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




        SBA DISTRICT OFFICE COLLABORATION WITH RESOURCE PARTNERS

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

                                HEARING

                               before the

                      SUBCOMMITTEE ON UNDERSERVED,
              AGRICULTURAL, AND RURAL BUSINESS DEVELOPMENT

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JULY 20, 2022

                               __________



                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]



            Small Business Committee Document Number 117-063
             Available via the GPO Website: www.govinfo.gov

                                 ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

48-013                    WASHINGTON : 2022






                   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
                     CHRISSY HOULAHAN, Pennsylvania
                          ANDY KIM, New Jersey
                         ANGIE CRAIG, Minnesota
                        SCOTT PETERS, California
              BLAINE LUETKEMEYER, Missouri, Ranking Member
                         ROGER WILLIAMS, Texas
                        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
                          MIKE FLOOD, Nebraska

                 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. Jared Golden................................................     1
Hon. Claudia Tenney..............................................     2

                               WITNESSES

Mr. Mark Delisle, Director, Maine Small Business Development 
  Center, Portland, ME...........................................     6
Ms. Nancy Strojny, SCORE Maine Assistant District Director, 
  Service Corps of Retired Executives (SCORE), Portland, ME......     7
Mr. J.D. Collins, Chief Executive Officer and Executive Director, 
  Michigan Small Business Development Center, Grand Rapids, MI...     9
Mr. John William (Bill) Leaverton, Regional Director, America's 
  SBDC at Tarleton State University, Stephenville, TX............    11

                                APPENDIX

Prepared Statements:
    Mr. Mark Delisle, Director, Maine Small Business Development 
      Center, Portland, ME.......................................    26
    Ms. Nancy Strojny, SCORE Maine Assistant District Director, 
      Service Corps of Retired Executives (SCORE), Portland, ME..    29
    Mr. J.D. Collins, Chief Executive Officer and Executive 
      Director, Michigan Small Business Development Center, Grand 
      Rapids, MI.................................................    32
    Mr. John William (Bill) Leaverton, Regional Director, 
      America's SBDC at Tarleton State University, Stephenville, 
      TX.........................................................    34
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    None.

