests $40 million in entrepreneurial 
education to leverage private and public sector best practices 
and to help boost existing small businesses to the next level 
of growth. In addition to counseling, SBA is working to ensure 
that small business owners in underserved communities have 
access to the capital they need to start and grow their 
business. According to the Urban Institute, SBA loans are three 
to five times more likely to go to women and minority-owned 
businesses than conventional loans. And we are working to fill 
existing market gaps for underserved communities across the 
board with both micro loans and smaller-dollar loans.
    We have already expanded and simplified our Community 
Advantage program and streamlined our signature Small Loan 
Advantage program, and the President's fiscal year 2014 budget 
plans to eliminate fees for borrowers and lenders for all 7(a) 
loans under $150,000 in fiscal year 2014.
    Additionally, SBA is working to ensure that more qualified 
women-owned and minority-owned small businesses are able to 
compete for government and commercial supply chain 
opportunities. Over the past four years, SBA has made 
significant progress to create more opportunities for 
entrepreneurs from underserved communities, and I have seen 
firsthand the benefits of these initiatives for small business 
owners in communities nationwide.
    Senator, as this is my last time appearing before this 
committee, I would like to conclude by noting that my tenure as 
SBA's Deputy Administrator has been more than just a job for 
me. It has been a fulfillment of my lifelong passion for 
supporting small business growth and economic empowerment. I am 
very proud of the work we have done at the agency, and I am 
deeply grateful to you for your support. Thank you.
    [The prepared statement of Ms. Johns follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you very much.
    Ms. Castillo.

 STATEMENT OF ALEJANDRA Y. CASTILLO, NATIONAL DEPUTY DIRECTOR, 
   MINORITY BUSINESS DEVELOPMENT AGENCY, U.S. DEPARTMENT OF 
                    COMMERCE, WASHINGTON, DC

