[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
SBA'S ENTREPRENEURIAL DEVELOPMENT
PROGRAMS: RESOURCES TO ASSIST SMALL BUSINESSES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CONTRACTING AND WORKFORCE
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
MARCH 30, 2017
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 115-013
Available via the GPO Website: www.fdsys.gov
__________
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24-760 PDF WASHINGTON : 2017
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HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
TRENT KELLY, Mississippi
ROD BLUM, Iowa
JAMES COMER, Kentucky
JENNIFFER GONZALEZ-COLON, Puerto Rico
DON BACON, Nebraska
BRIAN FITZPATRICK, Pennsylvania
ROGER MARSHALL, Kansas
VACANT
NYDIA VELAZQUEZ, New York, Ranking Member
DWIGHT EVANS, Pennsylvania
STEPHANIE MURPHY, Florida
AL LAWSON, JR., Florida
YVETTE CLARK, New York
JUDY CHU, California
ALMA ADAMS, North Carolina
ADRIANO ESPAILLAT, New York
BRAD SCHNEIDER, Illinois
VACANT
Kevin Fitzpatrick, Staff Director
Jan Oliver, Deputy Staff Director and Chief Counsel
Adam Minehardt, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Steve Knight................................................ 1
Hon. Stephanie Murphy............................................ 2
WITNESSES
Mr. W. Kenneth Yancey, Jr., CEO, SCORE, Herndon, VA.............. 5
Ms. Antonella Pianalto, President and CEO, Association of Women's
Business Centers, Washington, DC............................... 6
Mr. Charles Rowe, President & CEO, America's Small Business
Development Centers, Burke, VA................................. 8
Mr. Joseph C. Sharpe, Jr., Director, National Veterans Employment
& Education Division, The American Legion, Washington, DC...... 10
APPENDIX
Prepared Statements:
Mr. W. Kenneth Yancey, Jr., CEO, SCORE, Herndon, VA.......... 22
Ms. Antonella Pianalto, President and CEO, Association of
Women's Business Centers, Washington, DC................... 35
Mr. Charles Rowe, President & CEO, America's Small Business
Development Centers, Burke, VA............................. 45
Mr. Joseph C. Sharpe, Jr., Director, National Veterans
Employment & Education Division, The American Legion,
Washington, DC............................................. 55
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
SBA'S ENTREPRENEURIAL DEVELOPMENT PROGRAMS: RESOURCES TO ASSIST SMALL
BUSINESSES
----------
THURSDAY, MARCH 30, 2017
House of Representatives,
Committee on Small Business,
Subcommittee on Contracting and Workforce,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:01 a.m., in
Room 2360, Rayburn House Office Building, Hon. Steve Knight
[chairman of the Subcommittee] presiding.
Present: Representatives Knight, Murphy, Evans, and Clarke.
Chairman KNIGHT. Good morning. Thank you for coming to the
Subcommittee on Contracting and Workforce. We are--I will state
this quickly--we will be voting today. And we are keeping an
eye on the votes, but we are expecting, over the next probably
15, 20 minutes, they are going to start voting. And so I will
normally take a recess about 5 minutes into the voting so
everybody has enough time to walk down there and vote and do
all those things.
But we will get going. Entrepreneurship in our Nation is
truly an aspect of the American Dream. It is about hard work,
long hours, and sacrifices all in the name of creating the
newest product, the newest service, or the next great American
company. The risks are high, but the rewards can be even
greater.
From the startup company in my home district in California
to the entrepreneurs and innovators all over the country, small
businesses employ approximately half of all workers in the
United States. When startups are creating jobs and growing, so
does the United States economy. However, the Nation experienced
a downturn after the financial crisis in the late 2000s, and we
are only now beginning to see a recovery materialize.
Unfortunately, despite recent business optimism, the
challenges and obstacles confronting entrepreneurs are still
daunting. Instead of focusing their time and energy on growing
their endeavors and creating jobs, small businesses are faced
with a reality filled with rules, regulations, and a
constrained lending environment. Recent reports identify
healthcare costs, regulatory compliance, and burdensome Tax
Code as the top hurdles impacting the Nation's small
businesses. Frequently short on time and wearing many hats
within these new startups, entrepreneurs need guidance and
assistance.
This hearing today is about exploring the resources
available to entrepreneurs, startups, and small businesses as
they navigate a complex business ecosystem. We will hear about
the technical assistance and experts' advice available to them
through the Small Business Administration's entrepreneurial
development programs.
With approximately 29 million small businesses in the
United States, the programs within the SBA must operate
efficiently and swiftly as the entrepreneurs they seek to help.
I am looking forward to hearing about the details of these
programs: How do they help entrepreneurs? How do they assist
startups traversing the regulatory environment? How can the
programs be improved to better assist small businesses?
And that is always our mission here, is to see what we can
do. If it means streamlining, then that is what it means. If it
means that programs are working and we can help them, that is
what that means. But our mission, at least in my opinion, is
always how we can help small businesses to achieve and do more
and employ and do all of those things that we are hoping that
small businesses can do on a daily basis.
So I appreciate all of you being here today, and I look
forward to your testimony.
I now yield to Ranking Member Murphy for her opening
comments.
Mrs. MURPHY. Thank you, Mr. Chairman.
The SBA administers a portfolio of Entrepreneurial
Development programs, including Small Business Development
Centers, Women's Business Centers, the Service Corps of Retired
Executives or SCORE, and Veterans Business Outreach Programs.
These initiatives provide aspiring entrepreneurs and
existing businesses with invaluable counseling, training,
technical assistance, and mentorship. Whether it is help
creating a business plan, navigating the procurement process,
marketing a new product, or identifying international trade
opportunities, the SBA's entrepreneurial development programs
provide an array of services to help small firms navigate
regulatory obstacles, grow, and thrive.
The agency's network of Small Business Development Centers,
or SBDCs, is one such program. SBDCs operate in nearly 1,000
locations across the country and are located at colleges,
universities, Chambers of Commerce, and local economic
development corporations, allowing them to harness local
community resources.
In a single year, this initiative has helped more than
13,000 entrepreneurs launch new businesses, advise nearly
200,000 clients, provided training sessions for over 260,000
attendees, and helped clients obtain $4.6 billion in financing.
Clearly, SBDCs are a vital part of our Nation's entrepreneurial
system.
The SBA has also undertaken efforts to connect younger
entrepreneurs with more experienced business men and women
through the SCORE program, an expansive network of
entrepreneurs, business leaders, and executives who volunteer
as mentors to small firms both in person and online.
SCORE has grown to become one of the federal government's
largest volunteer business advisor and mentoring programs, with
over 11,000 business professionals at over 320 chapters
nationwide. By offering advice from real world professionals,
SCORE is helping many business owners within all categories of
the entrepreneurial community.
