[Senate Hearing 117-240]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-240

                          WOMEN ENTREPRENEURS:
                 AN ECONOMIC GROWTH ENGINE FOR AMERICA

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP

                                 of the

                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 27, 2021

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
    
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]    


        Available via the World Wide Web: http://www.govinfo.gov
        
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-359 PDF                 WASHINGTON : 2022                     
          
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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED SEVENTEENTH CONGRESS

                              ----------
                              
                 BENJAMIN L. CARDIN, Maryland, Chairman
                  RAND PAUL, Kentucky, Ranking Member
MARIA CANTWELL, Washington           MARCO RUBIO, Florida
JEANNE SHAHEEN, New Hampshire        JAMES E. RISCH, Idaho
EDWARD J. MARKEY, Massachusetts      TIM SCOTT, South Carolina
CORY A. BOOKER, New Jersey           JONI ERNST, Iowa
CHRISTOPHER A. COONS, Delaware       JAMES M. INHOFE, Oklahoma
MAZIE HIRONO, Hawaii                 TODD YOUNG, Indiana
TAMMY DUCKWORTH, Illinois            JOHN KENNEDY, Louisiana
JACKY ROSEN, Nevada                  JOSH HAWLEY, Missouri
JOHN HICKENLOOPER, Colorado          ROGER MARSHALL, Kansas
                 Sean Moore, Democratic Staff Director
              William Henderson, Republican Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Cardin, Hon. Benjamin L., Chairman, a U.S. Senator from Maryland.     1
Paul, Hon. Rand, Ranking Member, a U.S. Senator from Kentucky....     3

                               Witnesses

Lucas, Dr. Tammira, CEO, The Cube Cowork, Baltimore, MD..........     5
Waterman, Ms. Candace, President and CEO, Women Impacting Public 
  Policy, Washington, DC.........................................    11

          Alphabetical Listing and Appendix Material Submitted

Cardin, Hon. Benjamin L.
    Opening statement............................................     1
Engine
    Statement dated November 3, 2021.............................    26
Lucas, Dr. Tammira
    Testimony....................................................     5
    Prepared statement...........................................     8
    Responses to questions submitted by Senators Coons, Hirono, 
      and Rosen..................................................    30
Paul, Hon. Rand
    Opening statement............................................     3
Waterman, Ms. Candace
    Testimony....................................................    11
    Prepared statement...........................................    14
    Responses to questions submitted by Senators Coons, Hirono, 
      Rosen, and Inhofe..........................................    34

 
                          WOMEN ENTREPRENEURS:
                       AN ECONOMIC GROWTH ENGINE
                              FOR AMERICA

                              ----------                              


                      WEDNESDAY, OCTOBER 27, 2021

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:48 p.m., via 
WebEx and in Room 301, Russell Senate Office Building, Hon. 
Benjamin L. Cardin, Chairman of the Committee, presiding.
    Present: Senators Cardin, Cantwell, Duckworth, Rosen, 
Hickenlooper, Paul, Ernst, and Hawley.

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, CHAIRMAN, A U.S. 
                     SENATOR FROM MARYLAND