    Ms. Castillo. Good morning, Madam Chairwoman Landrieu, 
Ranking Member Risch, and members of the committee. Thank you 
for inviting the Minority Business Development Agency to appear 
before the committee and speak on strengthening minority women-
owned businesses during the 25th anniversary of the passage of 
the Women's Business Ownership Act. I ask that my statement be 
submitted for the record in its entirety.
    I would also like to take a moment to thank my friend and 
colleague, SBA Deputy Administrator Marie Johns, with whom I 
have had the pleasure of working closely with over the last 
four years. It is through this partnership that our respective 
agencies have been able to better assist and enhance the 
achievements of minority-owned businesses as well as the small 
business community writ large.
    Minority-owned businesses contribute significantly to this 
nation's economy. According to the Census's 2007 Survey of 
Business Owners, minority-owned business firms contribute $1 
trillion in total economic output and employ nearly six million 
Americans. They strengthen our global competitiveness. 
Minority-owned firms are twice as likely to export their goods 
and services than non-minority-owned firms. They are also three 
times as likely to derive 100 percent of their revenues from 
export, and also three times as likely to transact business in 
a language other than English.
    While minority-owned firms, on the whole, are helping grow 
our economy, minority women entrepreneurs are driving that 
growth. According to a recent study commissioned by American 
Express OPEN, there are nearly three million minority women-
owned firms. Minority women-owned firms also generate $226.8 
billion in total revenue and employ 1.4 million Americans.
    In particular, Latina-owned firms have seen tremendous 
growth over the same period. These firms have tripled in 
numbers while they have employed--their employment numbers have 
increased by 74 percent, outpacing women-owned firms in 
general.
    The growth of minority women-owned firms is a positive 
accomplishment. However, there is still much room for growth. 
They continue to encounter many obstacles. These obstacles 
include access to capital, access to contracts, as well as the 
lack of informal networks to assist in the pursuit of business 
opportunity.
    MBDA helps firms realize their full economic potential 
through technical assistance, public and private contracting 
opportunities, and serving as a strategic partner in their 
growth and development. MBDA is the only Federal agency 
dedicated to the growth and global competitiveness of the 
nation's 5.8 million minority businesses.
    The bulk of our work is accomplished through our nationwide 
network of MBDA Business Centers. Each center provides 
businesses with services to assist them in accessing capital, 
contract, and new markets, as well as helping them grow in size 
and scale. Over the course of the last four years, the MBDA 
Business Centers have been instrumental in the agency's 
achieving the highest performance in its history. Since 2009, 
MBDA has assisted clients in accessing $14.6 billion in 
contracts and capital, while helping them create and retain 
over 33,000 jobs. Some of MBDA's biggest successes have been 
with firms owned by women of color. I would like to take a 
moment and share a success story with you.
    For Mariana Oprea, failure is not an option. After being 
laid off, she founded Interavia Spares and Services. Her 
company is a distributor and reseller of aviation parts and 
materials to an international market of airlines, with 95 
percent of her business in export. ISS, Inc. had annual 
revenues of $3 million until 2009, when it dropped to $1.3 
million, due in large part to the recession. With the help of 
Miami MBDA Business Center, ISS was able to not only recover, 
but double its profits.
    This is just one of the agency's successes with minority 
women-owned businesses. Soon, MBDA will release its annual 
report for fiscal year 2012, and I encourage you to review this 
document and take notice of our ability to work with a business 
and grow it into a driver of job creation.
    Looking ahead, I want to assure each of you that MBDA is 
committed to strengthening the minority women-owned business 
community. If we are to create an economy built to last and 
have a nation that competes globally, the strength of this 
segment will be a determining factor.
    I look forward to working with the committee in this 
important topic and I look forward to answering your questions.
    [The prepared statement of Ms. Castillo follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you very much, and we do have a few.
    Let me start with you, Ms. Johns. In your testimony, you 
mentioned the SBA's efforts to provide counseling, training, 
and other technical assistance through the Women's Business 
Centers program. Some have argued that this program is 
duplicative. There have been reports that have come out from 
any number of Senators arguing that there is too much 
duplication in this space between the Department of Commerce, 
Department of Agriculture, and the Small Business 
Administration. How do you answer those charges, and how are 
the Women's Business Centers unique, and what kind of 
partnerships do they provide with some of these other agencies?
    Ms. Johns. Thank you for that question, Chair Landrieu. Our 
Women's Business Centers are part of what we like to describe 
as the ecosystem of our resource partner network on the ground. 
The SBA is a small agency, but we have one of the best ground 
games in the Federal Government in terms of the support that we 
provide through our 68 district offices. We have a Women's 
Business Center for the first time under this administration, a 
Women's Business Center in every jurisdiction, and they work 
closely with our Small Business Development Centers and our 
SCORE volunteers to provide the counseling, the training, all 
of the support that small businesses need across the continuum 
of their job--their business development.
    People come to a Women's Business Center, a woman comes 
there with an idea, and they want to talk about how to actually 
get started. Our WBCs also provide a great array of training 
classes that are very important for the continuum that I have 
described.
    But to get to some of the other elements that make the 
Women's Business Centers unique and why they are an important 
part of the network, and that is our Small Business Development 
Centers are also a very important part of what we do. They are 
often located on college campuses. For some women starting a 
business that can be a bit of an imposing atmosphere. Women's 
Business Centers are generally nonprofits. They are located 
often in underserved areas. I have had the honor of visiting 
many of our WBCs across the country and I am always moved and 
inspired by the stories that I have heard from women who 
started businesses and talk about the network, being able to 
talk with women, other women business owners and how important 
that has been in their business development.
    And our WBCs do not operate in a silo. WBC clients are 
regularly referred to SBDCs for the next stage of the support 
they need, to SCORE counselors for one-on-one long-term 
business counseling. So it all works together, and we could no 
more take our WBCs out of the mix than we could lop off an arm 
and say that the body still works the same. They are part of 
the ecosystem and it all works together, and we get the 
feedback from the over one million entrepreneurs that we 
counsel every year that the system works.
    Chair Landrieu. And how many SCORE chapters do we have in 
the country, approximately?
    Ms. Johns. We have, roughly--well, we have, of course, 
SCORE chapters in every one of our jurisdictions. We have about 
15,000 SCORE counselors nationwide.
    Chair Landrieu. And I think it is about 350 chapters, I 
think. It is approximately 350 chapters, and so you have how 
many Women's Business Centers?
    Ms. Johns. We have over 100.
    Chair Landrieu. A hundred of the Women's Business Centers, 
about 350 SCORE chapters. We have about 1,000-2,000, actually, 
banks that are lending through the Small Business Lending 
programs. And then we have how many Minority Business Centers, 
Ms. Castillo?
    Ms. Castillo. We have over 40 different Minority Business 
Centers throughout the country.
    Chair Landrieu. Okay. And if the staff could put up, this 
is just one graph of the Small Business Women's Centers, but if 
you lay it on top of that, and I am sorry we do not have it to 
show, because it is fairly impressive, but if you laid on top 
of this the 39 Minority Business Centers and then the 350 SCORE 
chapters and then the 2,000 banks that are in almost every 
community lending through the small business programs, you can 
see the strong network of resource partners, and that is not 
including the non-bank lenders which exist in many places.
    And I think what we are going to focus on going forward is 
the coordination, maybe better coordination between all of 
these. I think there is a lot of coordination going on, but we 
could always improve and enhance so you could literally get to 
the point where within a click of a mouse or within 20 minutes 
of almost anybody's home, even in a rural area, they can get to 
some partner in this network. Is that generally our idea going 
forward? What I have just described, is that something that you 
are thinking of or are already in the process of building?
    We will start with you, Ms. Johns.
    Ms. Johns. Well, Chair Landrieu, we know the budget 
situation that we are in and we would be remiss as an agency if 
we were not focused on making sure that we are making maximum 
value out of every taxpayer dollar. And so we have been very 
focused at the SBA on coordinating with other Federal agencies 
and ensuring that there is seamless alignment among our 
resource partners on the ground.
    To give you a couple of examples of where I think our 
interagency partnerships have been primarily effective, if I 
may, the President created by Executive Order the Interagency 
Task Force on Veterans Business Development back in 2010, and 
the SBA was named Chair of that task force and I have been 
honored to serve in that position since the task force's 
inception.
    We are working with other Federal agencies at the table--
Treasury, GSA, DOD, Department of Labor, the Veterans 
Administration, OMB. And then we have four individuals 
representing Veteran Serving Organizations from around the 
country. And what that task force has been able to do is to 
provide recommendations for how the Federal agencies can work 
together more effectively to support veterans, who are very 
entrepreneurial as a group.
    Why this is particularly germane for this hearing, women 
are serving in unprecedented numbers in the military. In fact, 
over 280,000 women have served in the Iraq and Afghanistan 
arenas, and those women are coming back, and just like their 
male counterparts, many of them have the skills and the energy 
and the desire to start a business. In fact, I was just in 
Chicago at the launch of a V-WISE, which is our women veterans 
entrepreneurship training program in Chicago, where we focus on 
giving women an intensive opportunity to get the skills and the 
training that they need to start businesses.
    We also have our Start Young initiative that is a 
partnership with the Department of Labor that I referenced 
briefly in my opening statement. We know that young people who 
are in Job Corps Centers around the country are often gaining 
the skills that are well suited for them to hang out a shingle 
and start their own small business, whether it is in barbering 
or computer technology, culinary arts. Those are all small Main 
Street businesses in the making.
    And so the SBA has developed a curriculum for 
entrepreneurship specifically focused for Job Corps students 
that we are delivering around the country. We started a pilot 
in three cities in 2012. We have expanded that to 12 cities 
this year, and we hope to expand beyond. Our resource partners 
are very involved. In fact, I was at a Start Young graduation 
in Milwaukee and the Women's Business Center there has been the 
faculty for Start Young.
    So that is an example. I hope you see those are examples of 
not only Federal coordination, but also very strong 
coordination of SBA's resource partner network.
    Chair Landrieu. And so the fact is, there really are not 
any bright lines between these entities and we do not really 
want bright lines because it is sort of a blurring or a 
coordination of resource partners. Some are funded publicly. 
Some are funded privately. Some are part Federal, part State. 
Banks are private entities. They are not necessarily funded by 
the government. They access government programs of lending to 
some of their customers. So it is really a blending of, I 
guess, a resource partner network.
    Ms. Castillo, could you comment about the closing of some 
of your MBDA, Minority Business Development, central offices 
and your reorganization, why you thought that was necessary, 
and have you been able to focus some additional investments in 
centers such as Atlanta, San Antonio, and San Jose, and can you 
explain a little bit about the actions that you have taken 
there.
    Ms. Castillo. Sure. Thank you for the question, Chairwoman. 
We actually in 2010 started the process of the reorganization, 
looking at the Federal funding constraints that we had. We 
wanted to be innovative and really redirect some of our 
resources to where we actually needed them the most, and that 
was at our Business Centers. So, indeed, we did close the five 
regional offices, but we reallocated those funds into our 
centers and we were able to increase the amount of the grant in 
some cases and actually create new centers, such as in Fresno. 
We understood that the on-the-ground operation is really where 
it is at. This is where the business owners come into contact 
with the technical assistance that they so desperately need.
    And just to add to the previous question in terms of the 
network, we are leveraging every possible tool that we have, 
whether it is technology, better technical assistance, and 
obviously leveraging our Federal partners, not only SBA, but, 
for example, EX-IM Bank, making sure that minority-owned 
businesses that want to export have the proper tools to export 
successfully. We know that if you try to export and fail, it 
takes another five to seven years to even consider it. So in 
that realm, we are actually trying to bring together all of the 
technical assistance to help minority-owned firms take 
advantage of the 95 percent of consumers that live outside of 
the U.S. borders.
    Chair Landrieu. Thank you.
    And Ms. Johns, just a couple more questions. In the budget 
submitted by Karen Mills, the Administrator of SBA, she 
submitted to us a new request for $40 million towards an 
entrepreneurship education program with some guidelines and 
expressions of how the agency would go about implementing these 
additional funds.
    Could you comment today about some of the thoughts that you 
are having about how this money, or a portion of it, could be 
allocated to help strengthen your efforts in entrepreneurship 
opportunity and expansion, accelerators, and growth for 
entrepreneurs, particularly with minority women?
    Ms. Johns. Thank you, Chair Landrieu. I would be happy to 
do so. What we aim to do with that $40 million is really build 
on best practices that we know work. Thanks to your leadership 
and support with the Small Business Jobs Act, we were given $30 
million for our Small Business Development Center network. That 
money was allocated on a competitive process and led to some 
very innovative programming that SBDCs implemented around the 
country.
    We know that intensive entrepreneurship education is one of 
the best ways that we can support businesses that are a going 
concern and to help them grow to that next level. When we look 
at job creation--and really, this is all about job creation--
when we look at job creation, a new business--every job that is 
started by a brand-new business, there is a factor of two-and-
a-half jobs that a going concern can create if that business is 
given the resources to grow.
    So by focusing the $40 million on intensive 
entrepreneurship education and borrowing from the best 
practices that we know work, whether it is elements of the 
Kaufmann Foundation's Fast Track Initiative, the Goldman Sachs 
10,000 Small Businesses Initiative, the SBA's own Emerging 
Leaders program, we have data, we have the experience from 
those initiatives that we know if we can expand intensive 
entrepreneurship education for businesses that are already 
going along, doing well, and with this additional support can 
grow to the next level, that that is going to have a 
significant impact on job creation across the country.
    So we are borrowing best practices. We are building on what 
we know works. And that is what the $40 million will allow us 
to do, to give our resource partner network the opportunity to 
bid, to bring their most innovative ideas for how to build on 
that model.
    Chair Landrieu. So it is not creating a new program----
    Ms. Johns. Absolutely not.
    Chair Landrieu [continuing]. It is enhancing the best 
practices that you all have spent the last few years 
identifying really work to create jobs.
    Ms. Johns. That is exactly what we are doing. As I say to 
my colleagues at the agency all the time, Chair Landrieu, we 
serve entrepreneurs. As a Federal agency, we must be 
entrepreneurial. We must be the most entrepreneurial agency in 
the government. And competition is important. That is how we 
get the best ideas. That is how we get the best creative juices 
flowing and the best new ways of ensuring that we are 
supporting small businesses. And so this $40 million is giving 
us an opportunity to tap into the creativity that is resident 
in our resource partner network, but also building on the best 
practices that have been proven successes over the years and 
that we know will work.
    Chair Landrieu. And let me end this round of questioning 
with just one last question, and then you are free to add 
another minute if there is something that I failed to ask you. 
But, Ms. Castillo, what would you say some of the biggest 
challenges still are for Latina women, for Latinas, for 
Hispanic women who are in the business world? What do you hear 
most often about some of their challenges? Is it lack of access 
to capital? Is it the lack of education and confidence? Is it 
the lack of opportunity for government contracting? All the 
above? But if you could be as specific as you can, based on 
your own personal experience.
    Ms. Castillo. So, if we start with the birth of a business, 
it is education and information. How do I start that business? 
What type of information do--what type of documentation do I 
need to register my business? So that is one area.
    But, by far, bar none, across the board, it is access to 
capital. How do I get the capital to start the business, but 
more importantly, how do I get the capital to grow the 
business?
    MBDA is focused on helping minority-owned firms grow in 
size and scale. That is the only way that we are going to 
generate the type of job creation that this nation needs.
    But it also goes further down. How do I have access to 
contracts? As my colleague mentioned, the White House, under 
the President's guidance, we did a review of the Federal 
procurement process. We came up with 13 different 
recommendations. One of the issues is bundling, as you well 
know. How do we provide information, transparency, level the 
playing field for small businesses, particularly women, 
minority, and service-disabled vets, to compete in that 
procurement process?
    So there is a--we have used the word ``continuum.'' There 
is a continuum as businesses begin, grow, and, one would even 
argue, succession planning, as well. These are the type of 
issues that we are all confronting. But in particular for 
Latina-owned businesses, they are extremely entrepreneurial. 
Sometimes it is helping them understand the importance of 
growth and assuring them how to manage that growth. Growth can 
also be a very challenging process, and that is a type of 
technical assistance that we provide, making our services 
available to them.
    Just an example on the export, which I have mentioned 
before. The President announced the Free Trade Agreement with 
Colombia, Panama, and South Korea. These are the type of 
opportunities that Latinas are looking for. How do I export to 
Latin America, for example? They feel comfortable with the 
language, with the culture. And these are opportunities that 
our nation really needs to leverage if we are going to remain 
competitive in the global marketplace.
    Chair Landrieu. Thank you.
    And Ms. Johns, how about for African American women in the 
general context? Would you agree with the testimony that these 
are still obstacles and challenges, or in your own experience 
and what are you hearing, particularly from African American 
women and other minority women about still some of the most--
the toughest problems they confront or the toughest challenges?
    Ms. Johns. I think I would agree with the comments that the 
National Deputy Director just made. Many of the issues or 
challenges are the same.
    What I hear often from women as I travel the country is 
awareness, that we still have work to do and we are working 
hard to build those awareness gaps to ensure that women 
business owners, African American, other communities of color, 
women in general, that all small business owners know about the 
power of the SBA network, how to connect and how to avail the 
resources that the agency can provide to the benefit of growing 
their businesses.
    What we have done in our three C areas, we focused early on 
during our time at the agency in building the tool kit, fixing 
some of the things that we needed to do, adding new tools like 
Community Advantage, where we opened our loan portfolio for the 
first time to include non-depository lenders, those community 
development financial institutions and micro loan 
intermediaries who are excellent lenders. They also provide 
technical assistance. And now, for the first time, with 
Community Advantage, they are able to take advantage of the 
SBA's loan guarantee. That is making a difference in terms of 
providing access to capital, particularly for women-owned, 
minority women-owned businesses, businesses in underserved 
areas.
    Our Start Young Initiative was an effort to delve more 
deeply into underserved communities to make sure that we are 
connecting SBA resources there.
    We also have--as far as outreach is concerned, we have been 
very focused on building better partnerships, because, as I 
said before, we are a small agency and we need partners in 
order to be effective in reaching small businesses across this 
country. So I know that you will be hearing from the Honorable 
Marc Morial on the next panel, and we are partners with the 
Urban League. We are partners with the U.S. Hispanic Chamber. 
We have strategic alliances with these organizations, with the 
National Minority Supplier Development Council, the U.S. Black 
Chamber, Women Impacting Public Policy. And all of these 
strategic alliances have been very effective in helping us 
reach more women, particularly minority women, and help them 
grow their businesses or make that decision to start a 
business.
    We just announced with Women Impacting Public Policy two 
weeks ago a new initiative, ChallengeHER, which is designed 
to--we are having a nationwide initiative to bring more women 
into Federal Government contracting. It is a $100 billion 
opportunity, as you well know. And we know that if we build 
that pipeline of women who are doing Federal Government 
contracting, their businesses will grow. They will create jobs.
    And we thank you, Senator, for your support of the National 
Defense Authorization Act, which allowed the ceilings on 
contract opportunities for women-owned small businesses to be 
eliminated so that there are no more barriers, no more boxes 
that women businesses have to fit in. They can take advantage 
of any Federal contracting opportunity. and that is why the 
ChallengeHER Initiative is so important. We want to make sure 
women know about this opportunity and that they are taking 
advantage.
    Chair Landrieu. Thank you.
    Do you all have any parting words or comments? We are going 
to move to the second panel. Anything that I did not ask you 
that you want to get into the record, something that you want 
to emphasize? You can take a minute to close. Ms. Castillo.
    Ms. Castillo. Thank you for that time. I do want to 
emphasize several things. One is we have talked about building 
collaboration, public-private partnerships, and this is all 
under the umbrella of building synergy, building synergy, 
breaking down silos so that information transfers and flows 
throughout the network, but more importantly, to service our 
constituents who are minority-owned businesses.
    I also want to emphasize, MBDA has tremendous partners, not 
just in the Federal Government, but also in the private sector, 
the National Minority Supplier Diversity Council, which helps 
us help minority-owned businesses in terms of contracting with 
the private sector. The Billion Dollar Roundtable is another 
tremendous effort, as well. We are also partners with the 
National Urban League with Mr. Morial, We Bank, and so many 
other organizations that really help to supplement or 
complement what the Federal Government is doing.
    The growth of this segment of the business community is 
tremendous. I think for our nation, we need to pay attention. 
We need to invest, because this is the business community. This 
is what the business community is going to start to look more 
like in the coming years.
    And again, I thank you for the time. I thank you for giving 
MBDA this opportunity. And to my colleague, I am a tremendous 
fan and thank you for all the work that she has done.
    Chair Landrieu. Thank you.
    Ms. Johns.
    Ms. Johns. Chair Landrieu, I want to start my closing 
opportunity and thank you for this minute to say thank you to 
you. Your support--it is hard to describe how significant your 
support has been for so many of the initiatives that we have 
been able to undertake at the SBA.
    The underserved agenda at the SBA is critical work. It is 
timely. It is important. And it is not yet finished. And so 
what I would like to emphasize is that what our agency--we are 
poised to really build on a great foundation, but there is more 
work to do, and with your support, we are eager and excited to 
continue that work.
    You have held very important conversations about what we 
know is the very tough challenges of the wealth gap in this 
country. But I know that small business creation and the jobs 
that those small businesses create for our economy, that is the 
answer. And so the more that we can leverage the power of our 
partnerships, the power of the SBA's network, and bring more 
underserved communities into job creation, small business 
creation, that is the answer to building a stronger economy for 
all of us.
    So, again, thank you for your support and for your 
continued support for this important work of the SBA.
    Chair Landrieu. Thank you all very much.
    We will move now to the second panel. We will hear from Ms. 
Eva Longoria, who, in addition to being a very impressive and 
well-known actress is also a nationally-known entrepreneur, has 
established a foundation dedicated to advancing Latina 
education and entrepreneurship.
    We will also hear from Marc Morial, former Mayor of New 
Orleans and currently the President and CEO of the National 
Urban League, which hosts our New Orleans Women's Business 
Center. We appreciate his longtime work in this area.
    And we will finally hear from Sophia Parker and other small 
business owners who can speak to the importance of Federal 
programs, specifically in helping their businesses to succeed. 
And I think we have Ms. Dixie Kolditz and Ms. Marianne 
Lancaster.
    Let us start with Ms. Longoria to begin with on this panel, 
and you know to limit your opening statement to five minutes. 
We have your statement, so if you want to summarize it, it is 
fine, or however you have prepared it, and then we will have a 
series of questions. Thank you so much for joining us today. 
Welcome to the nation's capital.