Small businesses are as diverse as our nation, and the SBA
has entrepreneurial development initiatives targeted at
specific demographic groups. Women's Business Centers, or WBCs,
are a critical initiative for female entrepreneurs. WBCs
provide indepth counseling, training, and mentoring to small
firms, resulting in substantial economic impact as measured by
successful business startups, job creation and retention, and
increased company revenues.
Women business owners have used this program to develop
business plans, obtain financing, and expand their operations.
In Fiscal Year 2015, over 100 WBCs reached 130,000 clients and
helped 700 new businesses get up and running.
Even though female entrepreneurship is on the rise, there
remain significant gaps between men and women-owned businesses.
As more women turn to entrepreneurship as a career path, it is
critical that this initiative remain in place to close these
gaps.
Finally, there are a range of SBA programs targeted at our
veterans, most notably the Veterans Business Outreach Centers,
which serve over 60,000 clients each year. The VBOC program,
along with Boots to Business and other veteran-oriented
initiatives, ensure that our servicemembers have the tools they
need to go into business for themselves.
With respect to each of these programs, it is vital that
taxpayer resources are being used wisely and to maximum effect.
That is why this Committee has long pushed for clearer metrics
and accountability, especially among the newer pilot programs
at SBA. However, the stated goal of eliminating duplication
should not be used as an excuse to underinvest in
entrepreneurial development.
I was disappointed to see that the Administration's recent
budget blueprint calls for a 5-percent reduction for SBA. It is
my hope that this Congress will provide robust funding for SBA
entrepreneurial development programs that have a proven track
record of helping small businesses create jobs and stimulate
economic growth.
That is why Chairman Knight and I recently wrote a letter
to the relevant Appropriations Subcommittee in support of these
programs. Small businesses are the backbone of the American
economy, and we should provide our entrepreneurs with the
critical resources that they need to succeed.
I look forward to hearing how these programs are helping
meet that need and what we can do to improve them. I thank the
witnesses for being here and for their insight, and I yield
back.
Chairman KNIGHT. Thank you very much.
And if any other Committee members have a statement, we
will take that in writing.
We are going to go vote. So I am probably going to stop it
right here before I get into everyone's comments. And I don't
want to cut anyone off. So what I am going to do is allow
members to go vote, and then we will start up as soon as votes
are over and as soon as we can get back here. And then we can
kind of have a good meeting all together. Okay.
And we will reconvene, I would say, 5 or 10 minutes after
votes. And we are in recess.
[Recess.]
Chairman KNIGHT. Okay. The Committee will reconvene. Thank
you very much for your patience. I think we got through that
fairly quickly.
And we will go through to introductions. So today we have
four witnesses. Our first witness is Kenneth Yancey. Mr. Yancey
is the chief executive officer at SCORE, where he has directed
the office for over two decades. Before taking on the
leadership role at SCORE, he was the executive director at the
National Business Association. With years of experience, Mr.
Yancey can often be seen on national television networks and
heard on national radio shows discussing topics focused on
small businesses and entrepreneurship. And we thank you for
being here.
Ms. Antonella Pianalto. Our next witness is Ms. Antonella
Pianalto. Ms. Pianalto is the president and chief executive
officer of the Association of Women's Business Centers. Having
spent years at American Express leading legislative,
regulatory, public policy, and advocacy efforts, along with the
Company's Small Business Saturday Initiative, she has years of
experience of interacting and working with small businesses.
She has also previously been a senior adviser to the U.S.
Ambassador to the United Kingdom, a Deputy Assistant to the
President for Presidential Personnel at the White House, and an
Associate Administrator for Management and Administration at
SBA.
We thank you for being here.
Third, I would like to introduce Mr. Tee Rowe. Our witness,
Mr. Rowe, is the president and chief executive officer of
America's SBDC, the resource partner for the Small Business
Development Centers. He joined America's SBDC in 2009 after
spending multiple years at the Small Business Administration,
where he first served as the Assistant General Counsel for
Legislation and Regulation and then as the Associate
Administrator for Congressional and Legislative Affairs. Prior
to his time at SBA, Mr. Rowe served the House Small Business
Committee for numerous years.
And we welcome you back.
Now I would like to yield to the ranking member for her
introduction to our final witness.
Mrs. MURPHY. It is my pleasure to introduce Mr. Joseph
Sharpe, Jr., the director of the Veterans Employment and
Education Commission at the American Legion. Prior to being
director, he served as the deputy director of the economic
division, healthcare field representative, and assistant
director of the Veterans Affairs and Rehabilitation Commission.
In 1982, Mr. Sharpe entered the United States Army, where
he served as a drug and alcohol counselor for the 2nd Infantry
Division in South Korea. He was also appointed as the
noncommissioned officer in charge of inpatient social work and
psychiatry service at Walter Reed Army Medical Center. Later,
during his military service with the Army Reserve Sergeant
First Class, Mr. Sharpe was deployed twice overseas and
received a bronze star medal.
Mr. Sharpe is a graduate of the Johns Hopkins School of
Advanced International Studies in Washington, D.C., where he
earned an M.A. in international relations and economics. He
also has two graduate certificates in international business
and trade and in healthcare management from Georgetown
University. Mr. Sharpe also earned his B.A. in sociology from
the University of Maryland, College Park, Maryland.
Welcome, Mr. Sharpe, and thank you for testifying today.
Chairman KNIGHT. Thank you all for being here.
So the way this works is you get 5 minutes or so. I am
pretty lenient on that. But as the lights start to go in the
order of a stoplight, then you will know where you are.
So 5 minutes, and we will start with Mr. Yancey.
STATEMENTS OF W. KENNETH YANCEY, JR., CEO, SCORE, HERNDON,
VIRGINIA; ANTONELLA PIANALTO, PRESIDENT AND CEO, ASSOCIATION OF
WOMEN'S BUSINESS CENTERS, WASHINGTON, D.C.; CHARLES ROWE,
PRESIDENT & CEO, AMERICA'S SMALL BUSINESS DEVELOPMENT CENTERS,
BURKE, VIRGINIA; JOSEPH C. SHARPE, JR., DIRECTOR, NATIONAL
VETERANS EMPLOYMENT & EDUCATION DIVISION, THE AMERICAN LEGION,
WASHINGTON, D.C.
STATEMENT OF W. KENNETH YANCEY, JR.
Mr. YANCEY. Subcommittee Chairman Knight, Ranking Member
Murphy, members of the Subcommittee, thank you for inviting me
today and for the opportunity to offer testimony updating the
Committee on SBA entrepreneurial development programs, and
specifically SCORE. I would ask that my written testimony be
read into the record, please.
