Rural American Recovery: the Role of Small Businesses and Entrepreneurship
Summary
The printed record of a hearing held July 13, 2021 before the House Committee on Small Business, published as Small Business Committee Document Number 117-024; the transcript records its Subcommittee on Underserved, Agricultural, and Rural Business Development meeting via Zoom. Chairman Jared Golden presided and says the SBA Office of Rural Affairs, first established in 1990, has been left largely vacant since 2005 and that Congress should give it a dedicated funding authorization. Representative Roger Williams, filling in as Ranking Member, cites inflation of 5.4 percent over the last 12 months and over 9.2 million job openings. The witnesses are the chief executive officer of the Rural Community Assistance Partnership, a Women's Business Center director at the Center for Rural Affairs, a senior vice president of CoBank, and the owner of Rangaire Manufacturing Company.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
RURAL AMERICAN RECOVERY: THE ROLE OF
SMALL BUSINESSES AND ENTREPRENEURSHIP
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JULY 13, 2021
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-024
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-125 WASHINGTON : 2021
-----------------------------------------------------------------------------------
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Jared Golden................................................ 1
Hon. Roger Williams.............................................. 3
WITNESSES
Mr. Nathan Ohle, Chief Executive Officer, Rural Community
Assistance Partnership, Washington, DC......................... 6
Ms. Jessica Campos, Women's Business Center Director, Center for
Rural Affairs, Lyons, NE....................................... 8
Mr. Brett Challenger, Senior Vice President of the Regional
Agribusiness Banking Group, CoBank, Greenwood Village, CO...... 9
Mr. Alan M. Crawford, Owner and President, Rangaire Manufacturing
Company, Cleburne, TX.......................................... 11
APPENDIX
Prepared Statements:
Mr. Nathan Ohle, Chief Executive Officer, Rural Community
Assistance Partnership, Washington, DC..................... 22
Ms. Jessica Campos, Women's Business Center Director, Center
for Rural Affairs, Lyons, NE............................... 27
Mr. Brett Challenger, Senior Vice President of the Regional
Agribusiness Banking Group, CoBank, Greenwood Village, CO.. 29
Mr. Alan M. Crawford, Owner and President, Rangaire
Manufacturing Company, Cleburne, TX........................ 36
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Main Street America.......................................... 39
National Association of Federally-Insured Credit Unions
(NAFCU).................................................... 42
RURAL AMERICAN RECOVERY: THE ROLE OF SMALL BUSINESSES AND
ENTREPRENEURSHIP
----------
TUESDAY, JULY 13, 2021
House of Representatives,
Committee on Small Business,
Subcommittee on Underserved,
Agricultural, and Rural Business Development,
Washington, DC.
The Subcommittee met, pursuant to call, at 12:59 p.m., via
Zoom, Hon. Jared Golden [chairman of the Subcommittee]
presiding.
Present: Representatives Golden, Delgado, and Williams.
Chairman GOLDEN. Good afternoon. I call this hearing to
order.
Without objection, the Chair is authorized to declare a
recess at any time.
I would like to begin first by thanking Representative
Williams for joining me today in the capacity of Ranking Member
for the Subcommittee, filling in for Congressman Hagedorn, who
I normally sit beside at all these hearings. I think it is okay
to say, given his public statements, that, you know, we are
thinking of him, the entire Congress, the entire Committee, and
I know staff as well want to send him our very best wishes. And
I will personally offer him all my prayers and very best wishes
[inaudible] soon, and all our best wishes for his health and
well-being.
And, Mr. Williams, thanks for joining us today.
First things first, I will point out a couple of
housekeeping issues. House and Committee rules and practices
continue to apply when we are having remote proceedings. This
means all members should expect to--or are expected to adhere
to the standing rules, including those around decorum, when
participating in remote events.
With that said, the technology we are using today requires
some small modifications to ensure that members can fully
participate in these proceedings. House regulations require
members to be visible through video connection throughout the
proceeding, so keep your cameras on. And if you have to
participate in another proceeding, please exit and log back in
later.
In the event a member encounters technical issues that
prevent you from being recognized for questioning, I will move
to the next available member of the same party and will
recognize that member at the next appropriate time spot.
Should a member's time be interrupted by technical issues--
hold on, that is just a repeat.
In the event that a witness loses their connectivity during
testimony or questioning, I will preserve their time as staff
work with them to try and fix the technical issue. We may need
to recess the proceedings to provide time for the witness to
reconnect.
And finally, remember to remain muted until you are
recognized in order to help minimize background noise. In
accordance with the rules, staff have been advised to mute
participants only when there is inadvertent background noise
that is disrupting the hearing.
Should a member wish to be recognized, they need to unmute
themselves and seek recognition at the appropriate time.
With that, I will provide an opening statement.
The health of the economy in rural communities is strongly
tied to the overall well-being of the American economy. Rural
areas hold the vast majority of our country's land and supply
the rest of the country with the food, water, and energy we
depend on.
And yet, as a Representative of one of the most rural
districts in the country, I have seen many examples of the way
rural communities are ignored by the Federal Government and
left out of the national political debate.
Even when Washington discusses rural America, rural
Americans themselves are provided little opportunity to give
their actual input. They are essentially often the subject of
debate rather than leading the debate themselves. As a result,
the Federal Government often makes half-hearted attempts to
spur economic development in rural communities.
Programs are targeted more towards urban and suburban
areas--where the money is--without much thought for how those
programs impact rural communities or could be changed to better
help rural business owners, like farmers, small-scale
manufacturers, fishermen, loggers here in Maine, and there are
many other examples all over the country.
The Office of Rural Affairs within the Small Business
Administration is a classic symbol of how the Federal
Government and Congress often fails in its commitment to rural
America. As a good friend of mine is known to say about
politics and government, too often when all is said and done,
more will be said than done.
The SBA Office of Rural Affairs was first established in
1990, during the first Bush administration, to provide
information and assistance to rural businesses. However, the
office has been left largely vacant since 2005.
When I arrived in Congress in 2019, I was upset to learn
that the office was dormant, and worked with a group of like-
minded members on this Committee to raise the issue with the
Trump administration. The administration was receptive and
became the first in nearly 15 years to devote resources to the
office.
Given that the office has been either empty or widely
under-resourced for years, it is no wonder that one of the
problems I hear most about SBA from rural small business owners
in my district is that they just don't know much about their
services, such as Small Business Development Centers or SCORE
partnership, or believe that their loans, SBA loans that is,
aren't competitive or come with too many bureaucratic strings
attached.
I was encouraged that the acting director of the office was
able to hire additional staff in 2020, thanks to funding from
the CARES Act. Congress should provide the office with a
dedicated funding authorization to build on what was
accomplished in 2019 and 2020, rather than fading away again to
leave rural businesses without an advocate within the SBA.
