[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                  THE SMALL BUSINESS ADMINISTRATION'S 
                  ENTREPRENEURIAL ECOSYSTEM: AN UPDATE 
                  AND NEXT STEPS WITH SBA'S RESOURCE
                  PARTNERS

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

                                HEARING

                               BEFORE THE
                               
                      SUBCOMMITTEE ON INNOVATION,
                           ENTREPRENEURSHIP,
                       AND WORKFORCE DEVELOPMENT

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                              MAY 19, 2021

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 117-014
             Available via the GPO Website: www.govinfo.gov
             
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
44-566                       WASHINGTON : 2021                     
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                          JARED GOLDEN, Maine
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                         MARIE NEWMAN, Illinois
                       CAROLYN BOURDEAUX, Georgia
                         TROY CARTER, Louisiana
                          JUDY CHU, California
                       DWIGHT EVANS, Pennsylvania
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                          ANDY KIM, New Jersey
                         ANGIE CRAIG, Minnesota
              BLAINE LUETKEMEYER, Missouri, Ranking Member
                         ROGER WILLIAMS, Texas
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                        CLAUDIA TENNEY, New York
                       ANDREW GARBARINO, New York
                         YOUNG KIM, California
                         BETH VAN DUYNE, Texas
                         BYRON DONALDS, Florida
                         MARIA SALAZAR, Florida
                      SCOTT FITZGERALD, Wisconsin

                 Melissa Jung, Majority Staff Director
            Ellen Harrington, Majority Deputy Staff Director
                     David Planning, Staff Director
                           
                           
                           C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Jason Crow..................................................     1
Hon. Young Kim...................................................     2

                               WITNESSES

Mr. Charles ``Tee'' Rowe, President & Chief Executive Officer, 
  America's Small Business Development Centers, Burke, VA........     5
Ms. Bridget Weston, Chief Executive Officer, Service Corps of 
  Retired Executives (SCORE), Herndon, VA........................     6
Ms. Corinne Hodges, Chief Executive Officer, Association of 
  Women's Business Centers, Washington, DC.......................     8
Mr. Patrick Montgomery, Founder & Chief Executive Officer, Kansas 
  City Cattle Company, Kansas City, MO...........................    10

                                APPENDIX

Prepared Statements:
    Mr. Charles ``Tee'' Rowe, President & Chief Executive 
      Officer, America's Small Business Development Centers, 
      Burke, VA..................................................    26
    Ms. Bridget Weston, Chief Executive Officer, Service Corps of 
      Retired Executives (SCORE), Herndon, VA....................    37
    Ms. Corinne Hodges, Chief Executive Officer, Association of 
      Women's Business Centers, Washington, DC...................    47
    Mr. Patrick Montgomery, Founder & Chief Executive Officer, 
      Kansas City Cattle Company, Kansas City, MO................    56
Questions and Answers for the Record:
    Questions from Hon. Jason Crow to Mr. Charles ``Tee'' Rowe 
      and Answers from Mr. Charles ``Tee'' Rowe..................    65
    Questions from Hon. Jason Crow to Ms. Bridget Weston and 
      Answers from Ms. Bridget Weston............................    67
    Questions from Hon. Jason Crow to Ms. Corinne Hodges and 
      Answers from Ms. Corinne Hodges............................    69
    Questions from Hon. Jason Crow to Mr. Patrick Montgomery and 
      Answers from Mr. Patrick Montgomery........................    70
Additional Material for the Record:
    Secure Towns.................................................    58
    Veteran Business Outreach Center Testimony...................    60

 
   THE SMALL BUSINESS ADMINISTRATION'S ENTREPRENEURIAL ECOSYSTEM: AN 
                   UPDATE AND NEXT STEPS WITH SBA'S 
                           RESOURCE PARTNERS