    Chairman Cardin. The Senate Small Business and 
Entrepreneurship Committee will come to order. It is good to 
have Senator Ernst with us. We have adjusted the schedule 
because of the rolling votes. We have just started two votes on 
the floor of the Senate, so I think members might be tending to 
their vote.
    Senator Paul, I understand, was here. He just left in order 
to cast that vote and then he will be coming back, and when he 
arrives we will allow him to give his opening statement.
    At this point I want to just welcome our two witnesses and 
thank you all for joining us today for this important hearing 
on how the Federal Government can empower women entrepreneurs 
and unleash the potential of women-owned small businesses so 
they can continue to be a growth engine for our economy as we 
recover from COVID-19 pandemic.
    This hearing comes as we close National Women's Small 
Business Month, during which we recognized the contributions of 
women entrepreneurs to our local and national economies. I look 
forward to National Women's Small Business Month each year 
because women entrepreneurs should be celebrated, for 
prospering in spirit of the historical barriers to success that 
persist.
    National Women's Small Business Month is particularly 
important in my home state of Maryland, as it boasts the 
highest concentration of women-owned small businesses in the 
country--we are very proud of which--many of which are owned by 
minority women. It is a distinction that fills me with great 
pride and informs my work as Chair of this Committee.
    Today's hearing also falls two days after the 33rd 
anniversary of the Women's Business Ownership Act being signed 
into law. This landmark bill eliminated state laws that 
prevented women from securing a business loan without a male 
co-signer, and it established the Women's Business Center 
Program at the Small Business Administration.
    We are now far removed from these antiquated state laws, 
but the past 18 months of COVID-19 pandemic has demonstrated 
that women entrepreneurs still face many structural barriers 
when they start, operate, and attempt to grow small businesses. 
Throughout the pandemic, women entrepreneurs have been more 
likely to report a significant decline in the health of their 
business than their male counterparts, according to the 
research conducted by the Kauffman Foundation.
    And historically, women-owned small businesses lag behind 
male-owned small businesses in four key indicators of future 
business growth: investment plans, revenue projections, 
staffing expectations, and access to capital. While the 
pandemic has shined a light on the structural barriers women 
still face, it has also demonstrated that the Federal 
Government can play a key role in breaking down those barriers 
and empowering women entrepreneurs.
    A recent report issued by the Government Accountability 
Office found that the policies championed by Senate Democrats 
in the Paycheck Protection Program and Health Care Enhancement 
Act, Economic Aid Act, and the American Rescue Plan made later 
rounds of the Paycheck Protection Program more equitable and 
accessible for underserved communities. While small business 
owners received only 9 percent of the initial PPP loans 
authorized by the CARES Act, the report found that the share of 
loans made to women-owned small businesses, following changes 
made by Congress, increased that to 16 percent. This is in line 
with the percentage of small businesses owned by women, which 
is also 16 percent.
    This report is proof that through thoughtful, concerted 
efforts it is possible to bridge the historical gaps that 
prevent underserved entrepreneurs from starting and growing 
small businesses.
    I was proud to work with my colleagues in the Senate, 
including several on this Committee, to secure those 
improvements to the PPP, and I am looking to build upon that 
work in the months and years ahead.
    Now as Congress continues to negotiate President Biden's 
Build Back Better agenda, a once-in-a-generation investment in 
our families, communities, and small businesses, it is vital 
that we build on the lessons learned during the pandemic to 
continue investing in women entrepreneurs. That is why I am 
looking forward to hearing the testimony of Tammira Lucas, 
founder of The Cube Cowork in Baltimore and co-founder of Moms 
As Entrepreneurs. Dr. Lucas will shed light on the unique 
barriers that women, including mothers, face on the path to 
business ownership. I would also like to congratulate Dr. Lucas 
on The Cube Cowork's grand opening of its expansion last week, 
making it the largest Black-owned coworking space in the 
country. Congratulations.
    I am looking forward to hearing from Women Impacting Public 
Policy's President and CEO, Candace Waterman, who advocates on 
behalf of women business owners to Congress. I know that that 
organization is celebrating its 20th anniversary next month, so 
Candace, I want to thank you and your colleagues for your 
tireless efforts to empower women small business owners over 
the last two decades.
    I hope to hear from you both about the tools and resources 
Congress can create and improve to support women on their 
entrepreneurship journey and ensure their success.
    The COVID-19 pandemic interrupted a period of tremendous 
growth for women-owned businesses. Women-owned businesses 
employed 9.2 million people, 8 percent of the total private 
sector workforce, and they generate $1.8 trillion in annual 
revenues, 4.3 percent of the annual private sector revenues.
    While these numbers seem small on the surface they tell a 
remarkable story about the potential women-owned small 
businesses. From 2007 to 2019, total employment by women-owned 
businesses rose 21 percent while employment for all businesses 
declined by 0.8 percent. In other words, for the past decade 
women-owned small businesses have been the drivers of economic 
growth in our economy, despite the myriad headwinds they face 
in the path to success.
    This fact is even more evident when it comes to minority 
women. Between 2007 and 2019, businesses owned by minority 
