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The Small Business Administration's Entrepreneurial Ecosystem: An Update and Next Steps with SBA's Resource Partners (House Small Business subcommittee hearing, May 19, 2021)

Summary

Printed record of a hearing of the House Committee on Small Business, Subcommittee on Innovation, Entrepreneurship, and Workforce Development, held May 19, 2021, titled The Small Business Administration's Entrepreneurial Ecosystem: An Update and Next Steps with SBA's Resource Partners, Small Business Committee Document Number 117–014. Opening statements came from Hon. Jason Crow and Hon. Young Kim. Witnesses were Charles Tee Rowe, president and chief executive officer of America's Small Business Development Centers; Bridget Weston, chief executive officer of the Service Corps of Retired Executives (SCORE); Corinne Hodges, chief executive officer of the Association of Women's Business Centers; and Patrick Montgomery, founder and chief executive officer of Kansas City Cattle Company. The appendix prints their statements and answers to questions from Crow.

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Cite this document

“The Small Business Administration's Entrepreneurial Ecosystem: An Update and Next Steps with SBA's Resource Partners (House Small Business subcommittee hearing, May 19, 2021).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/the-small-business-administration-s-entrepreneurial-ecosystem-an-updat-91f82ed855/, SHA-256 3aa6108af09932ef47efe4b632bdfe602a0420c5b4992ab55f1462771622c1b1.

Full text

                                                              THE SMALL BUSINESS ADMINISTRATION’S
                                                                ENTREPRENEURIAL ECOSYSTEM: AN UPDATE
                                                                AND NEXT STEPS WITH SBA’S RESOURCE
                                                                PARTNERS


                                                                                                  HEARING
                                                                                                         BEFORE THE


                                                                        SUBCOMMITTEE ON INNOVATION,
                                                                             ENTREPRENEURSHIP,
                                                                        AND WORKFORCE DEVELOPMENT
                                                                                                            OF THE


                                                                        COMMITTEE ON SMALL BUSINESS
                                                                               UNITED STATES
                                                                         HOUSE OF REPRESENTATIVES
                                                                                ONE HUNDRED SEVENTEENTH CONGRESS
                                                                                                       FIRST SESSION


                                                                                                       HEARING HELD
                                                                                                        MAY 19, 2021




                                                                                 Small Business Committee Document Number 117–014
                                                                                   Available via the GPO Website: www.govinfo.gov

                                                                                           U.S. GOVERNMENT PUBLISHING OFFICE
                                                                    44–566                             WASHINGTON : 2021




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                                                                                    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




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                                                                                                           CONTENTS
                                                                                                         OPENING STATEMENTS
                                                                                                                                                                                       Page
                                                              Hon. Jason Crow ......................................................................................................     1
                                                              Hon. Young Kim ......................................................................................................      2

                                                                                                                   WITNESSES
                                                              Mr. Charles ‘‘Tee’’ Rowe, President & Chief Executive Officer, America’s
                                                               Small Business Development Centers, Burke, VA ............................................                                5
                                                              Ms. Bridget Weston, Chief Executive Officer, Service Corps of Retired Execu-
                                                               tives (SCORE), Herndon, VA ..............................................................................                 6
                                                              Ms. Corinne Hodges, Chief Executive Officer, Association of Women’s Busi-
                                                               ness Centers, Washington, DC ............................................................................                 8
                                                              Mr. Patrick Montgomery, Founder & Chief Executive Officer, Kansas City
                                                               Cattle Company, Kansas City, MO ....................................................................                     10

                                                                                                                    APPENDIX
                                                              Prepared Statements:
                                                                  Mr. Charles ‘‘Tee’’ Rowe, President & Chief Executive Officer, America’s
                                                                    Small Business Development Centers, Burke, VA .....................................                                 26
                                                                  Ms. Bridget Weston, Chief Executive Officer, Service Corps of Retired
                                                                    Executives (SCORE), Herndon, VA .............................................................                       37
                                                                  Ms. Corinne Hodges, Chief Executive Officer, Association of Women’s
                                                                    Business Centers, Washington, DC .............................................................                      47
                                                                  Mr. Patrick Montgomery, Founder & Chief Executive Officer, Kansas
                                                                    City Cattle Company, Kansas City, MO .....................................................                          56
                                                              Questions and Answers for the Record:
                                                                  Questions from Hon. Jason Crow to Mr. Charles ‘‘Tee’’ Rowe and Answers
                                                                    from Mr. Charles ‘‘Tee’’ Rowe ......................................................................                65
                                                                  Questions from Hon. Jason Crow to Ms. Bridget Weston and Answers
                                                                    from Ms. Bridget Weston .............................................................................               67
                                                                  Questions from Hon. Jason Crow to Ms. Corinne Hodges and Answers
                                                                    from Ms. Corinne Hodges .............................................................................               69
                                                                  Questions from Hon. Jason Crow to Mr. Patrick Montgomery and An-
                                                                    swers from Mr. Patrick Montgomery ..........................................................                        70
                                                              Additional Material for the Record:
                                                                  Secure Towns ....................................................................................................     58
                                                                  Veteran Business Outreach Center Testimony ..............................................                             60




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                                                              THE SMALL BUSINESS ADMINISTRATION’S
                                                               ENTREPRENEURIAL   ECOSYSTEM:   AN
                                                               UPDATE AND NEXT STEPS WITH SBA’S
                                                               RESOURCE PARTNERS

