[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
                     ACCESS DENIED: CHALLENGES FOR

                       WOMEN- AND MINORITY-OWNED

                      BUSINESSES ACCESSING CAPITAL

                         AND FINANCIAL SERVICES

                          DURING THE PANDEMIC

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

                            VIRTUAL HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON DIVERSITY

                             AND INCLUSION

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 9, 2020

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-102
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                             ______                       


             U.S. GOVERNMENT PUBLISHING OFFICE 
43-195 PDF           WASHINGTON : 2021 



                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             ANN WAGNER, Missouri
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            SCOTT TIPTON, Colorado
BILL FOSTER, Illinois                ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio                   FRENCH HILL, Arkansas
DENNY HECK, Washington               TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
RASHIDA TLAIB, Michigan              DAVID KUSTOFF, Tennessee
KATIE PORTER, California             TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa                     ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois                JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts       BRYAN STEIL, Wisconsin
BEN McADAMS, Utah                    LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia            WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts      VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
                Subcommittee on Diversity and Inclusion

                     JOYCE BEATTY, Ohio, Chairwoman

WM. LACY CLAY, Missouri              ANN WAGNER, Missouri, Ranking 
AL GREEN, Texas                          Member
JOSH GOTTHEIMER, New Jersey          FRANK D. LUCAS, Oklahoma
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   TED BUDD, North Carolina
AYANNA PRESSLEY, Massachusetts       DAVID KUSTOFF, Tennessee
TULSI GABBARD, Hawaii                TREY HOLLINGSWORTH, Indiana
ALMA ADAMS, North Carolina           ANTHONY GONZALEZ, Ohio, Vice 
MADELEINE DEAN, Pennsylvania             Ranking Member
SYLVIA GARCIA, Texas                 BRYAN STEIL, Wisconsin
DEAN PHILLIPS, Minnesota             LANCE GOODEN, Texas

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 9, 2020.................................................     1
Appendix:
    July 9, 2020.................................................    39

                               WITNESSES
                         Thursday, July 9, 2020

Busby, Ron, Sr., President and CEO, U.S. Black Chambers, Inc.....     5
Castillo, Carmen, Chairwoman, Board of Directors, U.S. Hispanic 
  Chamber of Commerce............................................     7
Kerrigan, Karen, President and CEO, SBE Council..................     8
Ross, Jenell, President, Bob Ross Auto Group.....................    10

                                APPENDIX

Prepared statements:
    Busby, Ron, Sr...............................................    40
    Castillo, Carmen.............................................    46
    Kerrigan, Karen..............................................    77
    Ross, Jenell.................................................    83

              Additional Material Submitted for the Record

Beatty, Hon. Joyce:
    Written statement of the Asian/Pacific Islander American 
      Chamber of Commerce and Entrepreneurship...................    87
    Written statement of the Association of Women's Business 
      Centers....................................................    90
    Written statement of Clever Girl Finance.....................    91
    Written statement of Creative Investment Research............    95
    Written statement of Include Ventures........................   100
    Written statement of Fund Humanity...........................
 
    Written statement of the National Bankers Association........   115
    Written statement of United Bank.............................   118


                     ACCESS DENIED: CHALLENGES FOR

                       WOMEN- AND MINORITY-OWNED

                      BUSINESSES ACCESSING CAPITAL

                         AND FINANCIAL SERVICES

                          DURING THE PANDEMIC

                              ----------                              


                         Thursday, July 9, 2020

             U.S. House of Representatives,
                          Subcommittee on Diversity
                                     and Inclusion,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 12 p.m., via 
Webex, Hon. Joyce Beatty [chairwoman of the subcommittee] 
presiding.
    Members present: Representatives Beatty, Clay, Green, 
Gottheimer, Lawson, Pressley, Adams, Dean, Garcia of Texas, 
Phillips; Wagner, Mooney, Kustoff, Gonzalez of Ohio, and Steil.
    Ex officio present: Representative Waters.
    Also present: Representatives Garcia of Illinois and 
Porter.
    Chairwoman Beatty. The Subcommittee on Diversity and 
Inclusion will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time.
    Also, without objection, members of the full Financial 
Services Committee who are not members of the subcommittee are 
authorized to participate in today's hearing.
    Members are reminded to keep their video function on at all 
times, even when they are not being recognized by the Chair. 
Members are also reminded that they are responsible for muting 
and unmuting themselves, and to mute themselves after they are 
finished speaking.
    Consistent with the regulations accompanying H. Res. 965, 
staff will only mute Members and witnesses as appropriate when 
not being recognized by the Chair, to avoid inadvertent 
background noise. Members are reminded that all House rules 
relating to order and decorum apply to this remote hearing.
    Today's hearing is entitled, ``Access Denied: Challenges 
for Women- and Minority-Owned Businesses Accessing Capital and 
Financial Services During the Pandemic.''
    I now recognize myself for 5 minutes to give an opening 
statement.
    Good afternoon. Small businesses are critical to the United 
States' economic growth. They contribute 65 percent of all new 
jobs, and they are a critical tool for wealth creation and 
increasing employment. But minority- and women-owned businesses 
face numerous unique and disparate barriers to market entry. We 
must act to eliminate the systemic and racial barriers that 
impede the formation and competitiveness of minority- and 
women-owned businesses. These barriers create an uneven playing 
field when it comes to accessing capital, leveraging loans, and 
other credit products necessary to fund and sustain their 
business.
    In today's hearing, we will discuss how easing impediments 
on African-American access to capital will result in economic 
and employment growth in minority communities, and in the 
United States overall, and examine the historical and systemic 
challenges faced by minority- and women-owned businesses, such 
as a lack of access to capital and systemic racism, and how 
those persistent challenges have led to closure at a 
disproportionate rate during the COVID-19 pandemic.
    Small businesses experienced a 22-percent closure rate as 
the result of the COVID-19 pandemic from February to April of 
2020. But the closure rate for minority-owned businesses was 
significantly higher, with 41 percent of Black-owned 
businesses, 32 percent of Latinx-owned businesses, and 20 
percent of Asian-owned businesses closed over the same period.
    In April of this year, the Federal Reserve Bank of New York 
reported that minority- and women-owned businesses are 
significantly more likely to show signs of limited financial 
health, and are twice as likely to be classified as at risk, or 
distressed, than non-minority small businesses. Further, 
distressed companies are 3 times as likely as healthy 
businesses to close because of the 2-month revenue shot. The 
Paycheck Protection Program (PPP) was established under the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act, and 
administered by the Small Business Administration (SBA) and 
Treasury, as funding lifelines for distressed businesses 
responding to the COVID-19 pandemic.
    But a recent analysis by Color of Change in the United 
States found that only 1 in 10 African-American and Latinx-
owned businesses received the requested funds through the 
program.
    I have heard from many minority-owned businesses who did 
everything right. Yet, they did not get a loan number or a loan 
in the first round. Many minority businesses shared that the 
Enhancement Act was not adequately designed to enhance, or 
assist, small businesses.
    Thanks to the partnership of Financial Services Committee 
Chairwoman Maxine Waters, and Small Business Committee 
Chairwoman Nydia Velazquez, adjustments were made in the second 
round of funding. On June 30th, the Small Business 
Administration announced that 4.9 million loans totaling $521 
billion have been granted by the PPP.
    So now, let me just say that I look forward to hearing from 
our distinguished witnesses who will share key insights 
regarding the ongoing plight of minority- and women-owned 
businesses, and what steps Congress and the private sector can 
take to ensure necessary and fair inclusion in the economy.
    The Chair now recognizes the ranking member of the 
subcommittee, my good friend, colleague, and someone whom I am 
delighted to see, although it is on Zoom today, Ranking Member 
Ann Wagner.
    Mrs. Wagner. Thank you, Madam Chairwoman, and it is a 
delight to see you and all of our subcommittee here this 
afternoon, and thank you for holding this hearing.
    I want to welcome our witnesses and thank them for 
testifying about the obstacles that women- and minority-owned 
businesses face when it comes to accessing capital and 
financial services.
    When this pandemic began, and businesses were forced to 
close their doors in order to prevent the spread of the 
coronavirus, Congress took swift action to stabilize the 
economy, to keep Americans employed and businesses from 
closing, and to give our healthcare workers the resources that 
they needed to combat the disease. Those actions included 
providing regulatory relief to lenders, and access to emergency 
programs through the Federal Reserve, and the Small Business 
Administration.
    I want to highlight a few specific solutions that Congress 
has provided during this pandemic to ensure that U.S. 
businesses continue to have access to the relief they need. We 
have lowered the community bank leverage ratio to give 
community banks the ability to continue lending as cash 
deposits have increased. We have given flexibility to banks 
that would have been required to comply with the Current 
Expected Credit Loss (CECL) accounting standards, that would 
have locked up billions of dollars for financial institutions 
and hindered their ability to lend to those who need assistance 
the most.
    Finally, we authorized some $660 billion in forgivable 
loans under the Paycheck Protection Program (PPP), which has 
supported more than 51 million American jobs, and over 80 
percent of all small business employees. The Program included a 
set-aside amount of $10 billion for community financial 
institutions.
    When it comes to ensuring that women- and minority-owned 
businesses can access PPP loans and other funding, I am glad to 
see that some lenders have taken the initiative. Lenders, 
including Citigroup, JPMorgan Chase, and Bank of America, have 
provided data highlighting their work to ensure that PPP is 
available to a diverse group of customers. For example, 
JPMorgan set up a new program to focus on underserved 
entrepreneurs. And Bank of America is conducting extensive 
outreach to small business clients in low- and moderate-income 
neighborhoods to raise awareness about PPP and other loan 
facilities.
    But it is not just our nation's biggest banks that are 
helping those in need. Let me tell you about what happened in 
St. Louis last month, with a banker from Midwest BankCentre. He 
was getting his hair cut when he overheard that the African-
American woman barbershop owner had taken out a $5,000 payday 
loan to pay bills. The banker offered to assist her in applying 
for PPP loans. That interaction eventually led, most 
importantly, to the bank signing a deal with the National 
Minority Supplier Business Development Council, a group which 
helps minority-owned businesses access PPP loans. I commend 
these professionals for their outreach, and I urge other firms 
in the industry to follow suit if they have not done so 
already.
    I have also introduced the Calculate PPP Forgiveness Act, 
with my friend and colleague from Missouri, Congressman Clay, 
which instructs SBA and Treasury to create or certify a loan 
forgiveness calculator to resolve confusion between lenders and 
small businesses over what costs should be calculated, and to 
help small businesses complete their forgiveness forms.
    This bill has the support of U.S. Black Chambers, Inc., the 
Heartland St. Louis Black Chamber of Commerce, the National 
Federation of Independent Business (NFIB), the Independent 
Community Bankers of America (ICBA), the Missouri Bankers 
Association, and so many, many others. It is especially 
important for businesses that don't have the resources to hire 
outside consultants to help them with the forgiveness process.
    While this hearing is about access to capital during the 
pandemic, this subcommittee must also focus on permanent 
regulatory reforms to lift and strengthen minority- and women-
owned businesses beyond the pandemic. These businesses benefit 
when we cut unnecessary costs and expand opportunities for 
investors to put their money to work.
    Thank you, Madam Chairwoman.
    And I yield back.
    Chairwoman Beatty. Thank you.
    The Chair now recognizes the Chair of the full Financial 
Services Committee, Chairwoman Maxine Waters. It is indeed an 
honor for me to introduce someone who really needs no 
introduction. She is an advocate for the people and, as we talk 
about the PPP plan today and other financial services issues, 
please know that her fingerprints, and her footprints, are all 
over it, and she has been recognized for her great leadership.
    No further words are needed. Chairwoman Maxine Waters from 
the great State of California, I recognize you for 1 minute, or 
as much time as you may consume.
    Chairwoman Waters. I want to thank you so much, Chairwoman 
Beatty, for all of the work that you are doing to really get 
the whole discussion of inclusion and diversity in the national 
eyesight. You are doing a wonderful job, and I thank you for 
convening this important hearing on the struggles that women- 
and minority-owned businesses face in accessing capital.
    Before the COVID-19 crisis began, as you have said, 
minority- and women-owned businesses had serious challenges in 
accessing capital. For example, 2018 data showed that minority 
business owners were less likely to be approved for loans or 
were approved for lower loan amounts and higher interest rates 
than their White counterparts. Forbes also reported that when 
women- and minority-owned business owners applied for loans, 
they were often rejected due to a lack of assets caused by the 
widening racial and gender wealth gaps.
    Despite these challenges, women- and minority-owned 
businesses have grown 10 times faster than all other U.S. small 
businesses. However, we will never close the racial and gender 
gap and provide for expanded entrepreneurship opportunities for 
women and people of color until we can address these capital 
challenges.
    So, I am very pleased to be with you today, and I look 
forward to hearing from our witnesses. I thank our witnesses 
for being here, and I am looking forward to hearing their views 
on how to help solve this challenge.
    Thank you, Chairwoman Beatty.
    And I yield back the balance of my time.
    Chairwoman Beatty. And I thank you, Madam Chairwoman.
    Today, I am honored to welcome the testimony of our four 
witnesses. Our first witness, Mr. Ron Busby, Sr., is President 
and CEO of the United States Black Chamber of Commerce. Ron is 
a former CEO and serves on the Pfizer Small Business Council 
and the White House African American Leadership Council.
    Our second witness, Ms. Carmen Castillo, is Chairwoman of 
the Board of Directors of the United States Hispanic Chamber of 
Commerce. Carmen is also the President and CEO of SDI 
International, which she founded in 1992.
    Our third witness, Ms. Karen Kerrigan, is President and CEO 
of the Small Business & Entrepreneurship Council. Karen has 
been appointed to numerous Federal advisory boards, including 
the National Women's Business Council, the U.S.-Iraq Business 
Dialogue, and the United States Treasurer's Taxpayer Advisory 
Panel.
    Our final witness, Jenell Ross, is President of Bob Ross 
Automotive Group. She is the only second-generation African-
American woman dealer in the country. Jenell also serves as the 
Chair of the Board of Directors for the Cincinnati branch of 
the Federal Reserve Bank of Cleveland.
    Witnesses, you are reminded that your oral testimony will 
be limited to 5 minutes. A chime will go off at the end of your 
time, and I ask that you respect the members' and other 
witnesses' time by wrapping up your oral testimony. And without 
objection, your written statements will be made a part of the 
record.
    Mr. Busby, you are now recognized for 5 minutes to give an 
oral presentation of your testimony. Thank you.