women grew by more than 163 percent. Imagine what our women 
entrepreneurs could do if there were less obstacles in their 
way and if they had more support during their entrepreneurship 
journey.
    Supporting small businesses through the COVID-19 pandemic 
has been the most challenging and the most important thing this 
Committee has ever done. Our efforts to build back better in 
the years ahead will be another incredible challenge, but they 
are our opportunity to help our economy grow in a fairer, more 
productive way.
    We simply cannot waste the time that we have to make the 
process in these areas. We must commit ourselves to using this 
opportunity to create thoughtful policies that will empower 
women entrepreneurs for generations to come.
    And with that let me yield to the Ranking Republic Member, 
Senator Paul.

   OPENING STATEMENT OF HON. RAND PAUL, A U.S. SENATOR FROM 
                            KENTUCKY

    Senator Paul. Thank you, Mr. Chairman. The Chairman makes a 
great point that women are doing very well in small businesses 
across America, and I think every way have shown themselves to 
be the equal of men, if not often the superior to men. But it 
is also, I think, inadvertently an argument for why we do not 
need special set-asides for women. I think they can compete on 
their own two feet, just with men.
    You know, when I took over as Ranking Member of this 
Committee I believed that our charge would be to create an 
environment in which all small businesses can flourish. 
Instead, our work here, though, has focused almost exclusively 
on which side of the scale the heavy hand of government should 
place its thumb. While some businesses may have just been too 
large to qualify as small businesses and were ineligible for 
the Paycheck Protection Program, the Biden administration has 
continued to violate the law, to pay back, with taxpayer 
dollars, their political ally, Planned Parenthood.
    Then came the Restaurant Revitalization Fund, whose race 
and gender preferences were struck down by the Sixth Circuit 
for violating the Fourteenth Amendment's guarantee of equal 
protection under the law. It is simply galling that after 
Democratic governors shut restaurants down, shut the economy 
down, that Congress would insist that before owners receive 
assistance they are first asked whether they are a man or a 
woman, Black or White, Pakistani or Iraqi, and that the answers 
to these questions determine whether you go to the front of the 
line or the back of the line.
    Which brings us to today's attempts by the Biden 
administration to favor one set of races and genders over 
others. Rather we should embrace the words written by Justice 
John Marshall Harlan, in his dissenting opinion in Plessy v. 
Ferguson. He said, ``Our Constitution is colorblind and neither 
knows nor tolerates classes among its citizens.''
    The free enterprise system is consistent with those words. 
Free enterprise empowers those who innovate, who take risks, 
who work hard, including women. In other words, free enterprise 
is the great equalizer. The facts demonstrate that women 
entrepreneurs do not need government handouts. While just shy 
of 60 percent of Small Business Administration's microloans go 
to women-owned or women-led businesses, a majority of women 
entrepreneurs use private loans and sources of funding to start 
their own businesses, compared to just 20 percent who use SBA 
loans. Moreover, women-owned businesses have a nearly 70 
percent success rate with crowdfunding, outstripping male-owned 
businesses by nearly 10 percent.
    The history of women in business is a great one. Private 
tech companies led by women achieve a 35 percent higher return 
on investment than similar companies led by men. Look around. 
Women are succeeding like never before. Whether it be in 
academics or business, women have proven themselves to be the 
equals of men. Frankly, it is insulting to think that women 
need affirmative action.
    A century of economic history demonstrates, beyond a doubt, 
that the best way to promote economic growth and upward 
mobility for all is to adhere to free market principles. Those 
are the policies that should be on the agenda today, but they 
are not. If the Biden administration and most of my Democratic 
colleagues in the Senate were truly interested in discussing 
the issues facing female entrepreneurs today we would be here 
to discuss the impact of rising inflation, the growing supply 
chain crisis, inflation throughout the system, and the effects 
they are having on American small businesses. Instead, 
Democrats are planning to exacerbate these issues by spending 
trillions--trillions more of Americans' dollars, money that we 
do not have, in their attempt to remake America.
    At a time when 86 percent of small businesses today say 
they are concerned about inflation and 74 percent say inflation 
hurt their businesses, Congress is now, led by the Democrats, 
doubling down on failed big government socialist policies in 
precisely the wrong prescription, making it harder on small 
business. Rather, we ought to rediscover old economic truths, 
that all entrepreneurs thrive when they are encouraged to 
innovate and compete in a marketplace.
    This Committee should work to end discriminatory and 
patronizing programs and instead focus on policies in which all 
small business owners, no matter their race or gender, are most 
likely to thrive. Thank you.
    Chairman Cardin. Thank you, Senator Paul.
    [Pause.]
    Chairman Cardin. We will first hear from Dr. Tammira Lucas, 
who is a ``mompreneur,'' a mother and entrepreneur. She is CEO 
of The Cube Cowork, a coworking space in Baltimore that also 
provides childcare services, and co-founder of Moms As 
Entrepreneurs, an organization that focuses on decreasing 
chronic poverty by helping mothers build sustainable 
businesses. As of 2019, Dr. Lucas' program, Moms As 
Entrepreneurs, has helped over 100 moms launch businesses in 
Baltimore, and she recently expanded The Cube Cowork space to 
increase opportunity for even more entrepreneurs with children.
    Dr. Lucas, it is a pleasure to have you here.