 
        SBA DISTRICT OFFICE COLLABORATION WITH RESOURCE PARTNERS

                              ----------                              


                        WEDNESDAY, JULY 20, 2022

              House of Representatives,    
               Committee on Small Business,
         Subcommittee on Underserved, Agricultural,
                            and Rural Business Development,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:07 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Jared Golden 
[chairman of the Subcommittee] presiding.
    Present: Representatives Golden, Williams, Stauber, Tenney, 
and Flood.
    Chairman GOLDEN. Good morning. I call this hearing to 
order.
    Without objection, the Chair is authorized to declare a 
recess at any time.
    I would like to begin by noting a few requirements. 
Standing House and Committee rules continue to apply during 
hybrid proceedings, so all Members are reminded that they are 
expected to adhere to these rules, including the rules of 
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 background noise.
    In the event that 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 
will recognize that Member at the next appropriate time slot 
provided they have returned.
    I will now move to an opening statement.
    In the rural areas that make up most of my district, the 
benefits of small businesses go much further than jobs and a 
tax base. They also provide community. I have seen it with my 
parents' small business, where you can often find folks from 
all over town and the surrounding towns coming together to 
catch up, shoot the breeze, and check in on one another. Small 
businesses across rural America are essential to building and 
maintaining these communities and preserving the rural American 
way of life.
    But, as my own folks will tell you, running a small 
business is not an easy task. That is why the SBA offers free 
or low-cost counseling and training services that help address 
unique challenges that entrepreneurs face.
    The SBA relies on four primary resource partners to deliver 
these offerings. Those are the Small Business Development 
Centers, Women's Business Development Centers, SCORE, and 
Veterans Business Outreach Centers to help support small firms 
across the country, particularly in rural areas, through every 
step of the business cycle.
    SBA's programs and services, including resource partners, 
work in close partnership with SBA's 10 regional offices, and 
68 district offices across the country. U.S. SBA district 
offices primarily concentrate on outreach and marketing efforts 
and maintain working relationships with their local resource 
partners, lenders, and economic development organizations.
    These district offices perform regular reviews to ensure 
that resource partners meet the needs of their small business 
clients.
    Strong relationships between a district office and their 
local resource partners are vital to the success of the small 
businesses that they serve. Clear communication and 
coordination facilitate the flow of useful information from the 
SBA to small businesses. It also allows the SBA to receive 
feedback on challenges they face and how agency offerings can 
alleviate them.
    I have seen the benefit of strong collaboration between the 
agency and resource partners firsthand in Maine. With locations 
in Augusta, Bangor, and Portland, the Maine District Office 
delivers SBA programs and services across all of Maine's 16 
counties.
    The Maine District Office also meets with the Maine SBDCs, 
WBCs, and SCORE chapters quarterly to ensure everyone is rowing 
in the same direction.
    For the past 2-plus years, district office staff have been 
there to help guide Maine owners as they work to navigate the 
economic disruption, particularly early on during COVID-19. 
Their efforts have included partnering with me on tele-town 
halls to spread awareness about economic relief programs, like 
the Paycheck Protection Program that were available to small 
businesses. Together, we contacted thousands of business owners 
to make sure they knew that there were resources there for 
them.
    And while every relationship is unique, district offices 
and resource partners consistently have problems with staffing. 
Hiring caps due to budgeting constraints have left many offices 
short-staffed, increasing the burden on current employees, and 
leading to higher levels of burnout.
    In fiscal year 2022, SBA received approximately $278 
million, about $8 million more than the fiscal year 2021 
enacted level in the salaries and expenses account. This 
increase was, in part, intended to better support SBA 
employees. This budget increase is a good first step, but I 
would like to discuss other actions we can take to ensure that 
district offices and resource partners have the staff they need 
to serve main street.
    Today, I would like to take a closer look at this and other 
challenges that district offices face and steps we can take to 
strengthen the work shared between them and their resource 
partners.
    I will now yield to the Ranking Member, Ms. Tenney, for her 
opening statement.
    Ms. TENNEY. Thank you, Mr. Chairman. I really appreciate 
your comments, and I am looking forward to hearing from our 
witness today.
    As we hold this Committee hearing, I am a small business 
owner as well. Small businesses are facing historic economic 
headwinds, including soaring costs, chronic labor shortages, 
supply chain disruptions. Last week, the Consumer Price Index 
hit another historic level of 9.1 percent, the highest 12-month 
gain since 1981.
    The Bureau of Labor Statistics also reported the Producer 
Price Index, a measure of wholesale inflation, jumped 11.3 
percent from the previous year. Inflation is raging across all 
industries which means higher prices for smaller businesses and 
the customers.
    In addition to soaring prices, small businesses continue to 
experience significant labor issues and ongoing supply 
disruptions. The most recent Job Openings and Labor Turnover 
Summary reported 11.3 million job vacancies across the nation, 
and 4.3 million employees just simply quit their jobs. The 
National Federation of Independent Businesses Monthly Job 
Report shows half of small business owners reported job 
openings they could not fill. Further NFIB stated that 
approximately 94 percent of small businesses have been affected 
in some way by supply chain disruptions.
    As our economy approaches potentially a recession, it is 
important for our Committee to examine how the SBA can better 
support small businesses on the ground. The SBA's Office of 
Field Operations (OFO) is responsible for that. It oversees 
regional and district offices across the country. OFO is 
responsible for connecting and supporting entrepeneurs with SBA 
tools and services.
    Small business owners turn to district offices to gain 
access to capital, expand consumer base, navigate government 
regulations, and to work with the SBA resource partners. The 
SBA relies on its district offices to provide tools for 
enhancing and growing small businesses while overseeing the 
delivery of the SBA programs, including the Entrepreneurial 
Development programs.
    Upstate New York is home to three district offices that 
serve 34 counties. These district offices were vital during the 
pandemic as they assisted small firms in applying and assessing 
the Paycheck Protection Program, the Economic Injury Disaster 
Loans, and the Restaurant Revitalization Fund.
    In 2021, New York's SBDCs helped over 42,000 small 
businesses secure COVID-related loans and grants. They were a 
lifesaver. Further, they assisted almost 2,000 new firms 
opening their doors during 2021. These resources and programs 
have a real impact in rural communities like mine. Over 16,200 
new jobs were created because of this effort.
    However, I am concerned with the SBA actions to allocate 
resources for duplicative programs such as the Community 
Navigator Pilot program and the Growth Accelerators Fund.
    Further, it is troubling that the SBA is using resource 
partners and programs to advance unfortunately a political 
agenda. The SBA has touted becoming the first federal agency to 
be a designated voter agency. In a press release, the SBA 
states, ``It plans to use district offices to provide access to 
voter registration services and vote-by-mail ballot 
applications, otherwise known as vote harvesting.''
    Now, more than ever, small businesses need the SBA to carry 
out its statutory missions and core responsibilities. Small 
firms are struggling from the administration's poor economic 
policies and they need the SBA to put them first. For this 
reason, I am a sponsor of the Improve the SBA Act, which will 
safeguard taxpayer dollars by reducing duplicative programs, 
ensure that resource partners are effectively serving small 
businesses, and support entrepeneurs in navigating economic 
headwinds, especially what we are seeing today.
    I am also glad to have worked across the aisle to find some 
bipartisan solutions to improve the SBA resource partners and 
programs. In May, Representative Houlahan and I introduced H.R. 
7670, the Women-Owned Small Business Program Transparency Act, 
which will strengthen the women-owned small business 
contracting program by enhancing transparency and 
accountability, ensuring it works for taxpayers and our 
nation's small businesses.
    Further, I worked with Representative Davids to introduce 
H.R. 6441, the Women's Business Centers Improvement Act of 
2022, which reauthorizes the WBC program through fiscal year 
2025 and increases the cap on individual center grants for the 
first time.
    I am confident that we can continue to work together to 
strengthen these programs and better support small businesses. 
I look forward to hearing from our witness today as to how we 
can better empower our entrepeneurs and work to ensure that SBA 
resources are operating efficiently and communicating with the 
small businesses in a prompt and efficient manner.
    Thanks so much.
    Chairman GOLDEN. The gentlewoman yields back.
    I would like to take a moment to explain how this hearing 
will proceed. Each witness will 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 to mute when finished.
    Before introducing our witnesses, I just want to take a 
moment to welcome a new Member to the Subcommittee here. We 
have got Congressman Flood from Nebraska. Good to have you on 
board.
    Do you want to say hello, introduce yourself for a quick 
minute?
    Mr. FLOOD. Well, thank you very much, Mr. Chairman. I 
appreciate the opportunity to serve this Congress. I represent 
the City of Lincoln and a rural area in Northeast Nebraska and 
look forward to discussing the SBA and its services and how 
important it is for small businesses to thrive in America. So, 
thank you.
    Chairman GOLDEN. Welcome. Mr. Flood and I were just talking 
about how Maine and Nebraska are the only two states in the 
country that split their Electoral College votes according to 
the results of their congressional district votes. So something 
we have got in common. It is a unique system and one that I am 
a fan of.
    Moving to witness introduction.
    Mr. Delisle is the state director of the Main SBDC and 
oversees implementation of the program and delivery of its 
services. He serves on the National Accreditation Committee for 
American Small Business Development Centers and brings to his 
position extensive experience as a small business owner, most 
recently as an independent retailer of fine art supplies and 
picture framing. Mr. Delisle has a Master's in Business 
Administration and a Bachelor of Science in Materials 
Engineering from Rensselaer Polytechnic Institute. Welcome 
back, Mr. Delisle. Not your first time before the Committee by 
any means. It is good to have you.
    Our second witness is Ms. Nancy Strojny. She is the 
assistant district director for SCORE Maine. Ms. Strojny has 
served as the Chair of the Portland SCORE chapter from 2011 to 
2020 when she was promoted to assistant district director for 
SCORE. She is a national guest speaker, panelist, and blogger 
on a wide range of business issues and was selected as a White 
House Champion of Change in 2012. In 2019, the Portland Chapter 
of SCORE was voted the SBA's National SCORE Chapter of the 
Year. Welcome to Ms. Strojny.
    Our third witness is Mr. J.D. Collins. He is the state 
director of the Michigan SBDC. He leverages 20-plus years of 
executive leadership experience in small businesses and large 
corporations to oversee the SBDCs human, financial, and 
administrative resources, along with stakeholder relationships. 
Mr. Collins is passionate about serving Michigan's small 
business community. Welcome, Mr. Collins.
    And I will now yield to the Ranking Member, Ms. Tenney, to 
introduce our final witness.
    Ms. TENNEY. Thank you. I yield that distinguished 
introduction to the small business owner, Mr. Williams, 
Representative Williams.
    Mr. WILLIAMS. Thank you, Mr. Chairman, and thank you, Ms. 
Tenney for that. And it is an honor to do this today. I want to 
thank the Chairman and the Ranking Member for allowing me to 
introduce our final witness, who happens to be from my 
congressional district in Texas.
    Mr. Bill Leaverton is the regional director for Tarleton 
State University, home of the Texans. Fighting Texans, right? 
But University Small Business Development Center in 
Stephenville. A native Texan, Mr. Leaverton is proud to 
represent Tarleton State University and the SBDC in assisting 
rural entrepeneurs. We have a lot of rural in our district. 
Prior to assuming the position as director in 2019, Mr. 
Leaverton spent most of his career owning and operating small 
businesses that make up the bedrock of America and often that 
history, we do not have that in helping people. So you bring a 
unique background to us. In 2021, Mr. Leaverton's SBDC assisted 
in providing small businesses over $100 million in capital 
assistance, which was a record for their mostly rural network, 
and it has been a pleasure to watch rural area grow in our 
district and see the benefits that Tarleton's SBDC is having on 
our economy. Mr. Leaverton, thank you for all of your work to 
support main street. It is good to see that you brought some 
friends with you that we have, and I know your experience as a 
small business owner and SBDC regional director will be 
extremely beneficial to our hearing today. So Mr. Leaverton, 
thank you for taking time to testify before us, and I yield my 
time back, Mr. Chairman.
    Chairman GOLDEN. The gentleman yields back.
    Thank you all for being here. And we will begin with 
recognizing Mr. Delisle for 5 minutes. Go ahead, sir.

  STATEMENTS OF MARK DELISLE, DIRECTOR, MAINE SMALL BUSINESS 
   DEVELOPMENT CENTER; NANCY STROJNY, SCORE MAINE ASSISTANT 
DISTRICT DIRECTOR, SERVICE CORPS OF RETIRED EXECUTIVES (SCORE); 
 J.D. COLLINS, CHIEF EXECUTIVE OFFICER AND EXECUTIVE DIRECTOR, 
   MICHIGAN SMALL BUSINESS DEVELOPMENT CENTER; JOHN WILLIAM 
   ``BILL'' LEAVERTON, REGIONAL DIRECTOR, AMERICA'S SBDC AT 
                   TARLETON STATE UNIVERSITY