This office can and should play an important role in
connecting rural Americans to programs and services that can
help their businesses and subsequently help their communities.
It should also play a role in bringing feedback from rural
businesses back to the SBA headquarters, regionally and
nationally, so that it can make improvements to better serve
these important businesses.
I hope that today's hearing can help provide us with
feedback on how we can strengthen the Office of Rural Affairs
and other initiatives to support rural businesses. I see the
same value in the office that the Trump administration saw and
that members in this Committee in the last Congress saw. And I
believe that this work is long overdue and important to so many
communities across the country.
I look forward to working with my colleagues on this
Subcommittee to continue to ensure that rural communities get
the attention and support that they deserve.
I would now like to yield to Mr. Williams for his opening
statement.
Mr. WILLIAMS. Thank you, Mr. Chairman, Chairman Golden. I
want to thank you for allowing me to fill in for Ranking Member
Hagedorn, who we are all praying for as we sit here today.
Today's hearing is of the utmost importance as we are going
to be exploring the Nation's rural small businesses, how they
have fared under COVID-19, and what they face moving forward.
Despite their strong work ethic and dedication, America's
small businesses, entrepreneurs, and start-ups faced extreme
challenges dealing with COVID-19 and the State and local
shutdown measures that followed.
Without having the ability to make safe, sound, and prudent
business decisions, mandates were handed down that caused
businesses to change their operations or even close.
Thankfully, Congress worked with former President Trump to
enact and activate a number of critically important small
business relief programs, including the quick-moving Paycheck
Protection Program.
These relief programs, combined with States opening up,
started a sequence of events that provided small businesses
with the opportunity to look toward recovery. Unfortunately,
not all States have maintained the same speed of reopening.
However, in my State of Texas, we had the benefit of opening up
quickly, and we are seeing results as compared to those States
that have stayed closed for a longer period of time.
Moreover, as the country opens back up, small businesses
are now faced with a set of difficult realities. While
historically operating on thin margins, America's Main Street
is facing a rising new threat of inflation.
The price of everything from gasoline to products that we
use every day are climbing at the fastest pace we have seen in
almost a decade. And just this morning, the government
published new CPI numbers that shows inflation has increased to
5.4 percent over the last 12 months.
Additionally, labor and workforce issues continue to
challenge business owners as they search for employees. And
according to the Bureau of Labor Statistics, there are over 9.2
million job openings across the Nation, and, unfortunately,
help wanted signs are becoming all too familiar. And I can tell
you that we see that in my business every day.
On top of inflation and not being able to find workers, the
Biden administration is threatening the Nation's best job
creators with tax increases. Now, whether it is increases to
the individual's tax rate, the corporate rate, or increasing
capital gains tax, these changes will hurt small business
directly and indirectly and have lasting effects for small
businesses in my State of Texas, to Minnesota and beyond coast
to coast.
Instead of promoting a pro-growth environment, like we
should be, to help small businesses recover quickly from the
past year and a half, this administration is putting up
roadblocks and hurdles and making small business owners very
defensive.
Over the past year, this Committee, and especially this
Subcommittee, have put a focus on strengthening some of the
Nation's COVID programs for rural small businesses. We have
found common ground on rural issues in the past, and I look
forward to continuing to work with my colleagues to find
solutions for all of our rural small businesses.
And as Members of Congress, we must work together to bring
back the pro-growth environment that the Nation experienced
prior to COVID-19, an environment we had not seen in many, many
years. I hadn't seen it in the 51 years I have been in
business.
I look forward to today's conversation. I especially want
to thank our witnesses for being with us. Instead of running
their shops today, they are with us to discuss these important
topics. I thank you for joining us, and I look forward to
hearing from each one of you.
And, Mr. Chairman, again, thank you, and I yield my time
back.
Chairman GOLDEN. Thank you, Mr. Williams.
Take a quick moment here to explain how the 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. And,
with that, we will introduce our witnesses.
Our first witness is Mr. Nathan Ohle, the CEO of the Rural
Community Assistance Partnership, a national nonprofit focused
on economic development for rural communities, assisting rural
communities across the country as they work to build capacity
and resiliency.
Mr. Ohle has been a leader in economic development for more
than a decade, serving as senior adviser at the U.S. Economic
Development Administration under the Obama administration and
the White House Rural Council. Thank you for joining us today.
Our second witness is Ms. Jessica Campos of the Center for
Rural Affairs and director of the Women's Business Center. She
coordinates the Rural Enterprise Assistance Project.
Ms. Campos is focused on promoting the growth of women and
minority-owned small businesses through programs that provide
training, technical assistance, and access to credit and
capital. She has a background in banking and finance, including
more than a decade of experience providing financial education
to consumers, small business owners, and their employees. Thank
you for joining us today.
Our third witness is Mr. Brett Challenger, senior vice
president of CoBank, one of the largest providers of credit to
the U.S. rural economy. Mr. Challenger heads up CoBank's
Regional Agribusiness Banking Group, and also has experience
with CoBank's energy and water divisions.
Additionally, Mr. Challenger led CoBank's efforts with SBA
to provide PPP loans to customers, which involved developing
the entire program from the ground up at CoBank. Thank you for
joining us today as well.
And now I will recognize Mr. Williams to introduce his
witness.
Mr. WILLIAMS. Thank you, Ranking Member and Chairman
Golden, for extending me this opportunity to introduce one of
our witnesses, and I am proud to introduce Mr. Alan Crawford.
Mr. Crawford is the present owner of Rangaire Manufacturing
Company in Cleburne, Texas, which is located right in the
middle of my District 25 here in Texas. Rangaire Manufacturing
Company assembles cabinetry products for homes across the
Nation, including our military. The business started in 1948
and was purchased by Mr. Crawford when he was an employee of
the company in 2014. Prior to purchasing the Rangaire
Manufacturing Company, he was in engineering and operations
management for the business. He has truly seen this business
from all sides.
Mr. Crawford has been able to grow the company from
approximately 55 workers to just under one hundred today. With
a degree in industrial engineering and an MBA from Texas Tech
University, Mr. Crawford has had an extensive career working in
manufacturing, including expertise and experience with metal
fabrication, semiconductors, and telecom.
Now, he knows I am a TC Horned Frog; however, I can
appreciate Texas Tech University and all of the other great
schools and universities in my home State of Texas and people
that they put out and help us with our economy.