As an independent board-directed nonprofit, SCORE is the
Nation's largest network of volunteer expert business mentors,
with more than 10,000 volunteers across 300 chapters. We offer
free and confidential mentoring and advice to current and
aspiring small-business owners, as well as low-cost or no-cost
educational workshops.
In 2010, SCORE made the decision to become data-driven.
Since then, SCORE has developed measurement capability with a
focus on quality and service metrics. We have developed systems
and software that allow us to run all aspects of our operations
in a more businesslike manner.
Today, I will share just a few of the statistics that we
use to measure our success, our impact, and our value to small-
business owners and to the American economy.
In 2016, SCORE helped clients create 54,000 new jobs--new
businesses, excuse me, and add 79,000 new jobs. During 2016,
during fiscal year 2016's SCORE's clients stayed in business.
Ninety-six percent of SCORE's clients who were operational for
more than a year when they came to SCORE remained in business
in 2017.
SCORE is the most efficient, most effective business
formation and job-creation engine funded by the Federal
Government. Our cost to create a job is estimated at $133; our
cost to create a business, $194. In 2016 alone, SCORE clients
returned an estimated $46 in new tax revenue to the Treasury
for every dollar appropriated to SCORE.
Last year, SCORE volunteers donated 2.2 million hours and
provided 542,000 total chapter services, nearly a 9-percent
increase over the previous year. SCORE's client satisfaction
metrics have steadily improved over the last 6 years. SCORE's
2016 client engagement and impact survey showed that 83 percent
of clients are likely to recommend SCORE.
SCORE's 10,000 volunteer mentors represent approximately
300,000 years of business experience and provide the practical
knowledge and long-term emotional support that clients need to
thrive in the small-business arena. SCORE recruits more than
3,000 new volunteers annually. In 2016, 12 percent of our new
volunteers were former clients. All new volunteers participate
in extensive training and are certified in SCORE's mentoring
methodology.
Diversity is a core value at SCORE. SCORE is working with
diverse organizations to attract new clients and volunteers
from underrepresented communities. Organizations include the
National Urban League, African American Mayors Association,
Immigrant Business, Veterans Business Network, the Latino
Coalition, and the U.S. Black Chambers.
Fifty-eight percent of SCORE's clients were women last
year; 35 percent were minorities; and 11 percent were veterans.
On the volunteer side, 27 percent of SCORE volunteers are
minorities; 20 percent are women, compared to 17 percent in
2015. The average volunteer age has decreased from 72, in 2012,
to 67, in 2015, reflecting SCORE's increased efforts to recruit
active as well as retired entrepreneurs.
As SCORE plans for the future, we continue to provide
innovative solutions to meet our clients' needs. Last year,
SCORE produced two virtual conferences that helped more than
2,500 attendees. Participants learned from speakers in a
virtual environment, met sponsors and mentors, networked with
each other in real time, and asked questions via live chat.
Ninety-seven percent of the attendees of both conferences
reported that the conference helped them.
SCORE also successfully piloted video mentoring with
support from the Kauffman Foundation. The program connects
mentors and clients using services such as Skype to provide
remote face-to-face experience for entrepreneurs. Video
mentoring clients showed the highest level of client engagement
in SCORE, reporting client satisfaction of 4.3 out of 5. Based
on SCORE's demonstrated impact, we respectfully request support
for a $13 million appropriation for SCORE in fiscal year 2018.
This represents a $2.5 million increase. SCORE is scalable.
With a relatively small investment, we can provide even greater
value to the Federal taxpayer and to our Nation's economy.
Thank you again for your long support of SCORE and for
allowing us to testify. I will be happy to answer questions at
the appropriate time.
Chairman KNIGHT. Very good.
And, Ms. Pianalto, you are now recognized for 5 minutes.
STATEMENT OF ANTONELLA PIANALTO
Ms. PIANALTO. Thank you.
Chair KNIGHT, Ranking Member Murphy, and distinguished
members of the Subcommittee, thank you for the opportunity to
testify before you today.
My name is Antonella Pianalto, and I serve as the president
and CEO of the Association of Women's Business Centers, or
AWBC. We support Women's Business Centers, or WBCs, by
providing training, programming, and advocacy to improve their
services to women entrepreneurs. As the advocate for this
critical program, it is an honor to be here today.
The Women's Business Center Program is a public-private
partnership with more than 25 years of success in providing
training, counseling, mentoring, and access to capital to women
entrepreneurs. The WBC program was created by Congress as part
of H.R. 5050, the Women's Business Ownership Act of 1988. The
bill noted that women as a group are subjected to
discrimination in entrepreneurial endeavors due to their
gender. Congress sought to remedy this with the creation of the
WBC program.
WBCs are the only resource partners mandated to serve
socially and economically disadvantaged individuals. The
program has increased from four demonstration sites to a
network of 113 grants, leveraged to more than 150 locations in
48 States and territories.
Unfortunately, resources for the program have not grown in
parallel, and the more than 50 percent increase in centers over
the last 15 years has been matched by only a 25-percent
increase in funding. Nonetheless, WBCs have continued with
their mission. In the last decade, WBCs have served more than 2
million women entrepreneurs leading to the creation and
expansion of tens of thousands of new businesses and jobs.
In 2016, our centers reached more than 145,000 clients and
conducted over 93,000 hours of counseling and over 15,000
training sessions. Nearly half of the WBCs are direct lenders
and, in 2015, assisted with nearly $429 million in capital
infusion and, last year, helped to secure nearly $40 million in
government contracts. In 2015, 96 percent of clients reported
revenue growth totaling $658 million, creating nearly 25,000
jobs.
WBCs make a concerted effort to reach underserved
populations. Forty-five percent of clients in 2016 were
minorities, and a recent survey found that 64 percent of
clients were economically disadvantaged. The majority of WBCs
provide programming in two or more languages, and overall
services are provided in more than 35 languages.
Finally, the WBC program has been a good investment of
taxpayer dollars. Federal dollars are matched more than three
to one, surpassing the required match. For every invested
dollar, the program returns $46 to the economy.
As the program has grown in size and influence, some have
expressed the opinion that WBCs duplicate services provided by
other resources. I would like to address that. What makes WBCs
unique is the depth and breadth of our services. Women come to
WBCs because we address four critical areas: competence,
confidence, capital, and connection.
Women view their local WBC as a trusted advisor and partner
for the lifetime of their company. Clients consistently say
that they come to the WBCs not just for the business education
but for the supportive environment that helps build self-
efficacy and confidence in their ability to succeed. Evaluation
data indicate that women who receive business assistance from
WBC programs build larger businesses, create more jobs, and
have a significantly higher survival rate than the national
average.