    STATEMENT OF TAMMIRA LUCAS, Ph.D., CEO, THE CUBE COWORK

    Dr. Lucas. Good afternoon, Chairman Cardin, Ranking Member 
Paul, and members of the Committee. Thank you for having me 
today. I am Dr. Tammira Lucas, CEO of The Cube Cowork, 
Baltimore business leader, and business professor.
    As a mom, wife, and entrepreneur, I struggle to choose my 
business or my family. I quickly learned that I was not the 
only mother faced with these struggles, after training hundreds 
of mom entrepreneurs locally and nationally through my 
organization, Moms As Entrepreneurs. I spent two years 
researching solutions to these problems that many women 
entrepreneurs battle.
    The results of my extensive research determined that mom 
entrepreneurs all shared the same wants: more time, a network, 
and support services to grow their business. I created a 
solution to address these barriers to success for women 
entrepreneurs, The Cube Cowork. The Cube Cowork is the largest 
Black-woman owned coworking space in the United States, to 
provide a space where parents no longer have to choose their 
businesses over their families. The Cube Cowork provides onsite 
babysitting services, business-building resources, a network, 
and office space rental.
    The vast majority of growing businesses in the United 
States are women, and more specifically, Black women. 
Unfortunately, this same demographic experiences multiple 
pandemics, including the lack of financial capital, human 
capital, race inequities, and social capital to break the 
ceiling of 40 million to increase impact hiring. During the 
pandemic, women entrepreneurs, especially Black women 
entrepreneurs, were the most resilient, yet received the least 
support. With the lack of capital that already existed pre-
pandemic, women entrepreneurs had to figure out a way to 
survive during and after the pandemic.
    What we saw in communities like Baltimore was women using 
their creativity, social platforms, and the power of working 
together to ensure their businesses sustain. In theory, this 
sounds profound, but in reality, this should not be the case. 
We saw women business owners being pushed out of financial 
bailout opportunities like the first round of the PPP loans and 
EIDL, where big corporations, who had the resources, benefited, 
and small women-owned businesses continued to struggle. This 
should not be the case.
    This catastrophe taught us that women entrepreneurs need 
more access to capital and resources that Women Business 
Centers provide. The Women Business Center should continue to 
be funded and supported to help bridge the gap of support 
services needed to sustain a business. For example, many women-
owned businesses could access resources like the PPP loans in 
the beginning because they did not have proper accounting 
systems, banked with large financial institutions, or had a 
payroll. Women-owned businesses tend to not be in a place to 
have the resources to set up proper system or hire full-time or 
part-time staff.
    Sixty-one percent of Black women entrepreneurs start 
businesses in retail, beauty, health, education, or social 
service sectors. They are typically small, informal businesses 
with low margins and crowded, competitive markets, and are more 
challenging to sustain over the long term. This is due to the 
lack of knowledge, financial resources, and family 
consideration. However, these businesses are keeping the lights 
on and food in the refrigerators of families. These businesses 
are the ones that are setting a foundation to close the wealth 
gap in Black communities.
    According to the Kauffman Foundation, 37 percent of moms do 
not start businesses because of family considerations like 
childcare access. For those who do start their businesses, 
nearly half of them do not believe their businesses will 
succeed, which is why Black women have fewer established 
business owners compared to their high rate of new venture 
startups.
    Access to key resources needed for entrepreneurship is 
unevenly distributed in U.S. society, reinforcing the advantage 
of certain groups while impeding the entry and catching-up of 
certain disadvantaged groups. Black mothers are often pushed 
into necessity entrepreneurship, which often generates low 
income, and they have fewer choices in how they engage 
economically.
    Mothers who choose entrepreneurship as an attractive 
economic opportunity with access to the right resources are 
better able to start businesses and grow it. Mom entrepreneurs 
are ideally situated in close proximity to their potential 
customers and collaborators in the center of their often-
overlooked communities despite these added pressures. They are 
in an ideal position to identify business voids that address 
community needs and provide opportunities to generate income 
and wealth.
    The socioeconomic reality for Black mothers and women 
entrepreneurs in Baltimore and similar cities are defined by 
the legacies of structural racism, including redlining and 
underfunded education, in addition to the wage gap women face. 
The actual reality is that our economy would not sustain if it 
were not for women entrepreneurs and women consumers.
    I have seven recommendations.
    Number one, continue to fund and expand Women Business 
Centers in underserved communities and cities.
    Number two, accelerate finalizing the funding opportunity 
for the SBA Community Navigator and ensure the organizations 
that receive funding to implement these services have the 
capabilities to reach the underserved demographics. Too often, 
funding opportunities are given to organizations that do not 
have the capabilities to reach the actual people that need the 
services.
    Number three, under the Office of Women Business Ownership, 
create an advisory board that is solely focused on addressing 
the issue mom entrepreneurs face such as family considerations. 
Mom entrepreneurs continue to be grouped under women 
entrepreneurs, and there is a huge difference between being an 
entrepreneur as a woman and being an entrepreneur as a mom.
    Number four, create an advisory board that will help the 
SBA interface look less daunting to everyday women 
entrepreneurs and provide relatable outreach services. Most 
entrepreneurs do not access resources offered by the SBA 
because the interface is not friendly to those that need it 
most. We have to design access to services that are equitable 
for all.
    Number five, access to capital should be made easy for 
women entrepreneurs to access, taking into consideration that 
more than half of the 11.6 million entrepreneurs are moms 
living below the poverty level and may not have a great credit 
rating or collateral. This should not be the defining factor in 
whether they should access capital to start or sustain their 
businesses and create generational wealth for their families.
    Number six, provide affordable childcare to women starting 
and growing businesses. Often these resources are given to 
women who are looking to go into the workforce but not women 
who are creating the workforce.
    And Number seven, provide access to affordable health care. 
Women entrepreneurs' hesitation to start businesses often 
includes the barriers to affordable health care as an 
entrepreneur. Because of the lack of affordable health care for 
entrepreneurs, women tend to work full-time jobs to obtain 
health care while working in their business full-time. Women 
should not have to balance both or choose.
    In closing, in order to encourage more women to be 
entrepreneurs, they need to know that they have the resources 
and support to do so. This is not just business resources but 
this includes adequate housing, childcare, education, and 
mentorship.
    Thank you for your time and the opportunity to share my 
expertise and thoughts.
    [The prepared statement of Dr. Lucas follows:]
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Cardin. Thank you, Dr. Lucas, and we are very 
proud of your activities in our city of Baltimore.
    We will now hear, via the Web, from Mrs. Candace Waterman, 
who is the President and CEO of Women Impacting Public Policy, 
a national, nonpartisan public policy organization, advocating 
on behalf of women business owners and its coalition of 79 
business organizations.
    Mrs. Waterman has over 35 years of experience spanning 
across the private and public sector, owning companies herself 
in the medical, real estate, and hospitality industries. In her 
current role she works in a bipartisan way with lawmakers like 
ourselves to impact and influence policy that provides economic 
equity, procurement inclusion, and access to the global 
marketplace to women entrepreneurs.
    Mrs. Waterman, pleased to hear from you.