Mr. Crawford, I can't thank you enough for joining us
today. You and I are friends, and I have been to your office
and seen your facility. We look forward to hearing more about
your small business experience, how your company was impacted
by COVID-19, and the discussion on how Congress can assist in
the recovery of the rural small businesses. Again, thank you
for taking time out of your busy day to come educate all of us
on this Subcommittee.
Mr. Chairman, I turn my time back.
Chairman GOLDEN. Thank you very much.
We will now recognize our witnesses for 5 minutes. Mr.
Ohle, we will start with you. You are recognized for 5 minutes.
STATEMENTS OF MR. NATHAN OHLE, CHIEF EXECUTIVE OFFICER, RURAL
COMMUNITY ASSISTANCE PARTNERSHIP, WASHINGTON, DC; MS. JESSICA
CAMPOS, WOMEN'S BUSINESS CENTER DIRECTOR, CENTER FOR RURAL
AFFAIRS, LYONS, NE; MR. BRETT CHALLENGER, SENIOR VICE PRESIDENT
OF THE REGIONAL AGRIBUSINESS BANKING GROUP, COBANK, GREENWOOD
VILLAGE, CO; AND MR. ALAN M. CRAWFORD, OWNER AND PRESIDENT,
RANGAIRE MANUFACTURING COMPANY, CLEBURNE, TX
STATEMENT OF NATHAN OHLE
Mr. OHLE. Thank you, Chairman Golden, Congressman Williams,
and members of the Subcommittee, for this opportunity to
discuss the importance of small business and entrepreneurship
in supporting rural communities, and how the SBA can help small
businesses and entrepreneurs thrive in rural areas.
My name is Nathan Ohle, and I am the CEO of the Rural
Community Assistance Partnership. RCAP is a national network of
nonprofit partners, providing technical assistance, training,
and resources to rural and Tribal communities in every State,
territory, and on Tribal lands.
Through our regional partners, more than 300 technical
assistance providers build capacity that strengthens rural
economies. Our approach is grounded in long-term trusted
relationships with thousands of rural communities across the
country.
Last year, RCAP served more than 3.4 million rural and
Tribal residents in more than 2,000 rural communities with an
average population of 1,500 and a median household income of
half the national average. In addition, with people of color
representing 21 percent of the rural population and 83 percent
of rural population growth, we support a rural America that is
increasingly diverse.
The talent, innovation, and resiliency of America's rural
areas will play a central role in the future of the U.S.
economy. COVID-19 has further exacerbated the challenges rural
communities face as they have not fully recovered yet from the
2008 recession.
Now is the time to drive real and sustained change. Small
business growth is the best way to reinvigorate the economy,
especially in rural areas. The days of chasing after one big
manufacturer are gone, replaced by a growing need to drive
small business growth that intentionally embeds wealth locally,
lifting up regions in a more equitable fashion.
According to a July 2020 survey from NPR, over 40 percent
of rural households reported having household members that have
been furloughed, lost a job, or had wages or hours reduced as a
result of COVID. That same report said that over 30 percent of
rural households had reported using all or most of their
savings during COVID-19, including over 80 percent of Black and
Latino households.
Small businesses are the biggest drivers of economic growth
in the United States, employing 47 percent of the U.S.
workforce and generating two-thirds of new jobs. In rural
areas, people are more likely to be small business owners, and
these businesses tend to be more resilient than in larger
communities.
The SBA features a portfolio of small business lending and
grant programs. Given that small businesses and rural
communities are essential to the economic recovery efforts, an
intentional focus on these programs is necessary to ensure that
the smallest and lowest-resourced communities are not left
behind.
I want to thank this Committee for all that it has done to
support rural small businesses, in particular creating the
Paycheck Protection Program. After significant advocacy efforts
to help fill a major gap in rural communities, community
development financial institutions, or CDFIs, were granted the
opportunity to become PPP lenders. Two of RCAP's regional
partners--RCAC and Communities Unlimited--participated in PPP
as CDFIs.
CDFIs provide loans to small businesses, often pairing
funding with technical assistance, helping to build capacity,
and ensuring that those that need assistance the most receive
it.
For example, when Communities Unlimited began processing
PPP loans, they were intentional about reaching out to small-
scale growers and small business owners in very rural
communities. They immediately reached out to the Mileston
Cooperative in Mississippi to connect these Black-owned, small-
scale growers to critical funding for their farms during the
pandemic. More than 10 members of the Mileston Cooperative were
approved for loans in the PPP, giving them the critical funding
required to keep their farms during the pandemic. In total,
RCAC and CU made 597 loans, totaling almost $29 million.
There is still a great need, however, for additional PPP
funds for rural small businesses, as many got left behind in
the final days of the program. This included more than 50
applications, totaling almost $2 million, from RCAC and CU
alone, including many minority-owned businesses on the brink of
closing their doors.
Despite SBA's many successes, a substantial number of rural
small businesses have difficulty accessing SBA programs. With
help from experienced technical assistance providers, rural and
Tribal small businesses can better access and manage Federal
funds. Technical assistance plays a vital role in ensuring that
programs serve the vulnerable small businesses they were
designed to support. The newly created Community Navigator
Pilot Program addresses these issues and should be made
permanent. This program supplies grants to organizations with
deep ties to rural communities to engage trusted, culturally
knowledgeable field staff to conduct technical assistance and
outreach.
Technical assistance is key to fostering strong financial
management which, in turn, mitigates the risk for capital
investments, unlocking capital badly needed in these
communities.
In closing, the services provided through SBA deliver
critical assistance to small and disadvantaged communities
where it is most needed, especially as our country continues to
respond to the COVID-19 pandemic. We must use the pandemic to
put a stake in the ground, to start thinking innovatively about
how we address the systemic and long-term inequities that have
led to rural America falling behind its urban counterparts. If
we don't, we may never make up that gap.
I thank the Committee for inviting me to testify, and look
forward to working with you and your colleagues on these
important issues.
Chairman GOLDEN. Thank you very much.
We will now recognize Ms. Campos for 5 minutes.
STATEMENT OF JESSICA CAMPOS
Ms. CAMPOS. Good afternoon, and thank you for the
opportunity to testify today. My name is Jessica Campos, and I
am the Women's Business Center director for the Center for
Rural Affairs. The Center for Rural Affairs has been a leading
force engaging people to create a better rural future since
1973.
The Center's history of innovative, insightful, and
effective work for rural America provides a solid foundation
from which we continue to build.
We became the host organization for the Women's Business
Center, a service funded by the SBA's Office of Women's
Business Ownership in 2001, and this entity has functioned as
the primary educational and technical assistance provider for
the Center's small business development program ever since.
Demand for the services we provide continues to grow. In
the past 3 years alone, 2,795 aspiring or existing business
owners have completed CFRA technical assistant programs. This
has led to 164 business starts, 327 loans, and 557 jobs created
or retained. During this time, CFRA staff provided 20,342 hours
of business counseling over 16,693 sessions.