                   STATEMENT OF MARK DELISLE

    Mr. DELISLE. Good morning, Chairman Golden, Ranking Member 
Tenney, Members of the Committee. Thank you for inviting me to 
testify today.
    My name is Mark Delisle and I am the state director for the 
Maine Small Business Development Center program and joined the 
program in 2008. As you know, the SBDC is a nationwide network 
that helps build and strengthen small businesses through no-
cost, confidential business advising, training and educational 
resources. A program of the Small Business Administration, we 
have served in Maine businesses for over 40 years, being one of 
the initial eight pilot programs in the country.
    The impact of our program in Maine is substantial. In 2021 
alone, we helped 2,953 entrepreneurs to start 136 new 
businesses, create and save 917 jobs, and helped entrepreneurs 
access $48.8 million in capital. All of those results are 
verified and attributed to our assistance by the client in 
writing.
    We could not have this level of success without the support 
of our partners at the SBA's Maine District Office. District 
Director Diane Sturgeon and her team work tirelessly to support 
resource partners and the small businesses of Maine. Examples 
of our collaboration with the district offices include:
    Regular meetings. There are quarterly resource partner 
meetings that involve SBDC, Women's Business Center, the SCORE 
program as well, where we can enhance communication 
collaboration, understand each other's initiatives and 
programs, and avoid duplication.
    For the past several years, the SBA district offices also 
convene a broader meeting that includes many other economic 
development partners that meet on a quarterly basis. It is a 
great opportunity for not only SBA programs but other economic 
development partners and resources to get together quarterly, 
again to kind of coordinate and make sure that we are serving 
the best interests of small businesses across the state of 
Maine.
    We additional also cohost many educational events with the 
Maine District Office. A most recent example of that would be 
in May of this year, National Trade Month and Export Week, we 
co-hosted a four-part series on exporting with topics ranging 
from writing an export business plan to obtaining financing for 
an export venture. We also have regular sessions that we hold, 
discussing the resources that are available to small businesses 
and entrepeneurs across Maine and also basics of starting a 
business and have done that on an ongoing basis.
    There are also our promotional opportunities that are 
available that we work with the district office on where we 
will regularly visit local businesses, especially pre-pandemic, 
to highlight services that have been received by the small 
business from the SBA and the resource partners. The two times 
a year that that is most common is Small Business Saturday in 
the fall leading into the retail season, and also Small 
Business Week in May where we highlight many of our small 
business award winners, often our clients of the various 
resource partners as well.
    The other element of collaboration and coordination between 
the SBA district office and the resource partners at SBDC 
specifically would be oversight or compliance oversight. There 
is an annual Project Officer review. In fact, I had mine 
yesterday. It involved a 90-minute meeting with our project 
officer where we go over all the performance of the program and 
all aspects of collaboration and moving together, working 
forward, working together.
    They also have responsibility to sign off on our annual 
proposal and that goes in usually in August and September of 
this year. So they review what we are proposing for our core 
grant award.
    In addition to my work in Maine, as was noted, I am on the 
National Accreditation Committee for the SBDC program. I joined 
that Committee in 2018. This involves a weeklong review of SBDC 
programs across the country. Since 2010, I have been on teams 
that have reviewed 18 SBDCs across the countries. Every one of 
those reviews involves a meeting with the district director and 
the project officer at the SBA in whatever state or region we 
are in where we review the collaboration, the partnership, the 
relationship between the district officer and the SBDC program. 
So I have seen all sorts of great examples of collaboration of 
work between a district office and the SBDC program. The 
elements that are there when we have the strongest relationship 
from my view having gone to so many other states and programs 
are open communication, understanding each other's roles and 
responsibilities, and a mutual goal to serve entrepeneurs of 
small businesses in the state or the region.
    In Maine, our work together is mutually beneficial and 
helps increase awareness of the critical services we provide to 
Maine small businesses. The advocacy of our district office 
enables more entrepeneurs to access the SBDC services that they 
need to start, grow, and sustain their business. The district 
office relies on and trusts the resource partners to be their 
feet on the ground doing the fieldwork to deliver detailed one-
on-one guidance to small business.
    Thank you, and I look forward to any questions you might 
have.
    Chairman GOLDEN. Thank you.
    And we will now give 5 minutes to Ms. Strojny. Go ahead, 
ma'am. Thank you.

                   STATEMENT OF NANCY STROJNY

    Ms. STROJNY. Subcommittee Chairman Golden, Ranking Member 
Tenney, and Members of the Subcommittee, thank you for the 
opportunity to offer testimony on SCORE's collaboration with 
the U.S. Small Business Administration district offices in the 
state of Maine. I am Nancy Strojny and I am currently the 
assistant district director for SCORE in Maine.
    SCORE is the nation's largest network in the nation of 
volunteer, expert business mentors, with more than 10,000 
volunteers across the country offering free and confidential 
business advice and education.
    Since our founding in 1964, SCORE volunteers have helped 
more than 11 million entrepreneurs to start, grow, or 
troubleshoot their small business. We continue to mentor 
because mentoring works. SBA data shows that the business 
owners who received 3-plus hours of mentoring report higher 
revenues and increased business growth. In the past 5 years in 
the state of Maine alone, SCORE has helped our clients to start 
1,791 new businesses, in turn creating 5,487 new jobs.
    My fellow SCORE volunteers represent a diverse range of 
backgrounds and industry expertise. I spent 30 years working in 
sales and marketing with Proctor and Gamble and merchandising 
with CVS before going into business for myself.
    I have been a SCORE volunteer for more than a decade, 
serving in leadership roles as chapter chair, assistant 
district director, and the SCORE board of directors. As a 
mentor, I am proud to create meaningful and long-term 
relationships with my clients, helping them to launch new 
businesses and operate existing businesses more successfully.
    My SCORE client, Kate McAleer, founder and co-owner of 
Bixby Chocolates in Rockland, Maine, has explained the value of 
our mentoring relationship as, and I quote, ``Our participation 
with SCORE has been invaluable to Bixby's company. Our mentor 
has the extensive experience and incomparable ability to 
provide advice. Her judgement is always sound, invaluable, and 
uncanny. Her ability to help navigate our entrepreneurial 
journey for key decision making and support has been and 
continues to be important and critical to us in our 
successes.''
    Clients like Kate demonstrate SCORE's vital contribution to 
Maine's large and vibrant small business community. According 
to SBA data Maine's 150,000 small businesses represent 99.2 
percent of all state businesses. And small businesses accounted 
for 56.8 percent of Maine's employment in 2018, compared to 
39.7 percent nationally. Maine is truly a small business state.
    In order to best serve our clients, SCORE regularly 
collaborates with the SBA and its resource partners--the SBDC, 
the Women's Business Center, the Veterans Business Outreach 
Center. This is a result of the outstanding SBA leadership in 
Maine led by District Director Diane Sturgeon and our 
willingness to serve Maine clients without organizational or 
geographical boundaries. We share information and refer clients 
to each other freely, putting the needs of the client first.
    One example is Tiny Homes of Maine, a designer and builder 
of custom mobile spaces with a manufacturing facility located 
in Northern Maine. Founder Corinne Watson worked with an SBDC 
business advisor on her financials to help secure capital and 
worked with SCORE on strategy and operations.
    Another example of collaboration between resource partners 
in Maine is Focus ME, which is now in its 7th year. This 
women's group program was created in collaboration with the 
Women's Business Center and focuses on personal development, 
including goal setting and peer-to-peer learning.
    Our SCORE main client success award luncheon held annually 
in June celebrates business innovation, vision, and achievement 
and presents nonmonetary awards to worthy clients. Our resource 
partners and the SBA attend and participate in this luncheon.
    Serving clients without borders is a hallmark of SCORE and 
SBA teams in Maine. Other SBA collaborations include the SBA 
Thrive Emerging Leader Program. Score Maine has mentored 
clients through this program since 2018, also serving as expert 
panelists to provide insight and feedback on each business's 3-
year growth plan.
    Lender information panels, which are hosted by the SBA 
quarterly and are attended by all resource partners.
    The SBA Small Business Awards held each year during 
National Small Business Week. SCORE Maine clients regularly win 
SBA Maine awards, including Tyler Frank, founder of Garbage to 
Garden who won the 2022 Small Business Person of the Year Award 
in Maine. Tyler has been a SCORE client for over 7 years.
    SCORE participants in quarterly meetings hosted by our SBA 
district director. My colleague, Marty Doto, chapter chair for 
SCORE Central NY, also shared the following information about 
SCORE's collaboration with SBA district offices in New York. 
SBA staff participates in our monthly volunteer mentor 
meetings, provides insight into SBA programs and resources, 
which enables our mentors to offer clients enhanced services. 
Members of the SBA Upstate New York District Office team have 
also co-mentored with SCORE volunteers. During the pandemic, 
SCORE Central New York worked closely with the SBA to provide 
timely and updated guidance and training on SBA COVID relief 
programs as they evolved. The SBA District Office held numerous 
``train the trainer'' webinars to help us better counsel our 
clients in understanding and applying for emergency funding.
    Similar to my district in Maine, SCORE and the SBA 
collaborated on client recruitment, marketing of the emerging 
leaders, and THRIVE programs. At SCORE, we believe that our 
clients' success is our success and collaborating with the SBA 
and our fellow resource partners is one way we help our clients 
succeed.
    Thank you for the opportunity to testify today, and I 
welcome any questions.
    Chairman GOLDEN. Thank you.
    We will now give 5 minutes to Mr. Collins.

