[Senate Hearing 113-541]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 113-541
 
                FROM MILITARY SERVICE TO SMALL BUSINESS
                 OWNERS: SUPPORTING AMERICA'S VETERAN 
                             ENTREPRENEURS

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 4, 2014

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
    



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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED THIRTEENTH CONGRESS

                              ----------                              
                   MARIA CANTWELL, Washington, Chair
                 JAMES E. RISCH, Idaho, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
MARY L. LANDRIEU, Louisiana          MARCO RUBIO, Florida
MARK L. PRYOR, Arkansas              RAND PAUL, Kentucky
BENJAMIN L. CARDIN, Maryland         TIM SCOTT, South Carolina
JEANNE SHAHEEN, New Hampshire        DEB FISCHER, Nebraska
KAY R. HAGAN, North Carolina         MICHAEL B. ENZI, Wyoming
HEIDI HEITKAMP, North Dakota         RON JOHNSON, Wisconsin
EDWARD J. MARKEY, Massachusetts
CORY A. BOOKER, New Jersey
                Jane Campbell, Democratic Staff Director
           Skiffington Holderness, Republican Staff Director
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Cantwell, Hon. Maria, Chairwoman, and a U.S. Senator from 
  Washington.....................................................     1
Risch, Hon. James E., Ranking Member, a U.S. Senator from Idaho..     3
Pryor, Hon, Mark L., a U.S. Senator from Arkansas................     4
Fischer, Hon. Deb, a U.S. Senator from Nebraska..................     5
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire..........     5

                               Witnesses

Jeppson, Rhett, Associate Administrator, Office of Veterans 
  Business Development, U.S. Small Business Administration, 
  Washington, DC.................................................     6
Duso, Julianna, Program Director, Veterans Business Outreach 
  Center, SBA Region X, Seattle, WA..............................    13
Payton, Trena, President, ABN Technologies, Lacey, WA............    19
Multanen, Gary, Chief Executive Officer, Best Bath Systems, Inc., 
  Caldwell, ID...................................................    25
Proulx, Jr., Dan, Member Manager, Monument Construction, LLC, 
  Nashua, NH.....................................................    30

          Alphabetical Listing and Appendix Material Submitted

Cantwell, Hon. Maria
    Opening statement............................................     1
    Questions for the record.....................................    63
    Letter dated June 4, 2014, from Senators Burr and King, Jr...    72
Duso, Julianna
    Testimony....................................................    13
    Prepared statement...........................................    15
Fischer, Hon. Deb
    Opening statement............................................     5
    Questions for the record.....................................    54
Heitkamp, Hon. Heidi
    Prepared statement...........................................    50
    Questions for the record.....................................    68
Jeppson, Rhett
    Testimony....................................................     6
    Prepared statement...........................................     9
Multanen, Gary
    Testimony....................................................    25
    Prepared statement...........................................    27
Payton, Trena
    Testimony....................................................    19
    Prepared statement...........................................    21
Pepperman, Scott
    Letter dated June 5, 2014, to Senators Cantwell and Risch....    74
Proulx, Jr., Dan
    Testimony....................................................    30
    Prepared statement...........................................    32
Pryor, Hon, Mark L.
    Opening statement............................................     4
Risch, Hon. James E.
    Opening statement............................................     3
    Questions for the record.....................................    57
Shaheen, Hon. Jeanne
    Opening statement............................................     5
    Prepared statement...........................................    51
    Questions for the record.....................................    60
    The Veterans Entrepreneurship Act (S.2143)...................    77


                     FROM MILITARY SERVICE TO SMALL



      BUSINESS OWNERS: SUPPORTING AMERICA'S VETERAN ENTREPRENEURS

                              ----------                              


                        WEDNESDAY, JUNE 4, 2014

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:04 p.m., in 
Room 428-A, Russell Senate Office Building, Hon. Maria 
Cantwell, Chairwoman of the Committee, presiding.
    Present: Senators Cantwell, Pryor, Cardin, Shaheen, 
Heitkamp, Risch, and Fischer.

  OPENING STATEMENT OF HON. MARIA CANTWELL, CHAIRWOMAN, AND A 
                  U.S. SENATOR FROM WASHINGTON

    Chairwoman Cantwell. The Small Business Committee will come 
to order.
    Today, we are having a hearing on ``Military Service to 
Small Business Ownership: Supporting America's Veteran 
Entrepreneurs.'' Good afternoon and welcome to all of the 
witnesses. We have a distinguished panel here today. I thank 
each of them for making the time to be here.
    I also want to thank my colleague, Senator Pryor, for his 
leadership on helping get this important hearing underway today 
and for proposing legislation to strengthen the SBA program for 
veterans. Our colleague, Senator Shaheen, I know, will be 
joining us, and she also has legislation that she is proposing. 
And, my colleague, the Ranking Member, I understand is on his 
way, so we will hear from him when he arrives.
    The men and women who serve our nation deserve the best 
opportunities and care when they return home. It is our solemn 
duty as the U.S. Government to meet those obligations to our 
veterans.
    And, there are significant problems, as we have all been 
hearing about, at the Veterans Administration, and that is why 
we need to immediately prioritize getting veterans access to 
health care they need, and at the same time, ensuring that the 
VA identifies the structural reforms that are important to 
helping our veterans in the long run so the situation does not 
occur again.
    Today's hearing is about another issue facing our veterans. 
It is ensuring that they have economic opportunities when they 
come back from military service. Senator Risch and I want to 
see more veterans have a chance to become entrepreneurs, to 
open up businesses and create jobs, giving veterans the 
training and tools and resources they need to start small 
businesses and ensure that they will be able to make ends meet. 
I say this because we know that 75 percent of small 
businesses--that small businesses create 75 percent of the job 
growth in America, and we think with veterans at the helm, they 
will also hire more veterans. They will be able to provide for 
themselves and their families and transition back to civilian 
life.
    I am particularly concerned about the amount of new 
veterans that we are seeing. There are 2.8 million veterans 
returning from Iraq and Afghanistan. With continued withdrawal 
of U.S. forces from Afghanistan, the population of returning 
veterans will increase, and by some estimates, we will have 
another million veterans over the next five years.
    Last year, the Bureau of Labor Statistics reported that the 
unemployment rate for post-9/11 veterans was nine percent, so 
that is compared to the national unemployment rate of 7.4 
percent. So, while there has been some improvement this year in 
our economy, employment for new veterans remains a very, very 
serious issue. The Iraq and Afghanistan Veterans of America, 
which represent these new veterans, indicate that employment 
opportunities is the top concern for its members.
    Today's hearing is about what the Small Business 
Administration can do to help support small business ownership 
and entrepreneurial development for our nation's veterans, 
particularly those returning from Iraq and Afghanistan. We need 
to give our veterans the chance to become creators. Supporting 
veteran entrepreneurs will be part of our tool kit to ensure 
that veterans have a successful transition to civilian life and 
make ends meet, and we want to make sure that we are helping 
them become the small business owners of the future.
    We have lots of great examples. In my State, Seattle-based 
VECA, which stands for Veterans Electrical Contractor 
Association, was founded by World War II veterans and has a 
long history of training veterans. Over the last ten years, the 
company has employed more than 300 veterans, and we had a very 
proud moment at that company a year and a half ago when I was 
able to take Senator Inouye there, and they were all so happy 
to be with him and to have their picture taken with a war hero.
    In 1971, Jim Lea, of Veterans of the United States Air Army 
Corps in World War II, which is now the U.S. Air Force, along 
with Neil Anderson and John Burroughs, started another company 
in Seattle called Cascade Designs to better provide mattresses 
and greater comfort for hiking and camping. So, a lot of people 
may know them or have slept on one of their air mattresses. 
But, over the last 40 years, this company has become a 
household name of innovation and continues to hire veterans, as 
well.
    Spokane-based Quantum Solutions provides building products 
from floor to ceiling, and Quantum is owned by Dale Storr, a 
former service member and prisoner of war who was shot down in 
an A-10 during Operation Desert Storm. He recently retired as a 
Lieutenant Colonel from the Washington Air National Guard.
    And, of course, we will have another witness here, Trena 
Payton, who started a technology company in Lacey, Washington.
    The Small Business Administration has a number of programs 
that provide training and resources to our veterans to help 
them start these small businesses, and in fiscal year 2013, the 
SBA provided assistance to more than 144,000 veterans through 
the Small Business Development Centers, through the Women's 
Business Centers, and through the service corps of retired 
executives called SCORE and the Veterans Business Outreach 
Centers. I want more veterans to have a chance of getting this 
important help through the SBA programs and I want to explore 
what we can do to make sure that we are raising the awareness 
so that veterans know that these programs exist in our country.
    Again, not every veteran will want to pursue these SBA 
programs or opportunities, but we want to make sure that they 
know about them, and I want to make sure SBA programs for those 
veterans are streamlined so that they are very easy to use once 
veterans do know about them.
    I am pleased that today the SBA will be announcing that 
they are running Public Service Announcements about these 
veteran entrepreneur programs on the Worldwide Armed Forces 
Network. This TV and radio network reaches our military bases. 
I also urge the SBA to reach out to television stations in 
military communities across the United States to encourage them 
to run these Public Service Announcements in hopes of getting 
the word out. You never know where the next great idea is going 
to come from, but we know that the talent of the men and women 
who serve our country is great and we know that they can add to 
the opportunities for economic development in our country.
    Senator Pryor introduced S. 2396, the Veteran Entrepreneur 
Training and Opportunities Act of 2014. The bill would expand 
the SBA's existing entrepreneurial development initiative 
targeted to veterans and it would codify SBA programs like 
Boots to Business, and the Veterans Women Ignition and Spirit 
of Entrepreneurship, and the Entrepreneur Bootcamp for 
Veterans. And so I want to thank him for all of his leadership 
in trying to make the best of these programs, solid programs, 
in allowing us to really further communicate the opportunities 
that veterans have in seeking these programs. Having the 
specificity and the concrete nature of these programs in 
statute, I think, will help, so thank you for your leadership 
with that.
    So, now, I am going to turn it over to my colleague, 
Senator Risch, and ask him for an opening statement, and then 
any of our colleagues who would like to make a statement before 
we go to our witnesses.