For example, Chair Knight, Women's Economic Ventures, which
serves the Simi Valley, developed the Thrive in Five program.
Clients participating in this 5-year program show median sales
of $400,000 and have created an average of five jobs. Moreover,
95 percent of the clients who were in poverty at intake have
moved out of poverty. More examples from dozens of centers are
included in my written testimony.
The program does need modernizations. Since the early years
of the program, the grant amount from SBA has decreased as much
as 15 percent. Similarly, while the networks of centers span
the country, too many communities do not have access to the
unique services provided by WBCs. In addition to allowing for
the expansion of existing centers, new centers are needed in
geographies unaddressed by the program.
Finally, the program continues to suffer from burdensome
requirements. For example, up until 2015, OMB regulations
forbade WBC directors from fundraising while on the job, even
though they were required to match the Federal funds. The
challenges the program faces have legislative solutions. The
AWBC is tremendously grateful to Chair Knight's recent
introduction of H.R. 1680 and to Representative Lawson for
cosponsoring. We endorse it wholeheartedly.
The AWBC supports the recently introduced H.R. 1774
sponsored by Ranking Member Velazquez and cosponsored by Chair
Chabot. Many of this Subcommittee's members have cosponsored
similar legislation in the past, and for that, we are grateful.
The legislation strengthens centers in three ways: It
increases the program authorization to $21.75 million,
modernizes grant levels to $185,000, and streamlines certain
administrative requirements. In addition to reauthorization,
the upward trajectory of the program is deserving of more
Federal funds. While not the purview of this Subcommittee, we
have requested $21.75 million for fiscal year 2018.
In the formation of the WBC program, Congress determined
that barriers warranted the creation of a network of centers to
assist women entrepreneurs. Those challenges persist, as must
the commitment of the new Congress to advancing policies that
foster women's business ownership.
We appreciate this Committee's dedication to the
modernization of SBA's resource partners and your willingness
to hear from us. The WBC program is a proven and effective
public-private partnership and fills a growing need for the
distinct population we serve.
Thank you for the opportunity to testify, and I am happy to
answer any questions.
Chairman KNIGHT. Thank you very much.
And we will go to Mr. Rowe.
STATEMENT OF CHARLES ROWE
Mr. ROWE. Thank you, Mr. Chairman, Ranking Member Murphy,
members of the Subcommittee. My name is Tee Rowe, president of
America's SBDC representing the 63 SBDC networks, their nearly
1,000 centers, and over 4,500 professional staff.
SBDCs are primarily hosted by colleges and universities and
have a mandate to cover the entire State they operate in. Our
host institutions and partners contribute matching funds to
exceed the Federal funding by some $20 million every year. SBDC
funding is allocated as a result of the statewide mandate on a
population basis with a minimum funding level for smaller
States.
We serve small businesses at all stages: About 60 percent
are existing businesses; 40 percent are startups; 45 percent of
SBDC clients are women; 38 percent are minorities; and 10
percent are veterans.
Last year, the SBDC served over 192,000 counseling clients
and delivered over 1.2 million hours of counseling. The
majority of our advisers have business degrees and past
entrepreneurial experience; many, in fact, have been serial
entrepreneurs.
SBDC services are not monolithic. They are basic services
that SBDCs offer: business planning, marketing, et cetera. But
it is the specialized offerings that make SBDCs different. Our
accreditation process requires SBDCs to survey the needs of
small-business community and tailor their services accordingly.
In essence, SBDCs are 63 laboratories dedicated to small-
business growth. I can't list everything they offer, but I
would like to share some of the specialized services.
Intensive entrepreneurship. These programs offer weeks of
training and counseling and are geared to businesses with high-
growth potential. They aren't limited to a certain size of type
of business, and SBDCs often find that certain startup
businesses can benefit a lot from intensive training.
Incubators and accelerators. SBDCs support and host
incubators and accelerators all across the country, just to
name a few: Pennsylvania, Kentucky, Colorado, Arizona,
California, and the list goes on. I googled it, and I got
shocked by how much my guys are doing. And with an SBDC, an
incubator client receives not just the peer mentoring but
engagement with a highly trained adviser and that higher
education is a critical component in today's economy.
Export assistance. Under the JOBS Act a few years ago,
SBDCs expanded their capacity, certified more export counselors
than were required by the act, and retained those staff when
the funding lapsed. We now have over 640 export counselors and
many are NASBITE-certified global business professionals.
We also offer training in export regulations, shipping
compliance, and the like, and we are working in Latin America
and the Caribbean to help those countries develop their own
Small Business Development Center networks.
Veterans assistance. SBDCs have assisted hundreds of
thousands of veterans. In 2015 and 2016, SBDCs counseled and
trained over 60,000 veterans. Several of our States have
specialized programs. New York has a comprehensive veterans
program that includes an online training program with
coursework and live SBDC advising at the same time.
A sample of the impact from that at the Watertown SBDC--and
that is a small one--they assisted 884 veterans in the last 4
years resulting in 31 business starts and 197 new jobs. And we
also work proudly with SBA to carry out the Boots to Business
program, which is a great first step for vets interested in
small business.
Disaster assistance. SBDCs are an integral part of SBA's
disaster assistance effort. We set up the business recovery
centers and help staff them in support of SBA. But we also do
more than that, and an example of SBDC innovation and disaster
is the Florida SBDC's app ``Disaster,'' which features
resources to help small businesses prepare for and recover from
disasters, and you can download that off of Google Play for
free.
Finally, procurement assistance. SBDCs offer assistance in
certifications, searching for contract opportunities, and bid
proposal compliance. We have got a longstanding relationship
with the Procurement Technical Assistance Centers. Many PTACs
are actually part of or colocate with SBDCs, leveraging all of
our infrastructure.
And the results, well, in 2015, our most recent impact
survey, SBDCs helped their clients access $4.7 billion in
capital. The long-term clients alone created over 100,000 jobs
that year and $6.8 billion in sales. That generated $607
million in revenue for States and the Federal Government, about
$2.50 for every dollar spent on the program, and that is just
the long-term clients who are a third of the total clientele.
Now, SBDCs don't exist in a vacuum. We work with SCORE,
Women's Business Centers, and VBOCs every day. We share space.
We refer clients. And we believe that SBA has the best toolbox
of entrepreneurial assistance around. This hearing couldn't be
better timed, in my opinion.
The new Administrator has an opportunity to assess our
programs and work with us to maximize their effectiveness. We
need to evaluate our goals, metrics, and data systems to see if
we are providing the best assistance possible and work toward
that goal.
Again, thank you very much for inviting me to testify. I
look forward to your questions.