                   STATEMENT OF J.D. COLLINS

    Mr. COLLINS. Good morning. And thank you to the Committee 
for the opportunity to testify today. This is a real honor.
    Once again, I am J.D. Collins, and I am the executive 
director of the Michigan SBDC. The Michigan team consists of 
about 100 core consultants and specialty teams that address 
technology commercialization, cybersecurity, growth strategies, 
market research, and mobility. We are the Motor City after all.
    I am here today to discuss how Michigan established a 
robust relationship with our state and regional SBA offices and 
demonstrate how that relationship resulted in better outcomes 
for Michigan's small businesses. So I asked the question, what 
is the advantage of a tightly aligned small business partner 
network? Well, the advantage became evident during the early 
days of the pandemic. To take you back in those early March 
days in 2020, there was a tsunami of information cascading into 
the small business world, often leaving them with more 
questions than answers.
    Well, that is when the Michigan SBDC invited the SBA 
resource partners into daily huddles where we distilled 
information and distributed it to small businesses in terms 
that were easy to understand. We then coupled this information 
with co-hosted webinars that helped businesses navigate the 
early days of the pandemic. Think EIDL and PPP days.
    To say this was popular is an understatement.
    To put the demand into perspective, Michigan SBDC hosts 
webinars and we are thrilled if we get 10 attendees. For one 
PPP webinar, we had over 3,000 attendees.
    Mr. Golden, you mentioned in your preamble demand for 
services was high and I hope to address that as well as that is 
a continued issue for SBDCs in Michigan and I have heard from 
my fellow colleagues around the nation that demand for services 
is high. We can attribute this to people who reached out during 
the pandemic, liked what they got, and are coming back for 
repeat services as time goes on.
    So the business-friendly information ended up on our 
website. I have had to update the website in Michigan just to 
keep up with demand and keep the website from crashing. The 
collective efforts of the resource partners and our 
distribution of client-friendly information earned us the 
nickname, ``The Small Business Source of Truth.''
    Now, this story was made possible by the focused efforts to 
establish meaningful resource partnerships. It is about people. 
It is about relationships and it goes beyond names on paper. 
Yes, we have aligned strategies, goals, and clear 
communication, but it is a fact that I know our district 
director, Leketa Henderson, I know that she has my back. If can 
call her, and she will answer. And I have sat shoulder to 
shoulder in the trenches with the other resource partners as 
well. It is those deeper relationships that allowed a focused 
partner response when it was needed.
    Now, you have heard from my colleagues about regular 
cadence at meetings and partnership opportunities. We do the 
same here in Michigan. I can tell you one unique aspect of what 
we are doing, and in fact, I am there right now as we host and 
collaborate with the SBA district office on what we call the 
Great Lakes Lenders Conference. It is an SBA lender's 
conference where we bring partnerships together and allow for 
those human-to-human relationships and bonds to grow, and quite 
frankly, it builds esprit de corps amongst the team when it 
comes to planning it. That, coupled with our regular touch 
bases and strategic alignment allows us to partnership.
    So Michigan's resource relationships with our resource 
partners gave us a nick-name, and I am happy to answer any 
questions the Committee may have. Thank you for the opportunity 
to testify.
    Chairman GOLDEN. Thank you.
    And now Mr. Leaverton, thank you for being here today, and 
we will give you 5 minutes.

