Shaheen–Ernst Letter to GAO on SBA and Veterans (2024)
- Issuer
- Congressional materials
- Document type
- 2024 02 14 Ernst Shaheen Call To Sba Gao Ernst Shaheen Call For Comprehensive Review Of Ve
- Date
- 2024-02-14
- Case
- 2024 02 14 Ernst Shaheen Call To Sba Gao Ernst Shaheen Call For Comprehensive Review Of Veterans
Summary
A letter dated February 13, 2024 from Jeanne Shaheen, Chair, and Joni K. Ernst, Ranking Member, of the Senate Committee on Small Business and Entrepreneurship to Comptroller General Gene L. Dodaro of the Government Accountability Office. It asks GAO to examine the SBA's role in federal efforts to help veterans, reservists and military spouses gain financial literacy and access capital. The letter cites a November 15, 2023 committee hearing and a GAO report released December 21, 2023 on SBA procedures for reporting on veteran-owned businesses. It requests a review covering five analyses, including federal lending programs for veteran-owned small businesses, gaps in credit availability, obstacles to building credit, effects of deployment on credit history, and federal financial literacy programs.
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Full text
February 13, 2024
The Honorable Gene L. Dodaro
Comptroller General of the United States
Government Accountability Office
441 G Street, NW
Washington D.C. 20548
Dear Mr. Dodaro,
We write today to request that the Government Accountability Office (GAO) examine the role
the U.S. Small Business Administration (SBA) has in the broader federal effort to assist veterans,
reservists and their spouses gain financial literacy and increase their access to capital. The SBA
operates several programs for veterans, reservists and military spouses. At the start of their
entrepreneurial journey, Boots to Business and Boots to Business Reboot empower veterans and
reservists with the skills and knowledge to launch a business. Through Veterans Business
Outreach Centers, veterans can access business planning, entrepreneurial training, counseling
and mentorship. Other programs provide tailored support for service-disabled veterans, women
veterans and military spouses. These programs are all intended to help veterans on their
entrepreneurial journey, but veterans still face a myriad of issues when starting their own small
business. One issue of particular importance to veteran small business owners, as with other
entrepreneurs, is building credit and accessing capital.
Despite this support, access to capital remains a persistent issue for veteran and reservist
entrepreneurs and small business owners. Veterans, in particular, often submit more applications
for loans, lines of credit and cash advances than their nonveteran counterparts but obtain less
financing than requested.1 Moreover, veteran-owned small businesses’ loan approval rates were
lower than their civilian counterparts.2
On November 15, 2023, the Senate Committee on Small Business and Entrepreneurship held a
hearing titled, “Veteran Entrepreneurship: From Service to Small Business Success.” During the
hearing, we heard how barriers to capital access negatively impact veteran-owned small
1
Sid Sankaran and Jessica Battisto, Financing Their Future: Veteran Entrepreneurs and Capital Access, FEDERAL
RESERVE BANK OF NEW YORK AND U.S. SMALL BUS. ADMIN., (2018). See also, Rosalinda Maury et al., 2021
National Survey of Military-Affiliated Entrepreneurs, SYRACUSE UNIVERSITY D’ANIELLO INSTITUTE FOR VETERANS
& MILITARY FAMILIES, (April 2022).
2
Id.
1
businesses and how poor credit history or lack of financial literacy can impact veterans as they
transition to civilian life and attempt to secure loans to start a small business. Congress needs
more information on the issues facing veterans trying to access capital, what financial literacy
programs are available to them and how they could be more effective.
On December 21, 2023, the GAO released a report titled, “Small Business Administration:
Procedures for Reporting on Veteran-Owned Businesses Need Improvement,” which details
problems with SBA’s operation of programs designed to support veteran-owned small
businesses.3 The report states that SBA is required by law and regulations to give special
consideration to veterans in its lending programs, but the agency has not developed policies and
procedures to do so. We are pleased to see the SBA agrees with GAO’s recommendations to
improve services for veterans, and the Senate Small Business Committee is committed to its
oversight of the SBA to ensure full compliance. We remain concerned that the findings and
recommendations outlined in the December 21, 2023, report also reflect broader issues with the
effectiveness of federal programs designed to support veteran, reservist and military spouses
trying to start and grow small businesses.
To that end, we respectfully request that the GAO conduct a comprehensive review of federal
efforts to ensure veterans, reservists and military spouses are not being left behind when it comes
to accessing capital and have the financial literacy necessary to become successful entrepreneurs.
We respectfully request the report include the following:
1. An analysis of the federal lending programs available to provide credit specifically for
veteran, reservist or military/veteran spouse-owned small businesses.
2. An analysis of the gaps, if any, in the availability of credit for veteran, reservist or
military/veteran spouse-owned small businesses that are not being filled by the federal
government or private sources, and the reasons why those gaps exist.
3. An analysis of obstacles veterans, transitioning service members and military spouses
face when trying to build credit and access capital.
4. An analysis of the extent to which deployment and other military responsibilities affect
the credit history of active duty service members, veterans, reservists and their spouses,
and whether services or programs provided by the federal government help offset these
effects, to the extent practicable.
5. An analysis of financial literacy services or programs the federal government (including
the SBA, the Department of Defense and the Department of Veterans Affairs) provides to
active duty service members, veterans, reservists and their spouses to help them improve
financial decision making and identify any areas for improving these services.
3
Gov’t. Accountability Office, Small Business Administration: Procedures for Reporting on Veteran-Owned
Businesses Need Improvement, (2023).
2
Thank you for your assistance with this request. If you have any questions, please contact the
Senate Small Business and Entrepreneurship Committee Majority and Minority Staff at 202-224-
5175.
Sincerely,
__________________________ __________________________
Jeanne Shaheen Joni K. Ernst
Chair Ranking Member
3
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