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

    Senator Risch. Madam Chairman, first of all, let me say, 
thank you for holding this timely meeting.
    Obviously, there are a lot of things going on right now as 
far as veterans are concerned and with the Veterans 
Administration and some of the shabby treatment that veterans 
are getting. I think it is really important that every American 
live out the commitment we have made. The veterans have given 
us their absolute best. We owe it to them to give them our 
absolute best.
    As veterans come back and reintegrate into the free market 
and free enterprise system, they need help at times, and the 
VA, as we have seen, has fallen down on the job, badly in some 
instances. And here, we have an opportunity in a little 
different area, namely the area of reintegration, to actually 
do something about it.
    We have some programs that have started. They are somewhat 
small. They have been pilot programs. And we need to see what 
is working and what is not working.
    I have every confidence that through the SBA, we can do 
this a lot more efficiently and a lot better than has been done 
in some of the other Federal agencies, not the least of which 
is because we are smaller and we do give them substantially 
closer oversight through this committee.
    We have a great panel here of people who are going to 
address those issues. I have Gary Multanen here from Idaho. He 
is an Army veteran and serves on the Board of Directors of the 
Boise SBDC. I am anxious to hear his insight into these 
important issues.
    Madam Chairman, thank you very much.
    Chairwoman Cantwell. Thank you. Thank you, Senator Risch, 
and again, thank you for helping us get this hearing set and 
for your----
    Senator Risch. Madam Chairman, can I--one other thing. 
Senator Fischer has to leave at 3:30, and I know she has some 
input and some questions, so when we get to that, if I could 
yield my space to her, and anybody else----
    Chairwoman Cantwell. Very gentlemanly of you. Very 
gentlemanly of you.
    Senator Risch. Thank you.
    Chairwoman Cantwell. Senator Pryor, did you want to make a 
statement?

 OPENING STATEMENT OF HON. MARK L. PRYOR, A U.S. SENATOR FROM 
                            ARKANSAS

    Senator Pryor. Thank you, Madam Chair. I really want to 
thank you and Senator Risch for your leadership on this, and I 
want to thank our panelists. Many of you all are veterans and 
we appreciate your service and just appreciate what you are 
doing here today.
    Last November, in Arkansas, I was honored to host a Small 
Business Committee field hearing with a group of Arkansas 
veterans, and they shared their experiences and challenges that 
they face in starting and expanding their small businesses. And 
veterans, in my view, are natural entrepreneurs. They already 
have the skills, the experience, the leadership necessary to 
start a business and to create jobs. For those who want to 
pursue the path of entrepreneurship, we should be there to 
support them as they get their businesses off the ground.
    So, that is why I introduced the Veterans Entrepreneurship 
and Training Opportunities Act of 2014, or the VET 
Opportunities Act, as we call it. This legislation is 
cosponsored by Senator Landrieu, former Chairwoman of this 
committee, and is supported by the VFW, the American Legion, 
and the Association of the United States Navy. It is bipartisan 
legislation and it improves and expands upon successful Small 
Business Administration programs to ensure that our 
transitioning service member and veteran entrepreneurs have the 
tools they need to start their businesses with a solid 
foundation.
    Ms. Payton, who is going to testify today, benefitted from 
one of these programs. The Veteran Women Igniting the Spirit of 
Entrepreneurship, also known as V-WISE, has a proven track 
record. During my time at the Arkansas field hearing, one 
witness described this program as ``phenomenal.'' EBV, a 
similar program to V-WISE, focuses on the unique challenges 
veterans with disabilities face. These two programs alone have 
over half of participants going on to start small businesses. 
They do this all while leveraging limited Federal dollars with 
substantial private support.
    So, again, Madam Chair, I want to thank you for doing this 
today, and all the panelists, I want to thank you for being 
here. Thank you.
    Chairwoman Cantwell. Thank you.
    Senator Fischer.

  OPENING STATEMENT OF HON. DEB FISCHER, A U.S. SENATOR FROM 
                            NEBRASKA

    Senator Fischer. Thank you, Madam Chair, for holding the 
hearing, and Senator Risch, thank you for your letting me ask 
questions first. And I would like to thank the members of the 
panel for being here today. I look forward to hearing your 
testimony and getting to our questions. Thank you.
    Chairwoman Cantwell. Senator Shaheen, would you like to 
make a statement before we go to the witnesses? And, I want to 
thank you for your leadership on this, as well. You have been 
great in giving us input on legislation that, hopefully, we 
will be acting on before the committee, and I know you 
represent a lot of veterans, so thank you.

 OPENING STATEMENT OF HON. JEANNE SHAHEEN, A U.S. SENATOR FROM 
                         NEW HAMPSHIRE

    Senator Shaheen. Well, thank you very much, and thank you 
also to Ranking Member Risch and Chair Cantwell for holding 
this hearing.
    I really just want to take a minute and introduce the New 
Hampshire person who is here testifying on the panel, Dan 
Proulx. It is very nice to welcome you here, Dan. Dan is from a 
company called Monument Construction in Nashua, New Hampshire, 
and he is a Marine veteran who founded Monument in 2008. Dan 
and the employees at Monument provide complete construction 
services, including projects for Federal agencies, such as the 
VA, the Navy, the National Guard, and the Forestry Service.
    And, he has really grown the business in a very impressive 
way in a very short time, from its first full year in 2009, 
when they saw $290,000 in revenues, to this year, when they 
expect $12 million in revenue. This is the kind of small 
business growth that is very good for New Hampshire, that 
creates jobs, and good for the country.
    I know we are going to hear from Dan about the challenges 
and successes that he has faced, but I had the opportunity to 
visit the business in Nashua back in January and it was very 
impressive to see not only what you have done in the business, 
Dan, but your commitment to hiring other veterans. So, thank 
you very much for being here, for all of your efforts, and we 
look forward to hearing what you have to say. And, thank you to 
all the panelists for being here.
    Chairwoman Cantwell. Thank you very much, Senator Shaheen. 
I know that your focus has been particularly on making sure 
that the financial fees that are paid by veterans in these 
programs do not preclude getting veterans to participate, so we 
are happy to discuss that with people.
    But, we are going to start and go right down the aisle, so, 
Mr. Jeppson, if you would start. Introduce yourself. Turn on 
your microphone, make sure the light is on, and, if you could, 
stick to five minutes and then we will let people ask questions 
after everyone has finished. But, thank you all very much for 
being here.

STATEMENT OF RHETT JEPPSON, ASSOCIATE ADMINISTRATOR, OFFICE OF 
      VETERANS BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS 
                 ADMINISTRATION, WASHINGTON, DC

