Madrid Testimony

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Written testimony of Mark Madrid, Associate Administrator of the Office of Entrepreneurial Development at the U.S. Small Business Administration, before the Senate Committee on Small Business & Entrepreneurship, dated February 1, 2022. The testimony describes the office's Resource Partner network of Small Business Development Centers, Women's Business Centers and SCORE, along with the Community Navigator Pilot Program, which it says provides $100 million in grants to 51 organizations. It reports that Americans submitted 5.4 million applications for new businesses in 2021 and that SBA aid to small businesses reached $450 billion in 2021. It gives FY 2021 figures for the resource partners, including over 818,000 clients counseled by SBDCs, and describes the Emerging Leaders program and Regional Innovation Clusters.

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              Testimony of Mark Madrid
                Associate Administrator
        Office of Entrepreneurial Development
         U.S. Small Business Administration

                     before the
Senate Committee on Small Business & Entrepreneurship

                  February 1, 2022
                                  Testimony of Mark Madrid
                                    Associate Administrator
                            Office of Entrepreneurial Development
                             U.S. Small Business Administration

Good afternoon, Chairman Cardin, Ranking Member Paul, and distinguished members of the
committee. Thank you for the invitation to discuss the SBA’s Office of Entrepreneurial
Development.

Our mission is to help small businesses start, grow, and expand by providing quality training,
counseling, and access to resources. We achieve this mission through layering an expansive
national Resource Partner network, grant programs, Community Navigator services, and
entrepreneurship education. We spearhead this portfolio with Administrator Isabella Casillas
Guzman’s guiding north star of delivering a best-in-class customer experience, supporting new
small business creation and job growth across the country, while significantly advancing equity
and leaning into technology. We are honored to steward the technical resource and
entrepreneurship education arms of the Agency under Administrator Guzman’s results-driven
leadership.

I am a product of entrepreneurship. Like many of our U.S. small business owners, my dad was
unrelenting in changing the course of our family’s destiny, as he built his welding business in the
Texas Panhandle. We are proud of my dad for his evolution from the cotton fields to being his
own boss. Mi Papa (my dad) died last year from Covid-19, and we almost lost my mom. We
thank God that she survived. I consider supporting small businesses—like my dad’s— the honor
of a lifetime, and I have a proven track record of doing so on the ground.

Supporting small businesses like my dad’s has given me the greatest sense of purpose in my life.
Through my work leading Hispanic Chambers of Commerce in Texas, most recently serving as
CEO of Stanford University Latino Entrepreneurship Initiative and Latino Business Action
Network, and now at the SBA’s Office of Entrepreneurial Development (OED), I have had the
distinct honor of building a body of work and a seasoned track record based on listening to the
unique needs of small business owners across the U.S. and truly empathizing with them. As a
result, I am energized to lead this office.

A critical component of OED’s footprint is the services delivered by our Resource Partners: our
network of Small Business Development Centers (SBDCs), Women’s Business Centers (WBCs)
and SCORE. OED also spearheads the Community Navigator Pilot Program and our Strategic
Learning Initiative. Additionally, OED’s Office of Entrepreneurship Education (OEE) leads our
Cybersecurity Grant Program and Regional Innovation Clusters.


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Distinguished members of the committee, you know as well as anyone that the last two years
have tested America’s entrepreneurs in ways they could have never imagined. I am proud to
report to you today that entrepreneurship in America is booming. In fact, in no year prior to 2021
did more Americans take that courageous, American step of starting a business. The data proves
it. In 2021, Americans submitted 5.4 million applications for new businesses, the highest level
ever recorded.1 That 2021 level surpassed the previous record for new business applications by
more than 1 million, and it was 53% higher than the average of the previous five years.

This burst in new businesses is pervasive across the economy. It is seen across goods and
services sectors, in rural and urban states, and it includes what the Census calls high-propensity
new businesses, those with a strong likelihood of hiring employees. In 2021, there were 1.8
million applications for these likely-to-hire businesses—36% higher than the previous five years’
average.2

This record pace of new business creation is a credit to the thriving entrepreneurial spirit in this
country, which has shown itself resilient even in the face of a global pandemic. It is also thanks
to the strong emergency economic support provided by Congress, starting with the bipartisan
CARES Act and continuing through President Biden’s American Rescue Plan: stimulus checks
and child tax credits that gave economic security to families; aid to state and local governments
that prevented public sector layoffs; and, of course, the SBA’s aid to small businesses, which
reached $450 billion in 2021 alone, under the leadership of Administrator Guzman.

Recovery legislation has included $440 million for the SBA’s entrepreneurial development
programs. Today, I discuss how OED is honoring that investment through action, in support of
the entrepreneurship wave sweeping the country. The millions of new businesses are as diverse
as they are numerous, and so is the range of their counseling needs. Some entrepreneurs benefit
most from women-specific counseling; others need an experienced business mentor; and still
others need technical advice from a university-connected organization or one with strong ties to
their local community. I will discuss how OED programs provide that much-needed, diverse
range of small business support, starting with the Community Navigator Pilot Program.

This program is designed to reduce barriers that small businesses, including those owned by
disadvantaged groups such as veterans, women, and those from rural communities and
communities of color, often face in accessing critical support. Funded by the American Rescue
Plan Act of 2021, it provides $100 million in grants to 51 organizations that work with hundreds
of organizations and nonprofits to connect America’s entrepreneurs to SBA and federal, state,
and local resources so that they can recover and thrive.




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This program is more critical than ever as many small businesses are facing headwinds from
Omicron. It complements and bolsters the SBA’s core counseling programs by leveraging a
national network of Community Navigators, who, to use the words of Administrator Guzman,
are “reaching those business owners who don’t know that help is out there, or don’t know how to
access that help, and even those who may not think our programs are really for them.”