                                                                                            WEDNESDAY, MAY 19, 2021

                                                                                   HOUSE OF REPRESENTATIVES,
                                                                                   COMMITTEE ON SMALL BUSINESS,
                                                                   SUBCOMMITTEE ON INNOVATION, ENTREPRENEURSHIP,
                                                                                            AND WORKFORCE DEVELOPMENT,
                                                                                                                 Washington, DC.
                                                                 The Subcommittee met, pursuant to call, at 10:15 a.m., in Room
                                                              2360, Rayburn House Office Building and via Zoom, Hon. Jason
                                                              Crow [chairman of the Subcommittee] presiding.
                                                                 Present: Representatives Crow, Davids, Phillips, Newman,
                                                              Bourdeaux, Houlahan, Williams, Tenney, Garbarino, Ms. Young
                                                              Kim, and Salazar.
                                                                 Chairman CROW. Good morning. I call this hearing to order.
                                                              Without objection, the Chair is authorized to declare a recess at
                                                              any time.
                                                                 Let me begin by saying that standing House and Committee
                                                              rules and practice will continue to apply during hybrid proceedings.
                                                              All members are reminded that they are expected to adhere to
                                                              these standing rules, including decorum.
                                                                 House regulations require members to be visible through a video
                                                              connection throughout the proceeding, so please keep your cameras
                                                              on. Also, please remember to remain muted until you are recog-
                                                              nized to minimize the background noise. If you have to participate
                                                              in another proceeding, please exit this one and log back in later.
                                                                 In the event a member encounters technical issues that prevent
                                                              them from being recognized for their questioning, I will move to the
                                                              next available member of the same party and I will recognize that
                                                              member at the next appropriate time slot provided they have re-
                                                              turned to the proceeding.
                                                                 For those members physically present in the Committee room
                                                              today, we will continue to wear masks unless we are speaking here
                                                              and socially distant while the Chairwoman and Ranking Member
                                                              work with the office of the attending physician on updated guide-
                                                              lines and procedures. Members and staff are expected to wear
                                                              masks while in the hearing. With that said, members will be al-
                                                              lowed to briefly remove their masks when recognized by the Chair
                                                              for statement and questions. I know we all look forward to return-
                                                              ing to normal, but appreciate everyone’s patience while we
                                                              prioritize the health and safety of our staff and each other.
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                                                                 America’s 30 million small businesses support more than 56 mil-
                                                              lion jobs and account for nearly half of our nation’s GDP. It is no
                                                              exaggeration to say that these small firms are the foundation of
                                                              our economy. But despite the fundamental importance of these en-
                                                              terprises, the road to small business ownership is fraught and
                                                              paved with obstacles for prospective entrepreneurs.
                                                                 Recognizing the uphill climb facing many of those wishing to
                                                              start and run a business, the SBA offers a wide range of free or
                                                              low-cost counseling and training services to entrepreneurs. To de-
                                                              liver these services, SBA relies on its four primary resource part-
                                                              ners: Small Business Development Centers, or SBDCs; Women
                                                              Business Centers, WBCs; SCORE; and Veteran Business Outreach
                                                              Centers, VBOCs.
                                                                 From first-time entrepreneurs looking to create a business plan,
                                                              the long-time business owners looking for new ways to achieve
                                                              growth, these resource partners support small firms through every
                                                              step of the business cycle. These entrepreneur development initia-
                                                              tives have proven to be the difference between success and failure
                                                              for many, many businesses.
                                                                 According to SBA’s 2013 Impact Study, small businesses that re-
                                                              ceive 3 or more hours of counseling have higher survival rates than
                                                              firms that receive less counseling. In turn, these businesses go on
                                                              to earn more revenue and employ more workers.
                                                                 Resource partners have also served as a critical lifeline for small
                                                              businesses throughout the pandemic. When COVID struck, re-
                                                              source partners sprang into action, got innovative, and helped mil-
                                                              lions of entrepreneurs navigate a once in a lifetime crisis. I saw
                                                              that myself in my own community as businesses adapted and did
                                                              what they need to do to survive. I have heard so many stories from
                                                              my constituents in my district who relied on SBA’s resource part-
                                                              ners when they had nowhere else to turn.
                                                                 I hope today’s hearing allows us to learn more about these pro-
                                                              grams, hear about challenges they are currently facing, and exam-
                                                              ine how this Committee can improve and expand their reach. I am
                                                              especially interested in learning what more we can do to raise
                                                              awareness of these programs and ensure that the maximum num-
                                                              ber of small businesses are taking advantage of them.
                                                                 Today we will explore the resource partners’ current diversity
                                                              initiatives and efforts Congress can take to drive an equitable re-
                                                              covery. During the 116th Congress, the House passed three sepa-
                                                              rate bills to improve the SBA’s entrepreneurial development pro-
                                                              grams. If enacted into law, these bills would substantially improve
                                                              the SBDC, WBC, and SCORE programs and make them accessible
                                                              to more small businesses.
                                                                 Unfortunately, the Senate did not consider any of these bills. I
                                                              look forward to updating and advancing similar bills and finding
                                                              new ways to strengthen SBA’s entrepreneurial development pro-
                                                              grams.
                                                                 With that, I now yield to the Ranking Member for her opening
                                                              statement.
                                                                 Ms. YOUNG KIM. Thank you, Chairman Crow. Following a year
                                                              of unprecedented state and local government shutdowns and regu-
                                                              lations, and hampered demand due to COVID-19, small businesses
                                                              are collectively starting to recover. The SBA’s entrepreneur devel-




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                                                              opment programs have long served as a resource to small busi-
                                                              nesses across the country. During the COVID-19 outbreak small
                                                              businesses in record numbers turned to the resource partners to
                                                              navigate the SBA’s emergency relief programs, including the Pay-
                                                              check Protection Program, the Economy Injury Disaster Loan Pro-
                                                              gram, the Shuttered Venue Operator’s Grant, and also the Res-
                                                              taurant Revitalization Fund and many others.
                                                                 Through cooperative agreements, the SBA’s ED programs pro-
                                                              vide our nation’s entrepreneurs with free or low-cost training and
                                                              counseling on marketing, finance, technology, exports, human re-
                                                              sources, and more. We have all heard from constituents about how
                                                              Veterans Business Outreach Centers and Small Business Develop-
                                                              ment Centers, Women’s Business Centers, and the Service Core of
                                                              Retired Executives program can serve as valuable tools to small
                                                              businesses in their quest to grow their business, expand their con-
                                                              sumer base, gain access to capital, navigate government programs
                                                              and regulations, and meet their labor demands.
                                                                 With states opening and vaccines being distributed, our nation’s
                                                              job creators are eagerly anticipating a return to normal business
                                                              operations and the SBA’s entrepreneur development partners can
                                                              help. However, as small businesses continue to reopen their doors
                                                              and start their path to recovery, they are met with the obstacle of
                                                              proposed tax increases, regulations, and a tight labor market.
                                                                 The Department of Labor reported job openings reached a record
                                                              high of 8.1 million in March. According to NFIB’s April jobs report,
                                                              small business owners are experiencing the highest-ever reading of
                                                              unfilled job openings since polling started in 1973.
                                                                 I look forward to learning more today about how the SBA’s entre-
                                                              preneur development programs can serve our small business own-
                                                              ers in combatting these challenges so they can continue to create
                                                              jobs, skill employees, innovate, and serve their communities. As
                                                              members of the Committee, we must also ensure the SBA is man-
                                                              aging these programs properly and administering the necessary
                                                              oversight. In light of recent SBA Office of Inspector General re-
                                                              ports, entrepreneur development programs must be examined
                                                              closely to ensure duplication does not occur and waste, fraud, and
                                                              abuse is prevented.
                                                                 Today, we will hear from the associations that represented these
                                                              programs and also hear from Mr. Patrick Montgomery, who is a
                                                              small business owner and veteran who has utilized these programs,
                                                              on the effectiveness of technical assistance programs in supporting
                                                              small businesses and entrepreneurs in recovering from the pan-
                                                              demic and beyond.
                                                                 So, I want to thank all of our witnesses who are here today in
                                                              person and on the virtual call for providing your testimonies. And
                                                              I yield back.
                                                                 Chairman CROW. Thank you, Ms. Kim. The gentlewoman yields
                                                              back.
                                                                 I want to take a moment to explain how this hearing will pro-
                                                              ceed. Each witness is going to have 5 minutes to provide a state-
                                                              ment and each Committee member will have 5 minutes for ques-
                                                              tions. Please ensure that your microphone is on when you begin
                                                              speaking and that you return it to mute when you are finished.




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                                                                                                                  4

                                                                 And with that, I would like to introduce our witnesses. Our first
                                                              witness today is Mr. ‘‘Tee’’ Rowe, president and CEO of America’s
                                                              SBDC. Mr. Rowe has been with America’s SBDC since August
                                                              2009. He has a long history for advocating for America’s small busi-
                                                              nesses, including serving as counsel for this Committee from 1991
                                                              to 2001, so you have done your time on the Hill. Mr. Rowe has
                                                              been a valuable advocate for the SBDC program and we are
                                                              pleased he is joining us again today. Welcome back, Mr. Rowe.
                                                                 Our second witness is Ms. Bridget Weston, CEO of SCORE. As
                                                              CEO, Ms. Weston provides extensive leadership in works directly
                                                              and collaboratively with the board of directors to establish a vision
                                                              and direction of SCORE. In her 10 years with the organization she
                                                              has developed an in-depth understanding of the needs and chal-
                                                              lenges facing SCORE staff, its 300-plus chapters, and over 10,000
                                                              volunteers. Welcome back, Ms. Weston.
                                                                 And our third witness is Ms. Corinne Hodges, CEO of the Asso-
                                                              ciation of Women Business Centers, AWBC. Ms. Hodges joined the
                                                              AWBC as CEO in 2019 and is charged with bringing about en-
                                                              hanced sustainability and increased capacity to the Association and
                                                              its members. Welcome back, Ms. Hodges.
                                                                 I will now yield to the Ranking Member, Ms. Kim, to introduce
                                                              our final witness.
                                                                 Ms. YOUNG KIM. Thank you, Mr. Chairman. Our next witness
                                                              is Mr. Patrick Montgomery. As mentioned earlier, he is a veteran,
                                                              entrepreneur, and the chief executive officer and founder of KC
                                                              Cattle Company. After completing the Ranger Assessment and Se-
                                                              lection program in April 2011, Mr. Montgomery reported to the 1st
                                                              Ranger Battalion, 75th Ranger Regiment. While serving as a rang-
                                                              er, Mr. Montgomery completed two combat deployments to Afghan-
                                                              istan. He served as an assistant gunner, anti-tank team leader,
                                                              shooter for a sniper team, gun team leader, and weapons squad
                                                              leader.
                                                                 Following his service in the military, Mr. Montgomery completed
                                                              his bachelor of science in animal science at the University of Mis-
                                                              souri. And during his last semester in 2016, he created the busi-
                                                              ness plan for KC Cattle Company.
                                                                 While building his business, Mr. Montgomery completed his exec-
                                                              utive MBA program through the University of Missouri College of
                                                              Business. Mr. Montgomery founded KC Cattle Company with the
                                                              mindset of bridging the gap between agriculture and the consumer.
                                                              His company provides the highest quality Wagyu beef via mail
                                                              order to consumers in all 50 states and is 100 percent veteran-
                                                              owned and a 100 percent veteran-operated company.
                                                                 Mr. Montgomery, thank you for joining us today and thank you
                                                              for your service to our great nation.
                                                                 Chairman CROW. Thank you, Ms. Kim. And welcome, Mr. Mont-
                                                              gomery. It is good to have a fellow Ranger joining us today. Rang-
                                                              ers lead the way, although you did serve in our nation’s second best
                                                              Ranger battalion. That is an inside joke amongst us rangers. But
                                                              thank you, Mr. Montgomery. I appreciate you joining us here.
                                                                 So, let us begin with Mr. Rowe. Mr. Rowe, you are now recog-
                                                              nized for 5 minutes.