                              ----------                              


                        WEDNESDAY, MAY 19, 2021

              House of Representatives,    
               Committee on Small Business,
      Subcommittee on Innovation, Entrepreneurship,
                                 and Workforce Development,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:15 a.m., in 
Room 2360, Rayburn House Office Building and via Zoom, Hon. 
Jason Crow [chairman of the Subcommittee] presiding.
    Present: Representatives Crow, Davids, Phillips, Newman, 
Bourdeaux, Houlahan, Williams, Tenney, Garbarino, Ms. Young 
Kim, and Salazar.
    Chairman CROW. Good morning. I call this hearing to order. 
Without objection, the Chair is authorized to declare a recess 
at any time.
    Let me begin by saying that standing House and Committee 
rules and practice will continue to apply during hybrid 
proceedings. All members are reminded that they are expected to 
adhere to these standing rules, including decorum.
    House regulations require members to be visible through a 
video connection throughout the proceeding, so please keep your 
cameras on. Also, please remember to remain muted until you are 
recognized to minimize the background noise. If you have to 
participate in another proceeding, please exit this one and log 
back in later.
    In the event a member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available member of the same party and I 
will recognize that member at the next appropriate time slot 
provided they have returned to the proceeding.
    For those members physically present in the Committee room 
today, we will continue to wear masks unless we are speaking 
here and socially distant while the Chairwoman and Ranking 
Member work with the office of the attending physician on 
updated guidelines and procedures. Members and staff are 
expected to wear masks while in the hearing. With that said, 
members will be allowed to briefly remove their masks when 
recognized by the Chair for statement and questions. I know we 
all look forward to returning to normal, but appreciate 
everyone's patience while we prioritize the health and safety 
of our staff and each other.
    America's 30 million small businesses support more than 56 
million jobs and account for nearly half of our nation's GDP. 
It is no exaggeration to say that these small firms are the 
foundation of our economy. But despite the fundamental 
importance of these enterprises, the road to small business 
ownership is fraught and paved with obstacles for prospective 
entrepreneurs.
    Recognizing the uphill climb facing many of those wishing 
to start and run a business, the SBA offers a wide range of 
free or low-cost counseling and training services to 
entrepreneurs. To deliver these services, SBA relies on its 
four primary resource partners: Small Business Development 
Centers, or SBDCs; Women Business Centers, WBCs; SCORE; and 
Veteran Business Outreach Centers, VBOCs.
    From first-time entrepreneurs looking to create a business 
plan, the long-time business owners looking for new ways to 
achieve growth, these resource partners support small firms 
through every step of the business cycle. These entrepreneur 
development initiatives have proven to be the difference 
between success and failure for many, many businesses.
    According to SBA's 2013 Impact Study, small businesses that 
receive 3 or more hours of counseling have higher survival 
rates than firms that receive less counseling. In turn, these 
businesses go on to earn more revenue and employ more workers.
    Resource partners have also served as a critical lifeline 
for small businesses throughout the pandemic. When COVID 
struck, resource partners sprang into action, got innovative, 
and helped millions of entrepreneurs navigate a once in a 
lifetime crisis. I saw that myself in my own community as 
businesses adapted and did what they need to do to survive. I 
have heard so many stories from my constituents in my district 
who relied on SBA's resource partners when they had nowhere 
else to turn.
    I hope today's hearing allows us to learn more about these 
programs, hear about challenges they are currently facing, and 
examine how this Committee can improve and expand their reach. 
I am especially interested in learning what more we can do to 
raise awareness of these programs and ensure that the maximum 
number of small businesses are taking advantage of them.
    Today we will explore the resource partners' current 
diversity initiatives and efforts Congress can take to drive an 
equitable recovery. During the 116th Congress, the House passed 
three separate bills to improve the SBA's entrepreneurial 
development programs. If enacted into law, these bills would 
substantially improve the SBDC, WBC, and SCORE programs and 
make them accessible to more small businesses.
    Unfortunately, the Senate did not consider any of these 
bills. I look forward to updating and advancing similar bills 
and finding new ways to strengthen SBA's entrepreneurial 
development programs.
    With that, I now yield to the Ranking Member for her 
opening statement.
    Ms. YOUNG KIM. Thank you, Chairman Crow. Following a year 
of unprecedented state and local government shutdowns and 
regulations, and hampered demand due to COVID-19, small 
businesses are collectively starting to recover. The SBA's 
entrepreneur development programs have long served as a 
resource to small businesses across the country. During the 
COVID-19 outbreak small businesses in record numbers turned to 
the resource partners to navigate the SBA's emergency relief 
programs, including the Paycheck Protection Program, the 
Economy Injury Disaster Loan Program, the Shuttered Venue 
Operator's Grant, and also the Restaurant Revitalization Fund 
and many others.
    Through cooperative agreements, the SBA's ED programs 
provide our nation's entrepreneurs with free or low-cost 
training and counseling on marketing, finance, technology, 
exports, human resources, and more. We have all heard from 
constituents about how Veterans Business Outreach Centers and 
Small Business Development Centers, Women's Business Centers, 
and the Service Core of Retired Executives program can serve as 
valuable tools to small businesses in their quest to grow their 
business, expand their consumer base, gain access to capital, 
navigate government programs and regulations, and meet their 
labor demands.
    With states opening and vaccines being distributed, our 
nation's job creators are eagerly anticipating a return to 
normal business operations and the SBA's entrepreneur 
development partners can help. However, as small businesses 
continue to reopen their doors and start their path to 
recovery, they are met with the obstacle of proposed tax 
increases, regulations, and a tight labor market.
    The Department of Labor reported job openings reached a 
record high of 8.1 million in March. According to NFIB's April 
jobs report, small business owners are experiencing the 
highest-ever reading of unfilled job openings since polling 
started in 1973.
    I look forward to learning more today about how the SBA's 
entrepreneur development programs can serve our small business 
owners in combatting these challenges so they can continue to 
create jobs, skill employees, innovate, and serve their 
communities. As members of the Committee, we must also ensure 
the SBA is managing these programs properly and administering 
the necessary oversight. In light of recent SBA Office of 
Inspector General reports, entrepreneur development programs 
must be examined closely to ensure duplication does not occur 
and waste, fraud, and abuse is prevented.
    Today, we will hear from the associations that represented 
these programs and also hear from Mr. Patrick Montgomery, who 
is a small business owner and veteran who has utilized these 
programs, on the effectiveness of technical assistance programs 
in supporting small businesses and entrepreneurs in recovering 
from the pandemic and beyond.
    So, I want to thank all of our witnesses who are here today 
in person and on the virtual call for providing your 
testimonies. And I yield back.
    Chairman CROW. Thank you, Ms. Kim. The gentlewoman yields 
back.
    I want to take a moment to explain how this hearing will 
proceed. Each witness is going to have 5 minutes to provide a 
statement and each Committee member will have 5 minutes for 
questions. Please ensure that your microphone is on when you 
begin speaking and that you return it to mute when you are 
finished.
    And with that, I would like to introduce our witnesses. Our 
first witness today is Mr. ``Tee'' Rowe, president and CEO of 
America's SBDC. Mr. Rowe has been with America's SBDC since 
August 2009. He has a long history for advocating for America's 
small businesses, including serving as counsel for this 
Committee from 1991 to 2001, so you have done your time on the 
Hill. Mr. Rowe has been a valuable advocate for the SBDC 
program and we are pleased he is joining us again today. 
Welcome back, Mr. Rowe.
    Our second witness is Ms. Bridget Weston, CEO of SCORE. As 
CEO, Ms. Weston provides extensive leadership in works directly 
and collaboratively with the board of directors to establish a 
vision and direction of SCORE. In her 10 years with the 
organization she has developed an in-depth understanding of the 
needs and challenges facing SCORE staff, its 300-plus chapters, 
and over 10,000 volunteers. Welcome back, Ms. Weston.
    And our third witness is Ms. Corinne Hodges, CEO of the 
Association of Women Business Centers, AWBC. Ms. Hodges joined 
the AWBC as CEO in 2019 and is charged with bringing about 
enhanced sustainability and increased capacity to the 
Association and its members. Welcome back, Ms. Hodges.
    I will now yield to the Ranking Member, Ms. Kim, to 
introduce our final witness.
    Ms. YOUNG KIM. Thank you, Mr. Chairman. Our next witness is 
Mr. Patrick Montgomery. As mentioned earlier, he is a veteran, 
entrepreneur, and the chief executive officer and founder of KC 
Cattle Company. After completing the Ranger Assessment and 
Selection program in April 2011, Mr. Montgomery reported to the 
1st Ranger Battalion, 75th Ranger Regiment. While serving as a 
ranger, Mr. Montgomery completed two combat deployments to 
Afghanistan. He served as an assistant gunner, anti-tank team 
leader, shooter for a sniper team, gun team leader, and weapons 
squad leader.
    Following his service in the military, Mr. Montgomery 
completed his bachelor of science in animal science at the 
University of Missouri. And during his last semester in 2016, 
he created the business plan for KC Cattle Company.
    While building his business, Mr. Montgomery completed his 
executive MBA program through the University of Missouri 
College of Business. Mr. Montgomery founded KC Cattle Company 
with the mindset of bridging the gap between agriculture and 
the consumer. His company provides the highest quality Wagyu 
beef via mail order to consumers in all 50 states and is 100 
percent veteran-owned and a 100 percent veteran-operated 
company.
    Mr. Montgomery, thank you for joining us today and thank 
you for your service to our great nation.
    Chairman CROW. Thank you, Ms. Kim. And welcome, Mr. 
Montgomery. It is good to have a fellow Ranger joining us 
today. Rangers lead the way, although you did serve in our 
nation's second best Ranger battalion. That is an inside joke 
amongst us rangers. But thank you, Mr. Montgomery. I appreciate 
you joining us here.
    So, let us begin with Mr. Rowe. Mr. Rowe, you are now 
recognized for 5 minutes.

STATEMENTS OF CHARLES ``TEE'' ROWE, PRESIDENT & CHIEF EXECUTIVE 
OFFICER, AMERICA'S SMALL BUSINESS DEVELOPMENT CENTERS; BRIDGET 
   WESTON, CHIEF EXECUTIVE OFFICER, SERVICE CORPS OF RETIRED 
 EXECUTIVES (SCORE); CORINNE HODGES, CHIEF EXECUTIVE OFFICER, 
 ASSOCIATION OF WOMEN'S BUSINESS CENTERS; PATRICK MONTGOMERY, 
 FOUNDER & CHIEF EXECUTIVE OFFICER, KANSAS CITY CATTLE COMPANY

               STATEMENT OF CHARLES ``TEE'' ROWE

    Mr. ROWE. Thank you, Chairman Crow, Ranking Member Kim, 
members of the Committee. Thank you for inviting me to testify. 
I am a little thrown off because I am thinking about mail order 
Wagyu right now.
    I am president of America's SBDC, the Association of Small 
Business Development Centers. For 40 years, SBDCs have been 
providing services to small business owners throughout the 
nation. We operate out of host institutions and operate 
statewide. We may be headquartered at colleges, but our centers 
are in our communities. That is why you will fine SBDCs at the 
International Rescue Committee in El Cajon or the East Los 
Angeles Initiative or the Boulder Public Library.
    SBDCs help small businesses at all stages. Fifty percent of 
our clients are women, roughly 10 percent of our clients are 
veterans, and minority clients comprise over 38 percent of our 
client base. Every year we provide over 1-1/2 million hours of 
counseling and training to over 500,000 small business owners 
and their employees. And that assistance has generated great 
results. From 1990 to 2019, our clients accessed $76.5 billion 
in capital, increased their sales by $127 billion, and created 
3.3 million jobs, and they generated over $11 billion in tax 
revenue.
    As I laid out in my written statement, we offer a wide 
variety of assistance, and you can find more of that by 
following the link to our annual report. However, I would like 
to focus on just a couple of things.
    First, cybersecurity. SBDCs have a new cybersecurity 
program based on DOD's cybersecurity maturity model. It covers 
all facets of the DOD guidance in order to provide security 
education for small business owners.
    We also have a new program, Secure Towns. Through it, SBDCs 
work with chambers, development organizations, and local 
businesses to raise awareness and reduce cybersecurity threats.
    Regarding the COVID pandemic response, over the last year 
we have probably done close to 3 years' worth of work. We have 
participated in over 3,500 webinars and assisted over 315,000 
people in just the early months of the pandemic. As an example, 
the Pennsylvania SBDC launched nine new centers to provide 
services aimed at weathering the pandemic.
    We also assisted in provided helping get small businesses 
financing through PPP, EIDL, SVOG, and now the Restaurant 
Revitalization Fund. And as the demand surged, SBDC shifted on 
line, which will continue to be a significant alternative. It 
improves our productivity and allows broader use of specialized 
skills.
    And our client survey showed that the most requested 
programming, ``Finding New Customers,'' is also the frequently 
most mentioned challenge. And they also want strategic planning 
and digital marketing and social media and search engine 
optimization. In other words, going forward we see small 
businesses as increasingly reliant on technology. These changes 
may present a real challenge to some communities with limited 
broadband access.
    To overcome that, SBDCs are increasing our outreach. In 
Chicago's Southlands, the SBDC works with the Resurrection 
Project and the Urban League to ensure that services reach all 
communities. Likewise, the Houston SBDC is teaming with the 
Great Houston Black Chamber. They are creating a new business 
institute to improve access to capital and business growth. And 
to further these efforts, the SBDCs have become the inclusivity 
challenge based on the Northern California SBDC's Inclusivity 
Project.
    The challenge is simple: Do more. Based on local needs, 
SBDCs will establish more connections and provide more 
services. It is all about helping entrepreneurs, all 
entrepreneurs, overcome impediments to their success. That 
effort is complementary to the new Community Navigators 
program. In fact, several SBDCs are already engaged in pilot 
programs for community navigators.
    We would like to find the best ways to deliver services to 
all small businesses and leverage all the capacity available. 
To that end we strongly support reauthorization of the 
Entrepreneurial Development Programs. We think it is time to 
review and renew the commitment to assisting small business.
    Now I have got one last item and that is about the CARES 
Act and the resource partner training platform. We would really 
like to know what we should think of for its future.
    That concludes my testimony. I look forward to any 
questions.
    Chairman CROW. Thank you, Mr. Rowe. Ms. Weston, you ware 
now recognized for 5 minutes.