          STATEMENT OF JOHN WILLIAM ``BILL'' LEAVERTON

    Mr. LEAVERTON. Good morning, Chairman Golden, 
Representative Tenney, Representative Williams and Mr. Flood. 
Thank you for inviting me to testimony today. I look forward to 
discussing small business, and particularly in the rural 
setting with you.
    My name is Bill Leaverton. I am the regional director for 
the SBDC at Tarleton State University located in rural 
Stephenville, Texas. We represent some of the most rural 
communities of the state, if not, in fact, the nation.
    The SBDC's overall focus is simply to help the public 
become successful small business owners. I specifically focus 
on assisting small business owners in the rural setting obtain 
loans.
    So, we are here today to talk about the SBA's role and its 
collaboration with resource partners. So, I wanted to share 
with you some of that collaboration.
    As Representative Williams can certainly attest, the SBDC 
assisted countless businesses during the pandemic during the 
shutdown. We were given daily updates from the SBA, lots of 
webinars that were vital to helping the public understand what 
was going on and indeed, how to improve and yet survive.
    A significant program is the 504-loan guaranty program 
which helps small businesses obtain loans in order to open 
those dreams.
    But the needs of the rural entrepreneur are vastly 
different than that of our urban counterparts. They are not 
even close to the same. The first unique distinction I would 
like to point out is that the rural environment requires face-
to-face interaction. This type of interaction builds the most 
cornerstone foundation of small business in the rural setting 
and that is trust and in the SBDC. Another unique distinction 
is that in many rural areas, they simply do not have access to 
internet. It is vital.
    So, this makes online participation in webinars and Zoom 
conferences impractical at best. For example, I worked for 7 
months with a community in rural Texas of 500 people open a 
daycare center. It injected $260,000 into the economy, created 
eight jobs, and more importantly, put rural parents back into 
the workforce. I communicated with those people almost 
exclusively face to face or via telephone because they could 
not do Zoom conferences as they had no access to internet. 
Unfortunately, this is a problem that is rampant in small Texas 
rural areas.
    Second, the rural community needs longer term commitments 
programs. The CARES Act created human capital that allowed the 
SBDC to meet an overwhelming demand. Now that that program as 
it relates to the SBDC is expiring along with the human 
capital, we are left with a situation in which demand outpaces 
supply greatly. For instance, our office currently has a 3 week 
wait period to meet with clients.
    Third, rural communities need streamlined programs. Rural 
clients to the SBDC oftentimes find themselves attempting to 
navigate the many different programs available, and most of 
these programs quite frankly closely align with the mission of 
the SBDC. For example, the Navigator program was a very well-
designed and planned program. However, in my opinion, it could 
duplicate the efforts of the SBDC, overlap geography, and 
divert resources.
    Finally, the rural community needs direct support. 
Recently, I was able to obtain a $300,000 rural business 
development grant from the USDA. This allowed and enabled the 
Stephenville Economic Development Foundation to create a 
revolving loan that will create access to capital and jobs for 
our rural communities.
    The SBA is a successful organization but finding ways to 
strengthen those programs that are working is essential for the 
rural business. In my opinion, there are three examples that 
policy could assist.
    One, create more long-term horizon programs for the SBDC 
that result in direct interaction with the rural community. The 
SBDC is effective whenever we are allowed to be present.
    Second, streamline the various duplicate programs that 
could overlap the mission of the SBDC itself.
    Third, establish ways to provide direct access to capital 
for small and microbusinesses in rural areas. We desperately 
need that.
    In closing, thank you for inviting me to testify today. 
Your willingness to invest your time on this Committee is duly 
noted and we very much appreciate it. On behalf of the 
Northwest Texas SBDC Network, Tarleton University, and the 
University of A&M system, I thank you for your service.
    Chairman GOLDEN. Thank you very much.
    We are now going to move to the questions from Members 
portion of the hearing, and I will go ahead and recognize 
myself first. I will probably end up asking each one of you a 
question and I imagine there will be several rounds and we will 
do these in 5-minute increments.
    Someone has got to start the clock by the way. Thank you.
    So, I am going to actually start with you, Mr. Leaverton. 
Just kind of following up on what you were just talking about. 
I have heard a lot of what you just said from folks back home 
in Maine. You mentioned the 504 loan guaranty. You also talked 
about using this USDA grant to set up like a revolving loan 
program. So, and of course, I think you said you really focus 
on helping people get access to capital.
    So what are some of the challenges when you look at the 
various capital that is out there, particularly SBA versus 
private banking, et cetera? Just as an example, why the need to 
set up a revolving loan program rather than rely on others? 
What do you say to businesses when they come to you and say we 
need some help finding capital?
    Mr. LEAVERTON. Thank you, Mr. Chairman.
    What I say to them is simply access to capital is the most 
difficult part of opening a small business. And in many cases, 
particularly in the rural setting, access to capital is 
difficult because of the collateralization issue. Without that 
collateralization, that small business is not going to open. 
The banking institutions have their regulations and they have 
their need to make a profit as well. And so, their risk factors 
must be taken into consideration.
    With instituting a revolving loan fund from the USDA's 
rural business development grant allows a private group, albeit 
overseen by the USDA, but it allows them to inject capital into 
the rural setting in a much more personal way. We are able to 
have a committee that is made up of the community members. We 
are able to have a committee that is made up of small business 
owners, and therefore, they can make a determination on what is 
best to inject that money rather than at an institutional 
level.
    Chairman GOLDEN. Thank you. And tell us a little bit about 
how the 504 loan guaranty helps you with that problem you were 
just talking about as well.
    Mr. LEAVERTON. Sure. The SBA's guaranty programs, of which 
there are many, obviously, the 504 is the most popular one that 
I encounter due to the collateralization issue again. The 
banking institutions, like the 504 program, because it does 
leverage hard assets as it were, land, buildings, and such that 
enable the bank to mitigate their risk factor. And due to that 
issue, it is the most popular program we have in the rural 
area. The 7(a) loan is not as popular because it is a working 
capital loan and again, the collateralization issue is a 
problem. So, it is not as viable.
    Chairman GOLDEN. Thank you. I guess lastly, one of your 
third recommendations was on access to capital, and you talked 
about the need for some kind of maybe new program, what you 
could do like microloans and things of that nature. How do you 
envision that being implemented?
    Mr. LEAVERTON. Well, quite frankly, you know, there is no 
word ``business'' in the USDA. There is in the SBA. So, I do 
not understand quite honestly why we cannot operate in the same 
manner. I mean, if the USDA is coming to our aid, why cannot 
the SBA come to our aid? I realize that their mission may be a 
bit different but my question to you is, why is that? We can 
change that and make policy to enable them to allow the small 
business in the rural setting to thrive. Whereas, instead, I 
must turn to the USDA for that same very assistance and I find 
that troubling.
    Chairman GOLDEN. Thank you.
    I have got a minute left. I am going to stick with you and 
then we will hand it off to Ms. Tenney.
    I talk with Mr. Delisle a lot and I think he agrees with 
you about the importance of face to face. What type of 
challenges do you have with getting yourself and your SBDC 
employees out to meet with your potential clients face to face? 
Is it staffing? Is it a lack of resources? I mean, what can we 
do to help with that?
    Mr. LEAVERTON. Well, Mr. Chairman, the easy answer is more 
money. But the truth is that I have to make a choice. Do I 
drive to this small community that I mentioned about the 
daycare which is close to an hour from my office to meet with 
them and then drive back, thereby spending at least half a day, 
or do I stay in my office and meet with four people? That is 
the choice. And the question is, indeed, do I allocate my 
resources to that rural setting or do I not? And we are left 
with this uneasy feeling of are we going to help the rural 
businesses or are we not? And I think that we have to come 
together and say that we are going to and apply the necessary 
resources.
    Chairman GOLDEN. Thank you. And that was perfectly right on 
time for my 5 minutes.
    So with that, I will turn it over to Ms. Tenney.
    Ms. TENNEY. Thank you, Mr. Chairman. And thank you to the 
witnesses, all the witnesses for what you do, especially those 
who work for SBA.
    As a small business owner, you have been vitally important 
to our region. In my area, we have Bernie Paprocki, who does a 
phenomenal job for many years helping our small business 
community, and we are really grateful for your service, which 
is why this first issue I want to address is so upsetting to me 
as you just described your lack of resources.
    In January of 2022, the Small Business Administration 
issued a press release highlighting the agency's request, the 
agency's request to be a designated voter agency as a response 
to President Biden's March 2021 Executive Order. We still have 
not received the details as to what this would look like and 
what type of advocacy the agency will engage in. My biggest 
concern, obviously, as the founder of the Election Integrity 
Caucus and someone who has been through this, why are we 
tasking a nonpartisan organization to get involved in partisan 
work outside the mission of small business. The last thing I 
think that anyone in the SBA would want to be is in the middle 
of political battles, especially dealing with the nuances and 
the really important issues around voter security, making sure 
that there is one person, one vote. Making sure that we have 
private voting, all that goes into it. Why are we tasking the 
SBA and these other agencies? HUD is also included in this.
    I wanted to ask you, in viewing this, and you just decided 
the wonderful work you are doing in our rural communities, do 
you not think that this is really going to be a burden on SBA 