    Mr. Jeppson. Chairwoman Cantwell and Ranking Member Risch 
and distinguished members of the committee, thank you for 
inviting me to testify on SBA's ongoing work to serve our 
veteran entrepreneurs across the country. We greatly appreciate 
this committee's support to our SBA's efforts to assist our 
nation's heroes and job creators.
    As small business owners, veterans continue to serve our 
country by creating critical employment opportunities and 
driving economic growth. They possess the skills, discipline, 
and leadership to start and operate small businesses in our 
communities. In fact, veterans over-index in entrepreneurship 
and are 45 percent more likely than those with no active duty 
military experience to be self-employed. According to the most 
recent U.S. Census data, nearly one in ten small businesses are 
veteran owned. These businesses generate over $1.2 trillion 
annually in receipts and employ nearly 5.8 million Americans.
    With over 21 million veterans in America and more than 
250,000 service members transitioning from the military 
annually, SBA is focused on ensuring that they have the access 
to counseling, capital, contracting needed to start and grow 
successful businesses. In fiscal year 2013, SBA supported more 
than $1.1 billion in 7(a) and 504 loans to more than 2,400 
veteran-owned small businesses.
    In order to further expand access to capital for veterans, 
we also challenged the top 120 national and regional SBA 
lenders to increase their lending activity to veterans by five 
percent per year for the next five years. With this support 
from our lending partners, SBA will serve an additional 2,000 
veterans and increase lending by an additional $475 million.
    Moreover, in January of 2014, we launched the Veterans 
Advantage, which reduced the up-front borrower fee to zero for 
qualified veteran-owned businesses receiving SBA Express loans 
up to $350,000. In the fiscal year 2015 budget request, we 
outlined a plan to continue this program and to reduce the fee 
by half for all 7(a) loans over $350,000 to veterans.
    We also connect veteran entrepreneurs with contracting 
opportunities across the Federal Government. I am very proud to 
report that, for the first time ever, we met the three percent 
government-wide contracting goal for service disabled veteran-
owned small businesses in fiscal year 2012. We helped these 
veterans access more than $12 billion in Federal prime 
contracts, and despite budget cuts, we expect good numbers on 
the fiscal year 2013 scorecard.
    In terms of training and counseling, in fiscal year 2013, 
our nationwide resource partner network of VBOCs, SBDCs, WBCs, 
and the volunteer SCORE mentors reached over 144,000 veterans 
in the U.S. In addition to these services, SBA also offers 
entrepreneur training, including Boots to Business, V-WISE, EBV 
for service-disabled veterans, active duty service members, and 
their spouses.
    V-WISE and EBV are high-touch programs focused on the 
under-served communities. V-WISE helps women veterans, active 
duty servicewomen, and female spouses learn the business skills 
necessary to turn an idea or a start-up into a growth venture. 
As of next Friday, V-WISE will have trained over 1,300 women.
    EBV offers cutting-edge entrepreneurship training in small 
business management for post-9/11 veterans and active duty 
service members with service-connected disabilities. Through 
EBV, over a thousand veterans have been trained, and within six 
months of completing both EBV and V-WISE programs, there is a 
56 percent start rate for new business ventures, and within 
three years, that rate increases to 72 percent.
    In January of 2013, SBA launched Boots for Business, the 
entrepreneurship track of the Department of Defense Transition 
Assistance Program. The curriculum provides valuable assistance 
to exploring self-employment opportunities by leading 
participants through the key steps of evaluating business 
concepts and the foundational knowledge required for developing 
a business plan. With the funding provided in the fiscal year 
2014 budget, SBA plans to expand the Boots to Business program 
to more military installations within the U.S. and launch the 
program at bases around the world.
    Boots to Business just achieved a milestone of training 
10,000 transitioning service members in the last two-day 
Introduction to Entrepreneurship portion of the program. We 
project that we will train an additional 12,000 to 15,000 
participants through Boots to Business in fiscal year 2014.
    As of this week, we began airing PSAs about Boots to 
Business on the military television channels, including the 
Armed Forces Network and the Pentagon Channel. I would like to 
show you two video clips of about 30 seconds each.
    The first is Tony Turin, an EBV graduate who is in the 
process of transitioning from the Army and will be starting an 
optometry clinic back in his home State of Oregon.
    [Pause.]
    Chairwoman Cantwell. Demos never work when you want them 
to, so it is okay. They will get it in a second.
    Mr. Jeppson. I promise you, it is worth the wait. It really 
is good. And let me just--I mentioned Tony is the first----
    Chairwoman Cantwell. No, keep talking, and when they are 
ready, they will cue us.
    Mr. Jeppson. Okay. So, Tony is a Boots to Business 
graduate, optometrist, spent his time in the service, and had 
participated in one of our business plan competitions that we 
had recently and did very well.
    The second person that you will see is Sandra Gonzales. She 
is not only an Army veteran, was an Army nurse, but is also 
married to an active duty military member. She went through the 
Boots to Business program and started a business focused on 
providing home schooling to learning disabled children. She is 
the mother of six. She had a child with a learning disability 
and she had come up with some innovative ways of teaching her 
own child, and so she has turned that into a business idea and 
leveraged not only Boots to Business, but V-WISE, as well, so--
--
    Chairwoman Cantwell. Okay. Now, we just need volume.
    [Pause.]
    Mr. Jeppson. And, I will also mention, while we are waiting 
for the volume, that we produce these with a small amount of 
money. We only had to pay for the travel to the production 
studio. We partnered with the Defense Media Activity to produce 
these videos, so we did not spend any SBA money on these, other 
than----
    [A video was played.]
    We really believe that, now, that this will help build 
awareness with the transitioning service members. We have 
reached 10,000 with really no marketing at all to the service 
members or to build awareness, and so with this playing on 
those military channels, we believe that we will see our 
numbers really grow.
    [A video was played.]
    At SBA and across the administration, we are committed to 
helping our servicemen and women achieve the American dream 
that they fought so valiantly to defend.
    Thank you for this opportunity to testify and I look 
forward to answering your questions.
    [The prepared statement of Mr. Jeppson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
        
    Chairwoman Cantwell. Thank you. Thank you very much.
    So, Ms. Duso, again, welcome from Seattle. Thank you very 
much for being here.

STATEMENT OF JULIANNA DUSO, PROGRAM DIRECTOR, VETERANS BUSINESS 
           OUTREACH CENTER, SBA REGION X, SEATTLE, WA

    Ms. Duso. Chairwoman Cantwell, from my great State of 
Washington, and Ranking Member Risch and distinguished members 
of the committee, thank you for allowing me to be here today.
    I want to talk to you about my job. I have a great job. I 
am the Director of the Region X Veterans Business Outreach 
Center. I have the great honor of serving our country's heroes 
and families. Our center serves four States, Washington, 
Oregon, Alaska, and Idaho, and seven active military bases. We 
provide technical business assistance and training to veteran 
entrepreneurs and business owners as well as other members of 
the military community.
    I could talk to you today about the facts. I could tell you 
that our small team of two has provided over 3,200 hours of 
free individualized business assistance to over 1,600 veterans 
since its opening in 2010. I could tell you how we have 
provided training for over 1,000 individuals, ranging in topics 
from general management, entrepreneurial skills, financial 
planning, marketing, sales, and government contracting. I could 
tell you that our clients have started over 50 businesses, 
received $45 million in contracting, generated $19 million in 
revenue, provided 1,500 jobs throughout our four-State region.
    All of these facts are important. However, I would rather 
tell you about the cornerstone of what I do, the people I serve 
and the companies they built.
    I would like to talk to you about Rich. Rich is an eight-
year veteran of the Air Force and Air Force Reserves. Rich and 
his brother were seasoned professionals in the construction 
industry when it saw a drastic slow-down in activity in 2007. 
In 2011, Rich and his brother came to us with a dream of 
starting a new business in an area they were both passionate, 
craft beer. We worked with them to develop a business plan, 
create a marketing plan, and develop a strong financial road 
map.
    They invested every nickel they had and used the assistance 
from an SBA 7(a) loan to open Triplehorn Brewing Company. They 
finished 2013 with $700,000 in gross sales, created ten new 
jobs, and are one of the fastest growing breweries in the 
State. Rich has utilized the skills he learned during his 
service, such as organization, goal setting, problem solving, 
confidence, and resolve, to successfully grow his business. It 
should also be noted that Rich and his brother are second-
generation small business owners. Their father was the 
recipient of a small business loan, himself.
    I would also like to talk to you about Sam, a decorated 
Army veteran of both Iraq and Afghanistan. Sam's company, 
Strideline Spokane, imports and sells a popular line of socks 
sporting the skyline of his hometown, Spokane, Washington. In 
their first year of operation, Strideline Spokane generated 
$110,000 in revenue and secured contracts in 41 different 
retail stores in Washington and Idaho, projected to increase 
sales by $56,000 in the next six months. Strideline Spokane 
employs a team that includes a graphic designer, sales 
associate, and events staff. Sam has the rights to the designs 
for Denver, Salt Lake City, and Boise, where he plans to expand 
his business.
    I would like to end by telling you about Janell. Janell has 
served her country for over 20 years, including deployment in 
Afghanistan and current service in Washington Army National 
Guard's 81st Brigade, Special Troops Battalion. We partnered 
with Janell as she completed her business plan, conducted 
market research, and learned how to properly budget and utilize 
her resources. In November of that same year, she opened 
Janell's Gluten Free Market in her hometown of Everett, 
Washington.
    Last year, Janell's store recognized over $561,000 in top-
line sales. She has five full-time employees and plans to 
double her staff in the next year. She also participated in the 
V-WISE program, where she began planning for a second location. 
Janell's Gluten Free Market successfully launched its second 
store in Kirkland, Washington, three years after opening her 
first location, and we are currently working with her on the 
feasibility of a third location.
    Janell's service to her community did not end in the Army 
or National Guard. She has designed her business to serve as a 
resource to the celiac community and brings in doctors and 
other guest speakers to assist customers in finding resources 
for their ailments. Janell advocates for all veteran 
entrepreneurs to take advantage of SBA's resources. She 
emphasizes the value of classes offered at SBA and the VBOC, 
which guided her business decisions and helped her develop a 
well-grounded business plan.
    These are just a few of the extraordinary individuals I 
have the honor of working with. I have learned through working 
with them that veterans possess skills that make them uniquely 
prepared to be savvy business owners. During their service, 
they learn how to solve problems, work calmly under pressure, 
effectively utilize resources, and work tirelessly to achieve 
their goals. The veteran and military community is diverse and 
with a unique set of challenges. With your continued support 
and investment, we will not only sustain the work we are doing, 
but grow the breadth and reach of our assistance.
    Thank you for allowing me to share these stories with you 
and taking your time to listen to me.
    [The prepared statement of Ms. Duso follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [
    
    Chairwoman Cantwell. Thank you very much. Thank you for 
being here, and we look forward to asking you some questions 
about that, too, both the data and the stories.
    So, Ms. Payton, welcome. Thank you very much for being 
here.