Small business development is so important in rural
communities. Next to agriculture, small business is the most
critical economic engine in Nebraska. According to a 2018 SBA
report, 47 percent of our working population work for a small
business or are self-employed.
Microbusiness development is especially important in rural
areas where access to employment opportunities are limited and
where jobs pay less. For many people, microbusinesses provide
all or most of their household income. Self-employment provides
up to 90 percent of all jobs in many rural Nebraska counties.
Our target market is disadvantaged people living in rural
Nebraska. This includes women and families who earn low to
moderate income and Latinos who currently run or want to start
a small business.
To maximize client success, our Women's Business Center
operates as a center without walls, which means we go to where
the client is, both physically and educationally. We provide
many services at the business location, and we meet at the
client's level of understanding. We offer services both online
and in person in evolving communities and designated
opportunity zones.
In order to help us succeed, the Committee can help
facilitate this important work by supporting three key policy
changes.
First, permanently waive the 50 percent limit on pre- and
post-loan technical assistant grant expenses for prospective
borrowers. Naturally, providing the exact same amount of time
on TA after a loan approval is not necessary when pre-loan
training and education is effective.
Next, it is important to fully fund the Women's Business
Center program at $30 million in core funding, provide an
additional $48 million COVID-related appropriation, and waive
the match requirement until fiscal year of 2023. The increase
in core funding for the WBC program would support the increase
in clientele and services we are currently experiencing.
Separately, the additional COVID relief-related funding and
waived match requirement would extend the support provided in
statute to help WBCs over the past year.
With new business starts at an all-time high, demand for
our services will grow, and these priorities would enable WBCs
to continue the efforts we have adopted over the past year into
fiscal year 2023, to support entrepreneurs in need.
Finally, we encourage lawmakers to support funding for the
Office of Rural Affairs at SBA. The number of Federal programs
available to small businesses has increased over the past 18
months. This requires development of new rules and regulations
on a frequent basis.
We rely on SBA.gov for these announcements, but simply
placing new information on a website is not enough for those of
us who spend so much time on the road and meeting with clients.
Having a consistent, rural-focused resource at SBA can help
ensure we know where to go with any questions or concerns.
To conclude, I would like to thank you, and we appreciate
the opportunity to share our perspective, and look forward to
working with members of this Committee to develop and institute
needed changes. Once again, thank you.
Chairman GOLDEN. Thank you.
Next, Mr. Challenger, we will hear from you for 5 minutes.
STATEMENT OF BRETT CHALLENGER
Mr. CHALLENGER. Good afternoon. Thank you for calling this
hearing, and it is a privilege to be here. I am Brett
Challenger. I am the senior vice president of our Regional
Agribusiness Banking Group for CoBank in Greenwood Village,
Colorado. The bank provides loans, leases, export financing,
and other financial services to agribusiness and rural power,
water, and communications providers in all 50 States.
CoBank is a proud member of the Farm Credit System, and
also provides wholesale loans and other financial services to
20 affiliated Farm Credit associations, serving more than
75,000 farmers, ranchers, and other rural borrowers in 23
States.
We are immensely proud of the value and customer service we
provide our customer owners across rural America. Financial
strength and stability are critical to fulfill our mission to
serve rural communities.
Organized as a cooperative, CoBank's earnings go back
directly to our customers, not outside shareholders. Over the
past 5 years, CoBank has distributed $3.27 billion in patronage
back to our customers across rural America, highlighting the
enduring value of the cooperative model.
March 2020 brought tremendous uncertainty to CoBank. Our
board and management made decisions enhancing our ability to
respond to the economic challenges COVID-19 brought to our
customers.
In April of 2020, CoBank and 52 other Farm Credit
institutions mobilized to deliver Paycheck Protection Program
loans. While a few Farm Credit associations had previously been
Small Business Administration lenders, most, including CoBank,
had not.
I was fortunate to lead CoBank's team to stand up the
delivery mechanism for this economic lifeline. CoBank's
employees proceeded to help 318 customers obtain more than $418
million in PPP loans. Systemwide, Farm Credit delivered $2.29
billion in 51,760 PPP loans to customers across the country,
saving well over 126,000 jobs in rural America.
When we experienced challenges, the Office of Rural Affairs
answered hundreds of questions via email and phone calls for
us. They hosted two webinars for our customers to help navigate
the loan application and forgiveness documentation. The staff
went above and beyond while we at CoBank were delivering a
program brand-new to us and also partnering with an agency
which we had no familiarity with.
Without the Office of Rural Affairs, we would not have been
as successful in executing PPP loans or navigating our
customers' forgiveness applications through the SBA process.
A cooperative business model can be an answer to helping
businesses get started. Lack of interested investors in rural
businesses is not a new concept at CoBank. Over the last
several years, we have developed and created a solution to
address capital needs of small and emerging agriculture
cooperatives.
CoBank, like all institutions in the Farm Credit system, is
closely regulated by the Farm Credit Administration, an
independent Federal financial regulatory agency.
Businesses in the early stage of growth do not
traditionally meet underwriting guidelines. To address this,
the CoBank board proposed a solution to FCA, creating a
separate risk pool designed to provide more flexible financing
for these cooperatives.
FCA approved the proposal, and Co-op Start was launched in
2012. Co-op Start provides flexible financing, up to $250,000,
to early stage growth agriculture co-ops. Today, Co-op Start
has been used by 23 different small cooperatives in 9 States,
with a total of $2.7 million in commitments and loans and
leases.
CoBank is committed to fostering the creation of new
cooperatives through our support of numerous education and
technical assistant programs, but co-ops are not the only
answer. CoBank understands that rural entrepreneurs need
dependable sources of capital to grow their businesses. Senior
debt may be available, but equity in junior capital remain more
difficult to source. Few rural focused investment funds exist
beyond those that focus on acquiring farmland.
One type of equity investment that CoBank has made is with
rural business investment companies licensed by USDA. Since
2013, CoBank has committed $154.5 million to 10 private equity
funds, funding over 70 rural businesses across the country.
We are strong supporters of the Rural Capital Access Act
introduced by Senators Thune, Shaheen, and Fischer. This
legislation encourages small business investment companies to
invest in rural businesses while also allowing RBICs who do not
currently receive Federal appropriation to access leftover
funds from the SBIC program.
We think collaboration is important in rural America. And
at a time when rural communities are doing their best to
recover from COVID-19 pandemic, we encourage more attention and
investment into their longevity and success.
I want to express my strong support for the SBA Office of
Rural Affairs and thank them for their support through our
efforts through the PPP. Thank you.