Chairman KNIGHT. Thank you very much, Mr. Rowe.
And, Mr. Sharpe, you are now recognized for 5 minutes.
STATEMENT OF JOSEPH C. SHARPE, JR.
Mr. SHARPE. Thank you. Chairman Knight, Ranking Member
Murphy, and members of the Subcommittee, on behalf of the
National Commander, Charles E. Schmidt, and the American
Legion, we thank you for the opportunity to present American
Legion's views on the Small Business Administration's
entrepreneurial development programs.
The American Legion views small business as the backbone of
the American economy. It is the mobilizing force behind
America's past economic growth and has given the United States
a competitive advantage in the global market.
Small-business development will continue to be a major
factor in our Nation's economic national security well-being as
we move further into the 21st century. We know that giving
veterans the resources they need to start businesses will
assist in stimulating the Nation's economic recovery.
Veterans, when compared to their civilian counterparts, are
more likely to start a business and are generally more
successful in creating lasting small businesses. Therefore,
encouraging and supporting veterans is the first step to
recovering from a near 40-year low in entrepreneurship in the
United States.
Consequently, the American Legion supports increased
funding for SBA's Office of Veterans Business Development. Its
mission is to provide enhanced outreach, specific community-
based assistance to veterans and self-employed members of the
Reserve and National Guard.
The veteran community's demand for self-employment
resources is outpacing the 20 VBOCs SBA currently funds. With
additional funding, the VBOCs could expand their presence to
all 50 States and Puerto Rico while expanding their role in
outreach to local State and government entities to advocate for
veteran-owned small businesses in the local marketplace.
One example that I would like to bring to your attention is
what is currently occurring here in the District of Columbia.
The historic Walter Reed Army Medical Center closed a few years
ago. The property was purchased by the U.S. State Department
and the District of Columbia for a mere $26 million.
As of today, the District of Columbia has hiring quotas for
District residents but nothing for veterans. It has small-
business requirements to include special recognition for women
and minorities, small-business owners, but again, nothing for
veterans.
Advocacy on the local level by a VBOC's staff could have
alerted city officials to the need to include and notify some
of the 9,000 small veteran businesses in the District of
Columbia of opportunities such as Walter Reed and others.
Shifting points, the first step to opening a small business
is having access to capital. Even when the economy is strong,
access to capital is one of the largest impediments facing any
small business, hindering wishful and flourishing
entrepreneurs.
One of the leading barriers to small-business financing is
requiring debt to be secured by the equity and fixed assets.
Most veterans leaving military service lack the kind of equity
necessary for traditional bank loans. After all, we all know we
joined the military not to get rich but rather for the service
of the Nation.
One solution to aid veterans is to reintroduce legislation,
such as the Senate bill 1870, the Veterans Entrepreneurial
Transition Act of 2016, or the VET Act. If passed, this
commonsense bill would create a 3-year pilot program that would
allow veterans and servicemembers to turn their GI Bill
education benefits into financial capital to start a veteran-
owned business. It is ideas like this that drive our economy
forward, and it is veterans who will lead the way.
In conclusion, the mission of the American Legion's
National Veterans Employment and Education Commission is to
take actions that affect the economic well-being of veterans.
Small businesses continue to be a primary job generator and a
major trainer for American employees.
The American Legion reiterates that the Small Business
Administration Office of Veterans Business Development should
be the lead agency to ensure that all veterans are provided
with self-employment development assistance.
Chairman Knight, Ranking Member Murphy, and distinguished
members of the Committee, thank you for allowing the American
Legion to present our views on this very important issue. I
look forward to answering any questions you may have. Thank
you.
Chairman KNIGHT. Thank you very much for all the testimony.
And I am going to go into a couple questions here. I will
take 5 minutes, and we will go down the line, and if we want to
do a second round, we can certainly do that.
A couple questions just came to mind, Ms. Pianalto. What we
have tried to work on in the last year and a half or 2 years--I
have been here just over 2 years now--is access to capital, and
how we can make sure that women-owned businesses, disadvantaged
owned businesses, veteran-owned businesses are getting access
to capital, just kind of leveling out the playing field so that
they--when they go in, that there is that ability.
So can you give us some ideas of what you do and where we
can go as a Committee? Again, I am speaking for myself, but I
think that the Committee would be very good on this that--if we
can aspire to more access to capital and making sure that
women-owned businesses have that, then they are going to
flourish.
Ms. PIANALTO. Thank you for the question.
Two things come to mind, and I will reiterate what I
mentioned in my testimony. Almost half of the Women's Business
Centers are microlenders. They are either CDFI or SBA
microlenders. So, you know, focus on that is still very
important. And we do have a concern that the CDFI in the
current proposal, the administration's proposal, that program
is zeroed out, and that would be devastating to the community.
But the other thing just goes back to just education. And I
think what is important is having the ability to help women
through that process of what--where are the available lenders,
especially on the smaller scale, and then helping them through
that process for the more--you know, the businesses that are
able to go to a financial institution.
I am sure you know the statistic of only 4 percent of
commercial business loans go to women-owned businesses, 4
percent. So it is a problem.
Chairman KNIGHT. And we appreciate that. You know, a lot of
these--I have worked with SBDC many times, and a lot of it is
getting the people to the group, getting them to understand
that there is help for you, but you have got to go there. Now
that the World Baseball Classic is over, maybe people will go
to WBC more, and it will be higher on the Google list.
But it is the truth that there is a lot of help out there,
and there is a lot of government help that people just don't
know. A lot of our job is to make sure that they have that
access to either going to WBC, SBDC, or their VBOC or whatever.
And so I am going to go to you, Mr. Sharpe. We have two
VBOCs in California, and one is in the north, and one is in the
south, and we have a big State. And I am sure that Mrs. Murphy
would have a similar--she has got a big State too; that it is
tough for our veterans, unless they are going to go online,
unless they are going to do a virtual thing, which I appreciate
Mr. Yancey telling us about the virtual conferences.
But the VBOCs are either in Sacramento or in Carlsbad, and
that is--about a 9-hour drive in between those two, is very
difficult. So how can we make it so veterans have more access,
maybe not building more VBOCs but having more access to being
able to go in and get their help that they need on being an
entrepreneur and expanding their business?
Mr. SHARPE. Thank you for that question.
When the American Legion first wrote the GI Bill back in
the 1940s, the GI Bill was never meant to sit in a classroom.
It was always for gainful employment. So we have always felt
like those veterans that choose to start a business should be
able to use their benefits to start a business. I think that is
one of the first steps that we need to take to assist veterans.
California and Florida are huge States. We have been very
concerned with the veteran population in both States. That is
why we really push SBA to put a second VBOC in California. And
there needs to be more public/private partnerships in those two
States also to assist those veterans.