   STATEMENT OF RON BUSBY SR., PRESIDENT AND CEO, U.S. BLACK 
                         CHAMBERS, INC.

    Mr. Busby. Thank you, Chairwoman Beatty, Ranking Member 
Wagner, Chairwoman Maxine Waters, and distinguished members of 
the subcommittee, for the opportunity to share testimony with 
you today.
    My name is Ron Busby, and I serve as the President and CEO 
of the U.S. Black Chambers, Incorporated, the nation's leading 
voice for Black businesses across the country. We represent 145 
Chambers in 42 States, with a membership base of over 332,000 
Black-owned businesses, founded on our five pillars, which are: 
advocacy; access to capital; contracting opportunities; 
entrepreneur training; and Chamber development.
    The U.S. Black Chambers, better known as USBC, for the past 
decade has been providing committed visionary leadership and 
advocacy and the realization of economic empowerment. Through 
the creation of resources of initiatives, we support African-
American Chambers of Commerce and business organizations in the 
work of developing and growing Black businesses.
    Clearly, minority- and women-owned business enterprises 
(MWBEs) are critical components of the nation's vast economy. 
These funds collectively provide upwards of $1 trillion in 
annual receipts, and contribute nearly 9 million jobs to the 
country's labor market. MWBEs have been cited as the fastest-
growing segment of businesses, whose results created 40 percent 
of America's new jobs in recent decades.
    Despite this extraordinary impact, it is Black business 
owners and entrepreneurs that history and data shows face 
systemic barriers to entrepreneurial resources and access to 
capital, among other daunting challenges. In light of these 
facts, we believe that strategically engineered policy can put 
a stop to continuing disparities experienced by Black-owned 
businesses.
    Our participation in today's virtual hearing underscores 
the critical role of continued advocacy through the 
establishment of public policy that addresses continuing 
challenges in accessing capital and financial services.
    Amidst the ongoing health and economic crisis, the most 
permanent disparity exists within Black America. Case in point, 
the country lost 3.3 million small businesses in the first and 
second quarter of the year, but the number of Black 
entrepreneurs declined 41 percent. Nearly 450,000 Black-owned 
businesses were closed between the months of February and 
April.
    In addition to this disproportionate decline, Black America 
suffered the brunt of the labor lost during the pandemic. The 
Black unemployment rate peaked nearly to 17 percent last month. 
Despite the number of Black-owned businesses located in the 
nation's fastest growing markets, these enterprises faced 
economic derailment and revenue loss prior to the pandemic in 
part because Black firms are overwhelmingly represented among 
the high-impact industries and, in part, because they were 
already in weaker financial positions. The pandemic simply 
exacerbated these challenges.
    Even though congressional action resulted in nearly $700 
billion in relief to small businesses through the Payroll 
Protection Program, this week's SBA and Treasury records show 
that the case of structural discrimination against Black 
business owners remains prevalent. In the Program's more than 
650,000 PPP loans made above $150,000, only 143 Black firms 
received a loan of that size, and 90 percent of the members of 
the U.S. Black Chambers have reported that they have found far 
less of what they asked for, or none at all.
    Fortunately, we here at the U.S. Black Chambers are working 
to address these disparities by creating resources and funding 
that bridges the gaps in effective Federal policy. To jump-
start recovery, our organization recently launched a 
transformative initiative called the, ``Buy Black'' platform, 
which focuses on supporting the millions of Black businesses by 
providing grassroots assistance to the smallest Black firms in 
one digital marketplace.
    USBC is also forging ahead with a group of industry-leading 
technology partners to announce a Black business certification 
program aimed at increasing contract awards from both the 
Federal Government and corporate America. These programs will 
put the corporate and government sectors' rhetoric to the test 
and truly improve investments within our community.
    These are just a few actions that the USBC is taking to 
ensure that Black Americans weather this storm.
    We welcome Federal legislation that will foster, not 
overlook, Black America, and close the expanding racial wealth 
gap. We welcome the challenges that the Chamber has passed the 
HEROES Act, but believe legislatures who understand the 
importance of safeguarding the Black community must embrace 
equitable policies that will include reforming the 8(a) program 
to make sure that the most vulnerable and impacted Black firms 
receive priorities focused between 2021 and 2026; reauthorizing 
the Obama-era QuickPay initiative to guarantee that Black 
government contractors are paid within a 15-day period; and 
also, ensuring that within the discussion of a new 
infrastructure bill, that Black and local businesses are 
included in the contract opportunities, reconsidering the OCC's 
new CRA proposal to certify that changes truly benefit Black 
America, and prioritizing legislation that will provide Black-
owned businesses with additional access to SBA loans, training 
and education programs, and tax incentives to invest in 
startups.
    Finally, lawmakers must pass legislation that will codify 
the MBDA into law, increase--
    Chairwoman Beatty. I must remind the gentleman that his 
time is up. But thank you very much.
    Mr. Busby. Thank you.
    [The prepared statement of Mr. Busby can be found on page 
40 of the appendix.]
    Chairwoman Beatty. Thank you.
    I now recognize Ms. Castillo for 5 minutes to give an oral 
presentation of your testimony.

 STATEMENT OF CARMEN CASTILLO, CHAIRWOMAN, BOARD OF DIRECTORS, 
               U.S. HISPANIC CHAMBER OF COMMERCE

    Ms. Castillo. Thank you, Chairwoman Waters, Chairwoman 
Beatty, and members of the subcommittee, for the opportunity to 
share testimony on behalf of the U.S. Hispanic Chamber of 
Commerce (USHCC).
    I am the President and CEO of SDI International, one of the 
largest minority- and women-owned businesses in the United 
States. My team has been providing opportunities in business 
services to Fortune 500 companies for the last 27 years. I am 
an Hispanic immigrant, and an advocate for women- and minority-
owned businesses. Today, I am honored to represent the U.S. 
Hispanic Chamber of Commerce as the chairwoman of the board of 
directors.
    The USHCC is America's largest Hispanic business 
organization. We operate as an umbrella for more than 250 local 
Hispanic chambers and business associations nationwide. We 
represent over 4.7 million Hispanic business enterprises that 
contribute an estimated $800 billion annually to the U.S. 
economy.
    The Hispanic community has been affected the most 
economically by COVID-19. A study made by Stanford University 
shows that 65 percent of Latino-owned companies in the U.S. 
report that they will not be able to continue operating beyond 
6 months. This is the reason why 60 percent of Latino families 
have lost jobs and suffered pay cuts since the pandemic began.
    Furthermore, working from home is not an option for over 84 
percent of Latinos, making our community extremely vulnerable 
to the challenges our country is facing.
    According to a U.S. Latino survey, millions of Latino 
families and businesses did not receive any support from the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act, 
including 48 percent of households earning less than $25,000 a 
year. Due to the severity and urgency of the situation, we 
would like to collaborate with congressional leaders to 
participate in the creation of legislation that will 
economically impact Hispanic businesses.
    We are advocating for the following: expand opportunities 
for our business community to participate in Federal 
procurement contracting with fundraising to serve as a 
technical assistance bridge to provide necessary education for 
our members; forgive all 2019 payable taxes for America's 30 
million small businesses; provide an additional $65 billion for 
a minority equity fund to support minority business enterprises 
through economic relief programs implemented by Treasury, the 
Federal Reserve, and the Small Business Administration (SBA); 
expand lending for Minority Depository Institutions (MDIs) and 
Community Development Financial Institutions (CDFIs); and more 
transparent reporting on the Paycheck Protection Program and 
other disaster relief programs.
    As Congress continues to allocate stimulus funding, 
minorities need to be included in the management, distribution, 
and grant allocation of these funded programs with the same 
access to Congress as any large company. Allow undocumented 
business owners and undocumented workers who can prove that 
they have paid U.S. taxes in 2018 to take advantage of the 
CARES Act and other stimulus funding.
    I wanted to share statistics related to the economic 
impact. Prior to COVID-19, Latinos started businesses at 3 
times the rate of the national average. Latinas started 
businesses at 6 times that rate. One out of every four small 
businesses is run by an Hispanic entrepreneur, and 60 million 
Hispanic Americans account for $2.3 trillion of the U.S. 
economic activity. If Congress encourages financial 
institutions to provide capital for our community to scale up, 
an additional $1.38 trillion will be generated for the U.S. 
economy. If we fail to support our businesses, our economy will 
shrink by billions, we believe, far exceeding the investment 
needed from the Federal Government in order to rescue them.
    I thank you for your time, and we look forward to 
collaborating with you to create a lasting change.
    Thank you.
    [The prepared statement of Ms. Castillo can be found on 
page 46 of the appendix.]
    Chairwoman Beatty. Thank you very much.
    Ms. Kerrigan, you are now recognized for 5 minutes to give 
an oral presentation of your testimony.

