Rural American Recovery: The Role of Small Businesses and Entrepreneurship (House Small Business Committee hearing, July 13, 2021)
Summary
The printed record of a House Committee on Small Business hearing, Rural American Recovery: The Role of Small Businesses and Entrepreneurship, held July 13, 2021, Small Business Committee Document Number 117–024. Opening statements came from Hon. Jared Golden and Hon. Roger Williams. Four witnesses testified: Nathan Ohle of the Rural Community Assistance Partnership, Washington, DC; Jessica Campos of the Center for Rural Affairs, Lyons, NE; Brett Challenger of CoBank, Greenwood Village, CO; and Alan M. Crawford of Rangaire Manufacturing Company, Cleburne, TX. Their prepared statements appear in the appendix with material from Main Street America and the National Association of Federally-Insured Credit Unions; no questions for the record were submitted.
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
Cite this document
“Rural American Recovery: The Role of Small Businesses and Entrepreneurship (House Small Business Committee hearing, July 13, 2021).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/rural-american-recovery-the-role-of-small-businesses-and-entrepreneurs-7481c4aec9/
, SHA-256 8f1bdc73089e1a39efac2ab6de72eb7c9633faca7e557d36ad7828328e529c9b.Full text
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
Small Business Committee Document Number 117–024
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
45–125 WASHINGTON : 2021
SBD026 with DISTILLER
Congress.#13
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\DOCS\45125.TXT DEBBIE
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, 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
(II)
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 F:\DOCS\45125.TXT DEBBIE
CONTENTS
OPENING STATEMENTS
Page
Hon. Jared Golden ................................................................................................... 1
Hon. Roger Williams ................................................................................................ 3
WITNESSES
Mr. Nathan Ohle, Chief Executive Officer, Rural Community Assistance Part-
nership, 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 Com-
pany, 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
(III)
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 0486 F:\DOCS\45125.TXT DEBBIE
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 0486 F:\DOCS\45125.TXT DEBBIE
RURAL AMERICAN RECOVERY: THE ROLE OF
SMALL BUSINESSES AND ENTREPRENEUR-
SHIP
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 nor-
mally 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 person-
ally 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 mem-
ber at the next appropriate time spot.
Should a member’s time be interrupted by technical issues—hold
on, that is just a repeat.
(1)
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
2
In the event that a witness loses their connectivity during testi-
mony 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 commu-
nities are ignored by the Federal Government and left out of the
national political debate.
Even when Washington discusses rural America, rural Ameri-
cans 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 Govern-
ment often makes half-hearted attempts to spur economic develop-
ment 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 manufactur-
ers, fishermen, loggers here in Maine, and there are many other
examples all over the country.
The Office of Rural Affairs within the Small Business Adminis-
tration 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 ad-
ministration. 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
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
3
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 busi-
nesses 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 initia-
tives to support rural businesses. I see the same value in the office
that the Trump administration saw and that members in this Com-
mittee 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 Sub-
committee to continue to ensure that rural communities get the at-
tention and support that they deserve.
I would now like to yield to Mr. Williams for his opening state-
ment.
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 meas-
ures that followed.
Without having the ability to make safe, sound, and prudent
business decisions, mandates were handed down that caused busi-
nesses 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 op-
portunity 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 oper-
ating 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
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
4
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 be-
coming 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 Min-
nesota 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 Sub-
committee, have put a focus on strengthening some of the Nation’s
COVID programs for rural small businesses. We have found com-
mon ground on rural issues in the past, and I look forward to con-
tinuing 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 pro-
ceed. 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 in-
troduce 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 com-
munities across the country as they work to build capacity and re-
siliency.
Mr. Ohle has been a leader in economic development for more
than a decade, serving as senior adviser at the U.S. Economic De-
velopment 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 co-
ordinates the Rural Enterprise Assistance Project.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
5
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 en-
tire 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, includ-
ing 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 busi-
ness. He has truly seen this business from all sides.
Mr. Crawford has been able to grow the company from approxi-
mately 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 manufac-
turing, including expertise and experience with metal fabrication,
semiconductors, and telecom.
Now, he knows I am a TC Horned Frog; however, I can appre-
ciate 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 fa-
cility. 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.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
6
STATEMENTS OF MR. NATHAN OHLE, CHIEF EXECUTIVE OFFI-
CER, RURAL COMMUNITY ASSISTANCE PARTNERSHIP,
WASHINGTON, DC; MS. JESSICA CAMPOS, WOMEN’S BUSI-
NESS CENTER DIRECTOR, CENTER FOR RURAL AFFAIRS,
LYONS, NE; MR. BRETT CHALLENGER, SENIOR VICE PRESI-
DENT OF THE REGIONAL AGRIBUSINESS BANKING GROUP,
COBANK, GREENWOOD VILLAGE, CO; AND MR. ALAN M.
