[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
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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
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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
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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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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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