  STATEMENT OF KAREN KERRIGAN, PRESIDENT AND CEO, SBE COUNCIL

    Ms. Kerrigan. Thank you very much. And good afternoon, 
Chairwoman Beatty, Ranking Member Wagner, and, of course, 
Chairwoman Waters, and members of the subcommittee. Thank you 
for the opportunity to be a part of this hearing today, and for 
focusing on the critical issue of access to capital for women- 
and minority-owned businesses, particularly during this 
unprecedented period of time for all small businesses and, 
indeed, all Americans.
    SBE Council is an advocacy, research, and education 
organization dedicated to protecting small businesses, and 
promoting entrepreneurs. And for more than 25 years now, we 
have worked on a range of issues, including access to capital 
to strengthen the ecosystem for start-up activity and small 
business growth.
    As noted by my fellow witnesses, closed financial networks, 
longstanding financial institutional biases, and underserved 
markets work against the efforts of women and minority 
entrepreneurs who need capital to start up, operate, and grow 
their businesses. While the bipartisan CARES Act got money out 
the door quickly and helped many small businesses, the 
distribution channels of the first tranche of the funding 
underscored how the traditional financial system leaves many 
small businesses behind, particularly women- and minority-owned 
businesses.
    That is why very early on, before the launch of PPP, we 
were vocal advocates to bring Fintech lenders into the program 
to reach the kind of businesses that the PPP was also intended 
to reach, including women- and minority-owned businesses. 
Bringing Fintech into the PPP program certainly helped in 
reaching many small businesses that were falling through the 
cracks. But even when you account for their participation, 
along with the late involvement of the CDFIs, significant 
numbers of women- and minority-owned businesses have been left 
without the capital they need, or needed, to weather and 
navigate the COVID-19 crisis.
    As I noted in my written testimony, this was likely related 
to the design of PPP, which many self-employed sole proprietors 
felt was not structured for them. As we know, as many as 95 
percent of Black entrepreneurs are sole proprietors, and 88 
percent of women-owned businesses fall into this category as 
well.
    We know that Congress is looking at some additional fixes 
from perhaps a P4 program, with many of the elements that we 
support, to address these shortfalls. And SBE Council is 
engaged in these discussions.
    Support is obviously still needed, given the uncertainty of 
the pandemic and how it is and will continue to affect 
reopenings and the economy moving forward. In a recent survey 
by the National Association of Women Business Owners (NAWBO), 
45 percent of respondents stated that they still need access to 
capital in the form of grants or loans.
    We see the private sector, large companies, successful 
entrepreneurs, as well as State and local Governments, stepping 
up to meet the capital needs of struggling small businesses and 
we hope this continues because the need is vast. And we were 
pleased to see the SEC advance the temporary and conditional 
rule that eases some of the red tape and costs associated with 
regulated crowdfunding.
    Small businesses are just learning of this temporary rule, 
which, unfortunately, expires August 31st, and we are asking 
that it be extended at least through the end of the year. The 
rule was truly was designed to help small businesses, and the 
feedback that I am getting from several of our online platform 
members that we work with, who largely serve women- and 
minority-owned businesses, is that the relief is making a 
difference in terms of making this method of financing more 
accessible to these firms.
    With respect to investment crowdfunding in general, there 
is a tremendous potential and momentum behind this approach to 
financing for women and minority entrepreneurs. We believed 
another proposed rulemaking moving through the SEC, which 
allows for testing the waters, lifting the cap that can be 
raised from $1 million to $5 million, the use of special-
purpose vehicles as passed by the House in legislation, 
sponsored by Chairwoman Waters, and demo day clarification, 
will simplify and improve the crowdfunding offering framework, 
which will make it more accessible and cost-efficient for women 
and minority entrepreneurs.
    We are also exploring the concept of a crowdfunding public-
private partnership, whereby the Federal Government can match 
successful raises up to a certain dollar amount, along with 
investment tax credits. They do this in the U.K., and it has 
been very successful in that country.
    At the end of the day, there is an extraordinary amount of 
private capital out there, and SBE Council is very committed to 
policy innovations and incentives that unleash that capital and 
get it into the hands of women- and minority-owned businesses. 
There is a lot of work to do, and I look forward to our 
discussion today.
    Thank you very much.
    [The prepared statement of Ms. Kerrigan can be found on 
page 77 of the appendix.]
    Chairwoman Beatty. Thank you so much for your testimony.
    And now, Ms. Ross, you are recognized for 5 minutes to give 
an oral presentation of your testimony. And first, let me say 
that I would also like to congratulate you on the 23rd 
anniversary of you leading Bob Ross Automotive Group.