We do believe that more VBOCs are necessary, and the reason
why we believe that is basically what happened here in the
District of Columbia with the Walter Reed Medical Center. When
we attended one of the meetings with the developers, there
seems to be a lack of concern with the military.
Walter Reed has been around for 102 years. It was the
flagship for the Army. It served thousands of veterans. There
is a deep sentiment with veterans with that institution, and to
not be considered to be part of the redevelopment is an issue
that we see across the country. That is why we believe the
VBOCs are so important because you have veterans helping
veterans.
Chairman KNIGHT. And I appreciate that. I appreciate you
bringing up the VET Act. We would like to look at that more
extensively.
When I got out of the service 30 years ago and then went
into college, that is what it was there for: to go into
college. I think you have seen some changes over the years,
that we would like people, if you are going to go and get your
certification to be a welder, if you are going to go into a
setting that is going to go into a job, then that is a good use
of a GI Bill.
College is not for everyone, and some people want to do
other things in the automotive industry or whatever it is. In
my district, there is a lot of aerospace. There is no doubt
about that. And we want people to be able to transfer into
something they want to do, and that might not mean a 4-year
degree.
Mr. SHARPE. Exactly.
Chairman KNIGHT. And so I think that that is a good use of
the money that we are trying to get our veterans into
employment.
So I have taken a little extra time. So everyone will be up
to that.
And I will go to the ranking member, Mrs. Murphy.
Mrs. MURPHY. Thank you, Mr. Chairman.
You know, my first question is for Ms. Pianalto. Part of
the mission of the WBC is to expand into economically
distressed areas. Could you explain how you make the decision
for what areas you place a WBC and also the same question for
the rest of the panel?
Ms. PIANALTO. Thank you for that question. So, first of
all, it is the SBA that makes the decisions on where the WBCs
are placed, and it is a grant proposal process. So the SBA, if
they determine there are funds available to open new centers,
then they will issue a request for proposal, and they will
identify States where they think there are gaps in Women's
Business Centers.
And then they hope that an organization will submit a
proposal that will be, you know, acceptable and then they have
to make the determination. Last year, there were three new
centers granted a grant. They don't yet know based on the
funding what will be available this year.
But it is more of a process of, will there be an
organization in a particular State that will qualify for a
grant rather than identifying where the needs are and
proactively looking at what we might be able to do from a
community to establish a center there? So it is not an ideal
process.
Mr. YANCEY. We look at two different ways to have this
started: First, we are requested by a community to come in and
bring a chapter. And we would look at the community, look at
need, look at resources that were already available. Is there
an SBDC? Is there a Women's Business Center? How effective are
they at serving the need? Does it make sense?
And then we would look to an anchor organization to help us
find local volunteer leadership that we could then build on
with our chapters in the vicinity and support from our office.
When we haven't been requested, we will look at areas where
we believe that there is a need, again, based on knowledge and
understanding of the market, resources that are already
available, and then we will send somebody out to develop
community partnerships and support.
Obviously, our success is really based on finding a nucleus
of volunteer leaders in a community and supporting them to
grow, providing them with the tools and the materials and the
marketing initiatives and our own support, both presence and
dollars, if required, to help them get started.
Last year, we opened 11 new chapters, and those--it is the
first year that we have opened chapters in quite some time.
Mr. ROWE. When SBDCs--as I said earlier, we have a
statewide mandate. So we are trying to cover, say, the entire
State of Texas or Florida or Georgia. We will try and place--
much in the same situation that Ken's in--where we can find a
partner, a host institution.
Now, for example, in Mississippi, we were having some
problems, but we wanted to get coverage in the delta. And we
worked out an agreement with Jackson State, which is a
Historically Black College and University there. But what we
find sometimes is we get conflicting messages from SBA.
In our Houston regional SBDC, we had an agreement with a
Historically Black College and University, and we started
getting pressure because they weren't meeting the goals that
SBA wanted out of the center. And our director for the region
was: ``Well, I am not going to just pull out and abandon that
area. We will work to get it up. But you just can't leave it
and go.'' So, for SBDCs, it is always a question of finding the
right partners and then getting as much resources as we can
into those areas.
I will say that rural areas are the hardest thing for us
because we have got so much area to cover. We have the mandate,
and we want to do it, and honestly, rural America needs more
help, frankly, than the suburbs do.
Mr. SHARPE. I agree with what everyone else has had to say.
That is also a concern for us as well.
One issue, again, is, you know, trying to reach our
veterans. The American Legion is in, you know, all States and
in various territories, and right now, we are really concerned
with places like Puerto Rico. Our department there, we have an
unemployment rate between 16 and 25 percent. We have been doing
a lot of job fairs there, but we would like to also do some
business development workshops. The economy is in crisis. We
are doing a job fair May 18. We have about 65 companies that
are coming. About 400 servicemembers usually attend National
Guard, reservists. But the command just told us the other day
that one out of four reservists is unemployed. And if they are
employed, we are finding that many of them are underemployed,
and that is including our rural areas. So that is why we feel
so strongly that business development is the key to bringing
our economy back.
Mrs. MURPHY. Great. Thank you.
And I see that I am out of time. So I yield back.
Chairman KNIGHT. Thank you very much.
And we will go to Mr. Evans for his questions.
Mr. EVANS. Thank you, Mr. Chairman.
I too would like to thank the panel and what you have
offered today.
The question I would like to start out with: Could each of
you give one or two items on your congressional wish list that
you think would immediately help small businesses?
Ms. PIANALTO. Increased funding. That--I mean, obviously,
if we had more funds available for the centers and the various
resource partners, that would certainly go a long way. I think
another--perhaps another point is SBA being--working with us a
little bit more in terms of programming but also even metrics.
Congresswoman Murphy mentioned clearer metrics earlier. That is
a serious issue for SBA and the partners having to work with
them.
I will just note one item as an example in the Committee's
memo. We are listed as creating more than 750 small businesses
throughout the Nation. That metric is only on the Women's
Business Center counseling clients, which are only 15 percent
of our clients. SBA doesn't measure--doesn't do metrics on our
training clients, which are 85 percent of what we do. So I
think some work there needs to be done.
Mr. YANCEY. It is very easy to support the need for
funding. Programs like ours to expand and grow and serve, as we
all want them to, do require some level of investment and we
will all work hard to match that investment with private sector
dollars so that we can be effective.
Someone mentioned a little bit earlier access to capital,
and I will divide that into access to capital and access to
debt. Startup small businesses don't have access to capital,
often don't have access to debt. And Mr. Sharpe mentioned in
the veteran community how those that are separating don't have
the collateral or the equity that is required, and that is not
uncommon among many startup businesses.