    STATEMENT OF CANDACE WATERMAN, PRESIDENT AND CEO, WOMEN 
                    IMPACTING PUBLIC POLICY

    Ms. Waterman. Thank you so much, and good afternoon 
Chairman Cardin, Ranking Member Paul, and members of the 
Committee. It is an honor to meet you and to be invited to 
speak to the Committee today.
    My name is Candace Waterman, I serve as the President and 
CEO of Women Impacting Public Policy, a national nonpartisan 
organization advocating on behalf of women entrepreneurs, 
strengthening their impact on our Nation's public policy, and 
creating economic opportunities while and forging alliances 
with other business organizations.
    Thank you for the opportunity to speak at today's hearing, 
which will highlight the strength of women small business 
owners during the COVID-19 pandemic, the ongoing barriers to 
success these entrepreneurs face, and how Congress and the 
Small Business Administration can better support small business 
owners and encourage more women to pursue entrepreneurial 
opportunities.
    Women Impacting Public Policy is a national nonpartisan 
organization which educates and advocates on behalf of women-
owned businesses across the country. Since its inception in 
June 2001, WIPP has reviewed, provided input, and taken 
specific positions on many economic issues and policies which 
affect the bottom line of our membership. The issues cover a 
broad range of current legislation and/or policies such as 
affordable health care, leveling the playing field for women-
owned businesses, opening up Federal procurement policies for 
women-owned businesses, the implementation of well-established 
Federal law which seeks to encourage women in the marketplace, 
tax policies, energy, telecom, and more. Matters which are not 
directly relevant to the economic health and well-being of 
constituent businesses are not part of our agenda.
    Since its founding 20 years ago, WIPP's policy priorities 
have shifted to meet the times and to address the emerging 
policy areas impacting the economic health of women-owned small 
businesses, such as digital infrastructure and workforce 
development. Additionally, at its core, WIPP's advocacy has 
always been focused on increasing parity and equity for women-
owned small businesses in Federal contracting and access to 
capital.
    As an organization which represents the country's over 12 
million women-owned businesses, we have within our ranks 
Republicans, Democrats, Independents, liberals, conservatives 
and every variety of opinion. We urge and encourage our members 
to become involved and politically active as their consciences 
dictate.
    Our organization surveys its membership on a regular basis 
to determine which issues are priority issues for them, and we 
maintain the issue committees to review options and 
alternatively look to them for advice on legislation that meets 
the needs of our membership.
    In order to further our objectives, we maintain 
relationships with all Members of Congress, as well as the 
incumbent Administration, regardless of political affiliation, 
and we intentionally maintain our nonpartisan approach.
    WIPP has tackled Federal contracting issues since its 
inception. Access to Federal markets continues to be a 
challenge for WOSBs, given that the Federal Government has only 
met its modest goal of 5 percent awards to WOSBs twice. One 
missing piece is good data on these large, multi-year contracts 
also known as MACs. In addition, the government does not have 
sufficient data on whether subcontracting commitments have been 
met. A significant legislative victory was achieved in 2018, 
giving small firms more ``runway'' to transition out of the 
small business set-aside program and into full and open 
competition. The law allows businesses to average revenues over 
five years rather than the previous three years for purposes of 
determining their size standards.
    WIPP will continue to advocate for changes to acquisition 
policies that will generate more contract awards for women-
owned small businesses. Current efforts include support for 
expanding sole source awards to small businesses, 
reinvigorating education and support for the women-owned small 
business procurement program in Congress and in the agencies.
    WIPP's efforts to level the playing field cuts across a 
wide set of issues relating to the government's acquisition 
policy. Without our advocacy, small businesses and women-owned 
small businesses will continue to lose ground as procurements 
become larger and longer.
    Access to capital remains the top concern for women-owned 
small businesses. As members of this Committee are aware, 
women-owned small businesses have experienced great levels of 
hardship due to the pandemic, and have struggled to access the 
capital necessary to keep their businesses afloat. Without 
delving too deeply into these hardships, it has been widely 
reported that businesses owned by women were more likely to lay 
off employees, report losses in revenue, or close permanently, 
more than any other demographic.
    Also, in regard to financing, even when women successfully 
secure financing, it is often less than what they originally 
requested and certainly far less than what is needed. In a 
similar vein, women apply for less funding, due to what I call 
application anxiety. On average, they ask for $35,000 less than 
men.
    With all of that said, WIPP has committed to making access 
to capital one of our top policy priorities. To that end, we 
frequently engage with leaders in Congress and in the private 
sector to amplify measures that would increase women's access 
to capital. This includes engagement with banks, fintechs, 
financial institutions, NGOs and nonprofit organizations.
    We also host monthly advocacy updates for our members to 
keep them abreast of updates on the Hill as well as provide an 
opportunity to hear from policymakers like yourselves. 
Additionally, WIPP hosts regular educational sessions for our 
membership on access to capital.
    WIPP was founded in 2001, with the sole intention of 
serving America's women-owned businesses through advocacy and 
education. Since our founding, we have consistently prioritized 
the economic health and well-being of constituent businesses 
and have maintained bipartisan relationships at the state, 
local and federal levels.
    Like many organizations, WIPP has been confronted with the 
rapid changes in the small business community as it relates to 
Federal contracting and procurement, technology, infrastructure 
and economic opportunity. As these changes have occurred, WIPP 
has made great strides to confront them head-on through our 
greatest strengths, and that is advocacy, education, and 
mobilization of the WIPP network.
    Over the years, WIPP has been heavily involved with 
policymakers and experts in the private sector, whether that be 
through participation in hearings, like the one we are having 
today, meetings with key staff and committees, and through 
developing strong partnerships.
    Our actions have brought strong results on behalf of women 
business owners. For example, WIPP fought for implementation of 
the women-owned small business procurement program which gives 
Federal agencies the authority to set-aside contracts for 
WOSBs. In 2015, WIPP pressed for, and achieved, the swift 
implementation of sole-source authority to the WOSB Procurement 
Program. More recently, WIPP has joined Senator Cardin, the 
Rockville Economic Development and the Maryland Women's 
Business Center for a roundtable discussion about the issues 
that women business owners face running their businesses.
    WIPP also advocates for the collection of meaningful data 
as it relates to financing and Federal contracting for small 