CRAWFORD, OWNER AND PRESIDENT, RANGAIRE MANUFAC-
TURING COMPANY, CLEBURNE, TX
STATEMENT OF NATHAN OHLE
Mr. OHLE. Thank you, Chairman Golden, Congressman Wil-
liams, 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 Com-
munity Assistance Partnership. RCAP is a national network of
nonprofit partners, providing technical assistance, training, and re-
sources to rural and Tribal communities in every State, territory,
and on Tribal lands.
Through our regional partners, more than 300 technical assist-
ance 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 na-
tional 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 busi-
ness 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 re-
sult 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 house-
holds.
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.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
7
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 low-
est-resourced communities are not left behind.
I want to thank this Committee for all that it has done to sup-
port 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 Com-
munities 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 Mis-
sissippi to connect these Black-owned, small-scale growers to crit-
ical 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 mi-
nority-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 pro-
grams 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 pro-
gram supplies grants to organizations with deep ties to rural com-
munities to engage trusted, culturally knowledgeable field staff to
conduct technical assistance and outreach.
Technical assistance is key to fostering strong financial manage-
ment 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 as-
sistance 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 Amer-
ica falling behind its urban counterparts. If we don’t, we may never
make up that gap.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
8
I thank the Committee for inviting me to testify, and look for-
ward 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 oppor-
tunity 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 peo-
ple 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 con-
tinue to build.
We became the host organization for the Women’s Business Cen-
ter, 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 commu-
nities. Next to agriculture, small business is the most critical eco-
nomic engine in Nebraska. According to a 2018 SBA report, 47 per-
cent 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 per-
cent of all jobs in many rural Nebraska counties.
Our target market is disadvantaged people living in rural Ne-
braska. This includes women and families who earn low to mod-
erate income and Latinos who currently run or want to start a
small business.
To maximize client success, our Women’s Business Center oper-
ates as a center without walls, which means we go to where the
client is, both physically and educationally. We provide many serv-
ices 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 edu-
cation is effective.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
9
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 require-
ment 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 con-
tinue 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 Of-
fice 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 op-
portunity 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 pro-
vides loans, leases, export financing, and other financial services to
agribusiness and rural power, water, and communications pro-
viders 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 affili-
ated 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 cus-
tomers 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 re-
spond to the economic challenges COVID-19 brought to our cus-
tomers.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
10
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 pro-
ceeded 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 an-
swered 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’ for-
giveness applications through the SBA process.
A cooperative business model can be an answer to helping busi-
nesses 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 close-
ly 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 pro-
posed 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 coopera-
tives through our support of numerous education and technical as-
sistant programs, but co-ops are not the only answer. CoBank un-
derstands that rural entrepreneurs need dependable sources of cap-
ital to grow their businesses. Senior debt may be available, but eq-
uity in junior capital remain more difficult to source. Few rural fo-
cused 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 intro-
duced 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
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
11
Federal appropriation to access leftover funds from the SBIC pro-
gram.
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 clas-
sical manufacturing facility where we punch, form, paint, and as-
semble steel and plastic products for the residential housing mar-
ket.
It has endured many changes in ownership, product lines, and
economic challenges. During the economic turmoil and housing cri-
sis of 2007 and 2008, the parent company of Rangaire consolidated
many of their operations into our plant in Cleburne. I ran the oper-
ation for them when we transitioned from manufacturing ventila-
tion 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 en-
trepreneurial 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 house-
hold the best she could. With financial help from family, bank bor-
rowings, 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
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
12
competition. Our greatest competitive threat is from low-cost for-
eign manufacturers or large domestic producers that have a much
broader product offering and are better capitalized.
Tariffs imposed on foreign competitors have helped us im-
mensely, 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 impos-
sible to get in front of. Our material components, such as steel, cor-
rugated, and plastic, have seen cost increases from 15 to 40 per-
cent. We don’t enjoy much pricing power on our products, and, con-
sequently, 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 over-
time, which drives up labor cost and decreases productivity. These
challenges have made it difficult to meet our customers’ expecta-
tions, 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 increas-
ing costs of mandated health insurance. This regulation is a signifi-
cant 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 sur-
vive 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 work-
ing 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?
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
13
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 Of-
fice 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 ques-
tion, 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 Af-
fairs continue to be helpful in your mission within the Small Busi-
ness Administration?
Mr. CHALLENGER. Yes, thank you for the question. The health
of rural communities is really important, and our efforts are some-
what limited and our scope is limited. And so when we bring part-
ners, 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 constitu-
ents 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 en-
hance the ability to do that.
Chairman GOLDEN. Mr. Ohle, you talked a little bit about tech-
nical 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 va-
riety of needs for rural small businesses, anything from business
planning to marketing, to identifying how to use online market-
places to better sell and produce products.
For us, through PPP, our two CDFIs provide direct technical as-
sistance alongside the funding that they are providing so that they
are ensuring those small businesses have the capacity and cer-
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
14
tainly can sustain operations moving forward. And so for us, a
huge piece of that puzzle is pairing funding alongside technical as-
sistance.