    STATEMENT OF JENELL ROSS, PRESIDENT, BOB ROSS AUTO GROUP

    Ms. Ross. Thank you, Chairwoman Beatty, and thank you, 
Chairwoman Waters and the members of the subcommittee, for the 
opportunity to share my story with you today.
    My name is Jenell Ross, and I am the President of the Bob 
Ross Auto Group in Centerville, Ohio, which is the only 
Mercedes-Benz and Buick-GMC dealership owned by an African-
American woman in the United States. My father, Robert P. Ross, 
Sr., was selected to be in the first class of the General 
Motors Minority Dealer Development Academy in 1972. My father 
was the first in his class to purchase a dealership, and it was 
the only one, when he passed away, to still be in business.
    My father became the first African-American automobile 
dealer in the States of Indiana, Ohio, Kentucky, and West 
Virginia, along with being the first African-American 
International Harvester Dealer in the U.S. in 1974.
    In 1979, my father purchased a Buick and Mercedes-Benz 
dealership in Centerville, Ohio, and he became the first 
African-American Mercedes-Benz dealer in the world. In 1997, my 
mother, Norma J. Ross, assumed command of the dealerships after 
my dad's untimely death. At 27-years-old, I was thrust into 
running the day-to-day operations as vice president/dealer 
principal. Imagine walking into an automobile dealership 
meeting as, sometimes, the only female and/or person of color 
in the room who didn't work for the manufacturer or the travel 
company that set up the meeting.
    I became president of the Bob Ross Auto Group in 2010 as 
the result of my mother's passing. It has been 23 years this 
week that I have led our organization, and I hate to say that 
the diversification of the automobile dealer body is no better 
than when I started.
    According to the National Association of Minority 
Automobile Dealers (NAMAD), at the end of 2019, there were a 
total of 1,243 ethnic minority automobile dealerships in the 
United States out of 19,000. The breakdown is as follows: 
African American, 265; Hispanics, 585; Asian, 283; and Native 
American, 110.
    Ethnic minority women represent 72 of the 1,076 women-owned 
automobile dealerships. Only four of these women are African 
American--Gail Martin, Juanita Baranco, Eillaena Fairhurst, and 
myself.
    Since the initial launch of PPP and EIDL programs, several 
financial institutions explained to many small businesses that 
they were excluded from gaining access to these financial 
opportunities because of the, ``know your customer'' rule, even 
if the business had a banking relationship without having a 
credit lending history with them. NAMAD states that PPP left 
over 60 percent of the minority dealer body without bank 
approval and/or were told to seek another financial institution 
to apply for funding in the first round.
    Historically, access to capital has been the leading 
concern of women- and minority-owned businesses to survive, and 
during this pandemic, it has been no different. Even though the 
Bob Ross Auto Group has a very strong relationship with our 
financial institution, I, too, faced obstacles when applying 
for the PPP loan. After several days of waiting for proper 
information to submit our application, I, too, was instructed 
to go elsewhere.
    Fortunately, I was able to approach another financial 
institution, and in a matter of 48 hours, I was given approval. 
I, unlike many women- and minority-owned businesses, had the 
reserves and the safety net through financial relationships to 
fall back on.
    Despite these preparations and adjustments of our business 
operations during the pandemic, we are continuing to invest 
thousands of dollars to ensure the safety of our employees, 
clients, and facilities. I still feel a heightened sense of 
uncertainty, much like other women- and minority-owned 
businesses, of not knowing if we will be able to survive in the 
short term.
    In the end, the PPP program has allowed small businesses to 
keep our doors open, and to help reduce the amount of employee 
layoffs and business closures. The majority of all ethnic 
minority auto dealers are located in rural areas, and provide a 
significant amount of resources and financial support to local 
businesses, civic, and community-based organizations. NAMAD's 
concern is, once these funds run out, will these small 
businesses be forced to lay off employees, once again, who had 
to get rehired to participate in the PPP program?
    As women- and minority-owned companies continue to pivot 
their operations during the pandemic and navigate a new normal, 
it is imperative to utilize multiple resources to help drive 
their sustainability and growth. Being certified through the 
Women's Business Enterprise National Council (WBENC) and the 
National Minority Supplier Development Council (NMSDC) allows 
business owners to develop relationships with corporations and 
businesses who value diversity and inclusion and are looking to 
partner with like-minded companies.
    We have been awarded many contracts from the State of Ohio 
Minority Set Aside Bid regarding their vehicle needs. We 
continue to work with our regional partners to help grow our 
business and yield success of winning bids to add revenue to 
our operation. At the end of the day, without access to 
capital, a sound financial relationship, and education, the 
wealth gap for women- and minority-owned businesses will 
continue to widen.
    Thank you.
    [The prepared statement of Ms. Ross can be found on page 83 
of the appendix.]
    Chairwoman Beatty. Again, I thank all of the witnesses for 
your testimony. I now recognize myself for 5 minutes for 
questions.
    Recently, the Federal Reserve Bank of New York found that 
approximately 60 percent of minority- and women-owned 
businesses are considered at risk or distressed. We also read 
that many of them use their personal funds. Our committee has 
held hearings to examine the cause and impact of racial wealth 
disparities.
    To our two Chambers leaders of the African American Chamber 
and the Hispanic Chamber, how does the racial wealth gap impact 
access to emergency funding for minority-owned businesses 
during periods of financial challenges, such as we are going 
through now with COVID-19? So, that will be to the two of you.
    And then, Ms. Ross, do you believe the racial wealth gap 
impedes the success of minority- and women-owned businesses?
    I will start with you, Mr. Busby.
    And I will then go to you, Ms. Castillo.
    Mr. Busby. Thank you for the question, and thank you, 
again, for allowing us to give our testimony.
    That is a great question and as we talk to our business 
members across the country, the number one concern that they 
all have--
    Chairwoman Beatty. Would you speak up a little bit, Mr. 
Busby?
    Mr. Busby. Thank you, again, for allowing us to have this 
testimony.
    As we talk to our members across the country, the number 
one concern that they all have is access to capital. There was 
a survey that was done that said that the average Black family 
had roughly $400 in savings for an unexpected emergency, and 
those same homeowners, many of them, are now business owners. 
So you are placing the burden of having excess capital to get 
them through tough times with very limited resources 
collectively.
    The second thing, the access to capital, the cost of that 
capital is extremely expensive. The average African American is 
paying twice the rate of our White peers, and only about 33 
percent of our businesses actually have a line of credit.
    Chairwoman Beatty. I am going to have to interrupt you to 
go to the other two, because I only have a few minutes left. 
So, I will go to the next witness. Thank you.
    Ms. Castillo?
    Actually, I will go to you, Ms. Ross, because my time is 
ticking down.
    Ms. Ross. Yes. Can you repeat the question, Chairwoman 
Beatty?
    Chairwoman Beatty. Yes. Do you believe that the racial 
wealth gap impedes the success of minority- and women-owned 
businesses?
    Ms. Ross. It comes all back to education. And without the 
opportunities to educate minority- and women-owned businesses, 
it does put us at a hindrance in terms of continuing to move 
forward. And if we have the opportunities, we have definitely 
shown that we deserve to be at the table and be in the room; 
but without those opportunities, and for people not thinking 
that we should be, then that continues to create the problems 
that we have.
    Chairwoman Beatty. Thank you.
    To all of the witnesses--and we will start with you, Ms. 
Kerrigan, and then go backwards.
    I am very proud that all of you talked about the 
disparities and the challenges, and I was really pleased to 
hear you all mention the small businesses, the gigs, the 1099, 
et cetera. Early on, I went to the House Floor and advocated 
for those, and I would like to believe it had an impact on our 
second round of funding.
    The question is: What would you say to corporate America 
and to banks right now in this space we are in? People are 
really putting in more value. Majority companies are coming to 
us with money. Maybe some of it is guilt dollars. What would 
you say to them to help put more African-American and other 
minority businesses into the hopper?
    Ms. Kerrigan?
    Ms. Kerrigan. I would say to put your money where your 
mouth is, generally, and to really make a concerted effort to 
outreach to this community, and to look at the process by which 
you are outreaching and any type of the systems, the 
application process, whatever, that you may have for accessing 
capital, potential loans, potential dollars, and to simplify it 
as much as possible.
    One size does not fit all, and you really have to meet the 
needs of these entrepreneurs where they are, and a lot has to 
be simplified, and understanding that they are not all the same 
businesses.
    Chairwoman Beatty. Okay. We will try you again, Ms. 
Castillo, if you are unmuted. Is there anything in 10 seconds 
you would like to add?
    Ms. Castillo. Yes, pretty much, I totally agree with Ms. 
Kerrigan. In our community, only $3.7 billion from PPP went to 
our community, and the average loan was about $54,000, so I 
would just put--
    Chairwoman Beatty. Thank you. I like that. I am going to 
end with, put your money where your mouth is.
    Don't worry, to the other witnesses. We will have plenty of 
other questions coming from my colleagues.
    At this time, I would like to recognize the distinguished 
ranking member of the subcommittee, Mrs. Wagner, for 5 minutes.
    Mrs. Wagner. Thank you, Madam Chairwoman.
    Ms. Kerrigan, from your work with entrepreneurs and 
startups, what sort of regulatory barriers--and you touched on 
this briefly--have you experienced that have made it difficult 
to access capital and financial services?
    Ms. Kerrigan. The biggest barrier right now is actually 
getting clear, if you are talking about investment capital, is 
actually accessing and getting access to the investors. But 
when you are talking about--a lot of them look at equity and 
debt-based crowdfunding, and they see it has great potential.
    There are two things I think are holding them back. The 
first is some of the red tape and a lot of the burden in terms 
of the first forms, filling it out, what comes next.
    And the second, which I found very interesting, and we are 
learning more about, is this temporary relief that the SEC did. 
Most of these businesses are looking for debt financing, and 
so, the crowdfunding rules are treating all businesses the 
same, as one-size-fits-all, and I think we have to look at this 
a little differently and say, well, the information that the 
SEC needs or the intermediaries have to collect, does it have 
to be as intense as, say, an equity raise versus a debt raise?
    And can we look at the structures and say, do you need to 
be a corporate structure in order to access the finances as 
they do right now or can they be an LLC or can they be sort of 
a sole proprietor because they know they can be a bank loan?
    But right now, obviously, Congresswoman, the climate is so 
different than it was pre-COVID-19. I don't know if you are 
talking about the PPP loan or Main Street lending but--
    Mrs. Wagner. Ms. Kerrigan, if I could interrupt you, in 
your testimony you mentioned the idea of creating a public-
private partnership fund, and I am very interested in learning 
more about this co-investment model and how it could provide 
increased access to capital for women- and minority-owned 
businesses. Could you go into further detail about this fund? 
You also mentioned that the U.K. has a co-investment model. If 
you have any specific data on the success of the program for 
women- and minority-owned businesses, I am very interested.
    Ms. Kerrigan. Yes, and I will follow up with more specific 
information and data. I'm just beginning to talk to our members 
and sort of the crowdfunding community about the existing way. 
It has been very successful, so much so that they are 
increasing the fund. Most startup ecosystem raises its money 
online now, because there are tax credits, and U.K. policies do 
support investment crowdfunding.
    The whole notion of the public-private partnership is that 
the Federal Government will, if a small business raises X 
amount, come in and match that. But they will work with the 
existing platform. So, the government is not picking winners 
and losers. They are picking who the crowd believes, the 
investors believe is a business that can make it.
    And we do know that with crowdfunding in general, women 
entrepreneurs have more success at crowdfunding raises, and we 
do know that there are many more minority businesses that are 
using crowdfunding, going through their local community in 
order to keep those businesses in those communities and giving 
their customers for the first shot at investing in their 
businesses.
    Mrs. Wagner. Okay. And let me interrupt you just in the 
interest of time here. Ms. Castillo, and Ms. Kerrigan, but Ms. 
Castillo, if you could go first, I was proud to introduce the 
bipartisan Calculate PPP Forgiveness Act with my colleague, 
Congressman Lacy Clay, as I mentioned in my opening statement. 
This bill would direct the Small Business Administration to 
create or certify a PPP loan forgiveness calculator that is 
free and accurate, so small businesses can more easily populate 
their loan forgiveness applications. It would also help resolve 
tensions between lenders and small businesses over what payroll 
expenses should be covered, et cetera.
    Would this benefit your members as they navigate 
forgiveness applications, Ms. Castillo?
    Ms. Castillo. Yes, I think that it would. I really think it 
would. They do need quite a lot of education as well, but I do 
like what you just proposed, yes.
    Mrs. Wagner. Ms. Kerrigan?
    Ms. Kerrigan. Yes, because it would promote certainty 
across the financial--we are all using the same calculator, 
right? And I think having it as simple so that businesses know 
what the government is putting out there, and what will be 
forgivable. I think it is very important.
    Mrs. Wagner. We are going to try to include it in the next 
package going forward. So, I thank you for your input.
    Madam Chairwoman, I am out of time, so I yield back.
    Chairwoman Beatty. Thank you very much.
    The Chair now recognizes the distinguished Chair of the 
full Financial Services Committee, Chairwoman Maxine Waters.
    Chairwoman Waters. Chairwoman Beatty, let me just say that 
as I am sitting here watching you, I am thinking about how 
important diversity and inclusion is. If it was not for 
diversity and inclusion, I would not be sitting here with you 
in this very, very important hearing. You would not be sitting 
here as the Chair of the Subcommittee on Diversity and 
Inclusion. And we would not have been here at a time when we 
have COVID-19, where we were able to exercise some power in 
order to do everything that we could to try and get resources 
out, liquidity into the agencies that should have the kind of 
resources so that they could make the loans.
    So, I am very appreciative for your work, and you were 
primed for this task based on your work with the Office of 
Minority and Women Inclusion (OMWI) and the way that you came 
to this Congress, indicating your support for opening up this 
opportunity.
    Now, we have been confronted with COVID-19 and PPP, and we 
have learned an awful lot that we had not expected. First of 
all, I want to thank those banks that participated and did it 
the right way, but I want to tell you that some of the biggest 
banks in America literally opened up portals for their 
concierge clients early, and they spent millions of dollars, 
maybe billions of dollars funding those concierge clients, 
their big private clients. And somehow, in the legislation for 
the CARES Act, it had opened up the opportunity for SBA loans 
that were normally for those businesses, 500 and under, to now 
be spread out to restaurants and hotels, et cetera, who had 