businesses, an issue that has become increasingly important 
throughout the pandemic. It is critical that policymakers 
understand how aid is allocated and what can be done to better 
serve demographics that are passed over for aid.
    I would like to thank the Committee for inviting WIPP to 
testify today, and thank you, Chairman Cardin, Ranking Member 
Paul, and members and staff of the Committee for all of the 
work that you do on behalf of America's women small businesses. 
I look forward to answering your questions and a robust 
discussion.
    [The prepared statement of Ms. Waterman follows:]
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Cardin. Mrs. Waterman, thank you very much for 
your comments and your incredible record on advocacy on behalf 
of women-owned small businesses.
    We have been joined earlier, as I said, by Senator Paul and 
Senator Ernst. We also have Senator Hawley who has joined us by 
WebEx, Senator Hickenlooper, and Senator Rosen, also by WebEx. 
As I explained earlier, the members are coming in and out. If a 
member on WebEx wishes to ask a question, if they just show 
their video we will call on those that are on the WebEx.
    But let me get--and I see Senator Hickenlooper took me up 
on that suggestion, so let me call upon Senator Hickenlooper.
    Senator Hickenlooper. I did not want to usurp your role as 
asking the first question but since you have called on me, 
first I just want to thank both our guests and I appreciate how 
much work they have done, and as busy as they are taking time 
out for our hearing. It is important, and it makes a big 
difference, and it is important for us to get more perspective 
on some of the challenges we are facing.
    Women-owned businesses obviously are not getting their fair 
share. If you look at startups, the percentage of venture 
capital that goes to women-led startups is under 3 percent, 
which defies any possible measure of what is going on. We have 
got a bill we put together, the Small Business Investment 
Program, to try and make sure that the actual professionals who 
are directing and expanding the access to that kind of early-
stage funding, that there are more women and more people of 
color in those roles.
    I also come from Colorado, and some of you might know Guild 
Education. It is a women-started business that provides a 
marketplace for connecting large corporations, for these large 
corporations to get their employees connected to various 
colleges and community colleges. It was founded and is still 
run by a woman named Rachel Romer Carlson, who, if she was on 
this call, she would provide a lot of context of so many of the 
challenges that she faced and chilling, really chilling 
stories. They had this great idea. Her business is now valued 
at over $3 billion, and she is one of those rare success 
stories.
    Anyway, I would like to ask both of our witnesses today, 
you know, I mentioned that we are working on diversifying the 
pool of asset managers. Do you think that will help lead more 
capital to businesses like yours? Is that something that you 
think would help, and what else could the SBA be doing to 
encourage, or to make sure and facilitate more venture capital 
going to women-owned businesses?
    Chairman Cardin. Why don't we start with Dr. Lucas.
    Dr. Lucas. Could you clarify, I did not hear the first part 
of your question.
    Senator Hickenlooper. So there are serious professional 
restraints on who qualifies. You know, the SBA has a program 
called the Small Business Investment Program. It creates pools 
of money that are directed and usually in partnership with 
private money, but for early stage investors, for venture 
capital.
    The people who run these funds are generally all white 
males, and have been for a long time. This seemed an 
appropriate place to reach out and propose legislation that 
would change that. So I was wondering if there are other things 
you are aware of that the SBA should be doing to facilitate 
getting more funding to women-owned startups and startups that 
are not just by women but people of color, other marginalized 
communities. What could the SBA be doing that would provide 
even more help?
    Dr. Lucas. Great question. So, of course, one of the 
challenges, that, like you said, small businesses have is 
access, but it is access to patient capital. And so if there 
were funds available, let us just say $5,000 to $15,000, like a 
revolving fund, tied to technical assistance, there is a good 
chance that there could be more mom- and women-owned businesses 
to thrive.
    Senator Hickenlooper. Mrs. Waterman, do you want to add 
anything to the answer?
    Ms. Waterman. Yes. I would just like to add, on top of Dr. 
Tammira, this sort of mezzanine funding, if you will, or this 
sort of bootstrap funding, to, you know, make payroll, or pay 
for certifications. I think that is really needed. And I think 
the other thing is we need to look at the way that we are 
funding, because it is not a one-size-fits-all. We need to meet 
the businesses where they are to ensure that the methodology is 
appropriate when providing funding.
    Senator Hickenlooper. Got it. No, I appreciate that, and I 
agree completely.
    I am almost out of time, but just quickly, patents, the 
people that apply for patents are predominantly men. Twelve 
percent of investors filing for patents in 2019 were women. 
That is painfully low. Most of the best innovators I know, 
starting with my wife, are women, and yet somehow we have made 
that process feel foreign.
    And I guess we are running out of time. I will file this 
question and you can answer it in more detail, but I would just 
quickly as each of you, is there anything the SBA can be doing 
to facilitate getting more women into that process of filing 
patents?
    Chairman Cardin. Mrs. Waterman, do you want to start first?
    Ms. Waterman. Thank you. I would say by and large it is 
education. Some people do not even understand the process, so I 
think education is key at all levels, to understand, one, how 
to protect themselves, how to protect their IP, and more 
importantly, how to make certain that that IP is sustainable.
    Senator Hickenlooper. I love that. You are right.
    Chairman Cardin. We have been joined by Senator Cantwell. I 
am going to give her a moment. Senator Cantwell.
    Senator Cantwell. Yes. Thank you, Mr. Chairman. Thank you 
so much for your----
    Chairman Cardin. A former Chair of our Committee, I might 
point out.
    Senator Cantwell. Thank you. I love our partnership, 
because even when we work, the Chairman of the Committee, you 
did such great work in helping us with access to capital, and 
now that I am over at Commerce and you are here we are 
partnering again with your great help on the Minority Business 
Development Agency----
    Chairman Cardin. Thank you.
    Senator Cantwell [continuing]. And hopefully we will get a 
record. That was your legislation that was authorizing that 
organization.
    Chairman Cardin. And I just want to underscore that point. 
We were able to get the SBDA language included in the 
infrastructure thanks to Senator Cantwell, give it permanency 
and expand its applications, which is a critical tool to help 
the underserved and minority communities of small business. And 
Senator Cantwell, thank you so much for your work on that.
    Senator Cantwell. So we are very excited about that, 
because one of the issues is now, obviously, putting more money 
into that. So I do not know if the witnesses--you know, we have 
a couple of organizations in the State of Washington that are 
very focused on minority women business organizations and try 
to grow access to capital. So I do not know if the witnesses 