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                                                                                                                  5
                                                              STATEMENTS OF CHARLES ‘‘TEE’’ ROWE, PRESIDENT & CHIEF
                                                               EXECUTIVE OFFICER, AMERICA’S SMALL BUSINESS DEVEL-
                                                               OPMENT CENTERS; BRIDGET WESTON, CHIEF EXECUTIVE
                                                               OFFICER, SERVICE CORPS OF RETIRED EXECUTIVES
                                                               (SCORE); CORINNE HODGES, CHIEF EXECUTIVE OFFICER,
                                                               ASSOCIATION OF WOMEN’S BUSINESS CENTERS; PATRICK
                                                               MONTGOMERY, FOUNDER & CHIEF EXECUTIVE OFFICER,
                                                               KANSAS CITY CATTLE COMPANY

                                                                                   STATEMENT OF CHARLES ‘‘TEE’’ ROWE
                                                                 Mr. ROWE. Thank you, Chairman Crow, Ranking Member Kim,
                                                              members of the Committee. Thank you for inviting me to testify.
                                                              I am a little thrown off because I am thinking about mail order
                                                              Wagyu right now.
                                                                 I am president of America’s SBDC, the Association of Small Busi-
                                                              ness Development Centers. For 40 years, SBDCs have been pro-
                                                              viding services to small business owners throughout the nation. We
                                                              operate out of host institutions and operate statewide. We may be
                                                              headquartered at colleges, but our centers are in our communities.
                                                              That is why you will fine SBDCs at the International Rescue Com-
                                                              mittee in El Cajon or the East Los Angeles Initiative or the Boul-
                                                              der Public Library.
                                                                 SBDCs help small businesses at all stages. Fifty percent of our
                                                              clients are women, roughly 10 percent of our clients are veterans,
                                                              and minority clients comprise over 38 percent of our client base.
                                                              Every year we provide over 1-1/2 million hours of counseling and
                                                              training to over 500,000 small business owners and their employ-
                                                              ees. And that assistance has generated great results. From 1990 to
                                                              2019, our clients accessed $76.5 billion in capital, increased their
                                                              sales by $127 billion, and created 3.3 million jobs, and they gen-
                                                              erated over $11 billion in tax revenue.
                                                                 As I laid out in my written statement, we offer a wide variety
                                                              of assistance, and you can find more of that by following the link
                                                              to our annual report. However, I would like to focus on just a cou-
                                                              ple of things.
                                                                 First, cybersecurity. SBDCs have a new cybersecurity program
                                                              based on DOD’s cybersecurity maturity model. It covers all facets
                                                              of the DOD guidance in order to provide security education for
                                                              small business owners.
                                                                 We also have a new program, Secure Towns. Through it, SBDCs
                                                              work with chambers, development organizations, and local busi-
                                                              nesses to raise awareness and reduce cybersecurity threats.
                                                                 Regarding the COVID pandemic response, over the last year we
                                                              have probably done close to 3 years’ worth of work. We have par-
                                                              ticipated in over 3,500 webinars and assisted over 315,000 people
                                                              in just the early months of the pandemic. As an example, the Penn-
                                                              sylvania SBDC launched nine new centers to provide services
                                                              aimed at weathering the pandemic.
                                                                 We also assisted in provided helping get small businesses financ-
                                                              ing through PPP, EIDL, SVOG, and now the Restaurant Revital-
                                                              ization Fund. And as the demand surged, SBDC shifted on line,
                                                              which will continue to be a significant alternative. It improves our
                                                              productivity and allows broader use of specialized skills.




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                                                                 And our client survey showed that the most requested program-
                                                              ming, ‘‘Finding New Customers,’’ is also the frequently most men-
                                                              tioned challenge. And they also want strategic planning and digital
                                                              marketing and social media and search engine optimization. In
                                                              other words, going forward we see small businesses as increasingly
                                                              reliant on technology. These changes may present a real challenge
                                                              to some communities with limited broadband access.
                                                                 To overcome that, SBDCs are increasing our outreach. In Chi-
                                                              cago’s Southlands, the SBDC works with the Resurrection Project
                                                              and the Urban League to ensure that services reach all commu-
                                                              nities. Likewise, the Houston SBDC is teaming with the Great
                                                              Houston Black Chamber. They are creating a new business insti-
                                                              tute to improve access to capital and business growth. And to fur-
                                                              ther these efforts, the SBDCs have become the inclusivity challenge
                                                              based on the Northern California SBDC’s Inclusivity Project.
                                                                 The challenge is simple: Do more. Based on local needs, SBDCs
                                                              will establish more connections and provide more services. It is all
                                                              about helping entrepreneurs, all entrepreneurs, overcome impedi-
                                                              ments to their success. That effort is complementary to the new
                                                              Community Navigators program. In fact, several SBDCs are al-
                                                              ready engaged in pilot programs for community navigators.
                                                                 We would like to find the best ways to deliver services to all
                                                              small businesses and leverage all the capacity available. To that
                                                              end we strongly support reauthorization of the Entrepreneurial De-
                                                              velopment Programs. We think it is time to review and renew the
                                                              commitment to assisting small business.
                                                                 Now I have got one last item and that is about the CARES Act
                                                              and the resource partner training platform. We would really like
                                                              to know what we should think of for its future.
                                                                 That concludes my testimony. I look forward to any questions.
                                                                 Chairman CROW. Thank you, Mr. Rowe. Ms. Weston, you ware
                                                              now recognized for 5 minutes.

                                                                                     STATEMENT OF BRIDGET WESTON
                                                                 Ms. WESTON. Thank you, Chairman Crow, Ranking Member
                                                              Kim, and members of the Committee. Thank you for the oppor-
                                                              tunity to offer testimony today.
                                                                 SCORE is the nation’s largest network of volunteer business
                                                              mentors with more than 10,000 volunteers across 240 chapters, of-
                                                              fering free and confidential advices, and educational workshops to
                                                              small business owners. Founded in 1964 as a resource partner of
                                                              the SBC, SCORE has helped more than 11 million entrepreneurs
                                                              start, grow, or troubleshoot their business. Last year, SCORE
                                                              helped its clients to start over 45,000 new businesses and create
                                                              nearly 75,000 new jobs. And despite the challenging business cli-
                                                              mate of the pandemic, SCORE helped 82 percent of our clients stay
                                                              in business throughout the year.
                                                                 We believe SCORE is the most effective, efficient business forma-
                                                              tion and job creation engine funded by the federal government. In
                                                              2020, our cost to create a new job was $156 and $259 to create a
                                                              new business. For every $1 appropriated to SCORE, our clients re-
                                                              turned $67 in new federal tax revenue, further demonstrating
                                                              SCORE is a good steward of the federal dollar.