STATEMENT OF TRENA PAYTON, PRESIDENT, ABN TECHNOLOGIES, LACEY, 
                               WA

    Ms. Payton. Thank you. Good afternoon, Chair Cantwell, 
Ranking Member Risch, and members of the committee. Thank you 
for inviting me to testify today.
    My name is Trena Payton and I am President of ABN 
Technologies, located in Lacey, Washington. I am also a member 
of Women Impacting Public Policy, WIPP, Women's Presidents 
Organization, WPO, and the Washington State Women's Veterans 
Advisory Committee.
    ABN Technologies is a veteran, women, and minority-owned 
company that I founded in 2003. We provide clients with IT 
solutions in three core areas: Operational support, hardware 
and software procurement, and professional services. Today, ABN 
employs 12 employees, and in fiscal year 2013, we had revenues 
of $8.1 million.
    But, I would not be where I am today without the skills I 
learned in V-WISE and the SBA's Express Loan program. As the 
committee considers veteran entrepreneurship programs and how 
to enhance opportunities for our nation's veterans, I want to 
discuss my experience with some of the SBA programs available 
to entrepreneurs.
    Like many young people, I joined the Army to serve my 
country. The time I spent in the military opened up a new world 
to a young 19-year-old from the projects of Los Angeles. My 
experiences widened the possibilities of what life could hold 
beyond anything imaginable to me at the time. Once my 
enlistment was completed, I worked for organizations like the 
U.S. Army, Nordstrom, and Washington Mutual, until I came to a 
crossroad that led me to consider opening my own business.
    Like most people, I had no idea where to start or where to 
turn to to get information. Luckily for me, a few blocks from 
my Washington Mutual office in downtown Seattle was the local 
SBA office. I began daily visits to the office during lunch 
breaks, because each time I went, more and more questions were 
answered and I generated more and more questions. The SBA is a 
great resource for information.
    Well, I took the leap, and in the span of six months, I 
started my business out of my second bedroom, quit my job, and 
was living on my savings--which I do not recommend.
    [Laughter.]
    When I started my business, I made good and bad decisions, 
like most start-up businesses. However, most of the bad 
decisions I made were due, in part, to the piecemeal 
information that entrepreneurs get coupled with that soldiers' 
enthusiasm to get things done. I did not know what I did not 
know.
    It took over a year to land my first contract. From there, 
I had enough success to sustain myself and grow the business, 
but without consistent, repeatable results. Frustrated with my 
progress, in 2011, I saw an announcement for the V-WISE 
conference that was targeted for veteran women. It delivered an 
intensive immersion into entrepreneurship and a chance to be 
part of an ongoing educational experience and networking 
opportunities with industry experts.
    The other critical piece of growing my business was the 
line of credit I obtained through the SBA's Express Loan 
program. As the committee knows, bidding on a project and then 
attempting to secure financing is a painstaking process. The 
line of credit that we have through the SBA's Express Loan 
program means that we can bid on opportunities, knowing that we 
have the backing when we win.
    The Veterans Entrepreneurship Act, Senator Shaheen's 
legislation to make this fee waiver permanent, is an excellent 
idea, one that many veterans like me will embrace.
    In addition, the Veterans Entrepreneurship and Training 
Opportunities Act of 2014, Senator Pryor's legislation to make 
permanent several veteran entrepreneurship programs, such as V-
WISE, Boots to Business, and to double the number of Veterans 
Business Outreach Centers from 15 to 30 over the next five 
years, would be very helpful to veteran entrepreneurs.
    I personally know that many veterans consider starting and 
owning a business at some point in their career transition, and 
having resources there to make the connection for them would be 
a critical component to their decision making process.
    As my story reflects, Federal programs for veterans have 
been critical to my company's success. Small business programs, 
especially contracting programs, have leveled the playing 
field, allowing veteran entrepreneurs to thrive.
    As the head of a woman-owned business, I can tell you that 
access to the Federal marketplace is a huge issue. That is why 
I have been a strong supporter of the Women-Owned Small 
Business Federal Contracting Program. Removing the award caps 
for the WOSB program in 2013, which this committee supported, 
was a great improvement. The Senate will have the opportunity 
to improve it further by adding sole source authority to the 
program. This change would help millions of women break through 
barriers of accessing Federal contracts, if enacted. The House 
version of the 2015 National Defense Authorization Act contains 
this change.
    I implore the committee to continue funding V-WISE and the 
other SBA veteran entrepreneurship programs for all those 
people like me who are just starting, in a growth plateau, or 
are being challenged by business issues.
    Thank you, and I look forward to answering any questions 
you may have.
    [The prepared statement of Ms. Payton follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairwoman Cantwell. Thank you. Thank you very much, Ms. 
Payton. Thank you for being here.
    Mr. Multanen--is that the right pronunciation?
    Mr. Multanen. Madam Chairwoman, if you are Scandinavian, 
you say ``Molt'-a-nan.'' If you are not Scandinavian, you say 
``Mul-tan'-en.'' So, it works. My wife says ``Mul-tan'-en.''
    Chairwoman Cantwell. Ya, sure.
    [Laughter.]
    Thank you.

STATEMENT OF GARY MULTANEN, CHIEF EXECUTIVE OFFICER, BEST BATH 
                  SYSTEMS, INC., CALDWELL, ID

    Mr. Multanen. Thank you, Madam Chairwoman, Ranking Member 
Risch, and Senators. I have submitted a document for the record 
that talks about six businesses in Idaho, and so I think I will 
spend a couple minutes here not reading that but responding to 
what I have already heard.
    I believe it is really important that veterans have skin in 
the game when they choose to start a business. There has to be 
a mechanism to where they need to bring some capital to the 
program.
    Running a business is hard, every day, and most days, it is 
harder. Once you reach a level of success, those challenges 
change. So, I am on my third SBA loan. I got my first one in 
1981 to buy the business, to buy out my two partners, and I am 
now on my third loan. And so my personal goals today are 
significantly different than they were when I first started 
out. I am concerned about how do we keep a family business in 
the family and not have to sell to a third party so the old guy 
can have some money to retire on. And so I would like to make 
sure the SBA loan packages allow for legacy transition of 
businesses.
    The other issue that I have had the opportunity to be 
involved in twice is to repay a loan early. It is really 
irritating to have to pay a penalty to prepay the loan early. 
The whole idea of the loan is to help someone become successful 
in their business. So, my comment would be, do not penalize 
them if they want to repay the loan early. Let them repay the 
loan and move on.
    In Idaho, we have--the program in Idaho works and works 
well, and that is because SBDC does a great job and they 
partner with SCORE, and the Boots to Business program is led by 
SCORE in Idaho. I do not know if that is the case around the 
country.
    For the last three years, SBDC has averaged 150 veteran 
consultations each year, and they total about 11.5 hours per 
veteran. Of that, 45 percent are looking to start a new 
business and 55 percent are already in an existing business and 
looking for guidance and help, and probably loans, to continue 
to grow their business.
    What is frustrating from my--and I have served on the SBDC 
Advisory Board for 20 years, or right at 20 years--what is 
frustrating to me is that only six percent of the people who 
are engaged and involved in the program have true sustaining 
programs where they intend to grow their business year after 
year after year. That is where I think some effort needs to be 
spent, is how do you--it is okay if you want a lifestyle loan, 
a lifestyle business and all you want to do is take care of 
yourself and two or three people. But, the goal here is to 
employ veterans, and so we need to have more veteran businesses 
that are really focused on growing and have a business plan 
that allows sustainable growth.
    Madam Chairman, those are my comments for now.
    [The prepared statement of Mr. Multanen follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairwoman Cantwell. Thank you very much. Again, thank you 
for being here.
    And, certainly not least in this, but last, we will have 
Mr. Proulx. Thank you very much for being here.