                  STATEMENT OF BRIDGET WESTON

    Ms. WESTON. Thank you, Chairman Crow, Ranking Member Kim, 
and members of the Committee. Thank you for the opportunity to 
offer testimony today.
    SCORE is the nation's largest network of volunteer business 
mentors with more than 10,000 volunteers across 240 chapters, 
offering free and confidential advices, and educational 
workshops to small business owners. Founded in 1964 as a 
resource partner of the SBC, SCORE has helped more than 11 
million entrepreneurs start, grow, or troubleshoot their 
business. Last year, SCORE helped its clients to start over 
45,000 new businesses and create nearly 75,000 new jobs. And 
despite the challenging business climate of the pandemic, SCORE 
helped 82 percent of our clients stay in business throughout 
the year.
    We believe SCORE is the most effective, efficient business 
formation and job creation engine funded by the federal 
government. In 2020, our cost to create a new job was $156 and 
$259 to create a new business. For every $1 appropriated to 
SCORE, our clients returned $67 in new federal tax revenue, 
further demonstrating SCORE is a good steward of the federal 
dollar.
    SCORE volunteers are the lifeblood of our organization and 
are passionate about helping small businesses succeed. 
Volunteers come from all across the country with diverse 
backgrounds and experience in different industries. Our core 
services are mentoring, educational workshops, and online 
resources. Last year, SCORE volunteers held over 315,000 
mentoring sessions, guiding and supporting our clients through 
the tremendous challenges brought on by the pandemic. Many 
business owners told us they would not have applied for a PPP, 
EIDL, or Restaurant Revitalization loan without a SCORE mentor 
to walk them through the process. Our high rates of client 
satisfaction are captured in our Net Promoter Score of 87, 
which 70 being considered excellent.
    In addition to mentoring, SCORE provides virtual webinars 
on our website. And SCORE chapters offer local workshops that 
are in-person or virtual. These workshops drew over 464,000 
attendees last year.
    One of SCORE's key areas of focus is fostering diversity, 
equity, and inclusion for clients and volunteers. Women and 
minority volunteers climbed to 38 percent of total volunteers 
last year. This 5 percent increase represents the single 
biggest annual growth since we began tracking these metrics in 
2012.
    SCORE currently serves a diverse range of small business 
owners. Sixty percent of our clients are women and 46 percent 
are minorities. Earlier this year, SCORE launched the SCORE for 
Black Entrepreneurs as part of our SCORE for All Initiative to 
help serve disadvantaged businesses. We plan to add more SCORE 
for All campaigns to help these businesses survive and thrive, 
supporting women, rural entrepreneurs, veterans, the 50 and 
older community, and persons with disabilities.
    SCORE is working harder than ever to reach underserved 
entrepreneurs, leveraging our community relationship nationally 
and locally. National partnerships include the BIPOC Support 
Foundation, Women Entrepreneurs Grow Global, the National Black 
Chambers, and the Latino Coalition, who introduce us to new 
communities of small business owners. We also collaborate with 
our fellow resource partners here today nationally and locally.
    Across the nation SCORE chapters are integrated in their 
communities, reaching, guiding, and providing access to 
necessary resources. When the pandemic hit SCORE pivoted to 
delivering virtual mentoring and education without missing a 
day of service. We accommodated a 30 percent increase in 
services last year. And while the House of Representatives 
supported additional funding for SCORE's COVID-19 response, 
ultimately SCORE did not receive any relief funding.
    Nevertheless, we were able to stand up our Small Business 
Resilience Program, connecting SCORE mentors and educational 
resources to entrepreneurs to help them successfully navigate 
federal and local government programs, adapt to change, launch 
new businesses and inspire their customers to rally around 
their business. SCORE's Small Business Resilience hub has 
served 730,000 people since its launch in March 2020. Now we 
are at capacity and will not be able to grow without additional 
resources.
    Based on SCORE's continued demonstrated impact, increased 
demand for services, and our plans to reach more business 
owners in underserved and disadvantaged communities, SCORE is 
respectfully requesting an increase of 9-1/2 million in funding 
for a total appropriation next year of 21.7 million. I want to 
thank the Chairman and Ranking Member for leading the joint 
letter in support of robust funding for SCORE and thank all of 
the Members who signed. The additional funding would be spent 
to increase mentoring and education by reducing administrative 
burden on volunteers, provide more direct funding to local 
chapters for community outreach, and focus to help more 
underserved businesses.
    With this relatively small investment we can provide even 
greater value to business owners and the economy. This 
increased funding would allow us to deliver more than half a 
million additional client services with a projected outcome of 
100,000 additional new businesses started or jobs created. 
SCORE's mentoring and education are critical to helping small 
businesses overcome their challenges and succeed. SCORE stands 
ready to help our nation's most vulnerable small business 
owners so they can keep their doors open and keep people 
employed.
    Thank you very much for your time. I look forward to your 
questions.
    Chairman CROW. Thank you, Ms. Weston. Ms. Hodges, you are 
recognized for 5 minutes.

                  STATEMENT OF CORINNE HODGES

    Ms. HODGES. Thank you, Chair Crow, Ranking Member Kim, and 
distinguished members of the Subcommittee. The Association of 
Women's Business Centers works to secure empowerment and 
economic opportunities for women by supporting and sustaining 
the national network of 135 Women's Business Centers that 
provide counseling, training, mentoring, business development, 
and access to capital. And while all WBCs operate brick-and-
mortar locations, many have opened additional satellite 
locations, remote support, or even mobile units to serve the 
hardest to reach entrepreneurs.
    Women's Business Centers are essential to this period of 
economic recovery. And women entrepreneurs play a key role in 
our nation's economy, but, unfortunately, the pandemic has 
challenged them disproportionately. Women are exiting the 
workforce to care for families, particularly among low-income 
populations as well as communities of color. Women seeking 
flexibility and necessary household income turn to 
entrepreneurship.
    For existing businesses the pandemic presented challenging 
circumstances since women are more likely to have service-based 
businesses, such as childcare centers, salons, food services, 
et cetera, where rates of closure reached as high as 40 
percent. As a result, an unprecedented number of women have 
found entrepreneurship at their local Women's Business Center.
    In 2020, Women's Business centers had nearly 200,000 client 
engagements and assisted clients in accessing $362 million in 
business capital, more than double the previous year. They also 
helped clients retain and create new jobs, nearly 70,000 
nationwide. Not only are WBCs seeing more small business 
clients, those clients are returning for services at a higher 
rate, averaging 4 hours per client.
    But we could not have accomplished all of this without the 
leadership of this Committee, so allow me the opportunity to 
say thank you to this group of members and their diligent 
staff. The additional Women's Business Center funding and 
waiver of the matching requirement allowed Women's Business 
Centers the resources and flexibility they needed to respond to 
these surges in demand by hiring additional staff, providing 
essential counseling, and mentoring to convey rapidly changing 
federal program and loan guidance.
    This year provides us a reminder of the importance of 
serving underserved communities. In 2020, 70 percent of the 
individuals Women's Business Centers served were women and 56 
percent were people of color. And as detailed in my written 
testimony, Women's Business Centers and AWBC have led the way 
in reaching BIPOC women business owners and we hope to share 
these best practices.
    Women's Business Centers have a proven track record of 
producing exceptional results with limited resources. While 
Women's Business Centers exceed their goals when it comes to 
client service and performance, there are challenges faced 
within the technicalities of operating the program. And so for 
this reason, AWBC continues to advocate for reauthorization and 
modernization.
    Regulatory and grant compliance inconsistencies and 
inefficiencies can create challenges for even the highest 
performing Women's Business Centers. The recent OIG report 
identified specific findings that we see would be remedied by a 
modern redesign of the Women's Business Center program. We urge 
Congress to establish a structured accreditation program that 
ensures accountability to national standards for client 
service, including management and operational aspects. In 
addition, an increased individual grant level would effectively 
allow centers to raise awareness for their services and to 
reach deeper into marginalized and rural communities.
    AWBC endorsed and fully supports the Women's Business 
Centers Improvements Act from the 116th Congress. Had that 
legislation been enacted we believe Women's Business Centers 
would have been better positioned to respond to the pandemic. 
We urge this bipartisan legislation be enacted swiftly.
    Similarly, newer and smaller centers would stand to benefit 
from additional oversight and guidance to achieve maximum 
results. AWBC is exploring ways to support centers with 
greatest needs, including the smallest and newest centers. We 
seek savings for taxpayers using economies of scale for common 
purchases, like technology tools. We hope to work with this 
Committee to explore ways to achieve those economies of scale 
and modernize the program.
    We are proud of our partnership with SBA to ensure 
America's resource partners have the important information to 
support entrepreneurs. We urge Congress to ensure the 
investment and the resource partners training portal continues 
beyond COVID. We ask this Committee and the 117th Congress to 
take the following actions: fully fund the program at $30 
million for core funding; provide additional $48 million for 
COVID-related appropriation; reauthorize the program similar to 
legislation, like H.R. 4405; and ensure WBCs are partners of 
choice for engaging women business owners in any future jobs 
and infrastructure package.
    Thank you so much. I look forward to your questions.
    Chairman CROW. Thank you, Ms. Hodges. And Mr. Montgomery, 
you are now recognized for 5 minutes.