with unrelated tasks dealing with getting to the rural needs? 
You just cited the 504 loan guaranty program, 7(a), some of 
these. Could you just comment, I know you work for SBA, but is 
this not this kind of outside the mission in your opinion that 
we are getting involved in political partisan vote harvesting 
as opposed to really helping our small business community?
    Mr. LEAVERTON. Thank you, Ms. Tenney, Representative 
Tenney.
    Ms. TENNEY. The question is to Mr. Leaverton by the way.
    Mr. LEAVERTON. I do not know that I can speak to a lot of 
that because it does not affect me directly. I can tell you 
that I have never helped a small business open or a political 
party affiliation was ever an issue. They simply want to open a 
business, serve customers, and make a living. They are not 
trying to open the next Google. They are not trying to conquer 
the world so to speak. They simply want to provide for 
themselves in a fashion with their two hands or their brain or 
their back or what have you. They just simply want to put food 
on the table for their families. And not one time in my time 
has it ever been an issue. So I do not understand how that 
would ever need to be an issue. And I would certainly hope that 
it does not become one because there is not really, opening a 
small business in a rural setting is about as bipartisan as it 
gets.
    Ms. TENNEY. The nonpartisan nature of the SBA is so 
critically important to its mission. It seems to me that why 
would you want to engage in this when you are just really just 
trying to get people up and running. It just concerns me that 
the top at the SBA would actually make this pitch.
    Mr. LEAVERTON. I would hope that it does not become that.
    Ms. TENNEY. I thank you for that. I appreciate that.
    I just want to touch on a couple of things. So, you know, 
obviously, we have inflation. It is at a 41-year high. You are 
a small business owner, a former small business owner. What can 
we do as a Committee? How can we help the small business 
community weather this storm right now--inflation, rising 
costs, gas prices? And what can we do from the SBA viewpoint, 
how can we create legislation in a bipartisan way or some way 
to help these businesses with the struggling costs? What have 
you been doing and what have you been advocating for?
    Mr. LEAVERTON. Great question, actually. Very good 
question.
    Education is the key. Most of the people that come to us 
need education in small business. They understand how to bake a 
cake. They understand how to sew a dress. They understand to do 
the task that they are required to do or want to do. Bale hay, 
whatever that may be. They understand that. That is inherent in 
their nature. However, operating a business is not the same in 
most cases. And as a result, many of them just simply are not 
tooled, do not have the tools in order to perform that. And the 
challenge is----
    Ms. TENNEY. May I reclaim my time?
    So in education, how do we get them to weather the storm 
through these rising costs? What can we do with SBA and with 
our Committee on Small Business, how can we help them get 
through this with strategies, you know, the loan programs that 
might be extended to be able to deal with our----
    Mr. LEAVERTON. Certainly.
    Ms. TENNEY.--supply chain, rising costs, inflation? In 
especially rural areas. I know in my rural area, we do not even 
have public transportation in most parts.
    Mr. LEAVERTON. Part.
    Ms. TENNEY. So we have to drive to get to work.
    Mr. LEAVERTON. The short answer is all of the above. But 
certainly, capital is the biggest issue. At least access to it. 
That is probably the number one issue.
    Ms. TENNEY. I think my time is out. Thank you very much. I 
appreciate it. I yield back.
    Chairman GOLDEN. Thank you.
    Well, we will recognize Mr. Williams.
    Mr. WILLIAMS. Thank you, Mr. Chairman.
    As most of you know, I am also a small business owner. I 
have been for 51 years. And the challenges we see are a lot. 
And we appreciate what you are doing. And I have also seen 
Tarleton State University grow and transform over the years 
through expanding their career and technical education programs 
to partnering directly with small business owners in the 
community to focus their academic offerings on the current 
needs of employers. And there are a lot of those needs right 
now with the employment situation like it is. And furthermore, 
Tarleton's partnership with America's SBDC has been a great 
asset to our rural Texas communities.
    So Mr. Leaverton, your SBDC has leaned into its intended 
role and taken on the difficult task of helping rural 
entrepeneurs navigate the waters when opening their own small 
businesses.
    My first question would be to you. How can we direct SBDCs 
across the country to better carry out their intended mission 
and mimic, copy your success in reaching those in rural 
communities?
    Mr. LEAVERTON. Thank you, Congressman Williams.
    I think that the main success story is to say either we are 
going to pay attention to rural business or we are not. And it 
is that simple. And if we are, then we have to go meet with 
them face to face. As I said earlier in my testimony, trust is 
important in the small business community. You cannot build 
trust from a phone call. A friend of mine often says that an 
email creates contact. A phone call creates a conversation and 
a face-to-face meeting creates a relationship. Well, these 
people operate on relationships and you cannot do that from a 
Zoom call. You cannot do that from an email. It must be in 
person, speaking to them in the coffee shop or wherever they 
want to meet. And I will say to you that is a big piece.
    Mr. WILLIAMS. I agree with you. It is called being retail.
    Mr. LEAVERTON. Yes, sir.
    Mr. WILLIAMS. I mean, you have got to sell something; 
right?
    Mr. LEAVERTON. Right.
    Mr. WILLIAMS. And you forgot one thing. You talk about this 
and that, and you did not mention Zoom, but it is a disaster. I 
will add that to what you just said.
    Mr. LEAVERTON. Sure.
    Mr. WILLIAMS. Eye to eye contact is the way to get it done. 
So, since I took office, I have pushed for less government 
regulations and encouraged the streamline of federal programs 
to ensure government is being a good steward of taxpayer 
dollars.
    That is why I have been concerned with the newly created 
American Rescue Plan's Community Navigator Pilot program. It 
looks like this program is looking to perform extremely similar 
functions for the small businesses as SBDCs and it is 
insufficient and will cause confusion if we have two programs 
that frankly are doing the same thing, that are providing the 
same type of assistance.
    So the next question, in your opinion, does the duplication 
of these programs hinder the work your SBDC can provide to 
rural communities, and what issues does this cause?
    Mr. LEAVERTON. Great question, sir. Thank you so much for 
that. That is a really good question, actually.
    The answer is it hinders us greatly. We have many great 
programs out there. Unfortunately, many of them, their mission 
aligns with the same as the SBDC. Therefore, we have 
duplication of effort across many different platforms. So, if 
you are a small business owner in the rural area and you are 
trying to contact someone to help you, who do you contact? You 
contact three or four agencies. You have the Women's 
Development Center, the SBDC. You have SCORE and you have 
numerous other ones that are short-term based. And (a), the 
short-term based programs, when they just about get ramped up 
it is about time for the money to run out and so therefore, 
they extinguish. Secondly, some of the duplication of effort 
that happens is contradictory. Just by human nature it can be 
because we are person-to-person contacts, so my opinion and 
yours may vary. So that is very challenging, and it does hinder 
us greatly. And I would say to you, in my opinion, I quite 
frankly do not understand why we cannot streamline that and 
make a pointed approach. Gather the resources; therefore, I 
would have the ability to go out into those rural areas because 
those resources have been reallocated. You can call it the SBDC 
or call it something else but allocate the resources into a 
single fine point and then let us do our job.
    Mr. WILLIAMS. That is called common sense.
    Mr. LEAVERTON. Yes, sir.
    Mr. WILLIAMS. That is the answer to your question.
    Mr. LEAVERTON. Yes, sir.
    Mr. WILLIAMS. Quickly. main street sees a lot of problems. 
Right now we have got inflation skyrocketing, supply chain 
disruptions. I have been in business 55 years. I have never 
seen anything like this before. We cannot find workers. It is 
hindering business operations. It goes on and on and on. The 
Federal Reserve is raising interest rates now. It reminds me of 
1981 all over again. So with all these costs, business owners 
are having to make some difficult decisions that they have not 
made in the past. So, what are the top concerns you are hearing 
from American small businesses right now? And are you elevating 
these concerns to the top officials at the SBA? You have got 15 
seconds, if you can answer that.
    Mr. LEAVERTON. The answer to your question about the 
concerns they have is how do I raise my prices to afford the 
costs I have to meet the demand of the public, yet the demand 
cannot afford my product? How do I do that? That is the 
question?
    Mr. WILLIAMS. Yes.
    Mr. LEAVERTON. And there is no answer.
    Mr. WILLIAMS. Have you told the SBA? Have you talked to 
them about these concerns?
    Mr. LEAVERTON. I attempt to. Sure.
    Mr. WILLIAMS. Yeah. Attempt. Okay. I get it.
    All right, Mr. Chairman, I yield my time back. Thank you.
    Chairman GOLDEN. Thank you.
    Next up, Mr. Flood from Nebraska.
    Mr. FLOOD. Thank you, Mr. Chairman.
    You know, as a Nebraskan, we have the lowest unemployment 
rate of any state in the nation since they started keeping the 
statistics in 1974. Our state unemployment rate is the absolute 
lowest. To help me provide context to that, Mr. Leaverton, can 
you tell me, when you talk about rural, what size communities 
are you talking about? Like 2,000 people, 3,000 people, 10,000 
people in a community?
    Mr. LEAVERTON. The largest community I have in my whole 
region is 36,000 people.
    Mr. FLOOD. Okay.
    Mr. LEAVERTON. Which is why the Rural Business Development 
grant works because it requires 50,000 or less population in 
order for you to be accessible to that funding.
    Mr. FLOOD. In your service area, do you have towns of less 
than 5,000?
    Mr. LEAVERTON. Absolutely. I have towns less than 100.
    Mr. FLOOD. Okay.
    Mr. LEAVERTON. Most of my towns probably I would think 
average in the range of 2,000.
    Mr. FLOOD. Okay. So according to an NFIB report, half of 
small business owners reported job openings they could not 
fill. Is that a hurdle in your service area?
    Mr. LEAVERTON. Absolutely. I would think it probably, 
behind access to capital, be the second biggest challenge that 
small business owners face. There simply are not people to, in 
those communities there is no one to work which is why the USDA 