 STATEMENT OF EVA LONGORIA, FOUNDER, EVA LONGORIA FOUNDATION, 
                        LOS ANGELES, CA

    Ms. Longoria. Thank you. Thank you, Madam Chair, Ranking 
Member Risch. I am honored to testify before you today 
regarding the potential of Latina entrepreneurs and how we can 
better facilitate their success.
    You know me best as an actress, but I am also a Latina 
entrepreneur. I own two restaurants. I have two fragrance 
lines. I manage my own production company. And my experience as 
a Latina entrepreneur has inspired me to launch the Eva 
Longoria Foundation, which helps Latinas better their futures 
through entrepreneurial programs and educational programs.
    So I am here today because I am dedicated to advancing the 
cause of my fellow Latina business owners who still face 
significant challenges in launching and growing their 
businesses. But I think with the proper interventions, we can 
create opportunity for more of these women to succeed and to 
help grow our nation's economy.
    More than 25 million Latinas live in the U.S., making us 
the largest group of minority women in the country. Latinas are 
one of the most under-leveraged resources and are currently not 
reaching their potential to become an economic powerhouse. So 
for ordering them to succeed, we need to address some of the 
institutional barriers that exist. We also need to engage the 
private sector to have substantive supplier diversity programs 
that will help businesses grow.
    Minority-owned businesses, especially Latina-owned 
businesses, are the future of our country, and in order for the 
U.S. to remain globally competitive, we need to leverage our 
diversity. Latinas are the fastest-growing segment in small 
business, as we have said before, and with access to capital, 
financial literacy, and high-quality technical assistance and 
training, Latinas will continue to revitalize neighborhoods 
across the country.
    Statistics show that Latinas are incredibly 
entrepreneurial, and according to the most recent survey of 
business owners, the number of Latina-owned businesses has 
increased at eight times the rate of businesses owned by men. 
Now, even though Latinas are clearly driven to launch their own 
endeavors, they face numerous obstacles that prevent them from 
growing, and many are held back because of lack of access to 
capital. But with proper training, financial literacy, Latinas 
could run profitable businesses and effectively scale their 
operations.
    We are seeing women-owned businesses in non-traditional 
fields like engineering, design, construction, and IT, as well 
as health care IT, not to mention professional services. 
Latina-owned businesses are ahead of the curve, and therefore, 
it is imperative that we help these businesses now.
    The question, then, is what can we do to change the 
trajectory for Latina entrepreneurs? A clear opportunity is to 
offer the critical resources that Latinas lack, obviously, 
business training and capital access. So together with Howard 
Buffett, my foundation launched a program to do just that. 
During the next four years, the Buffett-Longoria Initiative 
will issue more than $2 million in micro loans.
    To illustrate our impact, I would like to share a story of 
one entrepreneur we sponsor, Maria. After years as an Avon 
saleswoman, Maria saw an opportunity to sell fashion products 
door to door. She had a great idea, but she lacked the capital 
to stock up on her inventory. So with a $5,000 loan from my 
foundation, Maria was able to buy merchandise and expand her 
offerings. In addition to the loan, she received training to 
create a solid business plan and financial literacy.
    With the proper investments, there are many people like 
Maria out there who are starting businesses and creating jobs, 
and we can address the institutional barriers that Maria and 
other thousands of Latina entrepreneurs out there so that they 
can become the economic engine of this country.
    So I have discussed a nonprofit intervention, but we know 
that government has an important role to play. And since 1988, 
the Small Business Administration has offered training and 
financial assistance programs through the WBC. However, without 
reauthorization from Congress, funding for this program is 
stuck at the 1999 level. So if Congress really wants to create 
jobs, it needs to invest in programs like the WBC Centers, 
which give Latinas the resources they need.
    Similarly, the Minority Business Development Agency at 
Commerce has been able to deliver technical assistance through 
its Business Centers. They are also helping minority businesses 
to export, as Alejandra said, especially through Business 
Centers like in San Antonio, Texas.
    So, to conclude, I want to just say, helping Latina 
entrepreneurs succeed is not only important for their personal 
livelihoods, but also for our country as a whole. By 2050, 
Latinas will comprise 15 percent of the U.S. population. And as 
Latinas become central to the future of America's workforce, I 
encourage Congress to invest in their potential, particularly 
in the fastest-growing fields of science, technology, 
engineering, and math.
    These women are our nation's greatest natural resources and 
we have to treat them as such. By investing and giving Latinas 
the tools to unlock their potential, we can create a brighter 
economic future for our country.
    So thank you very much for the opportunity to testify 
today, Madam Chair.
    [The prepared statement of Ms. Longoria follows:]