The opportunity to make that more available through the
MicroLoan Program and other similar programs, I think, is very
important. The idea of making debt more widely available for
small businesses, our banks are doing better but still not
fulfilling that need completely.
Credit cards aren't a great option but used too often to
the detriment of the small businesses. And I think that
encouraging community lenders to be more involved and to be
more accessible and more willing to support those small
businesses is pretty critical these days.
Mr. ROWE. Well, you know, I will certainly echo what
Antonella said. What I would really like to dive in on for a
second is I think the biggest problem we have sometimes is
focus. We know where the problems are. We can look at studies
from organizations like the economic innovation group, and they
can show us the counties that are having trouble with small-
business formation and job growth, et cetera.
But what we don't always end up with is a coordinated
strategy to utilize all of the resources we have to focus on
assisting those areas, whether they are rural counties or inner
city communities. And that, in a certain way, is kind of a
tragic waste. We are all producing great results, but sometimes
we are getting pushed to produce results so much that you tend
to focus where you can get results rather than focusing on
where you really need to offer help.
Mr. SHARPE. For the American Legion, of course, we would
like to see more VBOCs, and we would like to see them, besides
giving veterans training, but be more involved in advocacy.
They need to be engaged with the local market. If we had one in
the District of Columbia, they would have known of all the huge
projects that are taking place here, which is not happening
most places.
I think that would really change the dynamics of economic
development. If they were more engaged with what is happening
in the local area and being able to advocate to those
businesses that they are serving, these are opportunities for
you. And, of course, access to capital and being able to use
your GI Bill for capital.
Mr. EVANS. Thank you, Mr. Chairman.
I yield back the balance of my time.
Chairman KNIGHT. Thank you very much.
And we will go to Ms. Clarke for her questions.
Ms. CLARKE. Thank you, Mr. Chairman.
And I thank our ranking member, Mrs. Murphy, our panelists
for your expert testimony this morning, and a pleasant good
morning to everyone.
As everyone on this Subcommittee knows, small businesses
are the lifeblood of our economy. They allow hardworking women
and men across this Nation to harness their entrepreneurial
spirit for the benefit of themselves, their families, and our
country.
Indeed, the 28 million small businesses in the United
States account for 54 percent of all U.S. sales. This would not
be possible if it were not for the hard work and dedication of
the women and men at the Small Business Administration.
And at the heart of the SBA lies its entrepreneurial
development programs. These programs include Small Business
Development Centers, the Service Corps of Retired Executives,
the Women's Development Centers, and the Office of Veteran
Business Development. Each of these offices play an important
part in ensuring that the promise of small-business ownership
remains open to hardworking Americans across our country.
However, this is not to say that their functioning could
not be improved. I remain concerned that we do not have
sufficient metrics to judge the performance of SBA programs and
remain interested in learning how we can make the SBA as
efficient as possible.
And so my first question goes to Mr. Yancey. I commend the
improvement your program has seen in increasing the racial and
gender diversity of both clients and volunteers. However, the
gender diversity of volunteers remains low, at just 20.3
percent. Could you please describe the efforts you have made to
recruit volunteers from different backgrounds and what you are
planning to do to improve this number?
Mr. YANCEY. Yes, ma'am. Thank you very much for a very
important question.
Several things are happening for us as we work to improve
the diversity of both our volunteer corps as well as our
clients. I think one of the most important and one of the most
effective processes that we have found is to work with and
partner with other organizations who represent some of these
underserved communities: our partnership with the National
Urban League, the opportunity to do webinars in conjunction
with the urban league that are promoted to their members as
well as to our clients, both organizations having the
opportunity to refer clients back and forth, resulting in new
volunteers and new clients for both of us. The same thing with
the African American Mayors Association and the same thing with
the Latino Coalition--and our friend representing the Latino
Coalition, Mr. Gutierrez, is back here--those are good
opportunities for us to attract both clients as well as
volunteers.
The other thing on the volunteer corps, I mentioned that we
were--in 2016, 12 percent of our new volunteers are former
clients. Our client base is diverse, and it makes sense for us
to be reaching out to a group of people who have benefited from
the program previously. And in so doing, we are also improving
the diversity of the program.
In 2016, 30 percent of our new volunteers were women, which
is obviously higher than the percent now, the same way with
minority volunteers. So we are making progress. Quite frankly,
it is not fast enough for me or our board or anybody else, and
we are open to suggestion. We are open to additional referrals,
support, and appreciate you continuing to push on this
important topic.
Ms. CLARKE. Well, I thank you for the update.
Mr. Rowe, one of the critical programs SBDCs provide is
disaster recovery and preparedness assistance. Could you please
describe some of the specific services you provide in this
area? And let me just sort of preface this also by saying thank
you, because I come from Brooklyn, New York, and in the wake of
Superstorm Sandy, the SBDCs were really a lifeline.
Mr. ROWE. Well, thank you, ma'am.
One of the biggest efforts we make is helping the SBA
identify the locations to set up their business recovery
centers and then focusing our efforts on staffing those centers
and helping the small businesses get organized and get through
the process.
I am sure all of the members on the Committee know that
about 90 percent of the disaster loans are actually home loans.
Only 10 percent are business loans, but that 10 percent tends
to take about four times as long. Doing a disaster home loan is
actually pretty simple; it is like doing a second mortgage.
Doing a business loan is actually often incredibly complicated.
So we spend a great deal of time with small businesses that
have been affected, helping them through all that paperwork,
and sometimes it is a huge forensic issue. You know, it is
reconstructing your sales figures, et cetera, which is why we
put a lot of effort into disaster preparedness.
Now, in the case of Superstorm Sandy, I don't think as many
folks were expecting it as might expect it in, say, Florida,
when you are going to get a hurricane. But we are constantly
pushing on the disaster preparedness front because disasters
aren't just, you know, a natural occurrence. You could have a
fire and wipe yourself out.
Ms. CLARKE. Thank you.
I yield back, Mr. Chairman. I thank you for your
indulgence.
Chairman KNIGHT. Thank you very much.
And I am going to go to the ranking member. If members have
another round of questions, we can go through these. And I am
going to go to the ranking member, and I will bat cleanup after
everyone is done.
Mrs. MURPHY. Thank you, Mr. Chairman.
As I mentioned in my opening remarks, the administration's
recently released budget blueprint suggests reducing the SBA's
budget by 5 percent. And while it didn't specifically name any
of the programs for consolidation, it suggested that the
programs should be consolidated if they are duplicative.
Could you describe the impact of such a consolidation on
the services that you provide to clients? And this is for all
of the members.