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 Amer-
ica.
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 orga-
nized 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 re-
cover, 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 manufac-
turing 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 Amer-
ica 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 prof-
it 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 informa-
tion 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 poten-
tial tax hike, small business owners are on the defense. With loom-
ing threats of nearly doubling the capital gains tax, I have already
spoken to businesses who are changing their operations and put-
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
15
ting 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 in-
volved 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 sub-
side?
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 signifi-
cantly, 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?
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
16
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, espe-
cially 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?
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
17
Mr. CRAWFORD. No, nothing with the USDA.
Chairman GOLDEN. Just curious.
You know, one of the things you said that really got my atten-
tion, 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, some-
one 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 defi-
nitely consider any of the sources that are available to us to im-
prove 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 appre-
ciate 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 busi-
nesses, 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
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
18
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 cred-
it 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, talk-
ing 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 Cen-
ters 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 par-
ticular, 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.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
19
I will start with you, Mr. Challenger, because I know you have
actually had a pretty active interaction so far with staff at the Of-
fice of Rural Affairs.
Mr. CHALLENGER. Yes, thank you for the question. My re-
sponse 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 tech-
nical assistance and they need additional attention often times, be-
cause 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 busi-
nesses. 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 effec-
tive, 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 of-
fice.
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 be-
tween 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 orga-
nizations. 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.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
20
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 pri-
ority 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 famil-
iar with or, worse, having to drive hours when they really should
be focusing on starting up a business or running a business, al-
though 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, busi-
ness 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 in-
creases 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 ad-
ministration 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 Con-
gress 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 Af-
fairs existed in the law, in statute at SBA, but was completely
unstaffed, essentially ignoring the mandate from Congress to en-
sure 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 chal-
lenges 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
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
21
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 unfortu-
nate 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 mil-
lion 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 Rep-
resentative 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 busi-
nesses, 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 appre-
ciate 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 sup-
porting materials for the record.
Without objection, so ordered.
If there is no further business before the Committee, we are ad-
journed. Thank you all very much.
[Whereupon, at 2:07 p.m., the subcommittee was adjourned.]
SBD026 with DISTILLER
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\DOCS\45125.TXT DEBBIE
22
APPENDIX
SBD026 with DISTILLER Insert offset folio 22 here 45125.001
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00026 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
23
SBD026 with DISTILLER Insert offset folio 23 here 45125.002
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00027 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
24
SBD026 with DISTILLER Insert offset folio 24 here 45125.003
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00028 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
25
SBD026 with DISTILLER Insert offset folio 25 here 45125.004
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00029 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
26
SBD026 with DISTILLER Insert offset folio 26 here 45125.005
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00030 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
27
SBD026 with DISTILLER Insert offset folio 27 here 45125.006
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00031 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
28
SBD026 with DISTILLER Insert offset folio 28 here 45125.007
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00032 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
29
SBD026 with DISTILLER Insert offset folio 29 here 45125.008
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00033 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
30
SBD026 with DISTILLER Insert offset folio 30 here 45125.009
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00034 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
31
SBD026 with DISTILLER Insert offset folio 31 here 45125.010
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00035 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
32
SBD026 with DISTILLER Insert offset folio 32 here 45125.011
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00036 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
33
SBD026 with DISTILLER Insert offset folio 33 here 45125.012
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00037 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
34
SBD026 with DISTILLER Insert offset folio 34 here 45125.013
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00038 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
35
SBD026 with DISTILLER Insert offset folio 35 here 45125.014
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00039 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
36
SBD026 with DISTILLER Insert offset folio 36 here 45125.015
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00040 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
37
SBD026 with DISTILLER Insert offset folio 37 here 45125.016
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00041 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
38
SBD026 with DISTILLER Insert offset folio 38 here 45125.017
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00042 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
39
SBD026 with DISTILLER Insert offset folio 39 here 45125.018
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00043 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
40
SBD026 with DISTILLER Insert offset folio 40 here 45125.019
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00044 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
41
SBD026 with DISTILLER Insert offset folio 41 here 45125.020
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00045 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
42
SBD026 with DISTILLER Insert offset folio 42 here 45125.021
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00046 Fmt 6602 Sfmt 6602 F:\DOCS\45125.TXT DEBBIE
43
Æ
SBD026 with DISTILLER Insert offset folio 43 here 45125.022
VerDate Mar 15 2010 15:08 Sep 22, 2021 Jkt 000000 PO 00000 Frm 00047 Fmt 6602 Sfmt 6011 F:\DOCS\45125.TXT DEBBIE
File and source
- File
- CHRG-117hhrg45125.pdf
- Size
- 9,011,116 bytes
- SHA-256
- 8f1bdc73089e1a39efac2ab6de72eb7c9633faca7e557d36ad7828328e529c9b
- Our copy
- CHRG-117hhrg45125.pdf
- Original
- www.govinfo.gov