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    Chair Landrieu. Thank you very much.
    Mr. Mayor. Mr. Morial.

  STATEMENT OF MARC H. MORIAL, PRESIDENT AND CHIEF EXECUTIVE 
          OFFICER, NATIONAL URBAN LEAGUE, NEW YORK, NY

    Mr. Morial. Thank you. First of all, good morning. And to 
Chairwoman Landrieu, Ranking Member Risch, let me thank you, 
and I want to thank the members of your staff and other members 
of the committee for the opportunity to testify today.
    My written statement, of course, is available, and I ask 
that it be placed into the record.
    As leader of the National Urban League, this nation's 
largest historic civil rights and urban advocacy organization, 
we serve over two million people a year through a network of 95 
affiliates in 35 States plus the District of Columbia, and we 
serve 300 communities.
    The economic empowerment of our nation's historically 
disadvantaged communities has guided our work for 103 years, 
and the National Urban League is proud to commemorate the 50th 
anniversary of the great 1963 March on Washington, a watershed 
moment in this nation's history that gave voice and momentum to 
a great movement for social and economic justice that continues 
to today.
    We outlined a number of perspectives on that in this year's 
2013 State of Black America Report. One of the most fundamental 
concepts of economic and social justice and economic self-
sufficiency is entrepreneurship. I share with you that 
according to the Census Bureau, minority-owned businesses owned 
by women grew faster than all other groups of firms in gross 
receipts and employment between 2002 and 2007, and I encourage 
everyone to keep that point in mind throughout this testimony 
today.
    So I commend you and this committee for also marking the 
25th anniversary of the Women's Business Ownership Act, another 
important landmark piece of legislation on this road to social 
and economic justice which continues today.
    Empowering minority and minority women-owned entrepreneurs 
and accelerating their levels of growth and productivity is 
critical to strengthening U.S. competitiveness and overall 
growth. The two are intertwined and linked together. And we 
believe that a disproportionate number of people of color, 
particularly women of color, enter the workforce through self-
employment and through employment by businesses owned by other 
women of color. It is so critical to understand that.
    Now, when we talk about black-owned businesses, black 
women-owned businesses, there are approximately 547,000 of them 
in this country. It is also crucial to note that 45 percent of 
all African American-owned businesses are owned by women. They 
comprise over $20.7 billion in revenues, and this is a very 
important point. They are also crucial sources of employment 
and job creation. Those 547,000 businesses employ 176,000 
workers, and the average black women-owned enterprise employed 
the equivalent of 6.5 workers, or one worker for every $74,000 
of revenue. And when we celebrate this important growth, it is 
important to note that if we simply empowered each of these 
500,000 businesses to employ one additional person, that would 
be 500,000 more people employed in this nation.
    I would like to point out the important work that the 
National Urban League has done in this area. We manage ten--
ten--Entrepreneurship Centers which serve 9,000 small 
businesses. These Entrepreneurship Centers are primarily funded 
through private support and private contributions, including 
support we receive through our relationship with Stonehenge 
Capital Corporation and the New Markets Tax Credits Program. We 
are also part of the Goldman Sachs 10,000 Small Businesses 
Program. And our Urban League of New Orleans, one of our 
Entrepreneurship Centers, also manages a Women Business Center, 
which has been enormously successful in helping people and 
helping women business owners.
    And I just want to share with you the story, Senator, of 
Charmaine James, the owner of Condall Consulting Group in New 
Orleans and a client of our Women's Business Resource Center 
run by the Urban League of Greater New Orleans. Charmaine 
commenced her business in 2004, shortly before Katrina ravaged 
the Gulf Coast. Since then, she has rebuilt that business to 
four full-time employees, annual revenues of $500,000, and 
projections for this year of a million dollars in sales. She 
does business with the New Orleans Surging Water Board, the 
Louis Armstrong New Orleans International Airport, and other 
private and public agencies. Our work with her has helped her 
grow this business, and she indicates that without the 10,000 
Small Businesses Education Initiative, the Women's Business 
Resource Center, she would not have been able to do what she 
has done.
    So, since my time is coming to a close, I simply want to 
share with you that my testimony includes a number of very 
specific recommendations in terms of what we can do.
    But I leave you with this very important thought. The 
fortunes of the overall economy of the nation cannot be 
separated from the fortunes and growth of women-owned 
businesses, specifically businesses owned by women of color. If 
we want to grow our economy, if we want to strengthen our 
families, if we want to make America more competitive, I can 
assure you that there are great rates of return from investing 
in businesses owned by women, specifically businesses owned by 
women of color. Thank you.
    [The prepared statement of Mr. Morial follows:]

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    Chair Landrieu. Thank you very much, Mr. President. We 
really appreciate your passionate and so focused remarks and 
for your leadership, not only here in Washington, but around 
the country. Thank you----
    Mr. Morial. Thank you.
    Chair Landrieu [continuing]. For being such a strong 
partner.
    Ms. Parker.

    STATEMENT OF SOPHIA PARKER, FOUNDER AND CHIEF OPERATING 
           OFFICER, DSFEDERAL, INC., GAITHERSBURG, MD

    Ms. Parker. Good morning, Madam Chair Landrieu, Ranking 
Member Risch, and distinguished members of the Senate Small 
Business and Entrepreneurship. My name is Sophia Parker and I 
am the owner of DSFederal, Inc. I would like to thank you for 
this opportunity and like to thank the U.S. Pan Asian American 
Chamber of Commerce for the encouragement.
    I came to this country from Taiwan 33 years ago. Growing 
up, I did not know what it meant to have big dreams. I had to 
focus on putting food on the table at the age of seven. One 
day, a relative returned from the United States and told me 
that the streets in America were paved with gold, and I was 
told that as long as I would work hard and study hard, I would 
have a future. The rest is history.
    My transformation into entrepreneurship did not happen 
overnight. After graduating from school in the United States, 
the next 20 years of my life were dedicated to raising two 
beautiful children and working for the U.S. State Department in 
places like Pakistan, China, and Russia.
    At the age of 50, I left a comfortable job and started my 
own company. I mortgaged my home and put my life savings into 
starting the business. My dream was to connect the brightest 
mind with the best technology, and I believed I could do it 
with a better customer focus than my larger and more 
established competitors. It was difficult at first, and there 
were times we nearly lost everything. I had some very trying 
experiences and could tell you plenty of stories of how we were 
not treated fairly by larger companies. We could have given up, 
but that is not the American way.
    In 2008, we gained our 8(a) status. The process of becoming 
an 8(a) company was arduous, but fair and honest. My children 
always call me a ``Tiger Mom,'' a mother who is extremely 
demanding with high standards, and I will argue that SBA could 
give any ``Tiger Mom'' a run for her money.
    [Laughter.]
    In all seriousness, the SBA's strict standards and 
procedures helped our company. DSFederal could not be where it 
is today without the guidance provided by the SBA and the 8(a) 
program.
    Nine years in the 8(a) incubator helped us to graduate, and 
then, with the hope of mentoring other new business. The SBA 
District Office assisted us and mentored us with good business 
practices. DSFederal, in return, has thrived to fulfill our 
role by providing opportunities for minorities and women. We 
are proud to say--I checked yesterday--that 59 percent of our 
staff are women, 60 percent are minorities, and we look for 
ways to mentor our employees to help them to follow their 
dreams.
    Rhea Somaiya's parents came from India--Bombay, actually--
30 years ago, and she is an example of why it is so important 
to give women opportunities to excel in this country. Rhea is a 
high school student living in Virginia. She is part of a 
winning team that received a ``Mirror Me'' award, and they are 
matched with entrepreneurs who coach them with the help of 
business focused curriculum. When interviewed, Rhea said how 
the program has changed what she wants to do in college for her 
career. She wants to be a Washingtonian entrepreneur and at the 
same time be involved in public service. It is young women like 
Rhea who are great examples of why it is so important to 
empower young women to become entrepreneurs and leaders.
    DSFederal has been fortunate to become a viable small 
business. Since we are small and nimble, our customers get 
competitive pricing without sacrificing for services. What 
makes me most proud is that since winning our contract in 2009, 
we have never stopped hiring and we are proud American 
taxpayers, and every year, we pay more and more taxes.
    [Laughter.]
    Part of the American dream is to give back to those who are 
less fortunate. Last year, my son and I raised money and we 
went to Afghanistan. We spent Christmas and New Year helping to 
set up a library and a computer lab in a shelter in Kabul. We 
also spent time with many street children who are bright and 
eager despite the challenges they face every day on the street. 
When I spoke with the children, I told them that I, too, had 
spent my childhood at an orphanage in Taiwan. It was America 
that provided me the opportunities to build a life for me and 
my family. And I told them that if I could go to America for 
school and work hard and fulfill my dreams, so could they.
    The success of minority women like me represents true 
American success. America's streets are paved with gold, mined 
by those who work hard and work diligently. Minority women 
entrepreneurs not only create more jobs for the disadvantaged, 
we are the ``Tiger Moms,'' extremely demanding, with high 
standards, providing a positive role model for others in 
societies with a passion to fulfill their American dreams.
    Your support, Senator, to foster minority women 
entrepreneurs through funded programs give hope to women in not 
only our nation, but around the world, who still struggle and 
fight for economic and social equality. Please continue your 
support, and I thank you for your opportunity.
    [The prepared statement of Ms. Parker follows:]