many locations and franchises, et cetera, and they were able to 
get millions of dollars. That was not intended.
    And so, we know about that, we have learned an awful lot 
about that, and we have to shut that down, so that will not 
continue to favor the high-income private clients of banks.
    In addition to that, we learned an awful lot about what was 
going on with our Minority Business Development Agency that was 
created by an executive in 1969, for minority business 
development agencies. It was supposed to be tasked to foster 
growth of minority-owned businesses in America but it is at the 
whim of Presidents and Secretaries of Commerce because it is 
not in the law.
    I heard you when you talked about that, Mr. Busby. We are 
going to take care of that because we want every opportunity 
for our small businesses and our minority businesses, our 
women-owned businesses to have access to capital, or we won't 
survive. I heard you when you talked about the 8(a) Set-Aside 
program. That was a very successful program. Minorities had 
gotten involved with it, and did well. But guess what? That got 
shut down because you did too well. After you reached a certain 
level, they excluded you from the program. We have to open up 
8(a) Set-Aside all over again.
    I convened a lot of our CDFIs who did not have access to 
capital, and learned that they were operating on at such 
different levels. For example, you have some that had no 
liquidity. They were dealing with some joint venture-type 
opportunities. We had some with just a small amount of 
resources that were begging for more. But that is under the 
Treasury Secretary, who has the opportunity to fund through 
that CDFI Fund, and we are going to increase that and open up 
more opportunities for CDFIs.
    Also, we have been working for a long time with MDIs, and 
it is very important for you to know that, because of Ms. 
Velazquez and myself, we were able to get that $60 billion and 
target it so that $10 billion of it went right to the MDIs, and 
to the CDFIs, and to our credit unions and community banks.
    It would not have happened had it not been minority women 
sitting there. That is why opening up opportunity and diversity 
and inclusion is so important everywhere, in the private 
sector, in the government sector, everywhere. Unless you have 
people who not only understand these issues, but have been the 
victims of these issues, and see how wealth has not been able 
to be accumulated in our communities, you will never get the 
opportunities to open up.
    So I am pleased that we were able to get right to Mr. 
Mnuchin, and right to Mr. Powell, so that we were able to 
change some of the ways that they were doing things. I won't go 
into all of that now, but we absolutely changed the way that 
the Main Street Facility was operating with the Federal 
Reserve. We absolutely were able to get the $60 billion and 
direct more to the CDFIs.
    So, I am so thankful for your work, Ms. Beatty. I am so 
thankful for this hearing. I am so thankful for the witnesses 
who are telling us how we can even do better, and I am looking 
forward to correcting some things, but looking at the Fintechs 
to open up another opportunity.
    I yield back the balance of my time, and I thank you for 
allowing me this time.
    Chairwoman Beatty. Thank you very much, Chairwoman Waters.
    Now, the Chair recognizes the gentleman from West 
Virginia's 2nd District, Mr. Mooney.
    Mr. Mooney. I don't have any further comments. Thank you.
    Chairwoman Beatty. Thank you. The gentleman yields back.
    Now, it is my distinct honor to recognize the gentleman 
from Missouri, Mr. Clay, who is also the Chair of our 
Subcommittee on Housing, Community Development, and Insurance, 
for 5 minutes.
    Mr. Clay. Thank you, Madam Chairwoman, and I thank you and 
Ranking Member Wagner for conducting this most important 
hearing, and let me thank the witnesses for their participation 
today.
    The racial and gender wealth gap has been a persistent 
challenge for this country, and has increased over the past 50 
years, and limits the ability of women and minority would-be 
entrepreneurs from starting new businesses. And according to a 
racial wealth gap analysis by McKinsey & Company, African-
American and Latino families have approximately one-tenth the 
wealth of White families. Startup businesses need capital. 
Unfortunately, minorities are not as likely to have access to 
generational wealth and personal assets as the funding source 
for new business formation as a result of the wealth.
    My question is to Ms. Castillo and Mr. Busby. What have 
your members shared about how the lack of familial wealth 
affects the startup of minority-owned businesses? We will start 
with Ms. Castillo.
    Ms. Castillo. In my community, as you know, I think they 
are the most affected every time they go to a bank, just 
because we are Latin. They don't have the same facilities. They 
don't have the same advantages.
    When I started my business, it took me quite a while to get 
a loan. On our board of directors, we have several financial 
institutions, and those financial institutions are very 
committed to our community. They do have special programs, for 
example, JPMorgan and Goldman Sachs and Wells Fargo do have 
special programs just for us, and they certainly treat us more 
equally.
    Mr. Clay. Thank you for your response.
    Mr. Busby, how has the lack of familial wealth affected the 
startup of minority-owned businesses?
    Mr. Busby. Thank you, Representative Clay, for your 
question.
    Again, if you ask any small business owner what their 
number one concern is, they will say access to capital. But 
when you ask a Black business owner, he or she will say,that 
the number one, number two, and number three concerns are 
access to capital, not just the access, but the affordability 
as well as the availability of capital, to be able to start and 
sustain their businesses, and not just through pandemics, but 
through normal business practices. It is extremely difficult 
for Black businesses to be able to access the capital.
    And the reason that it is important is that we lost 450,000 
Black-owned businesses during this last 3 months, which means 
they all have customers, clients, vendors, and employees. And 
for those existing Black-owned businesses, we need to look at 
mergers, acquisitions, and joint ventures, to be able to take 
advantage of those lost businesses, to be able to merge those 
into our existing Black-owned businesses.
    At the U.S. Black Chamber, I have heard the conversation 
about Fintech. We believe that the future of Black-owned 
businesses is going to be with traditional Black and minority 
CDFIs. During this pandemic, they told us to go to your 
existing bank to ensure that you had a relationship to get the 
funds. If we don't establish banking relationships now, then in 
the future, our businesses will be hit twice as hard.
    So for us, we are looking for capital, but also, we are 
looking for financial institutions to ensure that they lower or 
remove the barriers to credit and make sure that it is 
affordable for our businesses.
    Mr. Clay. Thank you so much for that. And I heard 
Representative Wagner's example of a barber shop owner having 
to go to a payday lender.
    Ms. Ross, I believe, mentioned one of the instructions in 
the PPP program was with not having loan activity with an 
institution.
    Could any of the witnesses respond to that? Quickly, does 
anyone want to talk about the challenges that the businesses 
had when they went for the PPP?
    Mr. Busby. Well, first if the name of the program was the 
Paycheck Protection plan, and of the 2.6 million Black-owned 
businesses, only 2.5 million have no employees, that left 
roughly 100,000 Black-owned firms that would have even 
qualified to go and get the additional funding that they 
needed, so just in the name of the program, many of our 
businesses said that it did not include them.
    Second, you had to have a banking relationship with the 
lending officer, and only 30 percent of our businesses had 
that. Third, if they made the program available on a Friday--
    Mr. Clay. I am having a little trouble hearing you, Mr. 
Busby.
    Chairwoman Beatty. I have to remind the gentleman that his 
time is up. I'm sorry.
    Mr. Clay. No problem. I yield back.
    Chairwoman Beatty. Thank you. The gentleman yields back. 
The Chair now recognizes the gentleman from Tennessee's 18th 
District, Mr. Kustoff, for 5 minutes.
    Mr. Kustoff. Thank you. I want to thank the chairwoman for 
convening today's hearing, and the ranking member as well. I 
certainly appreciate all of the witnesses coming before us to 
testify today.
    Ms. Kerrigan, if I could, last I checked, there is around 
$130 billion left in the Paycheck Protection Program, and of 
course we know that as of now, it goes through August 8th.
    Last week, we had testifying before our committee Treasury 
Secretary Mnuchin and Federal Reserve Chairman Powell. 
Secretary Mnuchin, in his remarks, said that he wanted to 
repurpose the remaining money to assist what he characterized 
as especially hard-hit businesses.
    My question to you is, if you had 15 minutes directly with 
Secretary Mnuchin or Fed Chairman Powell, what would you tell 
them about specific ways to use this leftover money to provide 
additional relief, specifically to minority-owned businesses or 
women-owned businesses.
    Ms. Kerrigan. I think as the program went on, and as there 
were changes made and they began to onboard Fintechs and CDFIs 
and the distribution channels, I think it had gotten better in 
terms of reaching more women and minority entrepreneurs and 
self-employed businesses. And all of those types of businesses 
that didn't have those commercial relationships with their 
banks.
    But I would say this, I think, in acknowledging and 
recognizing that they do want to address the hardest hit and 
those businesses that weren't able to capitalize or use the 
Program the first time around, they are on the right track.
    And if we are repurposing the money, there does need to be 
some of that money that will be sort of set aside for employers 
with 10 employees or less, that we do need to look at, yes, 
those industries that have been hard hit and perhaps allow some 
of those businesses to come back for another PPP loan.
    But I would also say that you need to broaden the uses of 
what can be forgiven, the 75/25 rule that became 60/40, that 
was very restrictive to many types of small businesses, those 
with high overhead, with those self-employed people. So, we 
need to change that. You need to include a lot more forgivable 
expenses, PPE, cloud services, all of the things that 
businesses have had to expend money on in order to survive 
COVID-19.
    And then finally, I would say you really need to simplify 
the whole process. And if you are going to start the Program 
and it is going to be repurposed from the get-go, there has to 
be clear guidance. It can't continually change, because that 
confused so many businesses.
    So, a simple application process, reaching more businesses, 
dedicated and targeted to the smallest of businesses, broad 
usage. And I forget the last one. But I have already said it in 
my remarks--oh, guidance. When you come out of the program, 
when you launch out of it, the guidance has to be clear. It is 
very, very important.
    Mr. Kustoff. Thank you.
    Ms. Ross, in your testimony you talked about the difficulty 
you had trying to first apply for, and then ultimately you got 
the PPP loan. How confusing did you find the guidance that was 
given to you during the course of the process?
    Ms. Ross. Being a small business owner as things were 
evolving and changing daily and trying to make sure that the 
health of our employees was first important to us, but the 
guidance, as Karen said, continued to change. And ultimately, 
the application wasn't as bad, but now looking at the 
forgiveness application, it is like 4 times or probably 8 times 
the length of the original application.
    So with that, we have spent a lot of time, my management 
team and I, in trying to make sure that we are following the 
guidelines in terms of getting the most forgiven, but those 
keep changing, so it is what we worked on a month ago has 
changed for today.
    And I received an actual email last week that said we are 
still not in a position to really go forward with the 
application on the forgiveness and that we should have that in 
another month or so.
    So, it has taken a lot of time away from us, having to 
navigate and pivot and change our organization. And being an 
automobile dealership during a pandemic with a number of touch 
points of us involved with vehicles and getting people to 
understand that has been increasingly difficult from a 
compliance perspective.
    It has just added to the uncertainty and the anxiety of 
making sure that we are following all of the guidelines, in 
addition to health and safety guidelines as well.
    Mr. Kustoff. Thank you so much. I yield back.
    Chairwoman Beatty. Thank you. The gentleman yields back.
    The Chair now recognizes the gentleman from Texas' Ninth 
District, Mr. Green, who is also the Chair of our Subcommittee 
on Oversight and Investigations, for 5 minutes.
    Mr. Green. Thank you very much, Madam Chairwoman. I would 
like to associate myself with your initial comments. But I also 
would like to thank the Chair of the Full Committee. It is an 
honor to serve under her leadership. And I especially associate 
myself with the comments that she made with reference to the 
Minority Business Development Administration Act, something 
that I will be working on with her.
    I think a little bit of history is appropriate. In 1979, 
under a Republican Administration, Richard Nixon, by way of 
Executive Order 11458, created the Advisory Council for 
Minority Business Enterprise.
    And then, under a Democratic Administration, President 
Carter, in 1979 the Office of Minority Business Enterprise 
became the Minority Business Development Agency. I am 
mentioning both of these Administrations because it seems to me 
that what the chairwoman has proposed, and I am having the 
honor of working with her on, is something that should appeal 
across party lines, to both Democrats and Republicans.
    Because in fact, what this agency will do, if established 
as an independent agency as opposed to an extension or arm of 
another part of the government, if it is an independent agency, 
it will provide bootstraps in the form of grants.
    Many of our small businesses were not able to take 
advantage of the PPA because they were not prepared with the 
technical assistance necessary to apply for these loans. They 
just didn't get in line fast enough.
    And those who had lawyers, and accountants, and CPAs were 
in line and ready to go from day one. As a matter of fact, 
truth be told, they were ready before day one. They were 
waiting for day one to arrive. And upon the arrival of day one, 
all that was done was to hit send and your application was in, 
for all practical purposes.
    Well, what we would like to do is provide these small 
businesses with the bootstraps necessary to compete when 
opportunities are available. It is a wonderful thing to know 
that opportunities are available, but it is an even better 
thing to be able to take advantage of opportunities when they 
are available.
    This Administration would provide just such an opportunity. 
It would become a standalone entity, very similar to, but not 
the same as the SBA. The SBA does marvelous work, and I salute 
the SBA. This entity would be given a similar opportunity as it 
relates to providing what I call the bootstraps in the form of 
grants.
    So today, let me ask the panelists, understanding what this 
agency would metamorphose into, is this something that you 
believe you can support? I will start with the witnesses with 
the Chambers. Let's start with the Black Chamber, please. Is 
this something that you can support?
    Mr. Busby. Mr. Green, yes. This is Ron Busby with the U.S. 
Black Chamber, and we were the 2016 advocate of the year for 
the Minority Business Development Agency (MBDA). We believe in 
their mission. We have seen the results of their ability to 
receive additional funding in the second round of the stimulus 
package and we saw what they were able to do with the funding. 
It has made an impact.
    They have awarded the U.S. Black Chambers and the U.S. 
Hispanic Chamber and other minority business organizations with 
the resources and the funding that they need, to then turn 
around and make our businesses have the resources that they 
need--
    Mr. Green. Quickly, I will ask this of you, you hear people 
quite frequently talk about pulling yourself up by your 
bootstraps. Are these grants the kind of bootstraps that we 
need so that our businesses cannot only survive, but thrive?
    Mr. Busby. Yes. And it is not just the capital, 