Chairman GOLDEN. Thank you.
And, Mr. Crawford, we will have you wrap up the opening
part here with your 5 minutes.
STATEMENT OF ALAN M. CRAWFORD
Mr. CRAWFORD. Thank you.
Good afternoon, and thank you for taking the time to listen
to the voice of small business.
Rangaire Manufacturing Company has been in business since
1948, and is located in Cleburne, Texas, a small community of
about 30,000 people, just south of Dallas-Ft. Worth. We are a
classical manufacturing facility where we punch, form, paint,
and assemble steel and plastic products for the residential
housing market.
It has endured many changes in ownership, product lines,
and economic challenges. During the economic turmoil and
housing crisis of 2007 and 2008, the parent company of Rangaire
consolidated many of their operations into our plant in
Cleburne. I ran the operation for them when we transitioned
from manufacturing ventilation products to medicine cabinets.
When the product line continued to struggle, I purchased
the business from my employer, and in January of 2014, started
my entrepreneurial dream of owning and operating a
manufacturing business.
My parents were both public school teachers. My father died
when I was in high school, and my mother supported our
household the best she could. With financial help from family,
bank borrowings, savings, lots of hard work, and mostly God's
providential hand, my employees and I have been able to make
this opportunity grow and eke out a profit. At the time, we
saved about 55 jobs.
Today, we make products that support single family,
multifamily, and military housing all around the world. We have
more than 300 customers in all 50 States and Canada. Our sales
have grown more than 30 percent. We have just under a hundred
employees.
The savings from the 2017 tax cuts allowed us to invest in
the business which contributed to this growth until COVID hit.
While we took a significant hit to sales early in the pandemic,
we were able to mitigate the impact to the business and ended
2020 with sales essentially flat from 2019.
We utilized PPP funds to maintain our workforce, pay
bonuses, and extend paid leave so that our employees could take
the time to deal with COVID in their own personal way.
Lately, the current economic environment has proved to be
even more challenging than the pandemic. Our product line is
not very glamourous, has low margins, and is very fragmented
with lots of competition. Our greatest competitive threat is
from low-cost foreign manufacturers or large domestic producers
that have a much broader product offering and are better
capitalized.
Tariffs imposed on foreign competitors have helped us
immensely, and delays in ocean freight and other logistical
problems have driven even greater demand for our products. It
is a good problem to have.
However, the surge in commodity pricing has been nearly
impossible to get in front of. Our material components, such as
steel, corrugated, and plastic, have seen cost increases from
15 to 40 percent. We don't enjoy much pricing power on our
products, and, consequently, our margins and cash flow are
severely challenged in spite of the growth in top-line revenue.
Other concerns arising this year have been supply
shortages, longer lead times, and difficulty in finding labor.
Labor has been a significant challenge in both finding adequate
participants and meeting demands for higher wages. We are
compelled to work overtime, which drives up labor cost and
decreases productivity. These challenges have made it difficult
to meet our customers' expectations, and we risk losing them to
other suppliers. Unlike businesses with proprietary products,
our customers do have a choice.
Looming large is the uncertain but promised tax increases
from the current administration. I am concerned about losing
the benefit of the bonus depreciation for capital investments.
Texas' extraordinary population migration is causing real
estate values to explode. The real estate assessed value on my
business property has more than doubled, another unplanned tax
hit.
We continue to deal with the burden from the ACA, with
increasing costs of mandated health insurance. This regulation
is a significant burden to a company the size of mine as we are
just over the threshold to require company-furnished health
insurance but still so small that these costs are a major blow
to our bottom line.
I absolutely love being a small business owner, but I have
to say, I lose a lot of sleep when thinking about making
payroll, trying to mitigate cost increases and margin pressure.
The impact of COVID has proven to me that businesses can
survive and even thrive if we are allowed to pivot and
innovatively solve problems. The sad truth over the last year
has been that businesses that have failed, in most cases, is
not a result of their own decisions but on edicts and mandates
from local, State, and Federal Governments.
Thank you again for your time today.
Chairman GOLDEN. Thank you very much.
We will now go ahead and move to Q&A. I will go ahead and
start things off.
Mr. Challenger, I wanted to ask you first a little bit. You
talked about how the Office of Rural Affairs helped you as you
were working to stand up something completely new at CoBank,
which was getting involved in SBA lending and specifically how
to help your clients accessing the Paycheck Protection Program.
How did you find out about the Office of Rural Affairs? Did
they come to you? Did you reach out to them? How did that
relationship start?
Mr. CHALLENGER. Thanks for the question. It was such a
fast-moving process, and if you remember, when the PPP program
was started, when it first opened, we weren't a licensed lender
yet. We were not an SBA lender. We were still trying to get our
license. So through that effort and pushing to get our license,
we made contact with several people through SBA and were
connected with the Office of Rural Affairs and put in touch
with them.
Chairman GOLDEN. That is very helpful. Thank you. And most
of that was--I mean, were you working directly with people over
the phone or by email? You mentioned they did a couple of
webinars kind of training to help you and your staff know how
to access these loans?
Mr. CHALLENGER. Yes. Thank you for the follow-on question.
Yes, the staff there, we worked with, Jeff, Renee, and Eric.
They were on the phone with us and answered, I don't know, 200-
plus emails between me and my colleagues, just navigating
either the SBA system or the rules of the PPP program.
They also hosted, with our help, two webinars for over 600
of our customers. Now, we didn't make PPP loans to all those
customers, but they were also customers of ours. So they may
have gotten a PPP loan through another financial institution,
but the Office of Rural Affairs was instrumental in helping all
of our customers, those 600.
They followed up with--if they didn't know the answer to a
question, they followed up within 24 hours and got that
assistance from a technical perspective to our customers.
Chairman GOLDEN. [Inaudible] I guess just another followup.
Setting aside the PPP loan program, as you look at CoBank's
work with your clients going forward, how might the Office of
Rural Affairs continue to be helpful in your mission within the
Small Business Administration?
Mr. CHALLENGER. Yes, thank you for the question. The health
of rural communities is really important, and our efforts are
somewhat limited and our scope is limited. And so when we bring
partners, if you will, to the table, like the SBA and the
Office of Rural Affairs, the--I guess the ability to deliver
value to those constituents in rural communities just continues
to increase.
Our knowledge through the PPP program, our knowledge of
SBA, and now our contacts with the Office of Rural Affairs will
just enhance the ability to do that.
Chairman GOLDEN. Mr. Ohle, you talked a little bit about
technical assistance partners. Can you maybe spend a little bit
of time talking about the specific examples of technical
assistance that has been helpful to rural businesses? You know,
maybe you could also even just talk about this in the context
of PPP and, you know, if you could just add in how can the
Office of Rural Affairs help with this?