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    Chair Landrieu. Thank you, Ms. Parker. That does deserve a 
round of applause.
    [Applause.]
    Extraordinary testimony, and that will go right in, of 
course, to the Congressional record, and believe me, we will 
use it. All of your testimony so far has been so moving and 
inspirational. But to think of the State of Maryland, which you 
got your accounting degree many, many years ago, before you 
were married with children, and now to be a business owner of 
65 employees paying, I am sure, wonderful salaries, benefits, 
and taxes to the State of Maryland or wherever else you lived 
and now to the United States, I mean, that is what this meeting 
is about. It is about how to--what we can do better to help the 
road that you traveled be a little bit easier for the next 
person. Not everybody is going to be a ``Tiger Mom'' like you.
    Ms. Parker. Thank you very much.
    Chair Landrieu. We want to keep our high standards, but we 
wanted to make that road a little easier in the future. But 
thank you so much for being such an extraordinary pioneer.
    We are joined by Senator Heitkamp, and we are thrilled to 
have her here with us.
    Let us continue, Ms. Lancaster, and then we will get to Ms. 
Kolditz.

STATEMENT OF MARIANNE LANCASTER, PRESIDENT AND CHIEF EXECUTIVE 
         OFFICER, LANCASTER PACKAGING, INC., HUDSON, MA

    Ms. Lancaster. Good morning, Madam Chair. Good morning, 
committee, and greetings from Boston.
    In 1989, against all odds, as a recent college graduate at 
the age of 20, I started a business. Twenty-five years later, 
the business I started, Lancaster Packaging, an SDB 8(a) firm, 
is poised to do $18 million this year in sales with 20 
employees. The last quarter-century has not been easy for 
Lancaster Packaging. I am here today to share my story.
    Lack of access to viable funding solutions has prohibited 
Lancaster Packaging from being a $50 million business today. 
The key to many start-ups succeeding is often help from family 
and friends, financial help. Still today, black American 
families have one-tenth the wealth of Caucasian families. The 
majority of black women-owned companies are companies of two or 
less. Access to capital and just plain access to the business 
world for minority women has been a long, hard struggle.
    Even today, I struggle to get a seat at the table, or if I 
do, to be seen as a legitimate contender for their business or 
to contribute. When potential clients realize that there was no 
father, husband, or even a white businessman behind me, it took 
them a long time to see value in my business. It has taken even 
longer for funders to look at me and see the viability in a 
company run by a young black woman.
    I started selling military specification bags for the 
aerospace industry out of my house. With very little cash and a 
beat-up Ford Escort, I became a business owner. In my early 
days, I worked with the Minority Business Development Center of 
Boston. The organization helped me write a business plan, and 
experienced agents there acted as mentors, aiding me in the 
start-up of my business. These centers are crucial for minority 
women-owned businesses just starting or throughout the life 
cycle of our business, and we are, in fact, going back for help 
for business development over the next 12 months.
    Over the years, I became a wholesale distributor of all 
types of packaging, but still having my mainstay in the 
military packaging world. The majority of our customers are 
American manufacturers in the aerospace industry. These are 
companies that see the value and benefit from doing business 
with small women black-owned businesses, and for me, one in 
particular, Sikorsky Aircraft of United Technologies.
    Sikorsky was my second customer at the start of my business 
and is one of my largest today. Sikorsky took government 
mandates as their own, and doing business with minority-owned 
firms is part of their culture. I point out one specific 
organization because many minority women-owned firms often 
succeed because they have one or two corporate champions that 
help them to grow, and without these corporate champions, you 
often see failure.
    Over the past five years--excuse me. Over the first five 
years in business, I could not get any type of funding 
whatsoever. In 1994, I applied for State-funded loan program. 
After two years of working to get it, I finally was granted the 
loan. Two years later and 50 percent less of what I needed, a 
little too late, I somehow survived.
    In 2004, after nearly ten years in business, I finally 
secured a traditional line of credit. In 2005, my largest 
customer at the time, New England's largest bank, was both my 
customer and my bank. The bank was bought out by even a larger 
national bank. Within three months, my business was gone from 
that customer. Within one year, that very customer who now was 
my banker pulled their line of credit, citing that Lancaster 
did not have enough business.
    For six months, I hunted for a new line of credit and the 
end result was a factoring on our receivables at an interest 
rate of 22 percent. Here I was, with Grade A customers, ten 
years in business, and no financial institution would touch me. 
I spent the years battling out a factoring cycle. During those 
years, I was not able to hire, grow, or increase the capacity 
of my business. Every dollar I had went to paying the factoring 
folks.
    This story is very common--is a very common story for the 
women minority-owned business. Several of my fellow 
entrepreneurs had both SDB business, 8(a) contracts, and larger 
commercial contracts, and banks will not touch them. Even 
business owners with SBA guarantees struggle to get the banking 
community to invest in their organizations, and often when they 
do, at a higher interest rate, much higher than the market.
    This has been our story, our history for the past 25 years, 
and not just after the banking crisis. In our world, what the 
rest of the small business community has been experiencing 
since 2008 has been our normal way of doing business, and most 
of us do not survive.
    I applied for my 8(a) status late in the life of my 
company. Observing from the outside, I saw it was a battle. 
Once a company gets certified, if you do not have a team 
devoted to marketing and business development, which most of us 
do not, you can be plodding around in the dark searching for 
business. I realize not all 8(a) firms have such trouble as I 
did, but I do see that there is a gap and a disconnect between 
the 8(a) firms and the government procurement agencies. There 
is not a great enough infrastructure to help connect the two. 
With the lack of access to traditional funding, you are 
spinning your wheels or you end up in the factoring group, 
going through the process that strips your business of any 
profits and puts you in a financial treadmill while stunting 
your growth.
    My growth came from branching out and morphing into a 
different kind of business. I needed money to grow and expand, 
and without that, the only way to grow was to offer additional 
products and services. Today, Lancaster is a supply management 
company offering wholesale distribution and procurement 
services in the supply chain. We often work to make sure that 
our suppliers are women and minority-owned firms and build up 
our percentages as much as we can.
    Lancaster is still dwarfed and held by the lack of funds. 
We are unable to take advantage of amazing opportunities that 
would aid us in hiring new employees and increasing our 
capacity.
    I am ``Boston Strong,'' and that is why I survived. I know 
more of my kind would have if the environment had been more 
hospitable. Thank you.
    [The prepared statement of Ms. Lancaster follows:]

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    Chair Landrieu. Thank you very much.
    Ms. Kolditz.