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                                                                 SCORE volunteers are the lifeblood of our organization and are
                                                              passionate about helping small businesses succeed. Volunteers
                                                              come from all across the country with diverse backgrounds and ex-
                                                              perience in different industries. Our core services are mentoring,
                                                              educational workshops, and online resources. Last year, SCORE
                                                              volunteers held over 315,000 mentoring sessions, guiding and sup-
                                                              porting our clients through the tremendous challenges brought on
                                                              by the pandemic. Many business owners told us they would not
                                                              have applied for a PPP, EIDL, or Restaurant Revitalization loan
                                                              without a SCORE mentor to walk them through the process. Our
                                                              high rates of client satisfaction are captured in our Net Promoter
                                                              Score of 87, which 70 being considered excellent.
                                                                 In addition to mentoring, SCORE provides virtual webinars on
                                                              our website. And SCORE chapters offer local workshops that are
                                                              in-person or virtual. These workshops drew over 464,000 attendees
                                                              last year.
                                                                 One of SCORE’s key areas of focus is fostering diversity, equity,
                                                              and inclusion for clients and volunteers. Women and minority vol-
                                                              unteers climbed to 38 percent of total volunteers last year. This 5
                                                              percent increase represents the single biggest annual growth since
                                                              we began tracking these metrics in 2012.
                                                                 SCORE currently serves a diverse range of small business own-
                                                              ers. Sixty percent of our clients are women and 46 percent are mi-
                                                              norities. Earlier this year, SCORE launched the SCORE for Black
                                                              Entrepreneurs as part of our SCORE for All Initiative to help serve
                                                              disadvantaged businesses. We plan to add more SCORE for All
                                                              campaigns to help these businesses survive and thrive, supporting
                                                              women, rural entrepreneurs, veterans, the 50 and older commu-
                                                              nity, and persons with disabilities.
                                                                 SCORE is working harder than ever to reach underserved entre-
                                                              preneurs, leveraging our community relationship nationally and lo-
                                                              cally. National partnerships include the BIPOC Support Founda-
                                                              tion, Women Entrepreneurs Grow Global, the National Black
                                                              Chambers, and the Latino Coalition, who introduce us to new com-
                                                              munities of small business owners. We also collaborate with our
                                                              fellow resource partners here today nationally and locally.
                                                                 Across the nation SCORE chapters are integrated in their com-
                                                              munities, reaching, guiding, and providing access to necessary re-
                                                              sources. When the pandemic hit SCORE pivoted to delivering vir-
                                                              tual mentoring and education without missing a day of service. We
                                                              accommodated a 30 percent increase in services last year. And
                                                              while the House of Representatives supported additional funding
                                                              for SCORE’s COVID-19 response, ultimately SCORE did not re-
                                                              ceive any relief funding.
                                                                 Nevertheless, we were able to stand up our Small Business Resil-
                                                              ience Program, connecting SCORE mentors and educational re-
                                                              sources to entrepreneurs to help them successfully navigate federal
                                                              and local government programs, adapt to change, launch new busi-
                                                              nesses and inspire their customers to rally around their business.
                                                              SCORE’s Small Business Resilience hub has served 730,000 people
                                                              since its launch in March 2020. Now we are at capacity and will
                                                              not be able to grow without additional resources.
                                                                 Based on SCORE’s continued demonstrated impact, increased de-
                                                              mand for services, and our plans to reach more business owners in




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                                                              underserved and disadvantaged communities, SCORE is respect-
                                                              fully requesting an increase of 9-1/2 million in funding for a total
                                                              appropriation next year of 21.7 million. I want to thank the Chair-
                                                              man and Ranking Member for leading the joint letter in support
                                                              of robust funding for SCORE and thank all of the Members who
                                                              signed. The additional funding would be spent to increase men-
                                                              toring and education by reducing administrative burden on volun-
                                                              teers, provide more direct funding to local chapters for community
                                                              outreach, and focus to help more underserved businesses.
                                                                 With this relatively small investment we can provide even great-
                                                              er value to business owners and the economy. This increased fund-
                                                              ing would allow us to deliver more than half a million additional
                                                              client services with a projected outcome of 100,000 additional new
                                                              businesses started or jobs created. SCORE’s mentoring and edu-
                                                              cation are critical to helping small businesses overcome their chal-
                                                              lenges and succeed. SCORE stands ready to help our nation’s most
                                                              vulnerable small business owners so they can keep their doors open
                                                              and keep people employed.
                                                                 Thank you very much for your time. I look forward to your ques-
                                                              tions.
                                                                 Chairman CROW. Thank you, Ms. Weston. Ms. Hodges, you are
                                                              recognized for 5 minutes.

                                                                                     STATEMENT OF CORINNE HODGES
                                                                 Ms. HODGES. Thank you, Chair Crow, Ranking Member Kim,
                                                              and distinguished members of the Subcommittee. The Association
                                                              of Women’s Business Centers works to secure empowerment and
                                                              economic opportunities for women by supporting and sustaining the
                                                              national network of 135 Women’s Business Centers that provide
                                                              counseling, training, mentoring, business development, and access
                                                              to capital. And while all WBCs operate brick-and-mortar locations,
                                                              many have opened additional satellite locations, remote support, or
                                                              even mobile units to serve the hardest to reach entrepreneurs.
                                                                 Women’s Business Centers are essential to this period of eco-
                                                              nomic recovery. And women entrepreneurs play a key role in our
                                                              nation’s economy, but, unfortunately, the pandemic has challenged
                                                              them disproportionately. Women are exiting the workforce to care
                                                              for families, particularly among low-income populations as well as
                                                              communities of color. Women seeking flexibility and necessary
                                                              household income turn to entrepreneurship.
                                                                 For existing businesses the pandemic presented challenging cir-
                                                              cumstances since women are more likely to have service-based
                                                              businesses, such as childcare centers, salons, food services, et
                                                              cetera, where rates of closure reached as high as 40 percent. As a
                                                              result, an unprecedented number of women have found entrepre-
                                                              neurship at their local Women’s Business Center.
                                                                 In 2020, Women’s Business centers had nearly 200,000 client en-
                                                              gagements and assisted clients in accessing $362 million in busi-
                                                              ness capital, more than double the previous year. They also helped
                                                              clients retain and create new jobs, nearly 70,000 nationwide. Not
                                                              only are WBCs seeing more small business clients, those clients are
                                                              returning for services at a higher rate, averaging 4 hours per cli-
                                                              ent.