    STATEMENT OF DAN PROULX, JR., MEMBER MANAGER, MONUMENT 
                 CONSTRUCTION, LLC, NASHUA, NH

    Mr. Proulx. Thank you, Chair Cantwell, Ranking Member 
Risch, and Senator Shaheen and members of the Small Business 
Committee. Thank you for the opportunity for me to testify 
today.
    My name is Dan Proulx and I am a managing member of 
Monument Construction out of Nashua, New Hampshire. I speak to 
you today as a proud Marine veteran who, following my discharge 
in 1994, experienced the same types of challenges finding 
quality post-service employment being faced by many veterans 
today.
    I explored several paths in those years, some more 
promising than others, fortunately culminating with earning a 
Master Electrician's License followed by a General Contractor's 
License. Today, the construction firm I founded in 2008, along 
with three employees, Monument Construction, directly employs 
up to 44 professionals seasonally, in addition to providing 
many more quality jobs for our subcontractors.
    Monument Construction is a verified service-disabled 
veteran-owned and certified HUBZone small business delivering 
complete construction services, including new construction and 
renovation, plus full-service electrical, mechanical, plumbing, 
carpentry, site work, concrete, and project management. Our 
work includes over 70 Federal projects on both design-build and 
bid-build, and frequently with a focus on environmental 
sustainability components.
    Monument Construction in 2012 celebrated delivery of our 
largest project to date, the $6.5 million Psychiatric and Poly 
Trauma Facility at the Veterans Affairs Medical Center in White 
River Junction, Vermont, and was also awarded our largest 
project to date, a $7.8 million exterior renovation at the 
Department of Veterans Affairs in Jamaica Plain in 
Massachusetts. While some found Monument's initial growth 
predictions wildly optimistic in 2008, with support from our 
team, quality subcontractors, customers, agencies such as the 
New Hampshire PTAP, and the Small Business Administration, 
Monument exceeded those initial goals.
    At the beginning, Monument Construction's first project was 
a small one with the Department of Veterans Affairs in Togus, 
Maine. With no past performance, we constantly pestered many of 
New England's Federal contracting offices until one took a leap 
of faith to give us a chance to succeed with a $22,000 
ventilation project.
    Our success would not have been possible without the help 
of the PTAP and SBA. In fact, we would not have gotten off the 
ground without their expert advice of their advisors or without 
their finance programs. Our PTAP and SBA consultants guided us 
through the thicket of acronyms, paperwork, and registrations 
that enabled us to appear on contracting officers' radar in the 
first place, such as obtaining a CAGE code, registering for 
ORCA, and signing up for a DUNS number.
    In 2009, the SBA contacted us with a bank familiar with the 
Patriot Express Loan program, which from then until now has 
provided us liquidity to grow, and our Patriot Express Loans 
have grown with us. At the start, without any past performance 
to demonstrate, with no track record, obtaining conventional 
financing was an impossibility, as you can imagine. I believe 
Senator Shaheen's Veterans Entrepreneur Act, which, among other 
things, makes the SBA loan fee waiver fees permanent, deserves 
speedy passage.
    Our next major step forward came in 2009, when the 
Department of Veterans Affairs in New England awarded us a 
coveted spot on a five-year multi-award construction contract 
known as a MATOC. This MATOC award boosted us in two ways. 
First, we were awarded five of the MATOC's initial seed 
projects, providing critical cash flow for a new business. 
Second, and more importantly for the long term, receiving the 
MATOC Award let other contracting officers know that Monument 
Construction had passed an unusually rigorous vetting. Since 
that initial MATOC award, Monument has been awarded an 
additional 14 MATOCs, from Albuquerque to Maine.
    That year, in 2009, our first full year in business, we saw 
about $290,000 in revenue. This year, Monument Construction 
anticipates $12 million in revenue.
    This year, we saw another milestone for our firm when we 
completed renovations to our building. Once again, the SBA 
played a role, supporting our renovation with a 504 loan. 
Finally, even as I testify here, we are finalizing on an SBA 
CAPline 7(a) loan to fuel our ongoing growth.
    I am happy to testify today in the spirit of sharing our 
road to success in the hope that some of what worked for us 
will help other veteran entrepreneurs to succeed.
    In addition to my own post-service employment challenges, I 
have witnessed other veterans encountering difficulty in jump-
starting their post-service careers while serving on the Board 
of Directors of Harbor Homes, a New Hampshire Veterans Housing 
Organization. In addition to employing veterans and veteran-
owned subcontractors when possible, my door has always been 
open to mentor local veterans to encourage them on to the road 
to success. We subcontracted to another service-disabled 
veteran-owned construction firm, technically a competitor, when 
they encountered a temporary problem with their CVE 
certification. The reason behind this was so that they could 
continue to run their business until the issue was corrected, 
because I believe veterans should help each other out.
    All of us at Monument Construction are grateful for the 
programs that helped us succeed, from SBA and PTAP, veterans' 
only contracting set-asides, to the Veterans Affairs CVE 
process that has streamlined an easier certification process 
for legitimate veteran and service-disabled veteran-owned small 
businesses. We fully support your efforts to enhance and 
strengthen these programs so that other veterans may also find 
success.
    I thank you today for focusing on a most important issue 
and hope to assist your work wherever possible. Thank you.
    [The prepared statement of Mr. Proulx follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairwoman Cantwell. Thank you. And, thank you to all the 
witnesses. We so appreciate you being here and the testimony 
and experience you bring.
    I want to start with a round of questions, and we will just 
go in order here, but I wanted to start with you, Ms. Duso, 
since you had seen so many people. And my question is on the 
kinds of veterans' consultations you are seeing in the 
Northwest. Is this people who come with specific expertise that 
are a part of their military experience that they want to try 
to capitalize on, or are you seeing people who have a variety 
of ideas and really want the entrepreneurial and access to 
capital issues and information about that?
    Ms. Duso. Yes, I am happy to answer your question. So, a 
majority of the clients that we do see fall into the second 
category that you mentioned. I get a lot of e-mails and phone 
calls with veterans and a lot of them are post-9/11 veterans 
and they just say, ``I want to start a business and I really do 
not know what to do.'' So, it goes anywhere from walking them 
through, here is how you get a license, what kind of business 
entity is going to be a best fit for you, let us talk about how 
much money you need to make to be financially secure in your 
own self and for your own family and to be sustainable for your 
business, and then how much is it going to cost you to run a 
business, you know, what do all those numbers look like, and do 
those things line up together. And, that is really where we go. 
I would say that is probably 80 percent or more. I have not 
done any kind of analysis on that. But, a majority of my phone 
calls are that.
    And then we do see some that come to us that have 
businesses that are looking to expand, so they want--they need 
capital for expansion purposes, capital for start-up purposes, 
and then they do have some kind of expertise. I have one guy 
that was in the military and now he is working at Amazon and he 
does robotics, so he wants some robotics contracting and things 
like that.
    So, you know, it is a variety, but I would say most of ours 
fall into that second category.
    Chairwoman Cantwell. And primarily the technical and the 
help and support first and foremost, as opposed to access to 
capital?
    Ms. Duso. Oh, yes. So, I mean, the most important thing for 
us is to make sure that an idea is feasible for somebody, to 
help them write a good business plan, and to get a good 
financial road map, because I do not want to help somebody 
start a business that is just going to leave them three years 
later, four years later, with a lot of debt and in a worse 
situation than they were to start with. It takes a lot of time 
and energy to start a business, so I want to make sure that 
they are started off--that they are starting off on the right 
foot and that they have a real idea that can be successful and 
successful for the life that they need or that their family 
needs.
    Chairwoman Cantwell. And, you mentioned one of the veterans 
going into the brewing business and having one of the fastest 
growing breweries. What was that about, because, obviously, we 
have a lot of Northwest breweries in general.
    Ms. Duso. Yes.
    Chairwoman Cantwell. So, to claim that you have one of the 
fastest growing means they are doing something right. What do 
you think was the success there?
    Ms. Duso. I think it was a few things. They produce a 
really high-quality product. Rich's brother is--he has 
informally been called, like, the Brewing Savant. They have won 
some awards for----
    Chairwoman Cantwell. What is the name of the company?
    Ms. Duso. Triplehorn. So, they are Triplehorn. They are in 
Woodinville. Tom Douglas wanted them in a lot of his 
restaurants, and so they are talking about maybe partnering 
with the Seahawks next year. So, I think it is a combination of 
they have a really high-quality product. They work really hard. 
Rich is a perfectionist, and so is his brother, and so they do 
not want to put out a product that is low quality. And, they 
have done a lot of networking in the craft brewery world. I 
think the latest statistics say Oregon has the number one 
number of craft breweries and Washington has the number two, so 
it is a really competitive field.
    Chairwoman Cantwell. And so their background in the 
military probably gave them that ability to be very drilled 
down on the specificity that is required in brewing.
    Ms. Duso. Yes. I mean, and that is what Rich talks about 
all the time, you know, that his relentless pursuit of the best 
product possible is part of what has made him so successful, 
and their organization, as well, you know, just staying 
organized in their back office. Everything they did from the 
beginning of setting their back office up to be sustainably 
successful is pretty phenomenal.
    Chairwoman Cantwell. Great. Thank you. We will have more 
questions, but I want to give my colleagues a chance.
    Senator Risch.
    Senator Risch. Thank you, Madam Chairman.
    First of all, Senator Fischer indicated she did have some 
questions, but she will submit them for the record, so thank 
you very much.
    Chairwoman Cantwell. Great. Thank you.
    Senator Risch. Gary, it was interesting to hear you note 
the difference that businesses face and the challenges as they 
start versus the challenges as they become successful, 
particularly when it comes to transitioning to the next 
generation or what have you. My observation, and I would like 
your thoughts on this, is the SBA plays, I think, a very 
legitimate role as businesses get going, but usually by the 
time they get to the point where they are successful and they 
have the questions of legacy and moving to the next generation, 