created that program was to help revitalize small communities 
and thwart the urbanization.
    Mr. FLOOD. So I appreciate what you are doing. I think it 
is important work. Let's talk about the types of capital that 
we need. Obviously, there is the SBA traditional capital that 
you are talking about here that could be anything from a widget 
manufacturer to a dog grooming business. What tools do you have 
in the toolbox when it comes to at-risk capital? And by that I 
mean money for speculative tech startup type businesses that 
are part of the economic development ecosystem of American that 
is actually building wealth? What do you have? Is there a 
program in Texas that provides that or a nonprofit corporation?
    Mr. LEAVERTON. Not formally. No, sir. I have been fortunate 
enough to encounter some private equity groups that are willing 
to invest in a riskier startup faction such as tech or 
something in the medical field. But in terms of formal, no, 
sir, there is not. There is no network available that I am 
aware of.
    Mr. FLOOD. So would you say it is a fair characterization 
of the people in your service area, and this often happens in 
rural areas, where they think that tech startups and that 
economic development entrepreneurial ecosystem belongs only to 
towns like Boston, Austin, San Jose, and does not touch the 
places that you are currently serving? Is that a feeling?
    Mr. LEAVERTON. That is absolutely true. And I want to give 
you a real quick example. I moved a company from Mountain View, 
California, to Austin, Texas. I was an owner of the company and 
I moved them from there to Texas. And the thought was we had to 
be in the City of Austin because it is a tech-centric area. And 
therefore, we needed to be around tech people. And since then, 
I have obviously moved to Stephenville, Texas, and I can tell 
you that categorically that was incorrect. That business could 
have moved from Silicon Valley to Stephenville, Texas, and 
thrived just as well as it would have in Austin. It was a 
mischaracterization on my part it was, and I think it is a 
large miss for companies.
    Mr. FLOOD. And there is no data to support that only tech 
entrepeneurs live in places like Austin.
    Mr. LEAVERTON. No.
    Mr. FLOOD. They, in fact, live where you live. And would 
you also agree with me that, you know, when you live in a rural 
area, you find creative solutions to problems that people in 
larger cities with access to more amenities take for granted? 
They fashion their own parts in Stephenville, Texas.
    Mr. LEAVERTON. Absolutely. One of the largest resources 
that Stephenville has is human capital because Tarleton State 
University is so successful. Well, those people want to stay 
there. Well, there simply are not jobs when they graduate so 
they must migrate on to the urban areas which would give me as 
a business owner moving that company from Silicon Valley to 
Austin, Texas, it would have given me a tremendous amount of 
people to choose from. Can you imagine if I had to move there? 
I needed 32 people to work in that company. I would have had a 
choice of probably 500 or 600 to choose from versus in Austin I 
have a much more difficult time attracting the same talent 
pool. And people who want to live in those rural areas are 
willing to stay and sacrifice, and like you say, fashion things 
and do what is necessary. So, we need to pay more attention to 
it. Absolutely.
    Mr. FLOOD. Thank you for your answers. I yield back.
    Mr. LEAVERTON. Thank you.
    Chairman GOLDEN. We are going to go to a second round for 
those that want to stick around.
    Mr. Leaverton, thank you for your service to this 
Committee. You are off the hot seat for just a minute at least.
    I guess I will shift to Mr. Delisle, sticking with the SBDC 
aspects here. We have heard a lot about duplication. I shared a 
lot of those concerns as you know. And I am certainly a big fan 
of the work that SBDCs do. I have raised concerns on this 
Committee about the existence for decades in statute within SBA 
of something called the Office of Rural Affairs which literally 
had no staff and no funding. Something we have been trying to 
fix, and yet we are moving on creating more programs. And of 
course, I am the sponsor for the second time of a bill to 
reauthorize the SBDCs and try and improve upon the work that 
you can do, how you can use your money, and of course, get you 
more resources.
    Mr. Delisle, can you talk a little bit about the importance 
of reauthorization for the SBDC programs nationally and what 
you like most about the proposed bill that has passed the House 
for the second Congress in a row and of course has yet to see 
any action in the Senate?
    Mr. DELISLE. Yes. Thank you, Chairman Golden for the 
question. And thank you for your support of reauthorization.
    As you know, the reauthorization is critical to kind of 
endorsing the Small Business Development Centers program as an 
authorized program of Congress. It is very important. And it is 
also an opportunity to do some corrections or some enhancements 
of the rules and the criteria for operating the program. I know 
of your support of increasing our capability to market our 
services and to raise awareness. One thing that we definitely 
have seen through the pandemic is that by raising awareness of 
Small Business Development Centers and the other resource 
partners, it has really allowed us to really serve far more 
clients especially with the additional CARES funding. So having 
additional room to spend marketing dollars is important. 
Raising the authorized level so that the Appropriations 
Committees can take action to hopefully increase resources so 
that we can continue to provide those services ot the small 
businesses across Maine and across the country. So I am 
hopeful, as I know you are, that the Senate will also take up 
reauthorization and we can get that passed so that we can 
really advance the program further across the country.
    Chairman GOLDEN. Thank you. You know, it was my amendment 
to CARES that helped to increase SBDC funding as part of that 
CARES Act funding that Mr. Leaverton noted was really 
important. Of course, that increase now going away. We know 
that there are workforce shortages out there among your 
clients. What about among SBDCs in Maine, Mr. Delisle? Are you 
having a hard time maintaining staffing and finding the right 
people?
    Mr. DELISLE. We are not having a hard time maintaining 
staffing. We are fortunate that we have a great organization of 
staff of SBDC advisers in Main that are long term and many have 
retired, and we have been successful in hiring some really, 
really good people even through the workforce shortages that we 
have. So we do have good people.
    Now, what we find is that people who become business 
advisors for SBDC, they do it because they love the work. They 
love working with clients. They love the small businesses and 
they are really just committed to that mission. So, 
fortunately, even though it is such a tight labor market and 
certainly, all of my advisors could market their skills 
elsewhere probably for significantly higher pay, they really 
are committed to the organization.
    With that said, any time we have an opening, it is always a 
challenge. And as you know, especially in rural Maine, I have a 
host partner up in Caribou, Maine. If we need to hire an 
advisor in Caribou, Maine, it certainly is a challenge to find 
a good, talented pool of candidates for that position but 
fortunately right now we have a really good advisor in Caribou 
and I hope he does not go anywhere.
    Chairman GOLDEN. Thank you.
    I particularly like the aspect of the reauthorization bill 
that would allow you to use a small, responsible amount of your 
budget for marketing as both I think you and Mr. Leaverton have 
spoken to. What good are your services if the businesses, 
particularly in rural areas, do not even know that you exist? 
It is a real shame and something that we could fix with just a 
small tweak in the statute with the passage of that bill.
    I am going to probably come back in a little bit to ask 
some questions about SCORE, but I am going to give the 
opportunity to ask more questions.
    And I see that Mr. Stauber has joined us from Minnesota. 
Welcome, sir. And why do you not go ahead?
    Mr. STAUBER. Thank you very much, Chair and Ranking Member 
for holding this meeting.
    I first want to give a shout out to the SBA district office 
in Minnesota. District Director Brian McDonald and his team 
have been working tirelessly over the last few years, and I 
could not let this moment go by without acknowledging their 
hard work and it is greatly appreciated.
    And like the struggle, we, as Members of Congress have had 
to get the federal agency in D.C. to respond to our questions, 
the SBA district offices have been instrumental in helping our 
small businesses survive during the government-mandated 
shutdowns in 2020 and 2021 and have been extremely responsive 
to our local small businesses.
    Mr. Leaverton, with new inflation numbers at record highs, 
what would you say is the confidence level of the small 
business owners you interact with in the economy and current 
state of play?
    Mr. LEAVERTON. Thank you, Representative Stauber.
    By competence, you mean competence in their business 
environment?
    Mr. STAUBER. Yes.
    Mr. LEAVERTON. I would say that they know their business 
very well. The challenge is that they do not know the market or 
they do not know the environment very well and they cannot 
adapt to it whenever the inflationary conditions such as we are 
experiencing take place. They cannot adapt. They cannot change 
to that because they have not the tools to do so. So as a 
result, they are trying to utilize things that happened 2 years 
ago to help them operate their bakery or their business today 
and the conditions have migrated. So as a result, new tools are 
needed and they do not simply have them.
    Mr. STAUBER. Our federal government has put forth, and 
these are the Biden administration's number, $201 billion--that 
is with a B--$201 billion dollars of additional regulations on 
small businesses across this nation, punishing them even 
further. In your mind, are these regulations, do they stymie 
the small business growth and/or do they stymie people wanting 
to live that American dream by owning their small business?
    Mr. LEAVERTON. That is a great question. And actually, I 
think you hit the nail on the head when you said owning their 
dream. The people that see me simply have a dream. I have 
always wanted to open a small business. My kids are grown. Now 
is my time. I am going to open the restaurant I always wanted 
to. Or I have just graduated college and I want to forge my own 
path and I want to create my own business, to be my own person, 
my own boss.
    Quite frankly, it is that simple for them. They just want 
to provide a service or a product and be paid an appropriate 
price, put food on the table, and live their lives.
    Mr. STAUBER. Without the government on their back or in 
their pockets; right?
    Mr. LEAVERTON. Well, the challenge becomes whenever we 
mount regulation and require them to do more and more and more 