                STATEMENT OF PATRICK MONTGOMERY

    Mr. MONTGOMERY. Thank you, Chairman and members of the 
Subcommittee. I am honored to have the opportunity to represent 
the health and voice for small businesses across the nation. I 
consider myself blessed to live in a country where I have the 
opportunity to address the leaders of my nation coming from my 
humble beginnings. ``That these dead shall not have died in 
vain. Government of the people, by the people, for the people, 
shall not perish from this earth.'' Remembering the rangers who 
gave all so I can sit here before you, I aim to give an honest 
representation of my business and experiences for them.
    According to the Kauffman Foundation, the number of adults 
owning businesses have been declining since the 1990s. In a 
separate study by the Brookings Institute, the number of 
startups has fallen by half since 1978. These studies are 
troubling for America remaining the leader of the free world. 
Entrepreneurship is directly linked to job growth, wage growth, 
GDP, and innovation. Capital and advice are the quintessential 
needs of a new idea embarking on the journey to become a 
successful business.
    My journey to entrepreneurship started during my last 
semester of my undergrad at the University of Missouri at 
Columbia. I had put the business plan for KC Cattle Company 
together and was looking for a seed investment to get started 
once I graduated. I cleared out my wife and I's savings and 
contributed to the profit we made from selling our home in 
Columbia.
    I researched grants, government subsidized loans, and other 
government resources. I took advantage of using the University 
of Missouri's Extension program for advice and grant 
applications. I spoke with the USDA and banks regarding USDA 
and SBA loans. I was asking for $250,000 to make it through the 
first 3 years of owning my business to establish a viable 
business model. I did not have collateral or historic sales, so 
selling this to a lender proved impossible. I ended up raising 
half this amount from friends and family.
    I boot-strapped those first 3 years and made the resources 
I had work. I used my GI Bill to complete my MBA. The stipend 
from the GI Bill was my salary for those first 2 years of 
owning my business. We found success in our e-commerce business 
in 2019 and continued thriving in 2020 despite huge restraints 
on our supply chain from large processors throughout the 
country shutting down.
    2021 is proving to present its own set of challenges with 
rising costs across the board and constraints on the labor 
market. From 2017 through 2021, the government resources I used 
to help scale my business was the SBDC's ScaleUP! KC program, 
SBDC's marketing data resources, an SBA 7(a) line of credit, an 
SBA PPP loan, my post 9/11 GI Bill, and the Missouri Extension 
program.
    Specifically speaking about the SBDC, ScaleUP! KC was a 
great resource for thinking through how I am going to scale my 
business. Developing processes, thinking about our operating 
environment, and implementing the Entrepreneurial Operating 
System were some of my key takeaways. While completing this, I 
discovered I could use the SBDC for gaining specific insights 
into our target demographic by using information from our email 
list. I was I the process of paying a marketing firm $8,000 to 
do this for us. The SBDC did it for free, which allowed us to 
free up that cash to be able to hire new employees during the 
height of the pandemic.
    The resources I used from the government were essential to 
creating a successful business. As stated before, capital and 
advice are the lifeblood for startups. Without the resources 
stated above, I would have never been able to get to where we 
are as a company.
    However, these resources are not very easy to find as a 
small business and not easily accessible those first few years 
of trying to create a viable business model, specifically at 
the capital side. A few ideas I had while thinking through my 
talking points for this discussion.
    One, when filling out a new corporation with the state, 
what if the entity received information about available 
resources along with their formation documents from the state 
and IRS?
    Secondly, although the SBA has some great lending options, 
all of them are for established businesses. What if there was a 
program specifically for startups trying to breathe life into a 
new idea? This lending option could be paired with advisors 
from the SBDC to help work through the problems associated with 
a startup and help the individual network their new businesses. 
Startups are risky, but I would argue these loans could be a 
better investment for the government and the individual than 
student loans. We need individuals to have the means to pursue 
good ideas in this country.
    In conclusion, I believe the resources available from the 
SBA and affiliate partners are crucial for new businesses to 
succeed. However, I think these resources are not always easy 
to find or easy to access when starting a new company. Making 
resources, both capital and knowledge, available to aspiring 
entrepreneurs is critical to the United States remaining the 
gold standard for innovation and envy throughout the world.
    Thank you for this opportunity to speak with you. And I 
look forward to your questions.
    Chairman CROW. Thank you, Mr. Montgomery. And thank you to 
all the witnesses for everything you shared with us. I 
appreciate many of the comments and observations.
    I am going to begin by recognizing myself for 5 minutes. 
And Mr. Rowe, I want to start with you.
    You had mentioned cybersecurity as a really essential 
element here and the cybersecurity maturity model. I represent 
a state and district that has one of the largest defense 
aviation and aerospace industries in the country. In fact, I 
have over 250 primary small- and medium-sized businesses that 
serve within that industry, and cybersecurity is a huge issue. 
And, you know, our adversaries looked to target now our supply 
chain in those small- and medium-sized businesses that 
oftentimes do not have the resources to adequately bolster 
their cyber defenses. So, I am particularly interested in how 
we can assist with that process.
    Yet, at the same time, many of those businesses in the 
industry have told me, you know, expressed concern about the 
maturity model and reluctance to a one-size-fits-all approach 
because smaller companies, 10-, 15-employee companies, don't 
have the resources to necessarily comply with that.
    So, with that lead-in, could you just describe for me the 
tension there between adequately rolling out that model and 
those resources? And how do we adequately address the issue 
that smaller businesses may not have the resources, but, at the 
same time, they are primary targets as well and they need to be 
secured?
    Mr. ROWE. You are absolutely right, Mr. Crow, that those 
folks further down in the supply chain are a prime target. At 
the same time, they don't have, you know, a chief information 
security officer and all of those extra employees that they 
might need.
    So, what we focused on with the cybersecurity maturity 
model is getting more small businesses to what they call level 
one. They may not be certified yet, but we are getting them the 
very basics. But we are also working with sponsors to have the 
opportunity to give them more information, to get them, you 
know, a firewall or whatever they might need.
    And that goes along with what we are doing with Secure 
Towns. Now, we have just started this in Culpeper, Virginia, 
but we would like to expand it to other towns and cities where 
it has to become, you know, a global approach.
    I have got an example. You know, I had a court date cancel 
because the courthouse got hacked, ransomwared [sic]. It is not 
just businesses. It is our city governments, it is our 
courthouses, it is everywhere. And where we are trying to go is 
giving them the most information they can handle at the time to 
get them at that first level. And where they have to go from 
there, it has been a process working with DOD and all the other 
agencies.
    Chairman CROW. Okay, thank you, Mr. Rowe.
    Ms. Weston, I would like to talk about a bill that Mr. 
Balderson from Ohio, who was the Ranking Member on this 
Committee last Congress, we have a bill called the Next 
Generation Entrepreneurship Core Act, which I am sure you are 
aware of. And really what we aim to do is help catalyze 
entrepreneurship, particularly in underserved communities with 
wraparound services, a fellowship program, you know, 320-plus 
fellows a year to provide mentorship, offset costs, and really 
help lift up those entrepreneurs by reducing barriers that they 
face, particularly in the areas where they face more barriers 
than other entrepreneurs.
    So, I would just like to have your thoughts on the impact 
of a bill like that or an effort like that, that recognizes 
that not all communities face the same barriers to 
entrepreneurship, and yet there is great value in making some 
targeted investments within those communities to unleash 
innovation.
    Ms. WESTON. Thank you so much for the question. And SCORE 
is a strong supporter of the Next Generation Entrepreneurship 
bill. We know that disadvantaged and underserved communities 
have unique needs and unique challenges. And one of the things 
that we believe is by creating equity-based programming that 
brings training and mentorship focused on those needs will help 
elevate and reduce barriers. And when we see more success with 
those entrepreneurs who have the drive, have the desire, but 
have a lot of hurdles in their way, we know that the mentorship 
and the training will help them overcome. And this bill, the 
training will then be available for other entrepreneurs. They 
will see these successes. They will be able to take advantage 
of the training and the resource partners.