usually, the businesses have gone into the private sector and 
found what they need, whether it be legal help or accountant 
help or what have you. Is that a fair assessment of what 
happens as a business matures?
    Mr. Multanen. Senator Risch, that is a fair assessment, and 
we are there as a company and a family. We will accomplish the 
transition to the next generation.
    Senator Risch. By the way, I know your next generation and 
I believe that to be the fact.
    Mr. Multanen. Well, I have two adult children who are both 
very smart and very good and work hard.
    Senator Risch. And good lobbyists, too.
    Mr. Multanen. And good--correct. But, another option 
through SBA would just make it better. Here is what--here is 
the big--the most trouble comes from this approach. You have a 
successful business, and if you are really successful in what 
you do, there are lots of people that want to buy you. Most of 
them are those who are managing large buy-out funds. They want 
to buy you. They want to strip everything out of the business 
but the profits and then flip it in four or five or six years. 
Well, that totally removes the next generation from any 
successful path. Some of those buyout firms will let the next 
generation own three or four or five percent, but that is not 
owning the business.
    But, the first generation, or the second generation wanting 
to transfer to the third, you know, after you have spent 47 
years making a business successful, it would be nice to have 
the rewards from doing that. And so if the assets are there in 
the company, then the second generation, or the third 
generation, needs to carry the fiduciary responsibility of 
becoming owners of that business. And so I am just looking for 
another option besides the ones that are available through the 
private market.
    Senator Risch. Interesting observation.
    Ms. Duso and Mr. Jeppson, I appreciate your testimony, and 
it is always great to hear those success stories, but I would 
like to see some metrics on this, something that--I mean, we 
all know they are not all successes. There are failures in 
there, and then there is the middle of the road that probably 
did move forward somewhat well, but maybe did not set the world 
on fire. What can you tell me about the metrics available for 
these programs that you have talked about, starting with Mr. 
Jeppson, please.
    Mr. Jeppson. Yes, sir. Happy to. So, let me just break down 
a couple of the programs and the metrics. So, on our lower-
touch programs, like EBV and V-WISE, we have some pretty good 
metrics because they have been around about three years. So, we 
look at the start rate in the first year. It is well over 50 
percent. And then the start rate is over 70 percent at year 
three.
    When we look at the employment that they have produced, we 
only have that on EBV, not V-WISE yet, but on EBV, it is about 
one employee for every new start. So, a thousand new businesses 
started, a thousand jobs created, and that is still pretty 
good. When we consider that 80 percent of small business is 
self-employment and that it is only the other 20 percent that 
employs one or more employee, I think that that is a pretty 
good range of where we are going as veteran small business 
owners.
    With EBV, or, excuse me, with Boots to Business, we are 
still within that first year window, so all we are measuring 
right now is the throughput through the program. The way the 
transition assistance has been redesigned is that you actually 
go through transition assistance a year before you leave the 
service, ideally, and you receive educational benefit training. 
You receive training on getting a job from the Department of 
Labor. VA is there to give benefits briefings, et cetera.
    But, the optional track that we have, the Boots to 
Business, we still are within that first year window. We have 
just reached the 10,000th person to go--service member to go 
through the two-day training. Then they can opt into that 
eight-week online training.
    So, we are watching what the cohort looks like, and I can 
tell you about what the demographic of that looks like, but it 
will be sometime next year. With the $7 million in the budget 
that we have next year, we reserved a portion of that to be 
able to put in a mechanism so that we can actually provide to 
you what the new starts are, what the failure rate, and we can 
do that measurable. And, we will do it at the one-year mark, we 
will do it at the three-year mark for the service member, and 
then we will look at the mortality rate at the five-year mark 
on that. But, we are still a little bit ahead of ourselves on 
that piece.
    Senator Risch. Very helpful, Mr. Jeppson. It is unfortunate 
every Federal program did not have those kind of metrics.
    Ms. Duso, what can you add to the conversation here?
    Ms. Duso. I can tell you--very similar to what Mr. Jeppson 
has said. So, the Boots to Business program--the VBOC program 
just started in 2010. Our office itself just opened in 
September of 2010 itself. We do not, right now, we do not track 
any kind of mortality rate or anything like that. What we do 
track is most of the numbers I gave you. How many new starts do 
we have? How many employees? You know, are they hiring? We do 
our best to get updated information from our clients, but it is 
not always as easy to get some of those updates from them. And, 
you know, we do our best to keep in touch with them, but it 
does not always happen.
    Senator Risch. Thank you. My time is up. Thank you, Madam 
Chairman.
    Chairwoman Cantwell. Thank you.
    Senator Shaheen.
    Senator Shaheen. Thank you very much.
    Dan, one of the things you talked about is some of the 
challenges that you had as you started, and access to credit 
being one of those. Can you talk a little bit more about what 
you think would be helpful to ensure that start-up businesses 
can get access to credit.
    Mr. Proulx. Yes. I think a lot of the access to credit, as 
far as in the construction side of things, it is a little 
tougher, because we are more like a management company. But, 
when you are talking to the SBA and then the banks, I think it 
would be a little bit more advantageous for a bank to 
actually--it seems that they come up short a little bit with 
the SBA program. They do not know the SBA program. They do not 
do a lot of SBA loans, so even though the percentage that you 
are guaranteed, whether it is 75, 85 percent, the banks still 
are not--they are not looking to really give you the lending 
because they are not familiar with the program. So, I think a 
little bit of education on the bank's part to try to educate 
themselves more with the SBA program and how the programs work.
    I mean, like I said, with the construction side of things, 
it is a little bit tougher to access capital. When you are 
bonding projects or anything like that, the bonding company 
wants to see lines of credit in place, and unfortunately, I 
mean, Gary here said that you have skin in the game, which I 
believe is correct. But, on some of these other things that you 
are actually trying to do with the construction side, it is not 
as easy as it sounds, because that is where the challenges are 
with us as far as lending.
    Senator Shaheen. Well, and one of the things that is in the 
legislation that we just proposed would make permanent the fee 
waivers for SBA loans to veterans.
    But, Mr. Jeppson, can you talk a little bit about the kinds 
of things that you are doing to work with banks to address the 
credit piece?
    Mr. Jeppson. Yes, ma'am. If I could talk about the fee 
waivers just quickly.
    Senator Shaheen. Sure.
    Mr. Jeppson. So, if you look at 2011, which is our biggest 
lending year ever to veterans, we did about $118 million in the 
Patriot Express Loan, which had a higher fee, which we do not 
have anymore.
    Senator Shaheen. Right.
    Mr. Jeppson. And then we had--we did--out of the $1.2 
billion that we did, we saw a lot of veterans go to the lower-
fee loan. So, we believe that the fee will be a reduction, 
because that is a cash benefit up front. So, we support that.
    And, as I mentioned in my testimony, in the 2015 budget, we 
have asked for a continuation of that, the same as in your 
bill, and then to reduce that fee on 7(a) loans to half above 
350. That is a real tangible dollar savings up front that the 
veterans sees. So, we believe that that will have an impact.
    We continue to look at ways to improve the lending program 
for them, and we are really trying to dig into what are the 
biggest lending challenges facing veterans right now. We know 
anecdotally that credit score affects and challenges some of 
our veterans, as well as equity. You are not making a lot of 
money in the service. I have got a daughter who is in the 
Marine Corps, and I will tell you that with her $1,400 a month 
in pay, she is not building a big nest egg to invest in a 
start-up.
    So, those two things, credit, in some cases with the 
deployment schedules, it is hard for a service member to take a 
ding. But, that equity piece remain challenges.
    What we are also looking at is working with the traditional 
lenders to encourage them to reach out to the veterans' 
community to see where they can increase their lending. But, we 
have also started with my deputy to focus on the use of the 
nontraditional lending, if you will, through the Community 
Development Corporations and through the micro lending 
community, as well.
    I would mention, just briefly, that I recently attended a 
Vet Cap, which is a new program offered in partnership with 
Vets in Tech, where we are actually running panels across the 
nation where we will be bringing venture capital together along 
with angel investors, traditional lending, and SBA to focus on 
that and to actually talk to the veterans' communities where 
they can bring their business ideas. So, it is very exciting.
    Senator Shaheen. Good. You know, this a question that came 
really from New Hampshire, because what we have seen is that 
Boots to Business has really been limited in New Hampshire, and 
either you or Ms. Duso may want to answer this. But, can the 
kinds of initiatives that we have talked about to try and 
support veteran-owned businesses, can those services not be 
made available through existing programs? Like, is there an 
impediment to veterans to going to the SBDCs, for example, to 
get the same kinds of services that the Boots to Business 
provides? And, why are we setting up another program that may 
duplicate services that already exist for people?
    Mr. Jeppson. Yes, ma'am. If I could just answer that, and 
then I will let Ms. Duso fill in the details. Boots to Business 
is the actual transition program where we actually go on base 
and offer that for the transitioning service members. And so it 
is actually taught by the resource partners. There is about 20 
percent of the courses are actually taught by members of the 
District Office, but the rest of the courses are taught by the 
SBDCs, the WBCs, and the people local to the base. So, this is 
focused on the transitioning members.
    One of the single most important things we do is we teach 
them how to do a feasibility analysis and then help them write 
a business plan. But, key to all of that is that we introduced 
them to the resource partner network, because when they 
transition out of the service at the end of that year, they are 
going to go home to their locale and then they will look for 
those resource partners. They will engage the SBDC.
    And, I will tell you that, from personal experience, when I 
left the service the first time to go home and run a family 
business, I wish I would have known that there was an SBDC and 
a VBOC 45 minutes away. It would have kept me from making a few 