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                                                                 But we could not have accomplished all of this without the lead-
                                                              ership of this Committee, so allow me the opportunity to say thank
                                                              you to this group of members and their diligent staff. The addi-
                                                              tional Women’s Business Center funding and waiver of the match-
                                                              ing requirement allowed Women’s Business Centers the resources
                                                              and flexibility they needed to respond to these surges in demand
                                                              by hiring additional staff, providing essential counseling, and men-
                                                              toring to convey rapidly changing federal program and loan guid-
                                                              ance.
                                                                 This year provides us a reminder of the importance of serving
                                                              underserved communities. In 2020, 70 percent of the individuals
                                                              Women’s Business Centers served were women and 56 percent
                                                              were people of color. And as detailed in my written testimony,
                                                              Women’s Business Centers and AWBC have led the way in reach-
                                                              ing BIPOC women business owners and we hope to share these
                                                              best practices.
                                                                 Women’s Business Centers have a proven track record of pro-
                                                              ducing exceptional results with limited resources. While Women’s
                                                              Business Centers exceed their goals when it comes to client service
                                                              and performance, there are challenges faced within the technical-
                                                              ities of operating the program. And so for this reason, AWBC con-
                                                              tinues to advocate for reauthorization and modernization.
                                                                 Regulatory and grant compliance inconsistencies and inefficien-
                                                              cies can create challenges for even the highest performing Women’s
                                                              Business Centers. The recent OIG report identified specific findings
                                                              that we see would be remedied by a modern redesign of the Wom-
                                                              en’s Business Center program. We urge Congress to establish a
                                                              structured accreditation program that ensures accountability to na-
                                                              tional standards for client service, including management and oper-
                                                              ational aspects. In addition, an increased individual grant level
                                                              would effectively allow centers to raise awareness for their services
                                                              and to reach deeper into marginalized and rural communities.
                                                                 AWBC endorsed and fully supports the Women’s Business Cen-
                                                              ters Improvements Act from the 116th Congress. Had that legisla-
                                                              tion been enacted we believe Women’s Business Centers would
                                                              have been better positioned to respond to the pandemic. We urge
                                                              this bipartisan legislation be enacted swiftly.
                                                                 Similarly, newer and smaller centers would stand to benefit from
                                                              additional oversight and guidance to achieve maximum results.
                                                              AWBC is exploring ways to support centers with greatest needs, in-
                                                              cluding the smallest and newest centers. We seek savings for tax-
                                                              payers using economies of scale for common purchases, like tech-
                                                              nology tools. We hope to work with this Committee to explore ways
                                                              to achieve those economies of scale and modernize the program.
                                                                 We are proud of our partnership with SBA to ensure America’s
                                                              resource partners have the important information to support entre-
                                                              preneurs. We urge Congress to ensure the investment and the re-
                                                              source partners training portal continues beyond COVID. We ask
                                                              this Committee and the 117th Congress to take the following ac-
                                                              tions: fully fund the program at $30 million for core funding; pro-
                                                              vide additional $48 million for COVID-related appropriation; reau-
                                                              thorize the program similar to legislation, like H.R. 4405; and en-
                                                              sure WBCs are partners of choice for engaging women business
                                                              owners in any future jobs and infrastructure package.




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                                                                Thank you so much. I look forward to your questions.
                                                                Chairman CROW. Thank you, Ms. Hodges. And Mr. Mont-
                                                              gomery, you are now recognized for 5 minutes.
                                                                                 STATEMENT OF PATRICK MONTGOMERY
                                                                 Mr. MONTGOMERY. Thank you, Chairman and members of the
                                                              Subcommittee. I am honored to have the opportunity to represent
                                                              the health and voice for small businesses across the nation. I con-
                                                              sider myself blessed to live in a country where I have the oppor-
                                                              tunity to address the leaders of my nation coming from my humble
                                                              beginnings. ‘‘That these dead shall not have died in vain. Govern-
                                                              ment of the people, by the people, for the people, shall not perish
                                                              from this earth.’’ Remembering the rangers who gave all so I can
                                                              sit here before you, I aim to give an honest representation of my
                                                              business and experiences for them.
                                                                 According to the Kauffman Foundation, the number of adults
                                                              owning businesses have been declining since the 1990s. In a sepa-
                                                              rate study by the Brookings Institute, the number of startups has
                                                              fallen by half since 1978. These studies are troubling for America
                                                              remaining the leader of the free world. Entrepreneurship is directly
                                                              linked to job growth, wage growth, GDP, and innovation. Capital
                                                              and advice are the quintessential needs of a new idea embarking
                                                              on the journey to become a successful business.
                                                                 My journey to entrepreneurship started during my last semester
                                                              of my undergrad at the University of Missouri at Columbia. I had
                                                              put the business plan for KC Cattle Company together and was
                                                              looking for a seed investment to get started once I graduated. I
                                                              cleared out my wife and I’s savings and contributed to the profit
                                                              we made from selling our home in Columbia.
                                                                 I researched grants, government subsidized loans, and other gov-
                                                              ernment resources. I took advantage of using the University of Mis-
                                                              souri’s Extension program for advice and grant applications. I
                                                              spoke with the USDA and banks regarding USDA and SBA loans.
                                                              I was asking for $250,000 to make it through the first 3 years of
                                                              owning my business to establish a viable business model. I did not
                                                              have collateral or historic sales, so selling this to a lender proved
                                                              impossible. I ended up raising half this amount from friends and
                                                              family.
                                                                 I boot-strapped those first 3 years and made the resources I had
                                                              work. I used my GI Bill to complete my MBA. The stipend from
                                                              the GI Bill was my salary for those first 2 years of owning my busi-
                                                              ness. We found success in our e-commerce business in 2019 and
                                                              continued thriving in 2020 despite huge restraints on our supply
                                                              chain from large processors throughout the country shutting down.
                                                                 2021 is proving to present its own set of challenges with rising
                                                              costs across the board and constraints on the labor market. From
                                                              2017 through 2021, the government resources I used to help scale
                                                              my business was the SBDC’s ScaleUP! KC program, SBDC’s mar-
                                                              keting data resources, an SBA 7(a) line of credit, an SBA PPP loan,
                                                              my post 9/11 GI Bill, and the Missouri Extension program.
                                                                 Specifically speaking about the SBDC, ScaleUP! KC was a great
                                                              resource for thinking through how I am going to scale my business.
                                                              Developing processes, thinking about our operating environment,
                                                              and implementing the Entrepreneurial Operating System were




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                                                              some of my key takeaways. While completing this, I discovered I
                                                              could use the SBDC for gaining specific insights into our target de-
                                                              mographic by using information from our email list. I was I the
                                                              process of paying a marketing firm $8,000 to do this for us. The
                                                              SBDC did it for free, which allowed us to free up that cash to be
                                                              able to hire new employees during the height of the pandemic.
                                                                 The resources I used from the government were essential to cre-
                                                              ating a successful business. As stated before, capital and advice are
                                                              the lifeblood for startups. Without the resources stated above, I
                                                              would have never been able to get to where we are as a company.
                                                                 However, these resources are not very easy to find as a small
                                                              business and not easily accessible those first few years of trying to
                                                              create a viable business model, specifically at the capital side. A
                                                              few ideas I had while thinking through my talking points for this
                                                              discussion.
                                                                 One, when filling out a new corporation with the state, what if
                                                              the entity received information about available resources along
                                                              with their formation documents from the state and IRS?
                                                                 Secondly, although the SBA has some great lending options, all
                                                              of them are for established businesses. What if there was a pro-
                                                              gram specifically for startups trying to breathe life into a new idea?
                                                              This lending option could be paired with advisors from the SBDC
                                                              to help work through the problems associated with a startup and
                                                              help the individual network their new businesses. Startups are
                                                              risky, but I would argue these loans could be a better investment
                                                              for the government and the individual than student loans. We need
                                                              individuals to have the means to pursue good ideas in this country.
                                                                 In conclusion, I believe the resources available from the SBA and
                                                              affiliate partners are crucial for new businesses to succeed. How-
                                                              ever, I think these resources are not always easy to find or easy
                                                              to access when starting a new company. Making resources, both
                                                              capital and knowledge, available to aspiring entrepreneurs is crit-
                                                              ical to the United States remaining the gold standard for innova-
                                                              tion and envy throughout the world.
                                                                 Thank you for this opportunity to speak with you. And I look for-
                                                              ward to your questions.
                                                                 Chairman CROW. Thank you, Mr. Montgomery. And thank you
                                                              to all the witnesses for everything you shared with us. I appreciate
                                                              many of the comments and observations.
                                                                 I am going to begin by recognizing myself for 5 minutes. And Mr.
                                                              Rowe, I want to start with you.
                                                                 You had mentioned cybersecurity as a really essential element
                                                              here and the cybersecurity maturity model. I represent a state and
                                                              district that has one of the largest defense aviation and aerospace
                                                              industries in the country. In fact, I have over 250 primary small-
                                                              and medium-sized businesses that serve within that industry, and
                                                              cybersecurity is a huge issue. And, you know, our adversaries
                                                              looked to target now our supply chain in those small- and medium-
                                                              sized businesses that oftentimes do not have the resources to ade-
                                                              quately bolster their cyber defenses. So, I am particularly inter-
                                                              ested in how we can assist with that process.
                                                                 Yet, at the same time, many of those businesses in the industry
                                                              have told me, you know, expressed concern about the maturity
                                                              model and reluctance to a one-size-fits-all approach because small-