    And as we heard, awareness is a key problem. Once we can 
get access to these entrepreneurs to help them learn about the 
myriad of resources available they are more likely to succeed.
    So, we are very excited about the bill and hope that it 
passes.
    Chairman CROW. Thank you. And then I will add that it is 
not just bipartisan in the House, but we also have Senator 
Coons and Senator Scott in the Senate that are championing it 
in a bipartisan way on the other side of the Capitol as well. 
So, thank you.
    My time is done, so I would like to now recognize Ms. Kim, 
the Ranking Member, for 5 minutes.
    Ms. YOUNG KIM. Thank you, Chairman. So, thank you so much 
for all your testimonies.
    And so we heard that small businesses are unaware of these 
wonderful programs that are out there. So, what steps have you 
taken during the pandemic, especially during the pandemic, to 
help small businesses find your organization? And additionally, 
who will your organization change and adapt to assist small 
businesses as they continue to recover? This to all of you.
    Mr. ROWE. Well, with the CARES Act funding is actually the 
first time that an SBDC was allowed to use some of the funds 
for marketing. So, our folks had been reaching out usually 
through social media because it is actually the most cost-
effective. But that has been a huge problem all along as we 
were literally prohibited from marketing our services by the 
SBA. I guess the pandemic changed some minds. And so that is 
where we have gone.
    We also partner with companies like Google and Microsoft 
and Thrive to use their resources to get the word out. We had a 
resiliency guide that we worked on with Google and, you know, 
expanded our reach through that.
    Ms. YOUNG KIM. Okay.
    Ms. WESTON. With SCORE, one of the things we focus on is 
what our clients and others small business centers are saying 
that they need help with. And so the content that we create and 
share with our local chapters is also online and, of course, 
SEO, search engine optimization, is a key way that people are 
finding our content, finding it valuable, and then pairing it 
with a mentor or a workshop.
    Our local and national partnerships are another key area. 
By reaching new markets, like not just the partners I spoke 
about, but other corporate partners, they can amplify the 
message that SCORE and our other resource partners are here. I 
do believe that the SBA is a valued partner in helping to get 
the word out and I think there are things we can do to improve 
that because we know and we heard from the Chairman's testimony 
that when people are paired with SCORE or SBDCs or Women's 
Business Centers, the businesses are more likely to be 
successful.
    Ms. HODGES. If I could also just add partnership with 
constituent offices has been a really valuable way to direct 
traffic. So, when small businesses are asking who can help us 
and you send them to any of us, they can locate a center. That 
has proven to be a huge, I think, source of where a lot of our 
growth came from, from the Women's Business Center side.
    There is truly still a problem, though, with the awareness 
among the communities. I saw a survey from a couple of years 
ago, still more than 80, 85 percent of women business owners in 
our case know about a Women's Business Center. And similar 
numbers in our poll related back to SBDCs and SCORE as well.
    So, we do have to still continue to push the word, but 
there are limitations with the funding that has to be applied 
toward programming versus some of that kind of paid-for 
advertising.
    Ms. YOUNG KIM. Sure. I mean, we do know that there are 
great programs, but many people are having difficulty finding 
those programs. So, let me direct this question to Mr. 
Montgomery.
    In your testimony you mentioned that SBA's resources are 
not always easy to find or easy to access when starting a new 
company. So, do you think entrepreneurs would benefit from more 
streamlined resources? Are four separate SBA resource partners 
duplicative?
    Mr. MONTGOMERY. I wouldn't say they are duplicate at all. I 
just think they are tough to find, you know. Regarding the 
SBDCs specifically, we actually had a representative reach out 
to me about that specific program. And once I was able to, you 
know, participate in the program, I found all these additional 
resources that I had no idea existed.
    So, you know, I think probably one of the main touching 
points is normally a bank that you are trying to go through for 
an SBA loan, so, you know, maybe there is some kind of synergy 
there for marketing for these other free programs.
    Ms. YOUNG KIM. Thank you. Let me direct my last question to 
Ms. Weston.
    You know, we talked about in my opening statement the SBA's 
Office of Inspector General releasing the audit. And that was 
an oversight of your SCORE association and found that the 
program officials did not properly oversee SCORE's use of 
federal funds. And then you also talked about that you did not 
get any additional funding. So, can you provide an update on 
the corrective actions that are being implemented by your 
organization?
    Ms. WESTON. Absolutely. I appreciate the question. The 
Office of Inspector General's report was released in April of 
2019, and it was on fiscal year 2017 and the first quarter of 
2018. Two months after that report, there was a leadership 
change at the organization and less than a month after that we 
put together a comprehensive plan to address all of the 
findings in the OIG report. Less than a year later, every 
finding was closed.
    SCORE has a culture of compliance. We have centralized our 
accounting, so that every chapter dollar that is spent we can 
recognize and share with the SBA whether it was restricted or 
unrestricted. We have brought on a compliance manager to ensure 
that we are following all the processes and procedures related 
to our terms and conditions in the CFR 200. Our procurement 
processes have been strengthened. And in cooperation with the 
SBA, we are following what they have suggested, our board of 
directors has separated the association and the foundation. Our 
compensation policy has been enhanced in terms of salary data, 
limiting performance pay. And our whistleblower policy has been 
updated and every volunteer sees it every year by taking a 
required code of ethics.
    Ms. YOUNG KIM. Thank you. They say that our time is over, 
so I yield back.
    Chairman CROW. Thank you. The gentlewoman yields back. Now 
I will recognize the gentlewoman from Kansas, Ms. Davids, also 
the Chairwoman of the Subcommittee on Economic Growth, Tax, and 
Capital Access, for 5 minutes.
    Ms. DAVIDS. Thank you, Chairman. You know, our SBA resource 
partners have served a really invaluable role during this 
pandemic and that includes providing guidance and assistance to 
small businesses on some of the SBA relief programs that we 
have talked about today. You know, the resource partners in the 
Kansas Third have helped a lot of businesses, countless 
businesses, navigate the federal programs that exist and help 
access the resources available to them. And, you know, I think 
while we heard about some of this already, but, you know, when 
we are talking about the Women's Business Center increasing its 
reach by like 22 percent, we know that these things are really, 
really important.
    So, I want to start, Mr. Rowe, how can we learn lessons 
from this pandemic and further empower our resource partners in 
the long term? And, you know, that could be challenges and also 
opportunities.
    Mr. ROWE. I think the--and I am as bad with this as I am on 
a Zoom call. I think the biggest thing we have learned is that 
we can get a lot more mileage out of being online. But we also 
have to be really careful not to isolate ourselves. And we do 
spend an inordinate amount of time collaborating, whether it is 
with SCORE, Women's Business Centers, or with the Procurement 
Technical Assistance Centers. And for us the big thing is how 
do we break down the silos to make sure that all of the 
information and all of our capability and capacity is getting 
out to the community?
    I know we did, you know, gobs of town halls with Members 
like yourself. We can always do more. I think it would be great 
if every Member's website had a small business assistance 
banner on it where they could link to our services. I think we 
have learned a lot that sometimes folks just can't see because 
we are not raising our hands.
    Ms. DAVIDS. Thank you. I appreciate that. And I kind of 
want to--another piece of this is the Women's Business Centers 
and I know that, Ms. Hodges, you mentioned this in your 
testimony that reauthorizing the Women's Business Center 
program is, of course, really important. I know I was proud to 
introduce the Women's Business Center Improvement Act. It 
passed the House in 2019. I intend to reintroduce that piece of 
legislation later this year.
    But, you know, can you elaborate a bit on how the 
Improvement Act might either have better helped you respond to 
the pandemic, which I think you mentioned, but also just kind 
of moving forward how that is going to help us get on the other 
side of this economic crisis?
    Ms. HODGES. Gladly. Thank you, Representative Davids. 
Clearly, had we addressed the modernization prior to the 
pandemic, we would not have been still strapped with the 
$150,000 grant cap that we had 30 years ago when the program 
was initially introduced. And so we were in a position with the 
CARES Act funding, gratefully, to be able to scale up, but we 
were so far behind. And now as we see the CARES Act funding 
coming to fruition, we are at a position--we will be in a 
position to now have to scale back.
    And so just when the economy is now recovering, we have a 
tremendous opportunity to take a really strong look at the 
program. Everything that was in the bill that you introduced 
and passed was great and was a move in the right direction in 