Representative, it is also the technical assistance that our 
businesses need.
    We need both the resources of funding, as well as 
administrative and technical assistance to not just be able to 
get the bootstraps, but we need the boots themselves, to make 
sure that we can walk through the difficult and uphill battles 
that we are facing throughout not just this pandemic, but life 
in general.
    Mr. Green. Well said. Let me say again, well said, and move 
to the Hispanic Chamber. Would you kindly express your 
concerns? Could you support this legislation?
    Ms. Castillo. There is a successful relationship with the 
MBDA agency. We are very happy. We have been working with them 
for the last 2 years, and we are very, very happy.
    And yes, we do support your legislation.
    Mr. Green. Thank you, Madam Chairwoman. You have been very 
generous with the time. I yield back.
    Chairwoman Beatty. Thank you so much. The gentleman yields 
back.
    The Chair now recognizes the gentleman from Ohio's 16th 
District, Mr. Gonzalez, for 5 minutes.
    Mr Gonzalez of Ohio. Thank you, Madam Chairwoman. And thank 
you, everybody, for your participation in today's very 
important hearing.
    Ms. Castillo, I want to start with you. I am the son of a 
Latino business entrepreneur,and on the PPP, you talked about 
the difficulty that our community had in accessing the loans. I 
guess I have two questions.
    Number one, is that still the case now that we have changed 
the Program and extended it? And if it was and is, was that 
because of the structure of the Program or because there was 
something happening in the application process that was sort of 
weeding out Hispanic business owners?
    Ms. Castillo. At the beginning, naturally our community 
didn't get that much, it really didn't. Now, once you fix it, 
they get another amount of like 54,000 loans, so it is better.
    And I think the issue is that our businesses are very small 
businesses, as you know. It is a lot of having a line of 
credit, of having even the education to go and apply. The 
process was complex. And as you know, most of the PPP loans in 
the first year went to top corporations, corporations with 
lawyers, corporations that have the resources.
    Our community just doesn't have those kinds of assets. But 
I must say, it is getting better. I think that our community 
has gotten almost 7-something-billion total. But on average, 
again, a small average of like, $54,000, or $55,000
    Mr. Gonzalez of Ohio. That is consistent with Mr. Busby and 
what you said, right? And I think what this hearing has sort of 
shined a light on is something we knew, which is that the PPP 
program is not perfect. And I think also it shines a light on 
the fact that it just didn't hit our minority communities in a 
way that maybe we would want. And so as we go forward, I think 
retooling it or having a different program probably makes the 
most sense frankly.
    Ms. Ross, I want to transition to you. You have such an 
amazing personal story and I thank you for sharing it. And one 
of the things you highlighted is the difficulty that we have 
getting diversity in the automotive space and entrepreneurship 
in general.
    And I guess I would like to ask you, just sort of broadly 
speaking, what do you think we could be doing a better job on 
as a society but also congressionally to support women and 
minority entrepreneurs who are taking that big risk?
    Ms. Ross. It goes back to what I said in my statement. But 
the access to capital has historically limited minorities, and 
specifically in the automobile business, due to the heavy 
investment that is needed in order to become an automobile 
dealer.
    And within our industry, there are a lot of generational 
families who have been able to pass down their dealerships. And 
from an African-American perspective, we have not had that.
    For me to be the only female, African American, second-
generation automobile dealer just speaks to that volume, where 
there are hundreds of Caucasian women who would be able to be 
in that position. And I give kudos to NAMAD to starting an 
organization to help the next generation to try to facilitate 
that from an earlier perspective. But it does come back to the 
access to capital, just a huge investment that is needed to 
become an automobile dealer.
    And the manufacturers need to take the responsibility of 
assisting, and widening, and broadening their programs that 
they are offering, because there are a lot of individuals who 
are capable and can perform to the level of nonminority dealers 
if given the opportunity.
    Mr. Gonzalez of Ohio. Thank you.
    And then, Ms. Kerrigan, with my final 40 seconds, are there 
any statutory or regulatory barriers that you see that limit 
this access to capital that we could remove either temporarily 
or in full as we navigate the crisis?
    Ms. Kerrigan. I do. I think we are big on equity and debt-
based crowdfunding, we lead the whole effort. We made that 
legal to begin with. And I just think there is tremendous 
opportunity for committees to support the businesses in those 
communities.
    And thankfully, the SEC is addressing, I think some of the 
rulemakings to lower the barriers, but there is more that 
Congress can do as well, in terms of lifting it up in terms of 
the accredited investors and making sure we treat debt and 
equity the same. And I think that is going to have to come 
through congressional action because most small businesses are 
looking for debt and not for equity.
    And again, I think we are at the point where the community 
wants to support these small businesses. And small businesses 
definitely have the customers and the families who can support 
them. We have a list of things I can share with you, 
Congressman. And thank you for that question.
    Mr. Gonzalez of Ohio. Thank you, and I yield back. Thank 
you, Madam Chairwoman.
    Chairwoman Beatty. Thank you.
    The Chair now recognizes the gentleman from Florida's Fifth 
District, Mr. Lawson, for 5 minutes.
    Mr. Lawson. Thank you, Madam Chairwoman. And I would like 
to also thank the witnesses for appearing here today.
    I have been working with minority businesses from the 
standpoint of being in the insurance business. But also I 
think, Mr. Busby, you might know about the publication called 
the Black Pages. In fact, I have done it in this area for over 
30 years.
    One of the problems that I found, and maybe you can 
elaborate on it to a certain extent, is that it has been a very 
difficult keeping that publication going for 30 years, because 
we have a hard time getting minority businesses to advertise.
    Not only am I a member of the Black Chamber of Commerce, I 
am also a member of the main Chamber of Commerce and I have 
served on their board. I am saying that to say this, when we 
started having these problems and sometimes--Chairwoman Waters 
might want to respond to this too--
    I found out that those businesses, where if they were 
attorneys, or consulting firms, and so forth that seemed to be 
more in the mainstream of everything, they immediately applied 
for the PPP. But when the people that I was concerned about 
might be calling grocery stores, barbers and beauticians, and 
people of that nature--I know Ms. Ross might have some concerns 
to add and I don't want to take up all of the time--I had a lot 
of difficulty in trying to get them to even apply, because it 
seemed almost it was that tier there. And so by the time they 
got ready to apply, they said that all of the money was gone.
    And I know right now there is about 100-some billion 
dollars still in there. I want to ask Mr. Busby, how do you 
respond to that as being over the Black Chamber of Commerce, do 
you experience some of the same kind of results?
    Mr. Busby. Sure. And that's a great question. I would say 
that we lost 450,000 businesses. I want to keep saying that, 
because we have $130 billion left. Had that $130 billion been 
made available and accessible to those 450,000 businesses, the 
majority of them would still be in business. The payroll 
protection plan when it came out, again the name said payroll 
protection, so that meant to a business owner that did not have 
full-time employees, they felt that it was written for them.
    The second piece, if you look through the pieces, in the 
legislation, the 700-plus pages, the words ``Black'' or 
``African American'' were never listed. And so again, when our 
communities heard about the stimulus package, they felt like it 
wasn't necessarily for them.
    Third, when they said go to the bank, again the majority of 
our business members across the country may know their teller, 
may even know who cashes their check, have a checking account, 
a debit card, but they didn't have a lending relationship with 
the bank and so they felt like they were displaced in the 
opportunity.
    And then lastly, it was just application fatigue. So now, 
when you go back to business owners and say, there is money 
still available, they are nervous, because they have now heard 
that the Internal Revenue Service has placed additional 
funding--Internal Revenue agents to go out to make sure that 
the small businesses that may have gotten a couple of extra 
thousand dollars are now being audited and are facing extra 
scrutiny.
    And so many of them have said, hey, I think I have made it 
through the most difficult times. We are getting ready to 
reopen and so I have to think about the future as opposed to 
what has happened in the last 3 months. We are trying to 
educate our businesses that there are funds still available, 
but it really is about them understanding how to go about it, 
and making sure that the banks and community CDFIs that they 
have relationships with understand it as well.
    Mr. Lawson. Okay. And thank you.
    Madam Chairwoman, I just wanted to say, since you are here 
on this call, how do we get this message out to them in 
language, what Mr. Busby just talked about, to try to inform 
them, and I know Ms. Ross might have some ideas, and I don't 
want my time to run out. But I am just going to cut it off, 
because there seems to be a great deal of problems in 
communication.
    Mr. Busby. It was really unclear coming out initially, who, 
how, when, and where. And so for our community, it just took 
them a few days longer. And during the course of those few 
days, they heard that the funding was gone.
    I think that as you discussed, there are great 
opportunities through Black Pages, Black online, Black media, 
and Black news to ensure that our businesses understand how, 
where, and what is responsible for getting the additional 
dollars.
    Mr. Lawson. My time has run out. And I yield back, Madam 
Chairwoman.
    Chairwoman Beatty. Thank you. The Chair now recognizes the 
gentleman from Wisconsin's First District, Mr. Steil, for 5 
minutes.
    Mr. Steil. Thank you very much, Madam Chairwoman. Thank you 
for calling today's hearing on a really important topic.
    I want to build on what was just being discussed there, and 
would like to go back to you, Mr. Busby. One of my good friends 
was the President and CEO of the Milwaukee African American 
Chamber of Commerce, Dr. Eve Hall. She now runs the Urban 
League in the City of Milwaukee. And I have spoken with her and 
others.
    And earlier, we were talking about capital formation, and 
Representative Ann Wagner dove in there. And then later, you 
had comments about boots and bootstraps, that I think is very 
topical. Not only do you need access to the capital formation, 
but sometimes you need to have some knowledge and some 
mentorship.
    And I know the African American Chamber of Commerce was 
very involved in creating those types of relationships. Could 
you just share what you think are some of the best practices, 
making sure that we are getting information out, not only 
broadly, but in particular in the African-American community as 
well?
    Mr. Busby. Great question. I do know Dr. Eve Hall. She is a 
graduate of Florida A&M University, which is also my alma 
mater. When you speak to her again, tell her I said hello.
    I think the Urban League, as well as the U.S. Black Chamber 
and other local institutions play a critical role. We are the 
voice of Black business here at the U.S. Black Chamber. So we 
make sure that we try to develop great relationships with our 
local communities and local business owners, but we still have 
challenges.
    In many communities, they are facing challenges that don't 
reach Washington, D.C. And so, when they hear about what is 
happening here in the Nation's Capital, they don't understand 
the impact that it has on their local business and or local 
community.
    So, it is our role through our local chambers to really be 
the mouthpiece for our local communities here in Washington, as 
well as from Washington back to our local Black and Latin 
businesses that operate across the country.
    But I think we just have to be transparent. When we were 
asking for data early on about who was getting the loans, no 
one was able to share that. When we were yelling at the top of 
our lungs that we were going to lose 35 to 40 percent of our 
Black-owned businesses, no one heard that. And then the data 
came out that we had actually lost 41 percent. And now, 
Congress and other folks are saying, ``Wow, we didn't see it 
coming.''
    It is about having a realistic conversation as opposed to 
having one that is based on emotion. And so we are saying, we 
need transparency early on, from contracts, to loans, as well 
as opportunities.
    And then the third piece, I just want to make sure that I 
get an opportunity to say, when we are talking about 
government, as well as corporate America now saying, hey, we 
want to do more business with Black-owned businesses, we have 
to make sure that there is a certification to ensure that these 
businesses are actually Black-owned, so that corporate America 
can actually certify and say, yes, I am supporting a Black-
owned business.
    Because right now, we all fall under the umbrella of 
minority business. And we are not just minority businesses, we 
are Black businesses, we are Hispanic, Asian, and other, but we 
are not all Hispanic. And right now, when we are facing a 
pandemic that has a trifecta on the Black community, we need to 
be isolated out in reference to our support and as referenced 
to the dollars that are being spent from both corporate 
America, as well as the Federal Government.
    Thank you.
    Mr. Steil. Thank you very much. I appreciate your passion 
on the topic. Thank you for sharing your insight.
    I want to shift gears slightly and ask Ms. Kerrigan a 
question. One of the things I think we have seen during the 
broader pandemic is the ability of us to leverage in the 
technology, to make sure that we are getting access to people 
who may not have an easy time getting access to bank loans. And 
as we are thinking about kind of online notaries and some of 
the other legislative reforms that we can do, I would ask you 
to comment on what you see as the role of leveraging some of 
the financial technology services that are available to make 
sure that we are getting access to those who may not 
traditionally have a seat at the table.
    Ms. Kerrigan. Oh, it is critical. I think it is so 
critical. And thankfully, but unfortunately at the end of the 
first tranche of those PPP funds, the Fintechs were brought on 
board. And once they were, I think they made a pretty big 
difference in terms of these 21 lenders that did a significant 
amount of lending.
    So, it makes a big difference because they have the 
automation, they have the artificial intelligence (AI), they 
have actually between them all of the customer lists that they 
were able to outreach to them.
    So yes, we need to have the modern systems. As we like to 
say to our business owners and entrepreneurs, you have to meet 
customers where they are. We know they are using social media, 
they are using cloud services, they are using platforms. This 
is a platform-based economy. And in fact, the pandemic 
accelerated the movement to this platform economy. So that is 
why Fintech and technology is going to become even more 
important, so the government does have to recognize that and 
not be an afterthought. This has to be done at the beginning of 
any program.
    Mr. Steil. Thank you very much, Ms. Kerrigan.
    I appreciate you holding today's hearing, Madam Chairwoman. 
And I yield back.
    Chairwoman Beatty. Thank you so much. The Chair now 
recognizes the gentlewoman from Massachusetts Seventh District, 
Ms. Pressley, for 5 minutes.
    Ms. Pressley. Thank you, Chairwoman Beatty and Chairwoman 
Waters. I do believe that these are old fights, but it seems 
that we might be on the precipice of ushering in a new moment, 
and it has everything to do with the vigilance and the 
leadership of both of you. So thank you for your leadership, 
and thank you to all of our witnesses for joining us today.
    While this crisis is unprecedented, the disparities 