of those mistakes.
    So, I think it really enhances the existing programs and 
gets our service members an earlier introduction and helps set 
them off on the right footstep.
    Ms. Duso. And, you know, I think for me, from the VBOC 
perspective, there are a few things that I love about the 
program. First, I think it adds a lot of credibility to the 
military community that we are a veteran outreach organization 
and that that is our number one priority, as opposed to 
everybody. But, a veteran business owner faces all the same 
challenges that all other small business owners do, but they 
also face challenges that other small business owners do not 
face. And so we understand those challenges. We speak the 
language of a lot of the veteran business owners. And, we are 
experts in the benefits and advantages of being specifically a 
veteran-owned business. And so I think that that is where the 
advantages of the VBOC come in versus SBDC or WBC.
    Senator Shaheen. Thank you. My time is up.
    Chairwoman Cantwell. Senator Heitkamp.
    Senator Heitkamp. Thank you so much, to both you and the 
Ranking Member.
    I love this subject matter because it combines a couple of 
things that are critically important, which is welcoming home 
our veterans and giving them an opportunity, but also building 
American businesses. And so I am really excited about what you 
do and love hearing, Mr. Jeppson, about that you are not just 
looking at SBA, you are advising on angel funds, on 
Kickstarter, on the other kinds of alternative mechanisms, and 
there was one I wanted to talk to you about, but I do not 
remember the name of it, where you actually have a sponsor that 
brings you to the dance, so to speak, to the Web site and 
really--I just heard about this program from an SBA roundtable 
I just did in Dickinson, North Dakota.
    But, I want to touch on kind of two issues that are unique 
to those of us who have a lot of Indian Country in our 
territory. You know, Native Americans serve at a record number, 
and when they come home, there frequently is not a job back 
where they live, where their family lives in Indian Country. 
Capitalization of businesses in Indian Country is always very, 
very difficult, and making those transitions. And so I am 
wondering if you, in conjunction with the Native American 
portion of the VA, have collaborated on how we can build out 
more small businesses in Indian Country, for veterans in Indian 
Country.
    Mr. Jeppson. So, a great question, and it is one area that 
we have just turned our focus to. As we look at how we can 
expand entrepreneurial education to the 21 million veterans 
that exist, you know, we have this great program of Boots to 
Business for veterans who transition. We are looking into how 
we leverage this type of capability to those veterans through 
our resource partner network. We have started discussions not 
only with White House Native American Affairs, but also with 
our Office of Native American Affairs here, and we will be 
running a pilot on that in August of this year. So, we are in 
the formative stages of focusing on that under-served 
community.
    Senator Heitkamp. Well, it would be absolutely critical, I 
think. Probably in North Dakota, about ten to 15 percent of all 
the residents and Tribal members who live in Indian Country 
are, in fact, veterans. And frequently, they are under-served 
with veterans' services because of the remoteness or because 
there is not something that recognizes they are in a unique 
situation.
    My second question is, expanding on your capacity beyond 
just what SBA can do, and you guys do a great job trying to 
bring in all the partners, I am wondering if you found any 
State that has approached you or that you have approached to 
build out a greater development of this capability by working 
within State organizations, either Veterans Service 
Organizations or looking at one-stop shopping and various kind 
of State capacities.
    Mr. Jeppson. We have, and let me give three specific 
examples, and I will be quick. So, if you look at Montana, 
right now, one of our VBOCs is actually on a Reservation with a 
Veterans Service Organization, Rocky Boy Veterans Service 
Organization.
    If you look at the State of New Mexico, we have a VBOC that 
is actually hosted by the State Department of Veterans Affairs 
there, where they receive a lot of in-kind support and they 
leverage a lot of the State resources in their VBOC there.
    And then, thirdly, if you look at Illinois with Secretary 
Borggren [sic] and her team there, they have taken a lot of 
proactive initiatives, and they shared best practices with us 
and us with them on providing entrepreneurial education and 
training at the State level, using State funding. So, we 
partner and share best practices with them, and where 
appropriate, we use grant relationships to strengthen them.
    I would mention, if I could just briefly, as well, that if 
you look at EBV and V-WISE, those are both done as public-
private partnerships. You know, if you take an example for V-
WISE, we have almost a one-to-one match out of the private 
sector from great companies to V-WISE. By using that public-
private partnership, we are actually able to really execute at 
a much higher level than we could ever with public funding 
alone.
    Senator Heitkamp. Well, and just to put a fine point on it, 
North Dakota is blessed because we have something called the 
State-Owned Bank and a huge commitment to veterans, and I think 
there would be some great collaboration at the State Bank, 
looking at kind of building out capacity. And, I think, Jeanne 
made a great point, which is we have got all of these kinds of 
services out there. How do we utilize what we have? It sounds 
like you are already doing that. But, I certainly hope that you 
are looking at what are the State-based services, the State-
based commitments that we can do for all of our veterans and 
work that out.
    And, finally, I just have a little bit of time and just a 
quick suggestion. I think there are a lot of people out there 
who are at that point where they would like to invest in 
someone, and they sure would like to invest in a veteran. And, 
looking at angel funds or looking at trying to develop 
Kickstarters just for veterans, I think, would be an 
interesting idea, because I think it would be a lot of 
investors would be motivated to help American returning 
veterans.
    Chairwoman Cantwell. Thank you. Thank you.
    Senator Cardin.
    Senator Cardin. Well, Madam Chair, first of all, thank you 
for this hearing, and I thank all of our witnesses. This is an 
extremely important subject in which all of us are reaching out 
to our veterans' community to see how we can be more effective 
in helping them, particularly in the jurisdiction of the Small 
Business Committee.
    Mr. Jeppson, are you familiar with the Veterans Institute 
for Procurement at Montgomery County?
    Mr. Jeppson. I most certainly am. It is a great program.
    Senator Cardin. That is what I wanted you to say.
    [Laughter.]
    We are off to a good start.
    Mr. Jeppson. Sir, it absolutely is, and I think it fills a 
very, very needed niche, if you will, in where we are at. For 
those of you who are not familiar with it, VIP takes businesses 
that have been around for a while, have a minimum amount of 
revenue, and then helps them make the jump into government 
contracting here. It is really unique and they do a great job 
at it. Like everyone else, they struggle with the funding, but 
we work closely with Barbara----
    Senator Cardin. Do you want to explain how much money of 
the Small Business Administration goes to this program?
    Mr. Jeppson. We do not provide any money to that.
    Senator Cardin. That is what I wanted you to say.
    Mr. Jeppson. It is----
    Senator Cardin. This is 100 percent----
    Mr. Jeppson. It is----
    Senator Cardin [continuing]. Sponsored by the Montgomery 
County Chamber of Commerce.
    Mr. Jeppson. It is, and it is a fantastic program, sir.
    Senator Cardin. And it is nationwide in its help. It is not 
restricted to the businesses or veterans that live in 
Montgomery County, Maryland. They are helping veteran 
businesses throughout the country and doing this because of 
their patriotic sense that they should do something to help our 
veteran community.
    And, I have looked at some of the numbers. There were some 
early numbers in the program. These numbers have gone up 
dramatically since. But, they showed through surveys that they 
helped create 1,600 jobs, and most of those jobs were veterans, 
because veteran-owned businesses tend to be more likely to hire 
veterans and mentor veterans.
    And my point is this. I am very supportive of the programs 
we have. I think we need to build on them and we need to make 
sure we get the value. But here, we have a program that is 
totally privately run that is helping with a natural area that 
we can in Montgomery County, Maryland, on government 
procurement, because of our location and our expertise, are 
helping provide the wherewithal that veteran-owned businesses 
can get the type of help through government procurement to grow 
and create more jobs, et cetera.
    So, I guess my point is, there seems to me there should be 
some way that the SBA can take this model and try to leverage. 
You point out they are having difficulty in continuing this 
program year in, year out, because of the budget problems, et 
cetera. But, to the extent that we can leverage private sector 
involvement to help our veteran community where they have a 
proven record of success, it seems to me this is a natural for 
us to try to build partnerships with so that we can do more to 
help our veteran community.
    That is a lead for you to agree with me.
    [Laughter.]
    Mr. Jeppson. Sir, I could not agree more. We have had--we 
have had a lot of people go up there, from my office, go up 
there and actually participate in the program and observe the 
program, and it is a great program, and Barbara Ashe does a 
fantastic job there. In a less resource-constrained environment 
for us, they are certainly one of the types of programs that we 
would look to replicate across the nation. They do--I cannot 
really speak highly enough of the program.
    Senator Cardin. Well, I appreciate that, and I would just 
urge you--one thing you could do that would not cost any money 
is to promote what is being done by the private sector to help 
our veteran community. It is interesting. I think they tried to 
work with DOD and did not receive a lot of cooperation in 
trying to promote these programs and they were directed to the 
SBA. So, I would hope that the SBA would be a friendly 
environment to figure out how these types of programs can be 
expanded. And, again, it is not so much looking for money, it 
is looking for ways to make these sustainable programs and 
helping the private sector direct their own funds in the most 
constructive way.
    Mr. Jeppson. Yes, sir. And, I would add to that, if I may, 
that as we see successful businesses come out of the new 
starts, from Boots to Business, it is going to be essential 
that we have programs like this that can help them with that 
growth, because, as I mentioned earlier, it is that 20 percent 
of small businesses actually go to that growth. That is where 
the job generation happens.
    They are a lot of self-employment, and that is a wonderful 
thing. There are a lot of guys who leave the service, are going 
to go to, like a, you know, like my hometown of Blountstown, 
Florida, and they are going to be a welder and a small business 
owner and that is fantastic. But, there is that 20 percent that 
are going to be the job creators, and there is a good segment 
that will be in the government contracting arena and others who 