terms of increasing the grant cap, introducing accreditation 
and standards of quality. But the reality is none of those 
things have been able to be enacted, and so we are back at 
square one, basically 30 years ago, and still trying to run a 
modern program serving modern technological challenges, like 
the Chairman mentioned with cybersecurity, problems that were 
never envisioned when the program was initially thought of and 
piloted. And so we really just need to take a modern look at 
what services we know that women and particularly marginalized 
communities need to receive.
    Ms. DAVIDS. Thank you. I have one quick question for Mr. 
Montgomery. This weekend I am having a cookout. Should I get 
the ribeye or the strip steak?
    Mr. MONTGOMERY. I am a ribeye guy all day long.
    Ms. DAVIDS. Okay, very good. Thank you so much, Mr. 
Chairman. I yield back.
    Chairman CROW. Thank you. The gentlewoman yields back. And 
now I would like to recognize the gentleman from Texas, Mr. 
Williams, the Vice Ranking Member of the Committee. And I don't 
always root for the Atlanta Braves, but when I do it is because 
of you, Roger.
    Mr. WILLIAMS. Thank you.
    Chairman CROW. The gentleman is recognized for 5 minutes.
    Mr. WILLIAMS. Thank you, Mr. Chairman. In April 29th, we 
talked about the Inspector General releasing an audit of the 
SCORE association showing some abuses in taxpayer dollars. You 
have addressed that a little bit today. But it was over 700,000 
in federal grants were used for excessive staff bonuses, 
unallowable contracts, it even covered the cost of alcohol. And 
these findings were extremely troubling to a lot of us and 
should make us as lawmakers consider SCORE's ability to 
continue to receive federal funding unless these changes are 
made.
    I guess the question I would have is, were these 
accusations true?
    Ms. WESTON. There were some instances where we did not 
follow proper procedures in terms of contract documentation, 
proper bidding, and we did not have a formal compensation 
policy that limited fair pay across all of the staff in the 
organization. We now have a compliance manager, we have a 
procurement policy, we have a compensation policy, and those 
have been addressed now for over a year.
    Mr. WILLIAMS. Okay. The people that caused the problem, are 
they still there? And how are they going to change their ways?
    Ms. WESTON. They are not.
    Mr. WILLIAMS. They are gone, right? Another question I have 
is you talked about--I am a small business owner. I own car 
dealerships back in Texas and 51 years, so main street is 
important to me and I appreciate what you are doing. But when 
we talk about tax increases, which is happening now, how is 
that going to affect your small businesses?
    Ms. WESTON. Well, I believe that SCORE and our other 
resource partners are here to help small businesses navigate no 
matter what challenges and hurdles are put in front of them.
    Mr. WILLIAMS. But it is going to hurt them, isn't it?
    Ms. WESTON. I cannot speak to----
    Mr. WILLIAMS. If you pay more taxes, you pay more taxes.
    Ms. WESTON. What we know is that regardless of the hurdles 
thrown in front of small businesses, we will be able to help 
them navigate and figure out ways to overcome.
    Mr. WILLIAMS. To overcome paying more taxes.
    Ms. WESTON. To overcome the challenges for any small 
business owner.
    Mr. WILLIAMS. Okay. All right. Mr. Rowe, in your testimony 
you discussed Small Business Development Centers' inability to 
serve all counties. As someone who represents some very rural 
areas of Texas, I have seen unique challenges facing people who 
choose not to live in populated cities. Whenever you are 
dealing with federal programs I am concerned that a majority of 
funding and focus is being used in major metropolitan or urban 
areas.
    So, my question is, how is the SBDCs currently making sure 
that programs are beneficial to all Americans, no matter where 
they decide to open their business?
    Mr. ROWE. Well, just for instance, in Texas, A, if you look 
at my written testimony, for years the UTSA, South-West Texas 
Border Region SBDC has been hosting the Texas State Rural 
Business Conference. So, as a result, I continue to get emails 
from your colleague, Sid Miller.
    And that is a very real effort by us to share information 
with economic development organizations throughout the state of 
Texas. We have similar efforts, whether it is, you know, 
Wyoming, Montana, all of the states where we are dealing with 
significant rural areas. And frankly, in our network that is 
every place but the District of Columbia.
    Mr. WILLIAMS. Okay. All right. Having access to capital and 
a strong business plan are critical components of any 
entrepreneur looking to take a chance and start a new career. 
The SBA has resources available to try to help these 
individuals, but they are often unknown to people, and we 
talked about that today, who are just starting out or they are 
difficult to navigate.
    So, Mr. Montgomery, I am familiar with your industry, also. 
I run a few head back in Texas. And as someone who benefited 
from the SBDC assistance, what recommendations can you give the 
SBA partners to improve outreach to aspiring entrepreneurs? 
Because you are a great example.
    Mr. MONTGOMERY. Just like you were saying, Representative, 
during that initial time period, especially when you are making 
your business plan and you are searching for capital, you know, 
that capital is incredibly important to kind of get your start, 
you are having a lot of conversations with banks specifically. 
You know, for me it was the USDA, looking at some of those 
subsidized loans.
    So, I think there is a touch point there for banks to be 
able to educate folks about these additional resources that are 
available, especially SCORE. I didn't even know that existed 
and what a great opportunity to kind of have an advisor when 
you are initially trying to avoid making what I like to call 
tuition payments.
    In addition to that, social media and also what I was 
mentioning. I mean, you have to get those formation documents 
from the government, so maybe an additional pamphlet with some 
of those free resources I think would be crucial.
    Mr. WILLIAMS. Okay. Well, you got a great story. We 
appreciate all of you being here today. I yield my time back.
    Chairman CROW. Thank you. The gentleman yields back. I 
would now like to recognize the gentlewoman from Illinois, Ms. 
Newman, for 5 minutes.
    Ms. NEWMAN. Thank you, Chairman, and thank you, Ranking 
Member. And thank you to all of our great guests today. 
Wonderful comments and my sincere hope is that those pieces of 
legislation that were offered in the 116th pass in the 117th.
    And I also want to thank, special thanks to the Women's 
Business Centers for helping get my amendment passed to extend 
the waiver. So, bravo on all of you.
    I do have a couple of questions. The first one is directed 
to our friends at WBC and perhaps Ms. Hodges could answer. One 
of the huge issues as we head into a better economy and a 
healthy America is that women, as you cited, women have been 
inordinately dramatically lopsidedly affected by the pandemic 
and their ability to stay in their jobs, mostly due to 
childcare. Similarly, they are now wanting to start businesses 
in their homes because they have to be home with their kids.
    So, with that, what are your recommendations? And is there 
anything we can do as a Committee or a Congress to supplement 
your efforts to help all of these women entrepreneurs?
    Ms. HODGES. Thank you for all of your work and for the 
question, Representative Newman. I think there are a lot of 
things that we can do to enhance the capacity of the Women's 
Business Centers to serve more. Thanks to the pandemic, we have 
experienced what being at capacity is like.
    There are, in some cases, Women's Business Centers that a 
woman who is interested in startup, and I would echo everything 
you have stated, the startup requests are the greatest need at 
the present moment. Those are very high, intense, resource-
intense types of counseling requirements and training 
requirements. And we are at capacity. If you had an idea to 
start a business and called a Women's Business Center, you may 
have to wait weeks to get an appointment because there is just 
not available staff or time at even as many hours as they are 
working in a day.
    And so I would tell you, I think the single greatest thing 
we can do is just to increase the capacity of those who are 
proven to help women succeed regardless of what their goals 
are, whether it is to work in the home or elsewhere.
    Ms. NEWMAN. Thank you so much. And I yield back.
    Chairman CROW. The gentlewoman yields back. I will now 
recognize the gentlewoman from New York, Ms. Tenney, for 5 
minutes.
    Ms. TENNEY. Thank you, Ranking Member, and also the 
Chairman. I am so grateful for you to put this Committee 
together.
    I am a small business owner as well and I have just a few 
questions about some of our Small Business Development Centers. 
My son is also a captain in the Marine Corps and he also deals 
with issues with some of his command and people that are 
leaving the Marine Corps and getting their assistance. But you 
were talking about different--and I am addressing this Mr. 
Rowe. You mentioned in your testimony that there are 
specialized programs in several states to assist veterans with 
pre and post deployment. Veterans, you know, base their--you 
know, I am just curious in your work with veterans, I would be 
curious to hear your viewpoint, and I know my son has his own, 
but what do you think are some of the biggest obstacles in 
veterans accessing some of these SBA programs when they first 
come out? Because I know that has been an issue that has been 
raised by a number of people, a number of veterans in my 
community.
    Mr. ROWE. Well, one of the concerns, one of the problems is 