     STATEMENT OF BAATSEBA DIXIE KOLDITZ, OWNER, BRIGHTON 
ENTERPRISES, INC., AND OPEN-BOX CREATIONS, LLC, BATTLE GROUND, 
                               WA

    Ms. Kolditz. Thank you so much for this opportunity to come 
and speak before you. I want to thank you also for the Women's 
Act and to say what a great example that you show for us, being 
a champion for women. As I was looking at the research and 
looking at us thinking it has only been a few years that this 
has happened and thinking how women have come from that point.
    I will give a little bit of a history about myself. I grew 
up in a black township in South Africa during apartheid and got 
to experience firsthand what it means when one group is favored 
another and having a government limit a lot of the 
opportunities that you have. And so because of that, this Act 
is something where I appreciate it a lot more and looking at 
what our government officials are trying to do to improve our 
lives and help us so that we can grow our businesses. So we 
really do commend you and the work that you do. Thank you so 
much.
    I came to the United States in 1995 after I got a 
scholarship to study at Brigham University. I studied 
journalism and public relations, and that is where I also met 
my husband. I then started a seven-year-long process of 
becoming a citizen, and in 2004, I became a citizen of this 
country.
    My husband and I, we own two businesses, Brighton 
Enterprises, which is a supported living agency where we take 
care of mentally handicapped adults, and we also have a 
wholesale company that does home decor. And between the two 
companies, we have about 160 employees. And we run our business 
using a lot of cash that we have raised. We started this 
business by just working real hard to try to grow so that we 
can support our employees and also to support our family.
    Now the question is, we have not used a lot of the funding 
that has been provided by the government or any other group. We 
have done this just working very hard to try to grow our 
business. The challenges that we are facing, as I listen to 
everybody talking about all this growth and all these things 
that they are trying to do, is what happens after you have 
started a business, because now you have to face the struggles 
of the regulations that are placed before you.
    One of the biggest challenges that we have is employment 
discrimination litigation, which I like to call legal 
shakedown. That is something that, as business owners, 
especially as a minority woman, when you think of the 
challenges that you face when somebody comes and your employee 
can come and sue you for no reason at all and they can come and 
get money from you without anybody standing for you or kind of 
helping you out so that you can get out of that, so we end up 
settling.
    Another big challenge that we are also facing is the health 
care. The Health Care Act is one of those big things that 
everybody is going through right now. We pay so much money 
trying to help grow our business or trying to figure out, how 
do we go through with the challenges of this bill.
    And so those are some of the things that we are going 
through right now as a business. And you think of all these 
women that are now coming out trying to ask for help and 
saying, we want to start a business. We want to grow our 
business. There is so much regulation that is out there. Like I 
said, you have done the Women's Act. You have done something 
that is great. What else can you do? Can you limit the 
regulations that are faced in front of us as business owners? 
Can you help us so that we can find success?
    So we also are trying to do something in our community 
where we have started a company called District 19, and this is 
where we try to help local business owners, because we have a 
lot of business people in our area. It is a small town. And 
they do not have access to capital or do not have access to 
most of the businesses that we have had the opportunity to 
have.
    So what I have done is we have taken their products to 
market. So we are helping them out so that they can be put in 
the forefront and be able to create a bigger business than what 
they have and be able to access other people that they normally 
would not be able to access.
    I am so grateful that I can run a business. I am grateful 
that I can be able to provide for my family. We have eight 
children, and so I have to work hard to make sure that they 
have the opportunities that I never had. And so I have to work 
really hard to make sure that they can be independent business 
owners. Three of my children already have a business, and they 
also run a business together as a group so that they can have a 
better life than I had.
    Thank you so much for this opportunity.
    [The prepared statement of Ms. Kolditz follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you.
    I am interested if you could zero in a little bit more on 
the fact that you did not seem to have any trouble getting the 
original capital to start your business. Can you be a little 
bit more specific about where you raised the funds from and----
    Ms. Kolditz. Right.
    Chair Landrieu [continuing]. Because some of these others 
have testified that it is a very difficult thing to access, but 
you are testifying, basically, that you did not have any 
trouble at all.
    Ms. Kolditz. Well, because we are coming from old school 
and we got the business, we won our first----
    Chair Landrieu. What do you mean, you got the business. Did 
you buy the business?
    Ms. Kolditz. We bought the business, yes.
    Chair Landrieu. And with what?
    Ms. Kolditz. We had the people that owned the business, 
they gave us terms to pay for it as we worked. So when we got 
the first business, which was my husband's parents. So they let 
us pay for it as we were working for it.
    Chair Landrieu. Okay. But it was a family that----
    Ms. Kolditz. It was a family business.
    Chair Landrieu [continuing]. Provided you the family 
business----
    Ms. Kolditz. Yes, they did.
    Chair Landrieu. It was your husband's business that you 
basically married into and then they----
    Ms. Kolditz. Well, we did not marry into it.
    Chair Landrieu. No, you married him.
    Ms. Kolditz. Yes. Well----
    Chair Landrieu. You married him and he owned the business 
and the family allowed you all to work for buying it. I mean, 
that is a little different than going out on your own and 
borrowing money from strangers----
    Ms. Kolditz. Right. So it is the same thing. It is more 
like----
    Chair Landrieu. No, it is not the same thing.
    Ms. Kolditz [continuing]. We took a loan from them, I guess 
maybe putting it that way.
    Chair Landrieu. But it is not the same thing. It is a 
family----
    Ms. Kolditz. Yes, it is a family business.
    Chair Landrieu. You were very, very, very lucky to marry 
into a family----
    Ms. Kolditz. Oh, absolutely.
    Chair Landrieu. And how large was their business?
    Ms. Kolditz. At the time, they only had 40 employees at the 
time, and we have grown it since, and----
    Chair Landrieu. To how many do you have now?
    Ms. Kolditz. We have 160.
    Chair Landrieu. Okay. So you have increased it 
substantially.
    Ms. Kolditz. We have.
    Chair Landrieu. It is a little different than starting out 
completely on your own.
    Ms. Kolditz. Absolutely.
    Chair Landrieu. Ms. Parker, what would you suggest? Your 
testimony was so riveting.
    Ms. Parker. Thank you.
    Chair Landrieu. What would you suggest in terms of how a 
person really starting from scratch, particularly in the 
minority community, which traditionally does not have the same 
social networks and leveraging and friendships and other things 
that enable people to access opportunity for capital, what 
would you suggest that we focus on to--is it the micro loan 
programs? Is it maybe getting community banks to understand a 
little bit better about the needs of start-up companies? Are 
these incubators? There is one particularly in Boston that I 
visited in the Cambridge Innovation Center that is 
extraordinary that I am seeing some really tremendous 
opportunities, not as many women as I would like to see, but 
small businesses coming up. What would your suggestions be to 
our committee?
    Ms. Parker. You were very right about--because of our 
background of the networking opportunities we had. But I would 
say, go to SBA. The small business loan is wonderful. And when 
I only had $600 in my pocket, I did not have anything, it was 
because SBA helped me to get a small loan. That was $25,000. I 
was able to pay it back in three years. And also, the SCORE is 
wonderful and micro loan is wonderful. But the first stop is 
always SBA, and the 7(j) program is wonderful, and I said the 
government's investment in SBA is very small and the return is 
huge, because through SBA and through the Mentor-Protege, 
through the graduate 8(a) companies were able to help the 
newcomers.
    So I would say the first stop would be SBA, and there are 
more and more banks that are willing to work with SBA and work 
with small businesses that give a small amount of loans. I was 
not able to get any loan from the bank for many years and it 
was through networks, friends, people who loaned me money. But 
I would say the $25,000 from SBA's help was critical. I was 
about to close the door.
    Chair Landrieu. Well, I would say that was a very smart 
investment that the government made, $25,000 in your business, 
and now you employ 65 people and doing extraordinary work 
business-wise and charity-wise and we thank you very much.
    Ms. Parker. Thank you.
    Chair Landrieu. Mr. Morial, what would you say, working 
with the Urban League and all of your partners, what would you 
encourage us to look at to get that first level of financing, 
and then what are you finding is effective in taking that small 
business to the next level of expansion?
    Mr. Morial. Thank you for your question. Let me--I think 
the committee should consider a laser-like focus on the small 
business financing area writ large. So we have heard testimony 
this morning about the success of the SBA and the SBA's loan 
products and the return that the nation has gotten, businesses 
have gotten, and the taxpayers have gotten on modestly small 
investments.
    We have heard from Ms. Longoria, an initiative that is 
private sector financed, an initiative to provide micro loans 
to start-up small businesses, another example of an initiative 
to increase capital.
    Thirdly, I think that there are initiatives that exist, 
like the New Markets Tax Credits Program, which is highly 
successful but is really, really focused on what I call the 
larger, mature, existing small businesses, not the start-up 
firms or the firms that need maybe anywhere from $25,000 to a 
half-a-million dollars to either be able to start or to indeed 
grow. And the New Markets Tax Credits Program incentivizes 
private investments in these kinds of loan products and 
financing products that--for small businesses that are mature 
in distressed areas. It is another program that exists that 
needs to be looked at because it is successful, to be perhaps 
tailored or a component could be developed in order to be able 
to do that.
    I think that longstanding recommendations are unbundling of 
contracts, closer monitoring about Federal procurement goals, 
and also the Federal Government's goals for minority and 
business hiring for its own contractors in the defense and in 
the domestic industries. There needs to be stronger oversight, 
stronger accountability, more transparency about what all of 
these businesses are doing.
    And then I also think elevating. There are many Fortune 500 
companies that have had great success in the supplier diversity 
space. They have made a commitment to it. They have had success 
with it. And they are in abundance. They need to be lifted up 
to demonstrate to those who may not have had the same type of 
commitment what simply thinking more about where you spend 
dollars that you are going to spend already can, indeed, go.
    So there are a wide variety of recommendations, and 
ensuring that State and local governments, who have been on the 
front lines in many respects with commitments to women-owned 
businesses, small businesses, and minority businesses, continue 
those types of commitments.
    Here is a figure. I believe that there are--if one out of 
every three businesses who have less than $5 million a year in 
gross revenues hired one additional person, we would be at full 
employment in this nation. And I think that the employment 
component, the ability to take people and make them taxpayers, 
is so significant, and the rate of return--small investments in 
the SBA have yielded a lot.
    So I would recommend that the committee think about taking 
the testimony that we have heard today and doing a focus on 
innovation and creativity in the small business financing area, 
and some of the ideas that we have heard today, the testimony 
today, I think, sheds light on the types of things that, 
indeed, work.
    The final thing I would say is that the CDFI, Community 
Development Financial Institutions base, the National Urban 
League just started its own CDFI called the Urban Empowerment 
Fund. We are going to lend to small businesses who are looking 
for loan products in the $50,000 to $250,000 range, thinking 
about ways to pump more capital into CDFIs so that they can 
lend, because here is what you heard from Boston, and----
    Chair Landrieu. Mr. Morial, the Senator has to--if you 
could wrap up and----
    Mr. Morial. Yes. I will say this, because this is 
important. A lot of the mega-banks in the United States may not 
have the kind of----
    Chair Landrieu. I am sorry. Can Senator Heitkamp----
    Mr. Morial. Yes----
    Chair Landrieu [continuing]. Just say a word before she has 
to leave.
    Mr. Morial. Yes. I will yield.
    Senator Heitkamp. I have to go preside----
    Mr. Morial. I am sorry.
    Senator Heitkamp. If I do not get there in time, Harry Reid 
is very tough.
    Mr. Morial. We will not let him do that to you.
    Senator Heitkamp. I will tell him you said that.
    Mr. Morial. Yes, please do.
    [Laughter.]
    Senator Heitkamp. I want to congratulate all of you, 
everyone on the panel, for your tremendous testimony and for 
your efforts on behalf of the American people and on behalf of 
small business. It is absolutely essential that we get this 
right, because you are the future. You are the future. You are 