want to talk about access to capital. What we like about the 
MBDE is similar to the gap we found at SBA, there are the 
programs but where is the advisory help and support and some of 
those mentoring programs, the most senior people in business. 
Well, guess who they ended up being? White men. So when it came 
to the products and services that women might be offering, they 
were not as expert on what those products and services might 
be, or the interest.
    So anyway, I just do not know if somebody wants to comment 
on access to capital issues as it relates to trying to marry 
up, particularly for the minority community, what we need to 
do.
    Chairman Cardin. I think maybe Dr. Lucas can give her 
personal experiences that she confronted in her efforts.
    Dr. Lucas. Absolutely. So let me first say, access to 
capital has always been a hot topic and a huge barrier for 
women, especially minority women entrepreneurs. And the major 
problem with access to capital is that often minority women, 
especially those in underserved communities, do not have the 
credit score or the collateral to access funding. And I believe 
Congress could better support these entrepreneurs with early 
startup funding that does not have many barriers or 
contingencies.
    Let's think about the mom from West Baltimore, me, who 
desires to start a business and is currently working a job that 
barely pays her bills. The chances of her having a good credit 
or collateral is very low. She should not have to give up on 
her entrepreneurial dreams because of generations of poverty 
and structural racism that she was more likely born into.
    There is a huge opportunity to align access to capital to 
federally funded social service program, because contrary to 
what people think, many individuals who qualify for social 
services want more for themselves, but we have to design 
programing and opportunities to allow them to obtain more.
    Senator Cantwell. Thank you, Mr. Chairman.
    Chairman Cardin. Let me followup on some of these points. 
First, Dr. Lucas, thank you for your seven-point suggestion, 
and both of you have mentioned access to capital issues and the 
challenges with capital. I want to go down some of these issues 
and I want to get to the experiences under the Paycheck 
Protection Program, which I think underscores some of the 
structural challenges we have in underserved communities.
    First, in regard to Women's Business Centers, we are very 
proud of our Women's Business Centers. Thank you for that 
recommendation. We just opened up one recently in Morgan, and 
we also, by the way, opened up one in Salisbury. So we are now 
fortunate to have three Women's Business Centers in the State 
of Maryland, and they are all very valuable.
    In regard to the navigator program as part of the American 
Rescue Plan, your suggestions there are good suggestions. We 
have got to make sure it is implemented in the way that reaches 
the underserved communities.
    The family considerations. Senator Cantwell's point was so 
well taken, the challenges that you have in your answer. Cowork 
is truly unique, and we are blessed to have you in Baltimore, 
but there are so many communities that do not have a Cowork, 
where a woman can take care of her family obligations as well 
as enter the workforce and be an entrepreneur.
    We are trying to correct that in the Build Back Better 
agenda. Now that is being negotiated as we are here today. We 
hope this is going to be successful within the next 24 hours. 
But we deal with childcare, affordable childcare. We deal with 
health care access, which are critically important if we are 
going to be able to get the full entrepreneur participation in 
our economy, as you both have pointed out so well.
    But let's get to capital because capital really is, I 
think, the driving force. Senator Hickenlooper mentioned the 
SBIC. It is one of the tools available for capital, but it is a 
closed shop today. It is a narrow group of entrepreneurs who 
can benefit from the SBIC. And one of the areas that we are 
trying to expand that is to get fund managers that represent 
our community, particularly the underserved community, so that 
we can get startup capital and venture capital to minority 
small businesses and women-owned small businesses. Today the 
percentages, as Senator Hickenlooper pointed out, is virtually 
non-existent, the availability of venture capital. So we need 
to be able to do a better job in all of that.
    So my question to you is, what do we take away from the 
Paycheck Protection Program? This was the largest single 
program ever devised to help small business--$800 billion of 
funds were made available in a relatively short period of time.
    Now here is a program where there was no risk to the bank 
because it was 100 percent guaranteed by the government. We 
paid their costs. We did everything we could to make it easier 
for them to accept applications quickly in order to get money 
out to save small businesses. And yet we know, during the first 
rounds of PPP, the underserved, underbanked communities, women-
owned small businesses were not represented in the numbers that 
represent the number of women-owned small businesses in our 
community.
    So I guess my question to you, what is the lesson learned 
from this? We did modify the program as we went forward, 
including making sure that there were allocations to mission 
lenders that have a much better record in underserved 
communities, and we did expand the EIDL program, which is much 
more direct SBA involvement rather than the banks. And then 
lastly, we had a grant program because, as you pointed out, Dr. 
Lucas, in some cases small businesses cannot take out loans. 
The credit is just not there. The assets are not there. They do 
not want to take out additional loans. They need grants.
    So my question to you is, as we look at moving forward, 
what is the lesson learned from the PPP experience, which got 
off to a rocky start with women-owned small businesses. As we 
look at building back better, access to capital, women-owned 
small businesses, where should we put our priority?
    I will start with Mrs. Waterman. If you have some view on 
this I would appreciate it.
    Ms. Waterman. Absolutely. Thank you. You know, we totally 
understand that the pandemic took its toll, right, on 
businesses, particularly on those women and minority firms, 
with more than 71 percent of them having a decreased business 
revenue. I think that PPP and EIDL did work. I think that it 
worked for what it was. I think as we look at next steps, if 
you will, in our lessons learned, we have got to understand 
that the funds that were provided during that time, many people 
took it out of desperation. And so as they are desperate to 
keep the doors open, desperate to pay their employees, 
desperate to keep homes afloat, we have got to have the 
education for people to understand the cash flow, what is the 
funding that they are receiving, what does that mean, you know, 
what funding is right for them? Some of our members, I had a 
few who said, you know, they actually did not really want to 
have what it is that they received, meaning because the terms 
and conditions of it were just too stringent for them.
    So I think, one, education is key. Having us understand the 
true impact on the businesses that receive this funding, where 
are they at now, what funding do they need going forward, and 
are we ensuring that we are educating them on how to manage the 
P&L so that it can be a sustainable funding, not just a ``right 
now'' type of funding.
    Chairman Cardin. That is very helpful, and Dr. Lucas, your 
recommendations on the navigators would certainly help in that 