will need that help to make it from that. The needs of a start-
up are certainly different than the needs with a two or three 
or a couple million dollars revenue trying to make that jump, 
and we need to be there with them for that.
    Senator Cardin. Thank you. Thank you, Madam Chair.
    Chairwoman Cantwell. Thank you.
    I am going to ask another round of questions, so if any 
members want to, you are welcome to stay to do that. But, I am 
going to ask you, Ms. Payton, you made some testimony about 
removing the Federal caps and the sole source authority. Can 
you expand on that, about why you think that is so important in 
helping small businesses?
    Ms. Payton. From my experience, the competition and the 
market in the Federal contracting arena is extremely difficult 
for small women-owned businesses. So, when you get the audience 
of a program manager in a Federal agency and you get the 
audience of a contracting person that is willing to set aside 
opportunities because of the products that you provide, those 
caps can impede that progress which turns that into a real 
opportunity for business. So, removing those caps in places 
where it does not really make sense is, I think, going to open 
up the market for women-owned small businesses and allow the 
government to reach the goals that they have set and have tried 
to expand.
    Chairwoman Cantwell. Okay. And, do you have any comments on 
the waiving of the fee on the financial side that Mr. Proulx 
and other people have testified to?
    Ms. Payton. Well, yes. My fee was waived under the Recovery 
Act, and so I continue to renew my line of credit that I have 
had from years ago. So, if you have to pay that fee and you 
have to add that to your overhead, every little bit counts, 
especially as a small business. You are competing amongst other 
small businesses that have very lean operations. So, the fee is 
another thing that you have to work to build into your product, 
and it can be very difficult when the bank has their set of 
fees and then the SBA has fees that you have to pay, as well.
    Chairwoman Cantwell. And so, Ms. Duso, are you seeing this 
as a key issue in some of the things that you have seen in the 
Pacific Northwest, the fee as a barrier to actually getting 
businesses financed?
    Ms. Duso. I think any expense to a business is a barrier to 
getting them financed. The fee, you know, having the fee waived 
specifically is a great idea. I love it. It is more money into 
the pockets of those veterans up front. And Trena said, you 
know, she quit her job and kind of took the, I like to call it, 
burning the boats approach to starting her own business. And so 
a lot of times, people are living off of their savings, or they 
have just transitioned out of the military and maybe they have 
some kind of money that they have received, and so they are 
trying to live off of that money up front at the beginning, and 
any of that up-front beginning savings is a gateway for them to 
be able to more quickly create more revenue and add that money 
back into their business operations.
    Chairwoman Cantwell. Mr. Jeppson, Senator Risch brought up 
this very important point about metrics, and I understand from 
your answer about some of these programs are just getting 
underway. But, do you have any metrics on how many people may 
have gotten to that point on the financial thing but decided to 
turn back because of the fee?
    Mr. Jeppson. We do not, and I will be honest. On the fee 
piece with the Veterans Advantage, we have only had about--we 
have only got a first quarter, because we just started it at 
the first of the year. So, we are still a little new into that. 
We looked at the overall total lending. It is consistent with 
what we have seen in the past two years. So, we think that with 
a little more time and a little more outreach to the veterans' 
community, let them know about this advantage and the fact that 
the new--with the new piece that we will implement at the 
beginning of the fiscal year with the reduction above 350, we 
think that we will see kind of an acceleration of lending back 
on veterans.
    Chairwoman Cantwell. What was the higher amount?
    Mr. Jeppson. So, the fee will be reduced to half for 7(a) 
loans above $350,000 for veterans. So, right now, on a loan up 
to $350,000, a veteran can save over $5,000 on that loan. They 
will pay half the fee above that. So, if a veteran was looking 
for a million-dollar line of credit, that could be a $50,000 
savings to him.
    Chairwoman Cantwell. I think measuring, having some 
assessment, even if you can just on that portfolio of packages 
that have been approved on this program, I think would give us 
some understanding about what the market demand is, so to 
speak, for SBA loans under this program and give us some idea. 
It is hard to think, and the stories that I have heard today, 
that people are going to have $50,000 laying around for 
financing of an idea. You are talking about Boots to Business. 
To me, I just think about bootstrapping in general, and any 
small business is more in the bootstrapping mode. So, coming up 
with $50,000 seems like a huge barrier. But, anyway, I would 
love to know more.
    Mr. Proulx, did you have any comment on that before I turn 
it back over to my colleagues?
    Mr. Proulx. Yes. On that loan that he was talking about, 
the million dollars, I am actually going through the CAPline 
right now and that SBA fee/cost is roughly $30,000, is what I 
have got to pay up front right now, where I am looking at, just 
to secure a million-dollar line. So, right now, they are 
looking for a $30,000 fee.
    Chairwoman Cantwell. Okay. Good.
    Senator Risch.
    Senator Risch. Thank you, Madam Chair. I am going to pass 
on any further questions.
    Chairwoman Cantwell. Okay. Senator Shaheen.
    Senator Shaheen. We have been talking about procurement, 
and I know, Dan, one of the things you talked about in your 
testimony was the support from PTAP, the New Hampshire 
Procurement Technical Assistance Program, to help guide you 
through the process initially. Can you talk about what, from 
your perspective, we could do to improve the Federal 
procurement process in a way that would be more user friendly?
    Mr. Proulx. You know, the PTAP and the SBA have been very 
helpful in my region. I think with the procurement on the 
Federal side of things, with the DOD, they are still doing the 
self-verification, unlike the VA, which is doing the CVE. And, 
I think that with the fraud possibly on the DOD side, because 
they do not have that extra--with DOD being self-verification, 
not actually putting the teeth in DOD contracting I think on 
the DOD side, you would have a little bit more where the 
veteran or the service-disabled veteran-owned company would 
have a better procurement process on the DOD side.
    Right now, the VA kind of weeded out a lot of the fraud, 
which, when I started in 2008, there were approximately 6,500 
companies registered in the VA CVE, in our construction NAICS 
code and that was self-verification. In 2010, President Obama 
put the teeth into it. We are looking at, right now, 1,280, 
approximately, veteran-owned businesses that are actually 
registered in that CVE. So, you are looking at almost 5,000 
companies that were potentially fraud or had just disappeared.
    And I am sure, on the procurement DOD side, you are 
probably looking at--there has got to be potential fraud on 
that end. So, on the DOD procurement side, I would like to see 
some type of legislation with the veterans on that end, and 
also with the procurement process, with bonding fees and things 
like that. We find that when we do an RFP, some of these 
agencies are not promptly awarding these projects. So, it could 
be pushed out a year. So, by then, a job that is a million or 
two million dollars, I am actually tying up my bonding for one 
to two million dollars until that project is awarded, and that 
could take up to a year. When you are talking a small business 
whose bonding is being strung out for a year or two, that is 
painful. You have a business to run and that can really hurt 
your business.
    So, on the DOD side, if the fraud issue would be looked at, 
and then if the RFPs and the awards could go out more quickly 
on the procurement end, that would be great.
    Senator Shaheen. Good. Thank you.
    Ms. Payton, I know that you talked about the challenges 
that women face. As we looked at our Veterans Entrepreneurship 
Act, one of the things we learned is that even though women now 
make up 14 percent of the military, only about four percent of 
veteran-owned businesses are owned by women. So, one of the 
things that we have included in our Act are a requirement that 
SBA examine whether the counseling programs are actually 
reaching women veterans to help them as they think about what 
options might be available to them. Can you talk a little bit 
about what some of the hurdles are that women veterans might be 
facing as they are looking at trying to start a small business?
    Ms. Payton. Yes. You know, there is a camaraderie that 
comes with being in the military, and then when I experienced 
the V-WISE program, the camaraderie sort of extended to other 
women that wanted the business. So, I think that when you 
create a community of people with like interests, what happens 
is they tend to support each other and they tend to lend 
themselves as being a resource.
    So, I know that there are plenty of programs out there that 
provide counseling, that provide education, but that missing 
link was the networking and the camaraderie and the support 
that came at the V-WISE conference. And so that, coupled with 
the learning and education with the industry experts, that sort 
of clicked for me. I normally do not think of my service on a 
day-to-day basis, but when we got together as soldiers, that 
natural sort of kinship really sort of clicked for me.
    Senator Shaheen. Thank you.
    Mr. Jeppson. Senator, if I could just briefly add----
    Senator Shaheen. Sure.
    Mr. Jeppson [continuing]. Along that, just two points, 
quickly. V-WISE is--it is a great program, and when I first 
came in, I thought, well, why do we have to have something--a 
veteran is a veteran. Why are we differentiating? But, after 
having been to one, I clearly see the value in it. And, one of 
the things that we asked the private partners to give as well 
as money is their mentors to come along there.
    I would point out that with Boots to Business, as we track 
the cohort that goes through Boots to Business right now, a 
quarter of the participants in Boots to Business are female. 
And so when you consider that 14 percent of the service is 
female, they are over-indexing, or we have a lot more female 
veterans choosing the entrepreneurship track than are in the 
service. So, we think that this will help increase the number 
of female small business owners.
    Senator Shaheen. Good. Thank you very much. Thank you all.
    Chairwoman Cantwell. Good. Well, I want to thank all the 
witnesses. Obviously, as usual in a hearing, we will leave the 
record open for two weeks. So, if any of my colleagues who are 
not here wanted to submit questions for the witnesses, they can 
do so, and we will keep that for the official record.
    But, I thank all of you very much for being here and for 
your testimony and for your leadership on this important issue. 
You certainly have told us a lot of inspirational things today 
about what veterans are doing to help our economy grow, and we 
certainly want to partner with you all in making that happen 
even at a higher rate through the more efficient and effective 
use of these programs.
    So, if nothing else, we are adjourned.
    [Whereupon, at 4:28 p.m., the committee was adjourned.]
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