Mr. YANCEY. These programs are quite different beyond just
who we serve. The way the grants operate, the back end, the
partnership, service-to-the-community approach, we have never
felt that consolidation of entrepreneurial development programs
would be a healthy process.
In fact, I believe that often our best work is done in
conjunction with our colleagues at the Small Business
Development Centers or the Women's Business Centers or the
veterans centers, where we might come in and provide very
specific expertise around a business. If you had a high-end
restaurant and I had a restauranteur that had a fine-dining
restaurant, we might be able to provide specific information
that could be useful.
Putting them all together would, I think, create an
administrative challenge that is well beyond the challenges
that we face individually. And the cost would not be less than
what you find with the programs administering themselves.
Ms. PIANALTO. I would just absolutely agree with Ken. We do
serve different needs, and we do work very closely together.
And some of that is--you know, depends on the individuals in
all of our organizations as well as with the district office of
SBA. So there could always be improvement with coordination,
but we all serve very different purposes, and I do not think
consolidation would be helpful at all.
Mr. ROWE. My concern with the whole concept of
consolidation is, if you are seeking efficiency, that is one
thing, but never make the mistake of thinking that small
business is some monolithic thing. They are all different. It
is like the little placard my sister-in-law has at the house:
``You are unique, just like everybody else.''
There are 28 million, 29 million small businesses in the
United States. We probably touch, in the course of the year at
SBDCs, a little under 1 million in various ways. That leaves 27
million, and I don't think that Ken and Antonella or the VBOCs
got to the other 27 million.
You know, the problem, again, in my mind is, are we making
sure we are all working together and thinking about what we are
trying to achieve. You know, it is great to talk about
efficiency. Sometimes you have to think about the economy,
though, as kind of a big sloppy machine too.
Mr. SHARPE. I agree with everything else that has been
said. But the mission of the American Legion is to ensure that
veterans, when they leave the military, that they and their
families are gainfully employed and economically independent
and they are also able to contribute to their communities.
We have been a big supporter of the Veterans Business
Development Office in SBA, and the part of that that we like
the most is that the VBOCs are beholden to that office. So
anytime we have issues with veteran entrepreneurship in any
part of the country, we can always go to that office, get
stats, find out what is happening, be able to contact those
VBOCs directly. It's like a holistic approach to small business
for us, and that also helps our mission in ensuring the
veterans are taken care of.
Mrs. MURPHY. Thank you.
Chairman KNIGHT. And I will jump in real quick. There is a
couple things that I am sure is on everyone's mind. Budget is
always something that we look at. I would hope that we are
looking at making sure that everything that is happening now is
funded before we expand. And I think that is probably the best
way you can do, especially when you are talking about
government, and sometimes government is a weird animal to work
with and finite dollars and all of those things. But we want to
make sure that the programs that are working today are fully
funded so that people know, okay, I know there is SCORE here. I
know there is SBDC or WBC or VBOC here. I know that, and I am
happy.
The second part is working together. I think that, whether
you are a veteran in Los Angeles and you say, ``Golly, my
closest VBOC is, you know, 230 miles away,'' that is not okay,
but they still have other resources that they can go to. They
can go to their SBDC. They can go to their WBC. And they can go
to SCORE and say, ``I need help.'' And, conversely, people can
work throughout. So I like the fact that it is working
together, and I like the fact that you do have different kind
of resources that everyone brings together.
Mr. Sharpe, did you have something? Oh, I thought you
pressed your button.
Mr. SHARPE. No, no.
Chairman KNIGHT. And I think that that has kind of got to
be the mission, especially when we go into budgets, because it
is one of the reasons I don't sit on Appropriations, because I
don't want to deal with that stuff. I want to deal with policy
and what is good for America. And sometimes Appropriations are,
``Yes, this is good for America; we just don't have the dollars
to do it.'' And I would rather not be the bad guy on that.
So I am going to go to Mr. Evans for his second round.
Mr. EVANS. Mr. Chairman, I will yield. I don't have any
other questions. Thank you.
Chairman KNIGHT. Thank you very much.
And Ms. Clarke.
Ms. CLARKE. Thank you once again, Mr. Chairman.
Mr. Pianalto, in your testimony, you mentioned that WBCs
would be the appropriate body to provide third-party
certification for women-owned business. Could you please
describe some of the issues in the current certification system
and how moving certification to WBCs would alleviate that?
Ms. PIANALTO. Thank you for that question. And I will just
clarify----
Ms. CLARKE. I am sorry, Ms. I am sorry. Excuse me.
Ms. PIANALTO. Pardon?
Ms. CLARKE. I just wanted to make sure I got the gender
correct there.
Ms. PIANALTO. So the current structure is that women can be
self-certified through the SBA, or they can go to four third-
party certifiers. The 2015 NDAA eliminated the self-
certification process, and SBA is working through the
rulemaking on that right now.
What we are suggesting is that, not that the WBCs take that
over, but that you expand the availability of third-party
certifiers. And we feel the WBCs, some of which--we have four
WBCs who are regional partners of one of the third-party
certifiers right now, and many of the WBCs are also helping
with that self--the certification process. But we think the
WBCs--it makes perfect sense for them to be--play a greater
role in the certification process.
Ms. CLARKE. So just to get a better sense, do you think it
is important that women have access to programs like WBCs that
specifically focus on increasing female entrepreneurship? And
with those relationships with the third-party certifiers, do
you see that as being sort of a network that would expand
access?
Ms. PIANALTO. We think that the current list--available
certifiers needs to be expanded. And we think the WBCs play--
would be able to play a great role in that.
Ms. CLARKE. Very well. I thank you.
And I yield back, Mr. Chairman.
Chairman KNIGHT. Thank you very much, Ms. Clarke.
And I appreciate all the members for coming today. Of
course, the ranking member is always here.
Ms. Clarke and Mr. Evans, thank you very much for
attending.
And I want to thank the panel for their expert sharings of
what it is to be an SBA and what it is to help small businesses
and the entrepreneurial attitude today. I believe it is
important to hear directly from the groups and organizations
offering their expert advice to entrepreneurs all across the
Nation.
These programs are extremely important to millions of small
businesses trying to grow and create jobs. With a burdensome
business environment, you assist risk-taking entrepreneurs as
they charge ahead.
As this Subcommittee looks to enhance the workforce for our
Nation's small businesses and the resources available to them,
we will use this conversation moving forward, and we will
continue to advance bills working and advancing WBCs and bills
of that nature to try and help your work with our small
businesses. Much like the guidance you provide to small
businesses on a regular basis, we thank you for the advice you
have provided us today.
I ask unanimous consent that members have 5 legislative
days to submit statements and supporting materials for the
record.
Without objection, this hearing is now adjourned.
[Whereupon, at 11:48 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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