Mr. OHLE. Yes. Technical assistance can range from a whole
variety of needs for rural small businesses, anything from
business planning to marketing, to identifying how to use
online marketplaces to better sell and produce products.
For us, through PPP, our two CDFIs provide direct technical
assistance alongside the funding that they are providing so
that they are ensuring those small businesses have the capacity
and certainly can sustain operations moving forward. And so for
us, a huge piece of that puzzle is pairing funding alongside
technical assistance.
And the Office of Rural Affairs, we reached out to them as
well when CDFIs were not qualified as PPP lenders to help
advocate for that specific policy. That change was made, which
obviously helped rural and Tribal areas across the country to
access the PPP funds in a much more expedited process.
Chairman GOLDEN. Thank you very much.
Just seeing that I have only got about 20 seconds left, I
will go ahead and reserve further questions for the panel
later. I will now recognize Mr. Williams for 5 minutes.
Mr. WILLIAMS. Thank you, Mr. Chairman.
Today's hearing is all about small business recovery, which
is why I find ironic since my colleagues on the left are also
pushing for tax policies that will totally harm and hurt Main
Street America.
The Biden administration has proposed tax hikes to pay for
the American Families Plan, to advance the left's climate and
social agenda, which will ultimately be financed on the backs
of small business.
Under the proposal, businesses organized as C corporations
would see a tax increase from 21 to 28 percent. That is a lot.
And considering there are roughly 1.4 million small businesses
organized as C corps, and they employ almost 13 million
Americans, this dramatic increase will hurt small businesses
just as they begin to recover from COVID-19 and it will cost
jobs.
The American Families Plan would also increase the
individual tax rate, which also hurts small businesses who are
structured as pass-through entities. So if we want to help
small businesses recover, we cannot--I repeat--cannot be
increasing taxes.
So, Mr. Crawford, can you talk about the long-term
consequences on a small business like yours, and even mine, in
the manufacturing sector, if these tax hikes will be signed
into law? And do you agree that tax cuts and less regulations--
that is the fix. We can talk all day long about this, but that
is the fix to save rural America and small business.
Mr. CRAWFORD. I think what most people forget and don't
hear in the news is that most small businesses have very, very
thin margins. And when you are talking about a 2 or 3 percent
net profit margin on a business, any increase in an income tax,
coupled with all the other taxes that may come in--I mentioned
property taxes--that impact local business, small business as
well, that can translate to 30, 40, or 50 percent of your final
net income, which is a big blow to a small business.
So we see in the news of companies making a ton of money,
but we never hear about the private businesses because that
information is just not published. But it is a huge impact and
a big fear of just any increase in that tax rate can be a huge
blow to a small business.
Mr. WILLIAMS. Just by talking about President Biden's
potential tax hike, small business owners are on the defense.
With looming threats of nearly doubling the capital gains tax,
I have already spoken to businesses who are changing their
operations and putting off investments because they are unsure
what the Tax Code might look like in a year.
Now, these are ridiculous increases--there is no question
about it--and these increases will reduce long-term investments
since there will not be the same profit incentive for those
people willing to take a risk and bet they will be rewarded in
the future. Our Tax Code should focus on getting people to
invest, not to be penalized for their success.
So, Mr. Crawford, have any of your day-to-day business
decisions already changed due to the uncertainty and concerns
that tax hikes, like we have talked about, may come to
fruition?
Mr. CRAWFORD. It is incredible that you ask that question.
We have actually been reviewing some capital purchases over the
last 3 or 4 months that are significant purchases for us to
invest in our business.
We did that last year, made a significant investment in
some equipment. We wanted to do the same thing this year, but
frankly, with the state of the business, our cash flow impact,
the concern over increases in tax rates coming up probably
sooner rather than later, has put all of that on pause.
Our reaction to that is, we need to hold on to cash. We
need to be concerned about just margins in particular. And so
the risk involved with investing in capital in an uncertain
future is just too great right now. It is more of a wait-and-
see.
Mr. WILLIAMS. Yeah. You are playing defense just on what
you hear.
Real quick while my time is going, can you discuss the
workforce issues that you have experienced once the pandemic
began to subside?
I mean, here we are paying people to sit on the couch,
paying people not to work. In Texas, as you know, we have
stopped that and we have seen some movement. But why do you
believe small businesses are still struggling to find workers?
Mr. CRAWFORD. I do think it is a reaction to the demand
that we have seen, where our demand for employees has grown
significantly, but there is an awful lot of people out there
that aren't ready, for whatever reason, or don't want to come
back to work.
And I do believe that part of that is they have funding to
not work, whether that is extended unemployment benefits. We
are about to launch extended childcare credits. That is going
to be a significant cash flow to people that is in our
demographic of people we hire for our jobs.
And I believe that the difficulty is, there is just not a
pool of available workers that are willing and ready to come
back to work.
Mr. WILLIAMS. Well, thank you.
And my time is up, Mr. Chairman. I yield back.
Chairman GOLDEN. I appreciate that.
Do we have any other members on the line right now? I
noticed a few. They look like they might have dropped off.
All right. Well, I am going to ask a few more questions
then.
Mr. Crawford, actually I was just listening to your
testimony, wanted to ask--you used the Paycheck Protection
Program. Did you end up using a lender that you had a
preexisting relationship with or did you end up going to a new
lender?
Mr. CRAWFORD. I did utilize that program, and it was with
an existing lender, which was a large regional bank.
Chairman GOLDEN. Do you have--I mean, I know that that was
a really successful program and one that was really critical to
maintaining staffing for a lot of businesses, including your
own. I am sure you were appreciative of that.
In general, do you have any feedback, as a business owner,
about the program? Was it accessible and easy? Was it at times
difficult as you were going through the application process,
trying to figure out the rules?
I know Congress kept changing the guidelines, and then, of
course, you had to look at forgiveness. And I don't even know
the status of your own loan, has it been forgiven or not. You
may not want to get into that. But any feedback for us in
general about how that went?
Mr. CRAWFORD. It was very frustrating, to be truthful. I
was in the first wave of it, so there was an extremely high
amount of demand for that, and so there was a time-critical
element to try to get all of your application in. And the fact
that the rules kept changing, the interpretation kept changing,
it was really a stressful moment of were the funds going to be
available by the time we could figure out how to do the
application and get that submitted and get it approved.
So, yeah, it turned out to be a good program, but getting
there was quite a challenge.
Chairman GOLDEN. Yeah. It is very stressful, I am sure,
especially you are just, you know, wondering how beneficial is
this going to be at the end of the day and is it going to
actually help me keep these people on the payroll.