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                                                              er companies, 10-, 15-employee companies, don’t have the resources
                                                              to necessarily comply with that.
                                                                 So, with that lead-in, could you just describe for me the tension
                                                              there between adequately rolling out that model and those re-
                                                              sources? And how do we adequately address the issue that smaller
                                                              businesses may not have the resources, but, at the same time, they
                                                              are primary targets as well and they need to be secured?
                                                                 Mr. ROWE. You are absolutely right, Mr. Crow, that those folks
                                                              further down in the supply chain are a prime target. At the same
                                                              time, they don’t have, you know, a chief information security officer
                                                              and all of those extra employees that they might need.
                                                                 So, what we focused on with the cybersecurity maturity model is
                                                              getting more small businesses to what they call level one. They
                                                              may not be certified yet, but we are getting them the very basics.
                                                              But we are also working with sponsors to have the opportunity to
                                                              give them more information, to get them, you know, a firewall or
                                                              whatever they might need.
                                                                 And that goes along with what we are doing with Secure Towns.
                                                              Now, we have just started this in Culpeper, Virginia, but we would
                                                              like to expand it to other towns and cities where it has to become,
                                                              you know, a global approach.
                                                                 I have got an example. You know, I had a court date cancel be-
                                                              cause the courthouse got hacked, ransomwared [sic]. It is not just
                                                              businesses. It is our city governments, it is our courthouses, it is
                                                              everywhere. And where we are trying to go is giving them the most
                                                              information they can handle at the time to get them at that first
                                                              level. And where they have to go from there, it has been a process
                                                              working with DOD and all the other agencies.
                                                                 Chairman CROW. Okay, thank you, Mr. Rowe.
                                                                 Ms. Weston, I would like to talk about a bill that Mr. Balderson
                                                              from Ohio, who was the Ranking Member on this Committee last
                                                              Congress, we have a bill called the Next Generation Entrepreneur-
                                                              ship Core Act, which I am sure you are aware of. And really what
                                                              we aim to do is help catalyze entrepreneurship, particularly in un-
                                                              derserved communities with wraparound services, a fellowship pro-
                                                              gram, you know, 320-plus fellows a year to provide mentorship, off-
                                                              set costs, and really help lift up those entrepreneurs by reducing
                                                              barriers that they face, particularly in the areas where they face
                                                              more barriers than other entrepreneurs.
                                                                 So, I would just like to have your thoughts on the impact of a
                                                              bill like that or an effort like that, that recognizes that not all com-
                                                              munities face the same barriers to entrepreneurship, and yet there
                                                              is great value in making some targeted investments within those
                                                              communities to unleash innovation.
                                                                 Ms. WESTON. Thank you so much for the question. And SCORE
                                                              is a strong supporter of the Next Generation Entrepreneurship bill.
                                                              We know that disadvantaged and underserved communities have
                                                              unique needs and unique challenges. And one of the things that we
                                                              believe is by creating equity-based programming that brings train-
                                                              ing and mentorship focused on those needs will help elevate and
                                                              reduce barriers. And when we see more success with those entre-
                                                              preneurs who have the drive, have the desire, but have a lot of
                                                              hurdles in their way, we know that the mentorship and the train-
                                                              ing will help them overcome. And this bill, the training will then




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                                                              be available for other entrepreneurs. They will see these successes.
                                                              They will be able to take advantage of the training and the re-
                                                              source partners.
                                                                 And as we heard, awareness is a key problem. Once we can get
                                                              access to these entrepreneurs to help them learn about the myriad
                                                              of resources available they are more likely to succeed.
                                                                 So, we are very excited about the bill and hope that it passes.
                                                                 Chairman CROW. Thank you. And then I will add that it is not
                                                              just bipartisan in the House, but we also have Senator Coons and
                                                              Senator Scott in the Senate that are championing it in a bipartisan
                                                              way on the other side of the Capitol as well. So, thank you.
                                                                 My time is done, so I would like to now recognize Ms. Kim, the
                                                              Ranking Member, for 5 minutes.
                                                                 Ms. YOUNG KIM. Thank you, Chairman. So, thank you so much
                                                              for all your testimonies.
                                                                 And so we heard that small businesses are unaware of these
                                                              wonderful programs that are out there. So, what steps have you
                                                              taken during the pandemic, especially during the pandemic, to help
                                                              small businesses find your organization? And additionally, who will
                                                              your organization change and adapt to assist small businesses as
                                                              they continue to recover? This to all of you.
                                                                 Mr. ROWE. Well, with the CARES Act funding is actually the
                                                              first time that an SBDC was allowed to use some of the funds for
                                                              marketing. So, our folks had been reaching out usually through so-
                                                              cial media because it is actually the most cost-effective. But that
                                                              has been a huge problem all along as we were literally prohibited
                                                              from marketing our services by the SBA. I guess the pandemic
                                                              changed some minds. And so that is where we have gone.
                                                                 We also partner with companies like Google and Microsoft and
                                                              Thrive to use their resources to get the word out. We had a resil-
                                                              iency guide that we worked on with Google and, you know, ex-
                                                              panded our reach through that.
                                                                 Ms. YOUNG KIM. Okay.
                                                                 Ms. WESTON. With SCORE, one of the things we focus on is
                                                              what our clients and others small business centers are saying that
                                                              they need help with. And so the content that we create and share
                                                              with our local chapters is also online and, of course, SEO, search
                                                              engine optimization, is a key way that people are finding our con-
                                                              tent, finding it valuable, and then pairing it with a mentor or a
                                                              workshop.
                                                                 Our local and national partnerships are another key area. By
                                                              reaching new markets, like not just the partners I spoke about, but
                                                              other corporate partners, they can amplify the message that
                                                              SCORE and our other resource partners are here. I do believe that
                                                              the SBA is a valued partner in helping to get the word out and I
                                                              think there are things we can do to improve that because we know
                                                              and we heard from the Chairman’s testimony that when people are
                                                              paired with SCORE or SBDCs or Women’s Business Centers, the
                                                              businesses are more likely to be successful.
                                                                 Ms. HODGES. If I could also just add partnership with con-
                                                              stituent offices has been a really valuable way to direct traffic. So,
                                                              when small businesses are asking who can help us and you send
                                                              them to any of us, they can locate a center. That has proven to be