making sure that we are not siloing off our resources. We have 
got Veterans Business Ownership Centers working and lot of them 
go on base. SBDCs used to do this as well offering transition 
assistance.
    Ms. TENNEY. Okay.
    Mr. ROWE. And we sort of got slid out of that. But really 
it is just talking between organizations to make sure that the 
services are there. I know, for example, our network in South 
Carolina has a great relationship with the Marine Corps and has 
worked there regularly over the years providing transition 
assistance.
    Some of it is on us. If we offer someone assistance while 
they are mustering out and then, you know, they go from, say, 
South Carolina and they go home to wherever that is, we need to 
do a better job of making them aware that there can be a 
continuum of that assistance. They can go from the South 
Carolina SBDC to the Texas SBDC and continue getting that 
assistance, get all the information they need to keep moving 
on.
    Ms. TENNEY. If you could pick one, Mr. Rowe, if you could 
pick one policy that you would like to change by SBA to make it 
better and more accessible to veterans what would it be?
    Mr. ROWE. I think probably one of the greatest things would 
be allowing SBDCs to operate and compete for the Veterans 
Business Ownership Center program offices. We could vastly 
expand things. It has been a little bit siloed.
    Ms. TENNEY. Thank you very much. I appreciate that. I just 
have a quick question for Ms. Weston. I don't see my timer on 
there, but you stated SCORE respectfully requests an increase 
of 9.5 million in funding for fiscal year 2022 for a total 
amount of the appropriation being 21.7 million. Should the SBA 
recover the 713,000 and change of unallowable and unsupported 
costs as recommended by the SBA's Office of Inspector General 
prior to new funding?
    Ms. WESTON. Thank you for that question. We have already 
paid back the amount of funding that was required from the SBA. 
After more work with the SBA and the OIG report, we were able 
to provide more documentation on the allowability of contracts 
and we only had to pay back half of that 713,000. It is all 
paid back.
    Ms. TENNEY. That is fantastic. I wanted to hear that. Great 
to hear that and would like to address my next question to Ms. 
Hodges.
    I am a woman-owned business. My family business has been 
around since 1946. Eight out of 10 of our shareholders are 
women-owned, but, unfortunately, we can't get a woman-owned 
designation in New York. But I am concerned about, you know, 
how we continue to outreach to women. I know there is a lot of 
women mentors and leaders, but what do you recommend, you know, 
in terms of especially in the lending space?
    There are a lot of issues with women being able to access 
money and loans to get their business underway. I am working 
with a number of women now who have got fantastic business 
plans and we are struggling to get lenders to really push to 
get them the money they need. What type of outreach would you 
do to close this gap? And what do you recommend? If you could 
just pick one thing because I know my time is short.
    Ms. HODGES. If I just had to pick one thing it would be to 
be able to put money into the marketing. We just don't have the 
money to put into marketing and without dollars it is really 
difficult to people who don't know that you are trying to reach 
them. So, whether that is radio or billboards or other paid 
advertising, definitely there. But access to capital, you are 
right, is the number one barrier.
    Ms. TENNEY. Thank you. I appreciate that because it 
definitely is a marketing issue. We try to mentor as many women 
as we can and it is a--got great business plans, we just need 
the lenders to let that money flow to them so they can create 
and produce jobs.
    Thanks so much. I appreciate everyone. And I yield my time 
back.
    Chairman CROW. Thank you. The gentlewoman yields back. I 
will now recognize the gentleman from New York, Mr. Garbarino, 
for 5 minutes.
    Mr. GARBARINO. Thank you very much, Mr. Chairman. And thank 
you to all the witnesses that are here today. It has been great 
testimony so far.
    My first question is for Mr. Montgomery. Small business 
owners have expressed concerns regarding the proposed tax 
increases, regulations, inflation, labor shortages. What do you 
see as your biggest barrier to growing your business?
    Mr. MONTGOMERY. Right now it is inflation hands down. I 
mean, we have seen cost increases across the board on our cost 
of goods just within the first 3 months of this year. And we 
expect to see some more in the upcoming months, which is--it is 
scary, so we are starting to kind of plan around that for 
probably the next year here.
    Mr. GARBARINO. How do you plan around that? Do you have to 
raise your own prices or how are you planning to address that?
    Mr. MONTGOMERY. Yeah, I mean, we--yes, sir. So, we have 
done four price increases in the last year. Processing started 
going up last year with the constraints on that market. I think 
we are probably at the top of the consumer surplus of what, you 
know, customers are willing to pay for our product. So, now we 
have to kind of think smarter and probably less money in 
marketing and just to offset that cost to make sure that we are 
not losing money this year.
    Mr. GARBARINO. Okay. And as a small business, you know, it 
fluctuates, right? Some years you do well, some years you don't 
do well. So, if you have a profitable year, do you have to, you 
know, make those profits last several years in case there is a 
loss? You know, you are not guaranteed a profit every year, 
correct?
    Mr. MONTGOMERY. That is definitely correct, especially 
being a startup, you know.
    Mr. GARBARINO. Okay. No, I appreciate that and I appreciate 
you addressing the inflation issue. We have been hearing that a 
lot from a lot of different people.
    I have another question. This is for pretty much any of the 
witnesses, whoever wants to jump in. According to the NFIB 
April jobs report, small business owners are experiencing the 
highest ever readings of unfilled job openings since the 
polling started in 1973. What can BBOCs, SBDC, WBCs, and SCORE 
mentors do to help small businesses find employees?
    Ms. WESTON. Well, I will start. One of the things that I 
believe all of our resource partners do is really understand 
what the specific needs of the business are. We have seen since 
all of 2017 from a SCORE Megaphone of main street report that 
it was becoming more challenging to hire workers because of 
various trends, the gig economy being one of them, childcare 
needs being another. And what we are able to do is sit there 
and look at the resources and limitations for every small 
business owner and help them decide is a full-time employee 
best, a part-time employee, contractors. And make sure it makes 
sense for them while still working towards that goal of being 
profitable and maintaining profitability.
    Mr. GARBARINO. Anyone else? All right. I appreciate----
    Mr. ROWE. I think----
    Mr. GARBARINO. Oh, sorry, please.
    Mr. ROWE. Sorry, sir. I just had a quick thought on it. I 
think one of the big things we work on at SBDCs is--and, for 
example, some of our SBDCs colocate with the Workforce 
Development Boards, is trying to understand the changes in the 
labor market. You know, the pandemic has affected so much 
behavior that it has almost become a marketing tool sometimes 
for a small business to say, hey, we have got a safe, serious 
workplace and we need help. So that is just one of the things 
we are trying to accomplish.
    Mr. GARBARINO. I appreciate that. And actually back to Mr. 
Montgomery. What is the labor situation with your small 
business? Inflation we said is number one, but are you having 
any trouble filling spots?
    Mr. MONTGOMERY. We are. So, we just came out of our slow 
season and seasonality is our business, so we are just now 
starting to try to hire some part-time folks. Going into 
grilling season here. We did a $3 across the board increase on 
our hourly wage, going from 12 to a minimum of $15 an hour, 
going up to 18 based on experience, and we are still not 
getting applicants. So, it is a problem we are working right 
now and I don't think I have a good solution yet, so.
    Mr. GARBARINO. No, I appreciate that and I hope you are 
able to fill those slots so you can remain to be profitable. 
But that is it with all the questions I have. Thank you, Mr. 
Chairman, and I yield back.
    Chairman CROW. Thank you. The gentleman yields back. I will 
now recognize the gentlewoman from Georgia, Ms. Bourdeaux, for 
5 minutes.
    Ms. BOURDEAUX. Thank you, Chairman Crow and Ranking Member 
Kim. The SBA's resource partners provide entrepreneurs with 
some wonderful resources and really advanced this Committee's 
shared interest in promoting entrepreneurship and small 
business growth. My office worked closely with our local Small 
Business Development Centers and have greatly appreciated their 
efforts during the pandemic.
    Just a follow-up question, though, on that for Mr. Rowe. 
One of the questions we received from our Small Business 
Development Center and we are interested in what your answer 
might be, is that given how the pandemic has really increased 
the SBDC's profile in our community, they are concerned about 
what is going to happen after the pandemic when all of a sudden 
they are very, very well-known for this great assistance that 
they have provided? And wanted to get your thoughts about what 
resources might be needed going forward.
    Mr. ROWE. Thank you, ma'am. Appreciate the question. What 
we are looking for, and I appreciate the many Members who 
cosigned the letter that Congressman Larson and Mr. Balderson 
and Congressman Young initiated, we are looking for an 
appropriation of $150 million. What that would do is 
essentially help us not fall off a resource cliff, if you will. 