So did you find that your lender was able to help you as
all these changes and guidelines were going on and advise you?
Did you have to figure it out, you know, kind of put in your
own time into that, or, you know, who did you depend on to help
you through that process?
Mr. CRAWFORD. As it turned out, the bank was--had about as
difficult of a time. You know, they were trying to navigate the
rules for them from the lender perspective. And so, honestly,
it was such a large bank that I didn't get a lot of hand-
holding through that process and had to answer the questions
mostly on my own.
Chairman GOLDEN. Yeah. And I am sure [inaudible]. I am glad
to hear that it ultimately worked out in a good way.
I am not, you know, thoroughly familiar with Texas--
although I am going to be doing a visit to Texas with one of my
colleagues in a bipartisan exchange program. He is going to
come to me, and I will come to Texas later on. But I think that
won't be till sometime next year.
But I see that you are outside of the Dallas-Ft. Worth
metro area. I think there is a Small Business Development
Center, a partner with the SBA, about an hour away from you.
Have you ever heard of them or worked with them at all?
Mr. CRAWFORD. I have heard of that group several years ago,
but I have not personally worked with them.
Chairman GOLDEN. Yeah. And anything through like the USDA
and some of the programs they have for small manufacturers?
Mr. CRAWFORD. No, nothing with the USDA.
Chairman GOLDEN. Just curious.
You know, one of the things you said that really got my
attention, here in Maine, the Small Business Development
Centers worked with a lot of small business owners at the
beginning of the pandemic to help them pivot. You know, they
said, jeez, you know, maybe if your whole product line is
getting shut down, maybe we can pivot you into, you know,
something different here and, you know, try and make the--you
know, make something good out of a bad situation, which is, you
know, I think at the heart of what you were saying about
entrepreneurs being unleashed to have the flexibility to make a
change and survive.
But it certainly, I think, was helpful for them to have a
little bit of assistance in that. Sometimes having another--you
know, someone who has run a business in the past, you know, to
step in and just help you with some business counseling can
help you. But that is kind of what is at the heart of the SBDC
program, but also when we are talking about the Office of Rural
Affairs today.
Could you see yourself ever using a program like that that
is, you know, free to you through the SBA, or in general, you
know, do you think that you got all the capacity you need in-
house?
Mr. CRAWFORD. Well, I would certainly say that we don't
have all the capacity we need. I am constantly looking for
input, sources of information to improve my business operation.
So I would definitely consider any of the sources that are
available to us to improve our operations.
Chairman GOLDEN. Well, thank you for that. I appreciate it.
Mr. Williams, do you want to ask any follow-up questions? I
can give you another 5 minutes.
Mr. WILLIAMS. Yes. Thank you, Mr. Chairman.
I would ask Ms. Campos this just kind of generically
speaking. Ms. Campos, I am a business owner. I employ hundreds
of people down here in Texas, and been in business 51 years.
And I appreciate what you are doing. But do you agree with me
and many--and most small business owners that when we talk
about these tax increases, it is detrimental to small
businesses that are wanting to get started again, that tax cuts
really put more money in the hands of these small business
owners so they have rainy-day money, as we have heard Mr.
Crawford talk about? Rather than talking about tax increases,
tax cuts still work the best.
Ms. CAMPOS. I would like to say, in working with small
businesses, that is an issue that we do come along every day. I
think taxes are always an issue, regardless, to every business
owner. But I would have to agree with the overall----
Mr. WILLIAMS. Okay. I think it is normal.
Ms. CAMPOS. Yeah.
Mr. WILLIAMS. If we have more money to these businesses,
the more things we can do.
Ms. CAMPOS. Absolutely.
Mr. WILLIAMS. Mr. Crawford, you and I know there are a lot
of us face rising costs every single day and price pressures
because you operate on a thin margin, as I do--you have talked
about that--in my business. What tools do you feel like you
have at your disposal to react to these pressures from price
increases and, quite frankly, inflation that we see?
Mr. CRAWFORD. As a small business owner, it is a little--we
really don't have a lot of tools to leverage against big
suppliers. We generally have to take what they tell us, because
we are not big enough to really leverage our cost power and
pricing power with our vendors. So, really, our only reaction
is to either cut our costs in other ways, which is----
Mr. WILLIAMS. Right.
Mr. CRAWFORD.--maybe labor costs or other costs, and then
try to pass that on to our customers with price increases.
Mr. WILLIAMS. Lots of times, you and I know, you can't pass
it to the customer, and you can only cut expenses so much to
make a profit. So that is why--that is why the tax cuts we had
in 2016 really worked, enabled people to take risks and get
rewarded.
And I want to say this to everybody, and certainly the
Chairman, about the SBA. You know, my goal is, I want the SBA
to be the small business provider for small business, what they
are, and I hope down the road we can begin to do some things
together that will let the SBA think more like a small business
owner rather than a government employee. And I think that will
help our small business people too.
And I would just say this in closing, Mr. Challenger, I am
one of your customers. I am in the cattle business back here in
Texas. And the PPP program, at the end of the day, worked.
There was some confusion in the beginning, but I think all of
us would agree that the PPP program through Treasury allowed us
to get a lot of money out because I don't know another system
of banking or credit union system that anywhere in the world
could have done what they did.
So it did work, but we don't want people to rely on
government assistance. That is why we need to get back to
cutting taxes and let small business create their own cash
flow.
With that in mind, Mr. Chairman, I yield my time back to
you.
Chairman GOLDEN. I think just to close things up with the
panel and just think about what Mr. Williams just had to say,
talking about the SBA really having a focus on the small
business owner, not just from a lending perspective, but some
of these other great programs we have, from Small Business
Development Centers and Women's Business Centers and an office
like the Office of Rural Affairs, which is really the subject
of the hearing today, is how can we make sure that the Office
of Rural Affairs can be there to be a voice and an advocate for
small businesses but, in particular, small businesses residing
in rural areas.
I guess I will just ask, how do each of you--and some of
you have more experience than others with the SBA--but how do
each of you feel that the Office of Rural Affairs could be
useful to you and to your clients, given your experiences with
them or just, you know, given your experiences in general as a
business owner?
I think I will start with Mr. Challenger, and then we can
go to Mr. Ohle, Ms. Campos, and then Mr. Crawford, if you have
any closing thoughts on it.
I will start with you, Mr. Challenger, because I know you
have actually had a pretty active interaction so far with staff
at the Office of Rural Affairs.