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                                                              a huge, I think, source of where a lot of our growth came from,
                                                              from the Women’s Business Center side.
                                                                 There is truly still a problem, though, with the awareness among
                                                              the communities. I saw a survey from a couple of years ago, still
                                                              more than 80, 85 percent of women business owners in our case
                                                              know about a Women’s Business Center. And similar numbers in
                                                              our poll related back to SBDCs and SCORE as well.
                                                                 So, we do have to still continue to push the word, but there are
                                                              limitations with the funding that has to be applied toward pro-
                                                              gramming versus some of that kind of paid-for advertising.
                                                                 Ms. YOUNG KIM. Sure. I mean, we do know that there are great
                                                              programs, but many people are having difficulty finding those pro-
                                                              grams. So, let me direct this question to Mr. Montgomery.
                                                                 In your testimony you mentioned that SBA’s resources are not al-
                                                              ways easy to find or easy to access when starting a new company.
                                                              So, do you think entrepreneurs would benefit from more stream-
                                                              lined resources? Are four separate SBA resource partners duplica-
                                                              tive?
                                                                 Mr. MONTGOMERY. I wouldn’t say they are duplicate at all. I
                                                              just think they are tough to find, you know. Regarding the SBDCs
                                                              specifically, we actually had a representative reach out to me about
                                                              that specific program. And once I was able to, you know, partici-
                                                              pate in the program, I found all these additional resources that I
                                                              had no idea existed.
                                                                 So, you know, I think probably one of the main touching points
                                                              is normally a bank that you are trying to go through for an SBA
                                                              loan, so, you know, maybe there is some kind of synergy there for
                                                              marketing for these other free programs.
                                                                 Ms. YOUNG KIM. Thank you. Let me direct my last question to
                                                              Ms. Weston.
                                                                 You know, we talked about in my opening statement the SBA’s
                                                              Office of Inspector General releasing the audit. And that was an
                                                              oversight of your SCORE association and found that the program
                                                              officials did not properly oversee SCORE’s use of federal funds.
                                                              And then you also talked about that you did not get any additional
                                                              funding. So, can you provide an update on the corrective actions
                                                              that are being implemented by your organization?
                                                                 Ms. WESTON. Absolutely. I appreciate the question. The Office
                                                              of Inspector General’s report was released in April of 2019, and it
                                                              was on fiscal year 2017 and the first quarter of 2018. Two months
                                                              after that report, there was a leadership change at the organization
                                                              and less than a month after that we put together a comprehensive
                                                              plan to address all of the findings in the OIG report. Less than a
                                                              year later, every finding was closed.
                                                                 SCORE has a culture of compliance. We have centralized our ac-
                                                              counting, so that every chapter dollar that is spent we can recog-
                                                              nize and share with the SBA whether it was restricted or unre-
                                                              stricted. We have brought on a compliance manager to ensure that
                                                              we are following all the processes and procedures related to our
                                                              terms and conditions in the CFR 200. Our procurement processes
                                                              have been strengthened. And in cooperation with the SBA, we are
                                                              following what they have suggested, our board of directors has sep-
                                                              arated the association and the foundation. Our compensation policy
                                                              has been enhanced in terms of salary data, limiting performance




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                                                              pay. And our whistleblower policy has been updated and every vol-
                                                              unteer sees it every year by taking a required code of ethics.
                                                                 Ms. YOUNG KIM. Thank you. They say that our time is over,
                                                              so I yield back.
                                                                 Chairman CROW. Thank you. The gentlewoman yields back.
                                                              Now I will recognize the gentlewoman from Kansas, Ms. Davids,
                                                              also the Chairwoman of the Subcommittee on Economic Growth,
                                                              Tax, and Capital Access, for 5 minutes.
                                                                 Ms. DAVIDS. Thank you, Chairman. You know, our SBA re-
                                                              source partners have served a really invaluable role during this
                                                              pandemic and that includes providing guidance and assistance to
                                                              small businesses on some of the SBA relief programs that we have
                                                              talked about today. You know, the resource partners in the Kansas
                                                              Third have helped a lot of businesses, countless businesses, navi-
                                                              gate the federal programs that exist and help access the resources
                                                              available to them. And, you know, I think while we heard about
                                                              some of this already, but, you know, when we are talking about the
                                                              Women’s Business Center increasing its reach by like 22 percent,
                                                              we know that these things are really, really important.
                                                                 So, I want to start, Mr. Rowe, how can we learn lessons from this
                                                              pandemic and further empower our resource partners in the long
                                                              term? And, you know, that could be challenges and also opportuni-
                                                              ties.
                                                                 Mr. ROWE. I think the—and I am as bad with this as I am on
                                                              a Zoom call. I think the biggest thing we have learned is that we
                                                              can get a lot more mileage out of being online. But we also have
                                                              to be really careful not to isolate ourselves. And we do spend an
                                                              inordinate amount of time collaborating, whether it is with
                                                              SCORE, Women’s Business Centers, or with the Procurement Tech-
                                                              nical Assistance Centers. And for us the big thing is how do we
                                                              break down the silos to make sure that all of the information and
                                                              all of our capability and capacity is getting out to the community?
                                                                 I know we did, you know, gobs of town halls with Members like
                                                              yourself. We can always do more. I think it would be great if every
                                                              Member’s website had a small business assistance banner on it
                                                              where they could link to our services. I think we have learned a
                                                              lot that sometimes folks just can’t see because we are not raising
                                                              our hands.
                                                                 Ms. DAVIDS. Thank you. I appreciate that. And I kind of want
                                                              to—another piece of this is the Women’s Business Centers and I
                                                              know that, Ms. Hodges, you mentioned this in your testimony that
                                                              reauthorizing the Women’s Business Center program is, of course,
                                                              really important. I know I was proud to introduce the Women’s
                                                              Business Center Improvement Act. It passed the House in 2019. I
                                                              intend to reintroduce that piece of legislation later this year.
                                                                 But, you know, can you elaborate a bit on how the Improvement
                                                              Act might either have better helped you respond to the pandemic,
                                                              which I think you mentioned, but also just kind of moving forward
                                                              how that is going to help us get on the other side of this economic
                                                              crisis?
                                                                 Ms. HODGES. Gladly. Thank you, Representative Davids. Clear-
                                                              ly, had we addressed the modernization prior to the pandemic, we
                                                              would not have been still strapped with the $150,000 grant cap
                                                              that we had 30 years ago when the program was initially intro-




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                                                              duced. And so we were in a position with the CARES Act funding,
                                                              gratefully, to be able to scale up, but we were so far behind. And
                                                              now as we see the CARES Act funding coming to fruition, we are
                                                              at a position—we will be in a position to now have to scale back.
                                                                 And so just when the economy is now recovering, we have a tre-
                                                              mendous opportunity to take a really strong look at the program.
                                                              Everything that was in the bill that you introduced and passed was
                                                              great and was a move in the right direction in terms of increasing
                                                              the grant cap, introducing accreditation and standards of quality.
                                                              But the reality is none of those things have been able to be en-
                                                              acted, and so we are back at square one, basically 30 years ago,
                                                              and still trying to run a modern program serving modern techno-
                                                              logical challenges, like the Chairman mentioned with cybersecurity,
                                                              problems that were never envisioned when the program was ini-
                                                              tially thought of and piloted. And so we really just need to take a
                                                              modern look at what services we know that women and particu-
                                                              larly marginalized communities need to receive.
                                                                 Ms. DAVIDS. Thank you. I have one quick question for Mr.
                                                              Montgomery. This weekend I am having a cookout. Should I get
                                                              the ribeye or the strip steak?
                                                                 Mr. MONTGOMERY. I am a ribeye guy all day long.
                                                                 Ms. DAVIDS. Okay, very good. Thank you so much, Mr. Chair-
                                                              man. I yield back.
                                                                 Chairman CROW. Thank you. The gentlewoman yields back. And
                                                              now I would like to recognize the gentleman from Texas, Mr. Wil-
                                                              liams, the Vice Ranking Member of the Committee. And I don’t al-
                                                              ways root for the Atlanta Braves, but when I do it is because of
                                                              you, Roger.
                                                                 Mr. WILLIAMS. Thank you.
                                                                 Chairman CROW. The gentleman is recognized for 5 minutes.
                                                                 Mr. WILLIAMS. Thank you, Mr. Chairman. In April 29th, we
                                                              talked about the Inspector General releasing an audit of the
                                                              SCORE association showing some abuses in taxpayer dollars. You
                                                              have addressed that a little bit today. But it was over 700,000 in
                                                              federal grants were used for excessive staff bonuses, unallowable
                                                              contracts, it even covered the cost of alcohol. And these findings
                                                              were extremely troubling to a lot of us and should make us as law-
                                                              makers consider SCORE’s ability to continue to receive federal
                                                              funding unless these changes are made.
                                                                 I guess the question I would have is, were these accusations
                                                              true?
                                                                 Ms. WESTON. There were some instances where we did not fol-
                                                              low proper procedures in terms of contract documentation, proper
                                                              bidding, and we did not have a formal compensation policy that
                                                              limited fair pay across all of the staff in the organization. We now
                                                              have a compliance manager, we have a procurement policy, we
                                                              have a compensation policy, and those have been addressed now for
                                                              over a year.
                                                                 Mr. WILLIAMS. Okay. The people that caused the problem, are
                                                              they still there? And how are they going to change their ways?
                                                                 Ms. WESTON. They are not.
                                                                 Mr. WILLIAMS. They are gone, right? Another question I have
                                                              is you talked about—I am a small business owner. I own car deal-
                                                              erships back in Texas and 51 years, so main street is important to