revealed in our economic system and subsequent Federal response 
are unfortunately very familiar. From the Homestead Act to New 
Deal programs in the GI Bill, Black Americans have historically 
been locked out of large-scale government intervention and 
investment. We must not repeat exclusionary policies of past 
Federal responses.
    So, what does that mean? That means requiring the 
disclosure of racial data to better inform our allocation of 
resources for everything from testing and treatment to small 
business relief. And I appreciate very much seeing data on who 
actually received PPP loans, but the data we need is on who 
didn't receive PPP funding, who was denied and why, and why was 
it late?
    The National Bureau of Economic Research found that 41 
percent of Black businesses have shuttered since the pandemic 
began. From the onset, experts estimated that up to 95 percent 
of Black women business owners would be left out of the 
Program.
    Mr. Busby, could you speak specifically to the challenges 
faced by Black businesses, and that PPP funding and access to 
it was conditioned on access to banking?
    Mr. Busby. Yes. Again, when we first heard about the 
payroll protection plan, it was discussed on a Friday 
afternoon. By that Monday morning, the majority of the dollars 
had been already presented to 50 publicly traded firms in the 
amount of $250 billion. And so, many Black firms did not find 
out about the opportunity until the 11th hour.
    We also know that again, as I stated earlier, it was based 
on having a banking relationship.
    Ms. Pressley. Preexisting.
    Mr. Busby. A lending program and many of our businesses 
just did not have a loan currently because of the cost, as well 
as the inability to be able to get credit from an existing 
bank, so we did not.
    Ms. Pressley. Thank you. So, just reiterating that, since 
the majority of minority-, immigrant-, and women-owned 
businesses are micro in size--beauty salons, barbershops, 
bodegas, they are the backbone of our local economies. Yet, we 
just heard from struggling owners throughout the district based 
on the very point that you underscored there.
    So, the relief was nowhere to be found. And this includes 
Murray's Kitchen in Dorchester, which applied for PPP 
assistance back in May and has yet to hear back. Organizations 
in my district like BECMA, Commonwealth Kitchen, Amplify, 
Latinx, JPNDC, EforAll, and so many others have stepped up to 
provide businesses with support, but ultimately this is about 
Federal Government relief.
    As I said, these are old fights in a new moment. I hope 
this new moment is about new action. I introduced, in 
partnership with Senator Kamala Harris, the Saving Our Street 
(SOS)Act, to provide micro business owners with direct grants, 
not loans, of up to $250,000. We have to be intentional. And 
this bill requires 75 percent of the micro business assistance 
fund set aside for minority- and women-owned businesses.
    Mr. Busby how does the SOS Act correct some of the 
challenges of previous relief efforts? And why is it so 
critical to provide relief in the form of grants instead of 
loans?
    Mr. Busby. Well, we heard from Black Americans that the 
United States just wrote nearly a $2 trillion check in response 
to a stimulus that was needed from a pandemic.
    Black Americans have been saying we have been facing a 
pandemic for hundreds of years, and we want to have a 
conversation, and not necessarily just about reparations, but 
about equity. And so, as we would talk about a stimulus package 
that is geared towards micro businesses, the U.S. Black Chamber 
is definitely in favor of that.
    Ms. Pressley. Thank you.
    Mr. Busby. We want to make sure that the dollars go to the 
businesses as well as the sectors that need it the most: 40 
percent of all Black business revenue comes from 5 industries, 
and those 5 industries were the industries that were hit the 
hardest, and many of them were the same types of businesses 
that you have there in your district--restaurants, beauty 
salons, nightclubs, and social media types of places where you 
would normally go to gather are now closed. And many of those 
businesses don't see the future, but they definitely need the 
income as well as the grants to be able to have sustainability.
    Ms. Pressley. Thank you, Mr. Busby. Again, it is just clear 
that it is not a one-size-fits-all approach. We have to be 
targeting and very precise in the same way that we have 
codified disproportionate hurt, we can codify through law 
making justice and equity, and so I thank you for endorsing the 
legislation and we look forward to continuing to advocate for 
it, and to see it passed. Thank you.
    Mr. Busby. Thank you.
    Ms. Pressley. And I yield back.
    Chairwoman Beatty. Thank you. The Chair now recognizes the 
gentlewoman from North Carolina's 12th District, Ms. Adams, for 
5 minutes.
    Ms. Adams. Thank you, Chairwoman Beatty, and thank you to 
Chairwoman Waters as well. You both have done an absolutely 
outstanding job. This is an issue that we have been dealing 
with here in my district.
    Let me ask my first question. The Health and Economic 
Recovery Omnibus Emergency Solutions (HEROES) Act provided $1 
billion in emergency appropriations to the CDFI Fund and 
established a further set aside of either 25 percent of the 
remaining PPP funds or $10 billion for community financial 
institutions, including CDFIs and MDIs.
    As some of you have outlined, their limitations to the PPP 
to that program for our CDFIs and MDIs mainly that these banks 
or financial institutions are limiting their ability to lend 
based on their existing deposits or reserves. For example, in 
my State, one of our leading MDIs had to cap their PPP loans at 
$14 million. However, if this MDI and CDFI were able to receive 
a direct infusion of funding, they could continue to provide 
the assistance that was needed.
    I have introduced H.R. 7121 to address this issue. It would 
provide $5 billion to CDFI funds and set aside $2 billion for 
minority lending institutions. So Ms. Kerrigan and Mr. Busby, 
could you please highlight the significance of greater CDFI and 
MDI participation in the PPP? And how could it impact minority- 
and women-owned businesses?
    Ms. Kerrigan. I will go first.
    It's critical. We saw that once CDFIs were on board, 
additional dollars were provided, and the difference that they 
made in getting money to those underserved businesses, to 
minority entrepreneurs.
    So, it is a distribution channel that works. And again, 
CDFI it should not have been an afterthought. They should have 
been there from the beginning just like Fintechs and some of 
the other lenders to make sure we have the broadest 
distribution channels possible.
    So, it's very, very critical. And if we are going to do 
another round, another tranche or a phase for a package, they 
definitely should be included and funds should be re-upped 
because they made a huge difference.
    Ms. Adams. Great. Thank you. In response to the global 
financial crisis and the Great Recession of 2008, Congress 
established the State Small Business Credit Initiative (SSBCI) 
in 2010 to provide $1.5 billion in funding for State and 
territory programs that support access to credit for small 
businesses. This temporary program--and it was administered by 
the Treasury Department--expired in 2017.
    It provided awards to 47 States, 5 Territories, Washington, 
D.C., municipalities, and 3 States. Unfortunately, the 
expiration of the program has left a void in the marketplace 
for affordable small business loans.
    Madam Chairwoman, I would like to enter two letters into 
the record from the North Carolina community banks.
    Chairwoman Beatty. Without objection, it is so ordered.
    Ms. Adams. Thank you.
    Ms. Castillo, Mr. Busby, how could reauthorization of the 
SSBCI help minority-owned businesses during this pandemic? And 
do your organizations support the State Small Business Credit 
Initiative Renewal Act?
    Mr. Busby. I will go first. This is Ron Busby, U.S. Black 
Chamber. I will say in our 2020 Blackprint, we have somewhat 
outlined and addressed your bill specifically. I will also say 
that we believe that as many avenues that we can put access to 
capital in our States and local communities, we are in favor of 
that.
    We feel like that as many options as we have available to 
us, especially our CDFIs and our Black-owned banks, we know 
that they make 70 percent of their loans to Black homeowners 
and to Black businesses in local Black communities. That is the 
way we are going to have to have sustainability--
    Ms. Adams. We have 45 seconds. So, I will have the other 
speaker respond.
    Ms. Castillo. I pretty much agree with what Mr. Busby said. 
I totally echo his words. I think putting more money on the 
CDFIs would really, really help. Thank you.
    Ms. Adams. Thank you.
    Madam Chairwoman, I am going to yield back. Thank you.
    Chairwoman Beatty. The gentlewoman yields back.
    I now recognize the gentlewoman from Pennsylvania's 4th 
District, Ms. Dean, for 5 minutes.
    Ms. Dean. Thank you, Madam Chairwoman. Can you hear me?
    Chairwoman Beatty. Yes. We can hear you.
    Ms. Dean. I apologize. I have had some connection issues, 
but I am delighted to be here. I thank you Chairwoman Beatty, 
and I want to thank the entire panel of witnesses for joining 
us virtually today to talk about access and equity for 
minority- and women-owned businesses, specifically for helping 
inform us on how we move forward to support the American people 
as best as we possibly can, not just during a pandemic and an 
economic crisis, but for the long haul.
    Chairwoman Beatty, since you have allowed me to be a part 
of your subcommittee, I have taken my responsibility very 
seriously, and I have had the the chance to travel around my 
district, meeting with minority- and women-owned businesses. 
And I heard about some of the systemic barriers, pre-pandemic. 
But in light of the pandemic, I have had the chance to follow 
up.
    Just yesterday, I visited four different minority-owned 
businesses and women-owned businesses in my area. And some of 
the common themes that you hear beginning with when they were 
starting their businesses, not during a pandemic, but they had 
good robust business plans, and the difficulty of getting 
adequate startup capital was one recurring theme. A second 
recurring theme during the pandemic has been access to capital 
as well. I know we have discussed a lot about PPP.
    In particular, I spoke yesterday with a woman who heads the 
Norristown Chamber, Kym Ramsey; she has her own business. And 
she talked about mentoring others, particularly during this 
pandemic in terms of business plans, in terms of applications 
for relief, but also the serious lack of capital support.
    I am going to ask a broad question for any member of the 
panel, I was wondering if you could speak to these often 
recognized systemic barriers, some are systemic, some may be 
anecdotal but many are systemic, and what actions we should 
take beyond PPP, what actions we should take to help ensure 
access to support systems?
    And I would open that to anyone who would care to answer 
that.
    Ms. Castillo. Thank you for the question, Congresswoman 
Dean. I think that minority- and women-owned businesses, and I 
am certified as both, need to be included in the management, 
distribution, and brand location of any funds that Congress 
allocates to the stimulus. Really get us involved. Give us a 
seat at the table. I don't think the problem will be solved 
until Congress really engages us, engages Mr. Busby, engages 
the USHCC, and the NMSDC. You have to have either an advisory 
council or just some kind of council that is there with you, 
sharing the issues with you and helping you to write the right 
legislation, just to make sure it really does work in the 
communities.
    Ms. Dean. I appreciate that. One other issue that came up 
often as I visited businesses during COVID, that has been 
exacerbated, is a bias by financial institutions in lending to 
women, and in lending to minority businesses and enterprises.
    Can you speak to that, and how do we break down those 
biases?
    Mr. Busby. Thank you. I will answer that. I think again the 
access to capital is a concern by all minority-owned, 
particularly Black-owned businesses. The fastest growing sector 
of business owners in the country is Black women. And when you 
ask Black women their concerns, they will say, it is possible 
to get credit, yes, but they pay an exorbitant price for that 
credit.
    So, it is more than just having monies go into banks and 
banks then make loans. It needs to also be affordable so that 
the same business owner who is a White man, is paying the same 
rate based upon the same credit score, and the same criteria as 
any minority, particularly Black-, or Brown-, or women-owned 
businesses. We have to remove the barriers so that all of us 
have access to it. It is already difficult enough to run a 
business, and when you don't have the funding to grow to get 
through difficult times, it makes it that much more difficult.
    Ms. Dean. Now with your permission, Madam Chairwoman, I 
will pitch two bills that I have initiated. One is called the 
Restore America's Main Street Act, which would be direct 
liquidity to businesses not based on payroll so that the 
business itself could understand and use that money where it is 
needed.
    And then the other is my NRSRO bill, which I am very happy 
for the cosponsorship of many on this committee to get access 
to other credit institutions.
    I see my time has expired. Thank you very much, Madam 
Chairwoman, and thank you to our witnesses.
    Chairwoman Beatty. Thank you so much.
    The Chair now recognizes the gentlewoman from Texas' 29th 
District, Ms. Garcia, for 5 minutes.
    Ms. Garcia of Texas. Thank you, Madam Chairwoman. And I too 
want to thank you for bringing a topic to the table that is so 
important, particularly during this time of crisis, in knowing 
that so many small businesses are hurting and continue to hurt. 
And as most of our witnesses have said, unless they get help, 
they may not survive.
    I first want to associate myself with the history and 
comments from my colleague, my good friend from Houston, 
Congressman Green. I think making the MBDA an independent 
agency is a step in the right direction. And obviously, it is 
important to get those bootstraps, but I think the boot is also 
important.
    And so, I want to start with Mr. Busby. I thought that was 
a very creative way of illustrating what the dilemma is. Tell 
me, why does it matter that we get all of those technical 
resources and the help that small business needs, not just the 
capital but the assistance that can be provided in some of 
these centers?
    Mr. Busby. Currently, there are over 2.6 million unemployed 
Black people in America today.
    Ms. Garcia of Texas. Right.
    Mr. Busby. That is the bad news. The good news is there are 
2.6 million African-American-owned businesses today. If those 
2.6 million businesses have access to capital, access to 
opportunity, then they hire Black people within their 
community. If that is done across the country, we don't have an 
unemployment conversation for Black people in America. That is 
a concern.
    As you grow the wealth of Black people, as consumers, we 
are the best and biggest consumer in the country. As we earn 
dollars, as we grow our businesses, we spend our dollars within 
our local and State businesses, that is only going to boost the 
economy for America. So when you invest in Black-owned 
businesses, you are investing in ultimately--
    Ms. Garcia of Texas. Right. But I wanted to get to the 
illustration of the boot, what should the boot contain in terms 
of technical services to make sure that those businesses can 
thrive and grow, because then, obviously, the community grows 
with it and employment increases.
    Mr. Busby. I think technical assistance is very important. 
Again, if you look at the majority of Black-owned businesses, 
they don't have continuing education, thus the majority of 
Black-owned businesses are doing less than $100,000. But those 
businesses that are doing continuing education, online 
training, they are all are doing above $1 million.
    And so, we have to invest in the opportunities for our 
businesses to have technical assistance and that is coming out 
of the gate. That is not waiting until they have already 
established themselves, that is from pre-starting your business 
all the way through the existence of that business. That is how 
they will continue to be able to grow and have sustainability. 
That looks like--
    Ms. Garcia of Texas. Thank you. And Ms. Castillo, do you 
have anything to add to that and what that boot looks like?
    Ms. Castillo. Thank you. Yes, I do. Actually, we know that 
technology is here and is here to stay forever. And I totally 
agree with what Mr. Busby says. I think our community certainly 