the future Fortune 500 companies sitting at this table, and we 
are very excited.
    I just want to make one comment. We look at this very 
closely in my State because we need to build entrepreneurship. 
We need to build opportunities in Indian Country, which has 
staggering amounts of poverty, staggering amounts of lack of 
capacity in both education and business capacity.
    And so we are with you. I know that the Chairwoman is 
absolutely committed on this. I think sometimes when people 
come and testify, they think this is falling on deaf ears, but 
not on this committee. This truly is a panel who believes in 
what you are doing, believes that you are our future.
    And so thanks so much and thanks to the Chairwoman for 
empaneling this group and for your excellent testimony.
    Chair Landrieu. Thank you, Senator, and thank you for your 
advocacy for Native American women and for women generally and 
we are thrilled to have you as a member of the committee.
    We have also been joined by Senator Cowan, but let me 
recognize Congressman Cardenas from the 29th District in 
California. Thank you, Congressman, for joining us this 
morning, and any testimony that you want to submit for the 
record. You have been a great champion of women and minority-
owned business and business growth in your district and this 
country, so thank you.
    And, Senator, let me turn it over to you for just a few 
questions, and then I have a second round, and I think then we 
will close up.
    Senator Cowan. Thank you, Madam Chairman, and thanks to all 
the panelists. My apologies for arriving late, but I have had 
the pleasure of reading your testimony and I thank you for the 
time you have already put into this effort and your willingness 
to come and share your perspectives with this committee and, 
frankly, Congress today. It is deeply, deeply appreciated.
    And I am incredibly pleased to see Ms. Lancaster here from 
the great town of Hudson, Massachusetts, home of former 
Governor Paul Cellucci, former Ambassador Cellucci, and a great 
small business doing incredibly well in the Commonwealth.
    Ms. Lancaster, if I could, I would like to address a 
question to you, coming from my home State, just about the 
challenges and opportunities that you see for small minority-
owned women businesses. And, frankly, I would ask if you might 
be willing to share with us your perspective retrospectively on 
your business interest, but prospectively, what advice might 
you offer for others like you who are just getting started in 
this industry or in small businesses and how to take advantage 
of the resources available to them.
    Ms. Lancaster. Sure. As the previous panel has said, I do 
think the first stop is the MBDA and the SBA. I think in the 
last six years, initiatives have been absolutely amazing on 
that front.
    I would say that, in starting out, many banks, although, 
yes, there are 2,000 that work with the SBA, I think that there 
is still a great struggle even with the SBA guarantee to get 
the banks to want to invest. It is very difficult. Also, when 
they do, they are also at a rate of double-digit interest rate 
because of the value of their business or what forth.
    I have seen quite a bit of women-owned businesses in the 
past six years--let me backtrack for a minute. Most minority-
owned women businesses are getting the money from their homes. 
They are leveraging the value of their homes, and many women in 
the last five years are struggling, particularly with the 
housing crisis. As the values of their homes have gone down, 
their lines of credit go down or get cut off. And I think that 
that is something that is a big topic to try to address. But it 
is hurting the businesses that are already established that, 
really, that is the only place that they are getting their 
money from, tied to their homes.
    I think that, starting out, when we started, I was by 
myself in a loan, and it is a different environment. There are 
so many organizations, several nonprofit organizations. I am on 
the board of the Center for Women in Business Enterprise in 
Boston and that was just starting out after I was well 
established. You have got to reach out and find the homes, like 
the Cambridge Innovation Center. There are so many places, and 
you cannot just go to one. You may not find what you are 
looking for at one. You may piece it together. But that is the 
only way to survive, is to really create your own ecosystem and 
reach out.
    Senator Cowan. Thank you.
    A question to Ms. Longoria, if I may. I know that your 
foundation is focused particularly on helping Latino businesses 
and business women start and grow their businesses. Picking up 
from where Ms. Lancaster left off, what more can we do to 
educate those who are in business or wish to get started in 
business about the kind of resources they need? What can we 
particularly here in the Congress do to make those resources 
known and accessible?
    Ms. Longoria. Right. I just want to make a correction. My 
foundation focuses on Latinas, which are women only. I mean, 
the men are welcome, but----
    [Laughter.]
    Senator Cowan. Thank you for that.
    Ms. Longoria. Well, you know, the nonprofit and private 
sectors, things that my foundation does, does play a pivotal 
role in filling the gaps. But there is a solid pipeline of 
women who are still waiting to access resources, and we have 
seen that a lot with my foundation. There is a capacity issue 
that goes unmet, and that is where a foundation like mine or a 
partnership like mine and Howard Buffett's can step in. And I 
am not saying government is the sole answer, but it definitely 
should be the leader, as it has been thus far. I think 
government provides a leadership that we emulate. The private 
sector emulates what government is doing.
    So some of the great things that we have even heard today, 
two of our companies here utilize the 8(a) program, which is 
very essential and instrumental in helping minority 
entrepreneurs gain access to the economic mainstream and to 
gain a foothold in government contracting. I think that is a 
great program.
    I think Marianne talked about corporate champions, so the 
SBA's Mentor-Protege Program, pairing up a large company with a 
smaller company, doing a transfer of knowledge, where smaller 
companies do not have to reinvent the wheel. I think that is 
another great program.
    I also think what the SBA's Women's Business Centers are 
doing is very, very impressive. And again, we just emulate it. 
I am just taking the template that you guys have provided and 
giving it to more people. Providing informational, technical 
assistance, this has been tremendously helpful and an effective 
tool. And I think, as Alejandra said earlier in the first 
panel, if we look at business as a continuum, you have the 
start-up, you have the maintenance, and you have the growth. 
There are many interventions that the private sector can come 
into. But, again, we are only emulating the successful programs 
that the government has shown thus far and I think a foundation 
like mine, which provides career training and mentorship and 
capital and opportunity is necessary.
    But, again, to answer your specific question, awareness is 
a big part of it. So sometimes that is the barrier in itself.
    Senator Cowan. Yes. Thank you for that, and thank you for 
helping make the case that smart government investment of 
public dollars can leverage private opportunity and create even 
more economic growth and prosperity. Thank you.
    Madam Chairman, I yield.
    Chair Landrieu. Thank you.
    I am continuing to be more frustrated as I have these 
extraordinary panels and continue to hear year after year, time 
after time, the reluctance of some of our community banks to 
lend to businesses that are viable, that have proven track 
records, that have actual government contracts in hand. And I 
am going to direct the staff to focus on getting some proper 
reporting from our community banks. This committee does not 
have jurisdiction over the community banks, but we have some 
influence in the way the community banks operate.
    It is just a constant refrain that I hear from people that 
testify in front of this committee. I travel all over the 
country and hear a constant refrain that businesses that are 
viable, that have generated profits, that are longstanding, 
cannot get the kind of loan that they need from a community 
bank. Yet the community banks and the large banks get a lot of 
help from Washington, DC, a tremendous amount of help, when 
they get into difficult situations. And so we are going to stay 
focused on this until this problem is corrected and get the 
measurements so that we can tell if we are making any progress 
or not.
    Ms. Longoria, let me ask you, though, to be a little bit 
more specific with this micro loan program, because we have all 
read about tremendous success stories internationally, where 
international partners have come together in places like India 
or Korea or Vietnam, Cambodia, South Africa, to lend money to 
groups of women, primarily, individual women but in groups, to 
give them just a few hundred dollars. Now, in some other 
countries, it literally is a few hundred dollars, or in some 
cases, literally, a goat or a pig or a cow that is given to a 
woman, and because of her good industry and stewardship is able 
to get that gift, whether it is monetary or otherwise, and turn 
it into a business for the village.
    Now, we have heard about this internationally. Can you be a 
little bit more specific about the characteristics of your 
micro lending program, and what communities do you envision 
this being the most successful? And, again, describe your loan 
amounts. You are looking at lending somewhere between what and 
what?
    Ms. Longoria. As small as $5,000 to $25,000, micro loans. 
Our foundation--well, the Buffett-Longoria Micro Loan 
Initiative is a comprehensive solution to loan origination, and 
so we are hoping that this particular initiative increases 
lending efficiency and allows women to be--enables program 
scalability.
    So in order for this program to work, the micro loan 
initiatives have requirements of counseling, mentoring, 
training, and technical assistance. So every woman who receives 
a micro loan from this particular initiative must complete a 
series of one-on-one counseling by our counselors to help her 
develop a strong business plan, understand financial literacy, 
day-to-day operations, tax compliance, financial records, 
payroll, human resources. So our Latina entrepreneurs also 
participate in workshops that will address financial literacy, 
accounting, building credit.
    So we pair the micro loan process with the training 
components and it is one--this is the best practice, because my 
foundation leverages that in order to put entrepreneurs on the 
path to success. The whole idea is to set them up for success.
    Chair Landrieu. And how many loans do you think in a year 
that you all will be able to make through just your initiative?
    Ms. Longoria. We are hoping $500,000. Five hundred thousand 
within the program of $2 million.
    Chair Landrieu. And then as you think about, hopefully, you 
will have a 99 percent success rate or a 90 percent success 
rate. How are you going to encourage your businesses to go to 
that next level, when they need the $50,000 or $100,000? Are 
you thinking about pairing with a community bank in your area 
that might agree in advance to basically have your success 
stories advance through their potential loan programs, or what 
are you thinking about the next step for your successful 
borrowers?
    Ms. Longoria. Yes. Well, we just launched, maybe two weeks 
ago, so it is very early on in the stages, and we are starting 
with--we are pairing with a company called Accion Texas. So we 
are actually starting very specific in Texas for Latinas in 
Texas. We will expand to California, California and Texas being 
the largest Latina populations in the country.
    That would be a great growing pain for us to have, is, oh 
my gosh, we have all these women now at a level where they have 
to continue. I think a great handoff would be the MBDA and the 
SBA. I think there are some infrastructure there that is 
extremely effective, that is working. Again, because we look at 
business as a continuum, it is not just the start-up, it is how 
do I grow it. There is a glass ceiling that women hit, their 
own glass ceiling. If you get to a million dollars, usually, we 
do not know where to go, as Marianne said, although she is a 
much larger company.
    So I cannot wait to get to that problem and pass them on 
to--not pass them off, assist them and guide them in the right 
direction.
    Chair Landrieu. Thank you. I really appreciate that. And 
look at that as a bridge----
    Ms. Longoria. Absolutely.
    Chair Landrieu [continuing]. Because that is what it is, at 
different stages and kind of passing or handing off or 
partnering with this ecosystem that can help businesses emerge, 
get started, and then grow.
    Ms. Longoria. Yes.
    Chair Landrieu. And I think any country that has a good 
strategy in this will have a very bright economic future, and 
any country that does not will simply fall behind. I think, Mr. 
Mayor, you said it perfectly. These are untapped assets, and a 
smart country, a smart government, a pro-people government will 
invest in their people and provide opportunities for people to 
succeed.
    And that is, I think, what our committee wants to focus on, 
closing this wealth gap and recognizing women entrepreneurs as 
really an extraordinary untapped resource for this nation. 
Women, Asian American women, Hispanic women, African American 
women, and I am glad that Heidi brought up in our Native 
American community some women are particularly distressed and 
disadvantaged and we could unlock that potential.
    We are going to have to close, but I am going to give 
everybody one minute to make closing remarks, starting with 
you, Ms. Parker, anything that you want to underscore or 
stress, because our committee is really excited about this 25-
year anniversary.
    I am going to submit for the record the history going back 
to 1988 and how we got to the point where we are with the 25-
year anniversary, and we are going to be looking for a piece of 
legislation that can enhance and build on the successes of the 
last 25 years and lay a strong foundation for the next 25 years 
for women entrepreneurship in America. So your testimony is 
going to be a part of that and I thank all of you.
    [The information of Chair Landrieu follows:]