and more with the same dollar, if you will, either they are 
being taxed more or they are being appropriated more, or 
whatever the case may be, they wind up being inundated, and 
quite frankly discouraged. And I see some leave business 
because they simply just feel it is not worth the fight. And 
they consider it to be a fight.
    Mr. STAUBER. And it should not be. That is unfortunate.
    Mr. LEAVERTON. Well, again, they are just trying to 
support--if I own a bakery, you come in, you have got a 
birthday, you want to buy a cake from me. I bake you a cake, 
you buy it at an appropriate price, and we are all happy. Well, 
I do not see why we need to complicate that.
    Mr. STAUBER. Right. I agree with you.
    And this is for any witness. How has your role changed or 
what assistance have you started working on more given the 
historic economic headwinds facing small businesses? And this 
is for anybody. Anybody?
    Mr. COLLINS. Can you repeat the question?
    Mr. STAUBER. Yes. How has your role changed or what 
assistance have you started working on more given the historic 
economic headwinds facing small businesses? So what have your 
priorities been these last couple of years with reference to 
the headwinds we are facing with inflation and job creation?
    Mr. LEAVERTON. The headwinds are difficult. Coming out of 
COVID, people are struggling to begin with. Then, if you tack 
on some of the issues that we are facing in today's rural 
environment, and I operate in a very rural area of Texas 
mostly. And I can tell you that those people are at their wit's 
end and many of them do not survive because of that. They 
simply fold their tent and go home because the headwinds are 
too much. And so, they just do not have the tools to withstand 
it.
    Mr. STAUBER. We understand that the economic engines of 
Main Street American are our small businesses and we must do 
everything we can to help them succeed.
    Mr. Chair, I am out of time. I yield back.
    Chairman GOLDEN. We are going to recognize Mr. Williams 
next.
    Mr. WILLIAMS. Thank you, Mr. Chairman.
    What have you seen out of the SBA, the national scope, the 
Feds if you want to call them that? It has been my opinion that 
they do not really understand small business. They actually 
support higher taxes. And raising taxes on Main Street America 
is the wrong thing to do.
    We talked about burdens. My colleague talked about the 
dollars, but the manhours to do that is 130 million manhours 
for crying out loud. And the SBA does not want to talk about 
that. They do not want to talk about cutting taxes and what 
they do. Have you seen that kind of attitude from the Feds when 
it really gets down to it on helping small business and relieve 
burdens as opposed to raising burdens and keeping some of these 
businesses from staying in business?
    Mr. LEAVERTON. Well, Congressman, in my opinion, I see us 
adding programs, adding burdens, adding bureaucracy, if you 
will, to the small business environment. Simply put, we should 
just get out of their way. If I take a cake, you want to buy a 
cake for your birthday, I do not really see why we need to 
interfere so much.
    Mr. WILLIAMS. Well, competition works, does it not?
    Mr. LEAVERTON. Yes, sir.
    Mr. WILLIAMS. And if you get the government out of our life 
and let businesses compete for service, for customers, then 
customers will tell you if you are doing a good job or not.
    Mr. LEAVERTON. Right. I do think that there is a place for 
the SBA. I do think that there is a place for the programs 
because I do think that they can support, provide access to 
capital. And education is a big key, particularly in the rural 
area. But at what cost?
    Mr. WILLIAMS. Yeah, there is a place for the SBA. There is 
no question. But I think that the SBA should totally be for 
Main Street America regardless of who is in the White House. 
And cutting taxes, cutting regulations, cutting burdens, 
creating opportunity is the role of the SBA. And we have got 75 
percent of the workforce, 75 percent of the payroll is 
generated by the people you are talking about. And right now we 
need them more than ever.
    So, I appreciate you being here again. It is good to be 
able to call you a Texan. And with that, Mr. Chairman, I yield 
my time back.
    Chairman GOLDEN. Thank you very much.
    Mr. Flood is gone.
    Question for Ms. Strojny. So in 2019, your SCORE chapter 
was named Chapter of the Year. So what is your secret, and what 
do you think that Congress could do, this Committee 
specifically, to get resources to more SCORE chapters so they 
can be as successful as yours?
    Ms. STROJNY. Well, thank you for the question.
    The secret to our success in the Southern Maine chapter was 
really about building the appropriate team of people, of 
volunteers, to serve the community. SCORE initially in Southern 
Maine had a small cohort of volunteers, and we managed to bring 
that during a 6-year time, bring in volunteers who could 
deliver the expertise and help with clients and really make a 
difference in the community. So we expanded our footprint all 
across Maine. And trained up our volunteers and they provided 
extensive services in communities that we had not previously 
served because we did not have sufficient manpower.
    Now, relative to how you can support SCORE, it is all 
around the reauthorization and increasing our funding because 
when we have increased funding, we are able to do additional 
education. We are able to offer additional services. We have 
additional tools and resources that we can support the rural 
communities with.
    Chairman GOLDEN. Thank you. I appreciate that.
    Can you tell us a little bit about the performance reviews 
carried out by SBA district offices, reviews of the resource 
partnerships? So what is included in these reviews? Is the 
review structure beneficial to you? Is it a burden? Just tell 
us a little bit about that relationship.
    Ms. STROJNY. Yes. So the SBA reviews our services on an 
annual basis. Generally, we sit down for an hour based on the 
fact that we have extremely collaborative relationships with 
the SBA folks to begin with in Maine. This is not a burden but 
rather an opportunity to talk about how we each can better 
serve each other and serve the larger state of Maine. Questions 
are around educational opportunities. How can we partner? How 
can we partner more? How can the SBA support SCORE? Are there 
additional opportunities that can be addressed? We review the 
numbers, and by the numbers I mean how we create impact in the 
state of Maine so that the SBA during this review is fully up 
to speed on the role that SCORE plays in Maine. How many new 
businesses we help create, how many jobs we help create, the 
size of our organization, where we are growing, what is our 
expertise. One of the hallmarks of SCORE is that we have quite 
a bit of specific expertise that we call subject matter experts 
and it is always important because the SBA is often the first 
place that a person will call and say, hey, where can I get 
help? And so for the SBA during these reviews to be totally up 
to speed on what our organization looks like and what kind of 
expertise we offer actually helps the SBA to make sure that 
they are reviewing to the right organization and getting the 
help that that client needs.
    So, the reviews are not onerous in any way and based on how 
we support each other it is just an opportunity to review 
potential growth areas in the times ahead.
    Chairman GOLDEN. Great. I am not surprised that the 
relationship is pretty good between the partners and the SBA in 
Maine.
    But Mr. Collins, it has been described that when you took 
over the SBDC that maybe there is room for improvement is the 
way I have heard it described for the relationship with the 
district offices in Michigan. How did you go about 
accomplishing that and how would you advise others to improve 
upon that relationship and just improve the collaboration and 
communication? You can speak either to what SBDCs could do to 
improve that or the district offices themselves.
    Mr. COLLINS. Thank you for the question. I hope it came 
across in my testimony that it is all about people and it is 
about relationships. And yes, we have the metrics that were 
discussed earlier by Ms. Strojny, but the ability to 
collaborate on strategy, collaborate on programs, and it comes 
with establishing those relationships first. And so, we started 
with what we are just calling a monthly huddle. We then 
migrated that to partner meetings, and then took that up one 
step by cohosting some events together. And believe it or not, 
it is the planning committees and it is the ability to address 
strategy and be part of the participation in the event that 
really builds esprit de corps amongst the team and those 
relationships that allow us to have that relationship. So I 
would say that it started with the personal relationships and 
it has blossomed from there. So like I say, we are on really 
solid footing right now.
    Chairman GOLDEN. Thank you for that. I appreciate it very 
much.
    It looks like we are out of questions. And I appreciate 
the, first of all, testimony that you have provided to the 
Committee, as well as the answers that you have provided to the 
questions that have been put forward to you today.
    In closing, certainly, a big thanks to each one of you not 
only for joining us but for the work that you do in the 
communities that you serve helping small business owners, 
entrepeneurs, do what they want to do and be as successful as 
possible. I certainly believe that your work is vital to their 
success and to growth in our communities, and specifically, in 
rural communities like those represented by many of us that 
joined the hearing today. I think that here in this Committee, 
your partner programs are some of those that are most ripe for 
bipartisan support. I certainly agree with those that express 
concern about duplication, ways we might be able to find 
savings to put more resources into your hands so you can reach 
even more potential entrepeneurs and small business owners out 
there. So, thanks to you all and to your staff for the work 
that you do day in and day out and for being passionate about 
it. And of course, it is our responsibility to have good 
oversight over the agencies that are responsible for working 
with you and the district offices and the SBA, so we are always 
open to hearing your feedback about how we can press them, 
question them, and make sure that they are using their 
resources appropriately to support you and make sure that they 
are doing their job in trying to connect their potential 
clients with your great services as well.
    And with that, I am going to go ahead and close things out.
    And if there is no further business to come before the 
Committee, we will be adjourned.
    Although, I should say that Members have 5 legislative days 
to submit statements and supporting materials for the record. 
And we appreciate your time. Thank you all for coming.
    [Whereupon, at 11:23 a.m., the subcommittee was adjourned.]



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