Mr. CHALLENGER. Yes, thank you for the question. My
response is going to be a--have a couple elements to it. I
think that the SBA brings one of the tools, if you will, in the
toolbox to small businesses, whether they be rural or urban. I
think particularly in rural communities, like Ms. Campos has
expressed, they need technical assistance and they need
additional attention often times, because they don't have
necessarily access to all of the other, I guess, expertise that
you might find in a larger community.
So when I look at this as the Small Business
Administration, SBA is one piece of the whole pie, if you will.
The USDA brings programs to the table, they are all different.
As we say at CoBank, you know, more options for customers is
better and more options for communities is going to be better.
And so that the SBA programs and the Office of Rural
Affairs brings a number of expertise to the table which helps
small businesses. They may not be the solution, but there are
other solutions around, and the more collaboration and sort of
coordination we have, knowledge across agency products and
things, I think, will help continue to facilitate progress in
rural communities.
Thank you.
Chairman GOLDEN. Thank you.
Mr. Ohle?
Mr. OHLE. Thank you, Mr. Chair. I think in order to be
effective, the Office of Rural Affairs, really, number one,
needs to be fully staffed and have the capacity to address
these issues, but it also has to have real authority to help
expedite issues raised and address concerns of small businesses
that are coming into the office.
We also think, they should create some kind of advisory
council or entity that really engages folks on the ground,
people like Mr. Crawford and other small business owners, to
make sure that they hear the voices of those communities and
those small business owners.
And, finally, the intergovernmental kind of connection
between other agencies. Mr. Challenger talked about the USDA
programs. Helping to understand the connection between small
business growth, capital access, infrastructure like broadband
and water and wastewater is really critical, and so also being
that bridge between and among other Federal partners is
critical.
Chairman GOLDEN. Thank you.
Ms. Campos.
Ms. CAMPOS. Thank you. Thank you for the question. So I
think in our work, we not--we not only service clients but we
also act as a key resource for many municipal economic
development organizations. So when a local chamber of commerce
has a question about Federal programs, they often come to us.
And I think this is where additional resources is a huge need,
especially when it is something that is--within rural Nebraska,
there is such a large distance or such a long drive time
between one area to the other. So additional resources are
essential to what we do.
I also think this community-based need is a compelling
reason to ensure a rural outreach at SBA as it is prioritized,
and it is a priority that we do have. But I do think really as
we work with clients and community partners and leaders, the--
currently, the Women's Business Center is one of the major SBA
resources covering a large, large territory. So very crucial to
have a rural affairs.
Chairman GOLDEN. Well, one of my favorite things you
pointed out is that you go to clients. You meet them at their
business and meet them where they are at, instead of, you know,
forcing them maybe onto, you know, email or some platform they
are not familiar with or, worse, having to drive hours when
they really should be focusing on starting up a business or
running a business, although there are resource partners that
are able to get out in the field and go right to the business
owner, see the business firsthand too.
Mr. Crawford, any--anything that you want to add just about
how an office like this might be helpful in rural, you know,
business economic development?
Mr. CRAWFORD. Well, just real quickly, I do--I do think the
SBA and its branches have a very valuable role in supporting
small business in small communities. I would say I am a little
hesitant, when we talk about growing organizations in
government, that typically is not very efficient, an efficient
use of dollars. So I do think they have a role, but I agree
with Representative Williams that you got to fund those things,
and the taxes are just a huge problem to grow government in
order to pay for that. The tax increases are a problem.
Chairman GOLDEN. Thank you. I appreciate that.
You know, actually, I think the interesting part about the
story of the Office of Rural Affairs in the context of this
hearing is this is an office that was created by Congress under
the first Bush administration back in the 1990s, really to
bring an emphasis to the work of the SBA to rural businesses. I
think there was a feeling back then, as I believe there is
today, that a lot of times these, you know, programs end up not
being fully accessible or even many rural businesses aren't
even aware that they are there and how programs or lending
opportunities or services might actually be available to them.
Yet they are paying tax dollars into these SBA programs.
Shouldn't we make sure some of that benefit returns back out to
rural communities?
You know, a number of us on this Committee in the last
Congress in 2019 brought this to the attention of President
Trump's administration. We were very pleased how responsive
they were to agree with us that it was unacceptable that this
Office of Rural Affairs existed in the law, in statute at SBA,
but was completely unstaffed, essentially ignoring the mandate
from Congress to ensure that rural communities were getting a
focus and had a voice in the SBA.
He very quickly worked to put in an acting director and
some staff who ultimately were there to work with Mr.
Challenger, as an example, in the midst of a pandemic that
brought a lot of challenges to businesses. Who knows how many
jobs, you know, were saved or benefited directly from the
assistance that came out of the Office of Rural Affairs at that
time. I think, you know, the timing was fortuitous. But I don't
want to see it end there. I would like to see it, you know, be
successful moving forward. Really unfortunate that for over,
you know, a decade, a decade and a half, the office was just
allowed to fall by the wayside.
But I know what you mean, Mr. Crawford, and, you know, we
are trying to get a lot out of very little here. Our bill that
we are currently talking with the minority on--and I am always
looking for opportunities to work with more colleagues like Mr.
Williams--would bring these--this focus into the SBA for as
little as $3 million a year, which for a small business owner,
people don't blink an eye at $3 million but in the context of
the Federal budget.
So I think we can do a lot of good for rural businesses
with a very well, you know, thought-out office with a clear
mission and some talented staff. So I think it is a worthy
investment. I hope you all agree with me, and I look forward to
working with Representative Williams, Representative Hagedorn,
when we get him back, and with the rest of the Committee to try
and do something to the Office of Rural Affairs in the years
ahead and [inaudible] for small business owners around the
country.
Mr. Williams, any closing remarks on your end?
Mr. WILLIAMS. No.
Chairman GOLDEN. I appreciate your time today.
Mr. WILLIAMS. I think it has been a great hearing,
Chairman. And I want to thank again the witnesses for taking
time out of their busy day to come talk to us about this.
There are some common-ground issues in Washington, believe
it or not, and I think we have some common ground here. The
bottom line is we all realize, and one of you touched on it,
that small businesses, half the income, half the workforce,
even more than that, is what generates this great economy, and
we need to lessen the burden on small business, not increase
it. That is going to be my goal and others' too. So thank you
again for taking time, and you, Mr. Chairman, for holding the
hearing today.
I yield back.
The CHAIRMAN. Thank you, sir.
And thanks to all of our panelists for joining us today. We
appreciate your testimony and the answers you have provided to
our questions.
With that, I would ask that there be unanimous consent that
members have 5 legislative days to submit statements or
supporting materials for the record.
Without objection, so ordered.
If there is no further business before the Committee, we
are adjourned. Thank you all very much.
[Whereupon, at 2:07 p.m., the subcommittee was adjourned.]
A P P E N D I X
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