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    Chair Landrieu. So with a closing remark for maybe a 
minute, Ms. Parker, anything you want to underscore.
    Ms. Parker. Thank you, Chairwoman. I would like to dedicate 
60 seconds to advocating for SBA. Again, our SBA is 
underfunded. Every BOS has more than 100 cases. Each case 
represents many joint ventures, business opportunities, you 
know, mentor-protege agreements. There is just not enough hours 
in a day for them to adequately do their job. So I advocate 
that you help them to increase their funding. Like I say, it is 
a great return of investment.
    And I ask that you help look into the Mentor-Protege 
Program. I think this program really needs a lot of review. I 
think the mentors should be limited to companies who have 
graduated from the 8(a) company. They have walked a mile. They 
wore the shoes. And they know what faces the small businesses, 
versus the very large companies who, at the end of the day, are 
not helping the proteges. And I think SBA has a lot of 
networking capabilities and we are always ready to help our SBA 
and our local SCORE chapters. Thank you very much.
    Chair Landrieu. Thank you.
    Mr. Morial.
    Mr. Morial. Thank you. Thank you, Senator Landrieu. Three 
quick things.
    I join in saying protect and defend the SBA and the MBDA. 
And in this difficult time, do not allow those agencies, which 
are already small, to come under more stress when the return on 
investing in them is quite high. Protect and defend the SBA and 
the MBDA and the government's infrastructure that supports 
small businesses.
    Second, focus on small business financing and what more can 
be done by looking at what the government does, what the 
private sector does, and the nonprofit sector does.
    And, thirdly, recognize that the players in this space, the 
active players in this space include government, Federal, 
State, and local, the private sector, and all of the tools and 
mechanisms and programs that they utilize, as well as the 
nonprofit sector and the NGO sector, what Ms. Longoria is 
doing, what the National Urban League is doing, the mention of 
Accion Texas, all of us, and unleash their power and the return 
for the nation will be great.
    Chair Landrieu. Thank you.
    Ms. Longoria.
    Ms. Longoria. Thank you. I wanted to remind the committee 
that diversity breeds innovation, and that is what our country 
needs right now. And I also want to advocate for the MBDA. 
Currently, they have 40 Business Centers in 25 States, and that 
is a capacity issue. We have way more women that need access to 
these small business centers. And so I would say--I would mimic 
what you just said and say, let us fight for them and their 
funding.
    The bottom line is the incentive. The incentive to the 
private sector is the market, and as the market continues to 
diversify, specially with Latinos, we have to have 
accountability to the changing demographic of the market. So I 
think however we can, the public sector can help change the 
conditions to make building a business a more transparent 
process. Thank you.
    Chair Landrieu. Thank you very much.
    Ms. Kolditz.
    Ms. Kolditz. Thank you. I want to say, I hope you do not 
dismiss my statement because we started our business with 
support from our family, because you missed out on the fact 
that I started another business using savings that me and my 
family started. And because of that, we started our business 
because we were afraid of debt. And you think of how many 
people out there are afraid of acquiring more debt, and that is 
why we work hard at starting businesses small and growing them 
at smaller paces that we can afford.
    And also to think of the fact that there are more women out 
there who started their businesses that way and they are now 
trying to grow and they need more training, but they need 
training that can be custom fit for their businesses.
    So do not dismiss us because we are not taking loans. Think 
of programs that you can make to help us so that we can have 
more resources to grow. It might not be financial, but we also 
need some of the help. So there are women out there who are 
starting out businesses that way. Thank you.
    Chair Landrieu. Yes. I am a very strong supporter of the 
Mentorship Program. Unfortunately, we have not been able to get 
too much support from some members that are going to help make 
that bill possible, but I am a very strong supporter of 
mentorship and counseling.
    Ms. Lancaster.
    Ms. Lancaster. Thank you. I have to say ditto to everything 
about supporting the MBDA and the SBA. And also, I have to 
reiterate on the Mentor-Protege Program, as well, I think that 
it is true that the SBA does not have funding to tackle 
everything, but with more teeth in the Mentor-Protege Program 
and put the onus on the government prime contractors to really 
meet their requirements regarding--or make it a requirement to 
have mentor-protege agreements.
    I just have to say thank you, and I truly appreciate your 
comments on really looking at the banking industry and saying 
that you need to take a look at the measurements and get the 
data and then tackle dealing with the banking industry's 
overall attitude and environment towards minority-owned women 
businesses. Thank you.
    Chair Landrieu. Thank you all very much.
    The meeting is adjourned.
    [Whereupon, at 11:46 a.m., the committee was adjourned.]
                      APPENDIX MATERIAL SUBMITTED

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