needs that education because most of the businesses, even if it 
is a little mom and pop, like a restaurant, they don't have 
computers, they don't how to use assistance. So I am totally, 
totally in agreement that our community does need the--
    Ms. Garcia of Texas. They also would be accountants and 
lawyers. I remember as a lawyer helping someone with their--
    Ms. Castillo. Yes. I think center of excellence to educate 
them in how to use the computer, and how to complete an 
application, and how to really run the business. That is 
crucial for our community. Because we know--
    Ms. Garcia of Texas. Ms. Kerrigan, did you have anything to 
add?
    Ms. Kerrigan. I will say that for future startup activity 
and for entrepreneurship in general, that technical information 
is so critically important. Again, not only for existing 
businesses, because the world is changing every day, and there 
is social media, and it is this platform-based economy, you are 
going to need those types of modern support and that ongoing 
support in order to navigate, not only the pandemic, but also 
sort of this ever-changing economy.
    So, it is very, very vital. And again, young entrepreneurs 
particularly, and I think across-the-board and across 
demographics say that access to technical information is not 
access to capital, access to technical information is the 
number one thing that they need in order to start their 
businesses. They don't know where to go to. So yes, it is 
vital, very important.
    Ms. Garcia of Texas. Thank you. I only have one second 
left, and I would say to Ms. Ross, congratulations, and you go 
girl.
    Ms. Ross. Thank you.
    Ms. Garcia of Texas. With that, I yield back.
    Chairwoman Beatty. Thank you very much.
    The Chair now recognizes the gentleman from Minnesota's 
Third Congressional District, Mr. Phillips, for 5 minutes.
    Mr. Phillips. Thank you, Madam Chairwoman, and I thank our 
witnesses. I think it is fair to say that the pandemic will 
surely precipitate the failure of far too many businesses.
    Mr. Busby already noted, I think, that 450,000 have already 
closed and more are sure to follow suit. But prospectively, it 
is also going to present an opportunity for new businesses to 
be created once the pandemic passes.
    But just like so many of my colleagues have shared, 
including our witnesses, the hurdles to securing capital are 
terribly high, and often too high for women and minority 
entrepreneurs. And that is the focus of my forthcoming efforts 
and also my questions.
    Starting with Ms. Castillo and Mr. Busby, I want to ask 
first about inspiration and then capitalization. First, how do 
we inspire? And are there any programs on which you are working 
or you are familiar with to inspire young people to consider 
entrepreneurship and starting their own small businesses? I 
would love to hear your thoughts on that and save some time for 
how we are going to capitalize them.
    Ms. Castillo. Thank you so much, Representative, for the 
question. Definitely, young kids now are very entrepreneurial. 
I think that technology has really helped to make them more 
entrepreneurial. And it's the reason why they can work from 
anywhere.
    They have these great ideas. And I really think that 
technology has really triggered that in those individuals. And 
also, because the market is so tough, jobs are difficult to 
get. And the pandemic certainly has accelerated that increase.
    So I think that young people are more motivated than ever 
to really start their own businesses, because especially if 
they are technologically savvy, because they can run a business 
from a very tiny cell phone. They pretty much just have an idea 
and run a business.
    Mr. Phillips. And Mr. Busby, are you seeing the same things 
among your members and perhaps future generations?
    Mr. Busby. Yes, what we have done is we have partnered with 
the Historically Black Colleges and Universities to create 
Chambers of Commerce on the University campuses in the future, 
so that they can get an entrepreneurial experience and 
education firsthand before they leave college.
    Often, many young people say, I want to start a business, 
at 19- or 20-years-old, but they don't have the experience or 
the exposure. They end up messing up their credit or their 
parents' credit, they end up messing their name and an 
opportunity.
    We want those young people to partner with a mentor in an 
industry very similar to the idea or the concept that they have 
so they have a better chance of doing two things, long-term 
sustainability. What we also see is that many of our successful 
businesses don't have a succession plan.
    So you will find businesses that have been in business for 
10, 20, or 30 years and then fall off the map because they 
haven't had anyone to pass it off to.
    And so we are asking many of our young people not to 
necessarily start a new business but to go find an existing 
business where you can bring your talents and skills that you 
currently are just coming out of college with, bring that to 
some of our existing businesses and allow them to have 
sustainability, as well as allow you to be able to get into a 
business earlier and have a longer term of success.
    Mr. Phillips. I love that. And as the witnesses might know, 
and my colleagues, I authored a bill called the New Business 
Preservation Act, which would form a $1.5 billion allocation 
through the Treasury Department, to partner with States 
throughout the country to set up especially investment funds 
focused on women-owned and minority-owned setups with a one to 
one matching component in which venture capitalists can be 
matched with these funds to provide capital to startups.
    Is that the kind of program and initiative that you, Ms. 
Castillo and Mr. Busby in particular, feel is necessary to 
inspire that kind of new startup environment.
    Ms. Castillo. Absolutely. I think that is a great idea. I 
think any fund, any way to get financing when you are starting 
your business is absolutely crucial. I support your idea 100 
percent.
    Mr. Phillips. Wonderful. And Mr. Busby?
    Mr. Busby. Yes, I believe in the public-private 
partnership. What we are asking for from our corporate partners 
is if you have $100 million in assets, to take 15 percent of 
your assets that are sitting in a bank, and invest those assets 
in a Black-owned bank, which then turns around and invests in 
Black-owned businesses.
    And lastly as a president of the local chamber, the United 
States Black Chamber, invest in us, because we then turn and 
give technical assistance, and the access to capital, as well 
as the contracting relationship opportunity of many our 
businesses which are Black-owned.
    Mr. Phillips. I love that, because money without mentorship 
is like an engine without fuel.
    I thank you all for your time.
    I yield back, Madam Chairwoman.
    Chairwoman Beatty. Thank you. The Chair now recognizes the 
gentleman from Illinois' Fourth District, Mr. Garcia, for 5 
minutes.
    Mr. Garcia of Illinois. Thank you, Madam Chairwoman, for 
allowing me to participate in such an important hearing, and I 
thank Ranking Member Wagner as well.
    I represent a working-class immigrant district in Chicago. 
Small businesses are everywhere in my community. Before the 
pandemic, if you just drove down two of the main retail 
corridors, you would find restaurants, hardware stores, and 
supermarkets owned by immigrants. But when the pandemic passes, 
I am not sure what will still be there.
    Businesses shut down temporarily in March, but more and 
more are announcing that they will be closed for good. We need 
to act fast to fix that. First of all, our businesses need 
revenue, they need customers. The people in my community are 
worried about how they can pay the rent and pay their medical 
bills.
    If the Senate doesn't pass the HEROES Act, and Congress 
doesn't do more to ensure that people can stay in their homes 
and meet their needs, then no amount of loans can save these 
businesses.
    Small and minority-owned businesses also need access to 
credit. Before the PPP program, there were not many SBA lenders 
who operated in my community. After PPP was launched, it was 
not easy for additional lenders to get approval to make loans 
under the Program.
    We have talked a lot about how hard it was for minority-
owned businesses to get credit in the early days of PPP, and in 
my community, this is a reason why.
    Ms. Castillo, do you think the small, minority-owned 
lending institutions have built a better relationship with the 
Small Business Administration through the PPP program or has 
the implementation of the Program added new hurdles?
    Ms. Castillo. I think they have built a good relationship 
lately. I think when the program was implemented, they didn't. 
But I think likely, yes.
    Mr. Garcia of Illinois. Okay. Good for you.
    SBA released data about those who would access loans from 
the PPP program. Unfortunately, the main revelation from this 
release is that the SBA needs to do a better job of collecting 
data on this program. How can we act in Congress and in our 
communities to encourage better data collection by the SBA so 
that we can understand who benefited from these programs?
    Ms. Kerrigan?
    Ms. Kerrigan. Data is critical. And it starts at the very 
beginning in terms of collecting that data in the application 
process. I know it was voluntary. It wasn't required. I don't 
know what the legal hurdles are in terms of making that 
required information, but we need to have that data in order to 
see who benefited and where we go moving forward.
    Data drives decision-making. And I think that would help 
Congress do what they need to do to target the program better. 
So we are all about data disclosure and transparency, 
particularly when it comes to taxpayer dollars. So we fully 
support anything that we can do to get more data so that you 
all can make your decisions in a much more informed way.
    Mr. Garcia of Illinois. Any suggestions about what Congress 
can do to help produce that data on the part of SBA?
    Ms. Kerrigan. I think the more that you ask, hopefully, the 
more that you will get. In terms of any demographic data or 
anything relative to race, there are things that were 
voluntary, right?
    So, I think it would have to be an Act of Congress that 
makes that mandatory, as part of legislation.
    Again, that is something we would have to look into it but 
I think a lot of it was voluntary and not mandatory and, that 
being the case, you just do not have the data that you need at 
this point. So, it probably would have to be some type of Act 
of Congress to make that happen.
    Mr. Garcia of Illinois. Okay. Thank you, Madam Chairwoman.
    I yield back.
    Chairwoman Beatty. Thank you.
    The Chair now recognizes the gentlewoman from the 45th 
District of California, Ms. Porter, for 5 minutes.
    Ms. Porter. Thank you so much, Madam Chairwoman.
    As the only single mom in Congress with young kids, and as 
a person who is working from home as much as I can, I know that 
single moms are being asked to do the impossible right now. 
This isn't new, but the pandemic is certainly making it so much 
worse.
    Ms. Kerrigan, pre-COVID-19, what were the margins like for 
a normal small business, say a bakery owned and managed by a 
single mom who has two or three employees? What were those 
profit margins like?
    Ms. Kerrigan. Thin, thin, thin. I mean, really on the day-
to-day, very thin.
    Ms. Porter. That was back in normal times.
    Ms. Kerrigan. That is right.
    Ms. Porter. What would happen if this bakery saw the price 
of flour double?
    Ms. Kerrigan. It would be an enormous impact, not only in 
terms of prices going up but demand going down.
    Ms. Porter. What if the price of eggs were to triple? What 
would that do to the profit margins?
    Ms. Kerrigan. It would probably wipe many of them out. 
Sugar, any of the inputs that you are using in that bakery, you 
are really carefully monitoring those expenses, right?
    Ms. Porter. What about the cost of child care quadrupling, 
the child care that allows that bakery owner to come to work 
every day and bake? What does that do to the business?
    Ms. Kerrigan. It would probably kill the business because 
it would be impossible to do that, very, very difficult.
    Ms. Porter. And that is what is happening, by the way, when 
people have to go from paying, for example, for after-school 
child care to full-time child care. It causes one of the inputs 
of your business, which is the ability of the owner/operator or 
the employees to go to work, to essentially quadruple.
    And what we are seeing right now is all of that is 
happening at the same time that the number of customers is 
dropping, and that is going to push these businesses into the 
red.
    Do you think that this child care crisis is a crisis for 
our small business community?
    Ms. Kerrigan. Oh, absolutely, and the Small Business 
Roundtable on Facebook did a survey, The State of Small 
Business Report, and that was one of the biggest pressure 
points that they found was just sort of the enormous pressure 
that was being put on entrepreneurs, particularly women 
entrepreneurs, to juggle both. So absolutely, it is a crisis 
for working women and entrepreneurs, both.
    Ms. Porter. And working parents, but it falls particularly 
hard on those businesses with the thinnest margins which often 
are women-owned and minority-owned companies who have micro 
businesses and those very thin margins, just like they can't 
absorb a price shock of 4 times the cost of inputs like flour, 
they can't afford what is in essence a 4 times price shock in 
the cost of their own ability to contribute to that business, 
to put in the sweat equity by having to find child care.
    Do women business owners have easy access to capital to 
help them get through these tough times? Are you aware of 
anyone who makes loans to women business owners or to working 
parent business owners so that they can pay for the cost of 
child care?
    Ms. Kerrigan. No. The women entrepreneurs and business 
owners who have been able to get a PPP loan, have, done so 
because of the relationship they may have had established with 
the bank, and so they had a commercial relationship which was 
very few, and then through Fintech lenders, but if you are 
asking specifically and directly for child care, then no.
    Ms. Porter. So there is no assistance, no program. Can you 
use PPP funds to pay for child care for your employees, to 
provide that, for example, to them?
    Ms. Kerrigan. No, it is not a forgivable expense.
    Ms. Porter. Do you think the economy can fully recover if 
working parents, and particularly single parents, are trying to 
be full-time parents, assisting with emergency distance 
learning and work full time in their businesses to deal with 
all of the adjustments and struggles and changes that 
coronavirus survives? Can we have a full economic recovery in 
that kind of environment?
    Ms. Kerrigan. It is very difficult. It is very difficult to 
juggle, too. Not everything can be done out of the home in 
terms of a business. But even if you are in the home, working 
in the business, you have a home-based business and you have 
also the responsibility of educating your kids, if they are not 
going back to school, it would be extremely, extremely 
difficult, absolutely.
    No, it would be very difficult to get back to full economic 
recovery, back to ``normal'' with that scenario.
    Ms. Porter. So would you agree that we ought to be thinking 
about supports for child care and helping businesses deal with 
these and would employees deal with this cost of child care as 
part of how we think about economic recovery, they are hand-in-
glove issues?
    Ms. Kerrigan. I do. Just as we looked at PPP in terms of 
forgivable loans for, say, both payroll and healthcare 
expenses, yes, I think we need to have some very creative 
solutions because you are right. We cannot get back to full 
economic recovery without having that addressed. I agree with 
you, and I look forward to maybe working with you to see what 
we can do to make that happen.
    Ms. Porter. Thank you so much.
    And I yield back.
    Chairwoman Beatty. Thank you so much.
    I would like to thank all of the Members for their 
questions.
    And certainly, I would like to thank all of the witnesses 
for their testimony--Mr. Busby, Ms. Castillo, Ms. Kerrigan, and 
Ms. Ross.
    Without objection, I am submitting the following statements 
for the record: the Asian-American/Pacific Islander Chamber of 
Commerce and Entrepreneurship; Clever Girl Finance; Funds for 
Humanity; Include Ventures; and the National Bankers 
Association.
    Without objection, it is so ordered.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
This hearing is now adjourned.

[Whereupon, at 2:10 p.m., the hearing was adjourned.]



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