education and outreach suggestions to make sure the capital 
gets out in a more equitable way.
    I am going to yield to Senator Duckworth, who is on WebEx, 
and give her a chance to ask questions.
    Senator Duckworth. Thank you very much, Mr. Chairman, and I 
want to thank the folks for being here on this very important 
topic.
    Earlier this year a joint survey of nearly 1,200 female 
entrepreneurs was conducted to understand how they were 
affected by the pandemic, and the survey findings demonstrated 
the resilience of women entrepreneurs and just how important 
they are to rebuilding our economy. For example, many of the 
women surveyed had started a new small business over the past 
year, and of these new ventures, nearly half were owned by 
women of color.
    Ms. Waterman, could you address how increasing Federal 
investments in women entrepreneurs would deliver a strong 
return on investments for local economies and job growth?
    Ms. Waterman. Absolutely. You know, I say investing in 
women is an investment in our future and our economy. We know 
that women make 85 percent of the decisions in the household, 
they influence the other 15 percent, and when you overlay that 
with a business owner being a woman, and opening businesses at 
record rates prior to COVID, showing their resilience and 
innovation, I think those are the components, right, and the 
recipes for success in terms of knowing that the return on 
investment is there as you invest in women-owned small 
businesses, or in women businesses, in particular. They will 
have the funding to, again, not to startup their companies but 
to grow their companies and then be able to impact our economy 
in a very strong manner, as we are looking to make certain that 
we are moving from crisis to recovery.
    Senator Duckworth. Thank you. I could not agree with you 
more about the importance of supporting women-owned small 
businesses at the Federal level and the need to specifically 
help female entrepreneurs. It is why this summer I reintroduced 
my Interagency Committee on Women's Business Enterprise Act. I 
was proud that our Committee chairman, along with Senators Tim 
Scott and Susan Collins, joined me to introduce this bipartisan 
bill that simply seeks to restore the Federal interagency 
committee that was originally created to lead a whole-of-
government effort to support and promote women entrepreneurs.
    Ms. Waterman, in your testimony you mentioned the need to 
better understand how Federal aid is reaching, or failing to 
reach in your answer to the Chairman just now, as well, how 
Federal aid is reaching or failing to reach women small 
business owners, particularly women of color? Do you believe 
that restoring and reinvigorating the Interagency Committee on 
Women's Business Enterprise would improve Federal Government's 
efforts to solve longstanding challenges, such as making sure 
that Federal support is actually reaching women-owned business 
enterprises, sending them the most appropriate support that 
they need?
    Ms. Waterman. I say a resounding yes, and I say that, in 
June of this year we submitted a letter to Speaker Pelosi and 
leaders Schumer, McConnell, and McCarthy, to express our 
support of the Interagency Committee on Women's Business 
Enterprise Act. And we know that that agency is really critical 
to the Federal Government as it develops policies that would 
support these women business owners.
    After the last 18 months that we have had, which has been 
exceedingly challenging for women businesses, in particular, it 
is our hope here at WIPP that Congress can work together, in a 
bipartisan manner, so that Federal Government can provide 
targeted assistance to this demographic of women entrepreneurs 
as they seek to start and grow their businesses.
    Senator Duckworth. Thank you. I want to switch gears a 
little bit and talk about the care economy. I have been 
frustrated with a recent debate that sort of tries to separate 
so-called real infrastructure investments like roads and 
bridges and airports from investments in other economic 
programs that I think are just as important in the care 
economy.
    I think there is a false dichotomy here that ignores the 
reality that the care economy investments would empower more 
parents to start new businesses and level the playing field for 
small businesses that struggle to compete with large 
corporations because those large corporations can afford paid 
leave but the small businesses that are just starting out just 
simply cannot afford it, no matter how much they want to 
provide it.
    That is why I led 14 of my colleagues in sending a letter 
to Senate leadership pushing for major investments in 
caregiving as part of any Build Back Better package.
    Dr. Lucas, you highlighted mom entrepreneurs in your 
testimony. Could you address the caregiving challenges 
confronting mom entrepreneurs and address how enhancing our 
caregiving infrastructure from expanding affordable childcare 
to making home and community-based services accessible to our 
loved ones could help these entrepreneurs to start and grow 
their businesses?
    Dr. Lucas. Absolutely. Thank you. So just to kind of put 
some context to this, the median annual income for full-time 
female entrepreneurs is $40,000. The average cost of childcare 
just in Maryland is $15,335, the average yearly rent is 
$16,800, and the average yearly grocery bill is $8,600 for a 
family of three. Women are expected to raise families without 
assistance or work unfulfilled jobs, right? So in order for you 
to qualify for daycare vouchers, that is just a whole different 
battle by itself. A family of three has to only have an income 
of no more than $60,000, right. And so a Maryland resident, 
they either have to take their spouse or the child's father 
down for child support.
    There are all these guidelines in order to receive 
assistance. And so these requirements are not realistic, nor do 
they support the mom who desires to start or run a business, 
and I think that is extremely important for us to really look 
at how our social service system is set up and how we are 
constantly pushing mothers into low-income jobs.
    Senator Duckworth. Thank you so much. I am over time, Mr. 
Chairman. Thank you.
    Chairman Cardin. And let me thank Senator Duckworth for her 
leadership in regard to the Interagency Task Force. Your work 
has been incredible there on behalf of women, so thank you for 
your leadership on these issues.
    I want to thank both of our witnesses for their testimonies 
today. We are going to have a chance to deal with the issue 
Senator Duckworth was referring to in the care economy. We 
clearly are going to make that one of the major centers of our 
Build Back Better budget that we are working on right now. We 
are looking at strengthening the tools in the SBA toolkit to 
deal with the underbanked, underserved communities, with women-
owned small businesses. We are optimistic. We are working very 
closely with the Biden administration, and we are together in 
our priorities and with our counterparts in the House.
    So I particularly want to thank our stakeholders who have 
been working with us, including the Women Impacting Public 
Policy. You have been a great partner for us in these efforts. 
And as I said earlier, to Dr. Lucas, we are very proud of what 
you do in Baltimore, filling such an important need so that 
entrepreneurs, women, moms can enter the entrepreneurial space 
and help themselves and help our community.
    With that the Committee will stand adjourned with the 
thanks of the Committee to our witnesses.
    [Whereupon, at 3:44 p.m., the Committee was adjourned.]

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