We have our regular appropriation and then the very generous 
additional appropriation under the CARES Act. We have beefed up 
staff and resources and we want to be able to maintain those 
resources because, frankly, we don't see a diminishing amount 
of demand. Like the Women's Business Centers, very often we are 
having to, you know, schedule people several weeks out because 
there is just so many hours in a day.
    Ms. BOURDEAUX. Okay. In your testimony, well, another issue 
we have is we have a diverse community in the Seventh District. 
About 25 percent of the people in my district were born outside 
of this country. And so we are very, very interested in the 
Community Navigator program and really working on building our 
capacity to reach out to these diverse communities, many of 
whom are very entrepreneurial, they have got small businesses, 
but they may speak a different language. There may be all sorts 
of different barriers.
    In your testimony you mentioned that several SBDCs have 
already engaged in pilot programs for the Community Navigator 
program. And I was just curious how those efforts are going. Do 
you see a use for the Community Navigator model at SBA in 
reaching small businesses in underserved communities, like the 
ones I am talking about in my district, beyond the pandemic?
    Mr. ROWE. Well, I think there is obviously a need. That is 
why we are working on our own on the inclusivity challenge. The 
simple fact is there are 30 million small businesses and I 
don't know how many aspiring entrepreneurs in this country. And 
it is going to take a massive effort for us to make sure we are 
hitting everyone.
    Community Navigators is a great start. We work hard to find 
the associations and the organizations that we can work with to 
get out to those communities. And it is a constant effort.
    Ms. BOURDEAUX. Do any of the other panelists have any 
thoughts on this? I saw you, Ms. Hodges, nodding on that.
    Ms. HODGES. Thank you, Representative Bourdeaux. So many 
fond thoughts of Georgia. I spent many years there and we have 
a very strong Women's Business Center presence in Georgia and a 
new one that opened in Savannah. And I think about how the 
Community Navigator program can complement and can also 
challenge as we think about our program.
    We know that the Community Navigator challenge has a 
tremendous funding instrument attached, $100 million. And 
really, how can you put a price tag on the health of small 
business in our economy?
    However, our experience in working with the Small Business 
Office of Entrepreneurial Development is that they are 
themselves somewhat taxed in terms of levels of staff and 
resources. It is not their fault. This is a situation not by 
their making or their design.
    And so, in some ways, we find it can be somewhat of a 
competition for resources, for attention to do the things that, 
quite frankly, Women's Business Centers have been doing for 
three decades and have been doing extremely well with many 
fewer resources. If you compare the $30 million ask of Women's 
Business Centers with $100 million ask of a brand-new, never 
tested Community Navigator program, one can ask a lot of 
questions.
    That being said, we embrace every opportunity to partner. 
We canvass every community for every asset, for every 
opportunity to reach into those communities and serve. And so 
as soon as the Community Navigator program officially launches, 
we will embrace it and we will make the most of it as we do 
every dollar and every resource we have ever gotten.
    Ms. BOURDEAUX. Good. Thank you so much. And I yield back.
    Chairman CROW. Thank you. The gentlewoman yields back. I 
will now recognize the gentleman from Minnesota, Mr. Phillips, 
Chairman of the Subcommittee on Oversight Investigations and 
Regulations, for 5 minutes.
    Mr. PHILLIPS. Thank you, Mr. Chairman. And thank you to our 
witnesses today.
    Mr. Montgomery, I would like to start with you. I celebrate 
your story and am particularly intrigued by your testimony 
regarding a lack of lending options available for startups and 
new businesses compared to the SBA programs that exist that 
seems to be more focused on existing businesses or incumbent 
businesses, as politicians would probably prefer to say.
    I have authored legislation myself, called the New Business 
Preservation Act, that would enable states to set up pools of 
capital alongside private investors and venture capital to 
support scalable high-growth companies headquartered 
particularly in America's heartland.
    So, if you would take a moment and provide some more detail 
on your proposal to increase financial support for individuals 
pursuing new business ideas and how a program like the New 
Business Preservation Act might play a role in addressing this 
gap.
    Mr. MONTGOMERY. Thank you, Representative Phillips. I 
appreciate the question.
    First, I will kid of start with my experience. Like I was 
referring to in my testimony, you know, we are asking for a 
quarter-million to kind of make it through those first 3 years 
of creating a viable business. Obviously, it proved almost 
impossible. I think the USDA subsidized loans through the FSA 
office. They offered me 16,000, which was kind of enough to 
drown myself without actually succeeding.
    So, I think what you are proposing is exactly what I am 
thinking. There needs to be capital for people with good ideas, 
that have a solid business model. Because there is definitely 
plenty of advice out there for aspiring entrepreneurs, but the 
capital is not always as easy to come by. And I think that is 
imperative because you need both those things to get off the 
ground.
    Mr. PHILLIPS. All right. I appreciate that. And thank you 
once again.
    Mr. Rowe, in your testimony you mentioned that the SBDC 
accreditation process is built on the Baldrige standards. I 
have developed another bill that is called the Honest 
Enterprise Act that would use the same framework to encourage 
and reward companies for excellence in creating inclusive 
workplaces. And I think this kind of stakeholder capitalism has 
to be baked into businesses at the earliest stages.
    So, what kind of counsel might you provide, if any, that 
might encourage prospective business owners to consider more 
than just their profits and the management and benefits of 
their employees and their communities and the role that they 
can play in protecting the environment? How can we provide 
those incentives?
    Mr. ROWE. Well, I think the first thing is providing 
incentives. I think it is great to want people to conserve 
energy, let us say, and have a green workplace. To offer them a 
tax credit is even better.
    I think as far as the workplace ethos goes, one of the 
things we work on at SBDCs is succession planning. We have done 
a lot of it, particularly in the state of New York, 
implementing Senator Gillibrand's bill. And that was really how 
do we take a current business model and help plant it into an 
employee-owned model? And that, for us, has provided a lot of 
ways to take both senior entrepreneurs and bring younger 
businesspeople into the marketplace and sort of open that up.
    Now, just quick to go back to your question of Mr. 
Montgomery, one of things we could think about is steering the 
funds in the SSBCI program towards startup entrepreneurs. That 
is up to every individual state on how they use those funds, 
but very often they are tending to a venture model that really 
is geared toward established businesses.
    Mr. PHILLIPS. Great. I have to say, your remarks about 
employees' ESOPs, Employee Stock Ownership Programs, and how we 
might use thoughtful policy to not just encourage, but provide 
incentives for businesses of all sizes. To do so is, I think, a 
grand opportunity for those of us who believe in compassionate 
capitalism.
    I see my time has, unfortunately, expired, but thanks again 
for our witnesses. And I yield back, Mr. Chairman.
    Chairman CROW. Thank you. The gentleman yields back. No 
other members?
    Okay. It looks like we have no other members with questions 
right now, so I want to thank again all of our witnesses for 
participating today. Thank you and your organization staff for 
your efforts in preparing for the testimony and for your work 
during the pandemic and economic downturn.
    And I want to thank in particular Mr. Montgomery for your 
time because I know as a business owner and somebody who is 
dealing with a lot of challenges, your time is extremely 
valuable, so taking time to share your insights has been very 
useful to us.
    And at the beginning of the testimony you said you endeavor 
to keep faith with our fellow rangers by giving earnest and 
honest and good testimony, and I will say that you accomplished 
that mission. So, we thank you very much for your time.
    Mr. MONTGOMERY. Thank you, Chairman.
    Chairman CROW. So, with that, you know, we have identified 
a number of issues that I think falls within the purview of 
this Committee and Congress. This Committee has a long history 
of working bipartisan, in a bipartisan fashion to find 
practical and pragmatic solutions to these issues. You have 
identified a number of things and areas of improvement for us 
to continue to work on. And we appreciate that very much. I 
look forward to working with all of my colleagues to find those 
solutions and to make sure that we are fulfilling what is our 
unified and joint mission, and that is supporting our small 
businesses around the country to grow our economy, to grow 
jobs, and to achieve the American dream.
    So, I would ask unanimous consent that members have 5 
legislative days to submit statements and supporting materials 
for the record. Without objection, so ordered.
    And if there is no further business to come before the 
Committee, we are adjourned today.
    [Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]
                            
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