In October, SBA announced the program’s grantees that were selected through a rigorous review
process. Diversity and inclusivity are at the core of this initiative, as illustrated by our eight Tier
1 grantees: National Urban League, U.S. Black Chambers, US Hispanic Chamber of Commerce,
U.S. Pan Asian Chamber of Commerce, Syracuse’s Institute for Veterans and Military Families,
Oweesta Corporation (which has a special focus on serving small businesses in Indian country),
Local Initiatives Support Corporation (which has a unique reach to women entrepreneurs), and
International Rescue Committee.

After working on the ground for two months, our Navigators are well underway in supporting
small businesses. For example, in December, Daughters of Zion in Memphis, Tennessee, a Tier 3
$1 million grantee, held a workshop to help walk more than 30 local entrepreneurs through how
to complete applications for the Economic Injury Disaster (EIDL) loans, the Targeted EIDL
Advance, and the Supplemental Targeted Advance before the December application deadlines
for these programs.

In addition to Community Navigators, SBA’s Resource Partners are a critical element of OED’s
service portfolio. Small Business Development Centers (SBDCs), which are supported by our
Office of Small Business Development Centers, have tremendous reach via 62 state Lead
Centers and over 900 Service Centers. Our SBDCs provide support to small business owners that
is contextualized to the communities that they are serving. Their ongoing Building a Dream
Team Series focuses on supporting SBDC leadership by delivering culturally competent success
strategies to assist diverse business owners in realizing the American dream.

Our SBDCs’ pandemic relief efforts have been bolstered by the $192 million in funding that they
received through the CARES Act, which has enabled SBDCs to amplify their support for small
businesses. In FY 2021, our network of SBDCs counseled and trained over 818,000 clients and
helped them to start over 26,000 new small businesses.

Small business owners view SBA Resource Partners as a critical lifeline. One such example is
Ms. Saskia Foley, the CEO of Radius Corporation in Kutztown, Pennsylvania, which I had the
honor of visiting recently. Radius creates sustainable toothbrushes and other daily use household
items. Saskia told me about how she took over as President from her father back in 2014 and has
been partnering with the Kutztown SBDC over the past several years, particularly during Covid-
19. Her SBDC mentors supported her through the process of applying for and receiving an SBA


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Economic Injury Disaster Loan (EIDL) and two draws of SBA’s Paycheck Protection Program
(PPP). Both EIDL and PPP loans helped Radius retain its 29 employees and prevent layoffs.
Notably, Saskia also told me about how she has leveraged export counseling.

Our network of Women’s Business Centers, supported by the SBA’s Office of Women’s
Business Ownership, also create gateways to opportunity for entrepreneurs. WBCs were
bolstered by the $48 million in CARES Act funding in FY21 and that same year, Women’s
Business Centers assisted more than 87,000 small businesses and helped them start over 3,300
new small businesses.

Our WBCs are positioned across the country and reach into rural areas. They serve entrepreneurs
like Adelle Starin who owns Baby’s on Broadway in rural Little Falls, Minnesota. Adelle created
Baby’s on Broadway in 2013 and has received critical support from the SBA-powered
Women’s Business Alliance in Little Falls throughout her entrepreneurial journey. With
assistance from an SBA lender, she expanded her business by acquiring a storefront and
becoming a durable medical equipment supplier. Her local Women’s Business Center provided
mentorship and guidance to the resources she needed. To weather COVID’s impact on her small
business, her WBC helped her access the Paycheck Protection Program and secure an Economic
Injury Disaster Loan. And now on a growth trajectory, Adelle has been accepted into Emerging
Leaders. Adelle and Baby’s on Broadway are a testament tothe layered support provided by SBA
through our resource partners.

SCORE is another component of our technical assistance ecosystem, with over 10,000 volunteer
mentors spread across a local footprint of over 250 chapters and a robust online platform. In FY
2021, SCORE mentors counseled and trained over 570,000 clients. Our Resource Partners’
efforts have been further scaled by their new Centralized Hub for Covid-19 support. That hub is
fully operational and has helped our Resource Partners create efficiencies by enabling them to
rapidly train their network.

Through our Office of Entrepreneurship Education, we deliver an expansive e-learning and in-
person training portfolio to all entrepreneurs including the underserved, unrepresented and
under-accessed. This portfolio includes the Emerging Leaders initiative, an immersive,
executive-style training program for maturing small business. In December, I had the honor of
announcing the 759 Emerging Leaders graduates in 52 locations across 37 states, celebrating
their completion of this rigorous, seven-month, executive-level program. Collectively, this group
represents $1.2 billion in gross annual revenues and employs over 10,000.

Notably in this space of delivering to the underserved, OEE also leads Agency efforts in
Cybersecurity and Regional Innovation Clusters (RICs). In 2021, SBA announced five new
RICs: Acendian in Missouri, AgLaunch in Tennessee, Development Capital Networks in


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Oklahoma, Unmanned Aerial Systems in California, and Startup Junkie Consulting in Arkansas.
This new cohort brings the total number of RICs across the United States to 12.

America’s small business owners are tenacious, and we admire their resilience. We are honored,
as you are, to support them as they persist, recover, and thrive. We share your commitment to
entrepreneurs and strengthening the support that we provide them, particularly at this inflection
point. I look forward to continuing our collaboration.

Thank you for this opportunity to appear before you today.

1
 U.S. Census Bureau Business Formation Statistics, Seasonally Adjusted Business Applications, U.S. Total
2
 U.S. Census Bureau Business Formation Statistics, Seasonally Adjusted High-Propensity Business Applications, U.S.
Total




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