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                                                              me and I appreciate what you are doing. But when we talk about
                                                              tax increases, which is happening now, how is that going to affect
                                                              your small businesses?
                                                                 Ms. WESTON. Well, I believe that SCORE and our other re-
                                                              source partners are here to help small businesses navigate no mat-
                                                              ter what challenges and hurdles are put in front of them.
                                                                 Mr. WILLIAMS. But it is going to hurt them, isn’t it?
                                                                 Ms. WESTON. I cannot speak to——
                                                                 Mr. WILLIAMS. If you pay more taxes, you pay more taxes.
                                                                 Ms. WESTON. What we know is that regardless of the hurdles
                                                              thrown in front of small businesses, we will be able to help them
                                                              navigate and figure out ways to overcome.
                                                                 Mr. WILLIAMS. To overcome paying more taxes.
                                                                 Ms. WESTON. To overcome the challenges for any small busi-
                                                              ness owner.
                                                                 Mr. WILLIAMS. Okay. All right. Mr. Rowe, in your testimony
                                                              you discussed Small Business Development Centers’ inability to
                                                              serve all counties. As someone who represents some very rural
                                                              areas of Texas, I have seen unique challenges facing people who
                                                              choose not to live in populated cities. Whenever you are dealing
                                                              with federal programs I am concerned that a majority of funding
                                                              and focus is being used in major metropolitan or urban areas.
                                                                 So, my question is, how is the SBDCs currently making sure that
                                                              programs are beneficial to all Americans, no matter where they de-
                                                              cide to open their business?
                                                                 Mr. ROWE. Well, just for instance, in Texas, A, if you look at my
                                                              written testimony, for years the UTSA, South-West Texas Border
                                                              Region SBDC has been hosting the Texas State Rural Business
                                                              Conference. So, as a result, I continue to get emails from your col-
                                                              league, Sid Miller.
                                                                 And that is a very real effort by us to share information with eco-
                                                              nomic development organizations throughout the state of Texas.
                                                              We have similar efforts, whether it is, you know, Wyoming, Mon-
                                                              tana, all of the states where we are dealing with significant rural
                                                              areas. And frankly, in our network that is every place but the Dis-
                                                              trict of Columbia.
                                                                 Mr. WILLIAMS. Okay. All right. Having access to capital and a
                                                              strong business plan are critical components of any entrepreneur
                                                              looking to take a chance and start a new career. The SBA has re-
                                                              sources available to try to help these individuals, but they are often
                                                              unknown to people, and we talked about that today, who are just
                                                              starting out or they are difficult to navigate.
                                                                 So, Mr. Montgomery, I am familiar with your industry, also. I
                                                              run a few head back in Texas. And as someone who benefited from
                                                              the SBDC assistance, what recommendations can you give the SBA
                                                              partners to improve outreach to aspiring entrepreneurs? Because
                                                              you are a great example.
                                                                 Mr. MONTGOMERY. Just like you were saying, Representative,
                                                              during that initial time period, especially when you are making
                                                              your business plan and you are searching for capital, you know,
                                                              that capital is incredibly important to kind of get your start, you
                                                              are having a lot of conversations with banks specifically. You know,
                                                              for me it was the USDA, looking at some of those subsidized loans.




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                                                                 So, I think there is a touch point there for banks to be able to
                                                              educate folks about these additional resources that are available,
                                                              especially SCORE. I didn’t even know that existed and what a
                                                              great opportunity to kind of have an advisor when you are initially
                                                              trying to avoid making what I like to call tuition payments.
                                                                 In addition to that, social media and also what I was mentioning.
                                                              I mean, you have to get those formation documents from the gov-
                                                              ernment, so maybe an additional pamphlet with some of those free
                                                              resources I think would be crucial.
                                                                 Mr. WILLIAMS. Okay. Well, you got a great story. We appreciate
                                                              all of you being here today. I yield my time back.
                                                                 Chairman CROW. Thank you. The gentleman yields back. I
                                                              would now like to recognize the gentlewoman from Illinois, Ms.
                                                              Newman, for 5 minutes.
                                                                 Ms. NEWMAN. Thank you, Chairman, and thank you, Ranking
                                                              Member. And thank you to all of our great guests today. Wonderful
                                                              comments and my sincere hope is that those pieces of legislation
                                                              that were offered in the 116th pass in the 117th.
                                                                 And I also want to thank, special thanks to the Women’s Busi-
                                                              ness Centers for helping get my amendment passed to extend the
                                                              waiver. So, bravo on all of you.
                                                                 I do have a couple of questions. The first one is directed to our
                                                              friends at WBC and perhaps Ms. Hodges could answer. One of the
                                                              huge issues as we head into a better economy and a healthy Amer-
                                                              ica is that women, as you cited, women have been inordinately dra-
                                                              matically lopsidedly affected by the pandemic and their ability to
                                                              stay in their jobs, mostly due to childcare. Similarly, they are now
                                                              wanting to start businesses in their homes because they have to be
                                                              home with their kids.
                                                                 So, with that, what are your recommendations? And is there any-
                                                              thing we can do as a Committee or a Congress to supplement your
                                                              efforts to help all of these women entrepreneurs?
                                                                 Ms. HODGES. Thank you for all of your work and for the ques-
                                                              tion, Representative Newman. I think there are a lot of things that
                                                              we can do to enhance the capacity of the Women’s Business Cen-
                                                              ters to serve more. Thanks to the pandemic, we have experienced
                                                              what being at capacity is like.
                                                                 There are, in some cases, Women’s Business Centers that a
                                                              woman who is interested in startup, and I would echo everything
                                                              you have stated, the startup requests are the greatest need at the
                                                              present moment. Those are very high, intense, resource-intense
                                                              types of counseling requirements and training requirements. And
                                                              we are at capacity. If you had an idea to start a business and called
                                                              a Women’s Business Center, you may have to wait weeks to get an
                                                              appointment because there is just not available staff or time at
                                                              even as many hours as they are working in a day.
                                                                 And so I would tell you, I think the single greatest thing we can
                                                              do is just to increase the capacity of those who are proven to help
                                                              women succeed regardless of what their goals are, whether it is to
                                                              work in the home or elsewhere.
                                                                 Ms. NEWMAN. Thank you so much. And I yield back.
                                                                 Chairman CROW. The gentlewoman yields back. I will now rec-
                                                              ognize the gentlewoman from New York, Ms. Tenney, for 5 min-
                                                              utes.




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                                                                 Ms. TENNEY. Thank you, Ranking Member, and also the Chair-
                                                              man. I am so grateful for you to put this Committee together.
                                                                 I am a small business owner as well and I have just a few ques-
                                                              tions about some of our Small Business Development Centers. My
                                                              son is also a captain in the Marine Corps and he also deals with
                                                              issues with some of his command and people that are leaving the
                                                              Marine Corps and getting their assistance. But you were talking
                                                              about different—and I am addressing this Mr. Rowe. You men-
                                                              tioned in your testimony that there are specialized programs in
                                                              several states to assist veterans with pre and post deployment. Vet-
                                                              erans, you know, base their—you know, I am just curious in your
                                                              work with veterans, I would be curious to hear your viewpoint, and
                                                              I know my son has his own, but what do you think are some of
                                                              the biggest obstacles in veterans accessing some of these SBA pro-
                                                              grams when they first come out? Because I know that has been an
                                                              issue that has been raised by a number of people, a number of vet-
                                                              erans in my community.
                                                                 Mr. ROWE. Well, one of the concerns, one of the problems is
                                                              making sure that we are not siloing off our resources. We have got
                                                              Veterans Business Ownership Centers working and lot of them go
                                                              on base. SBDCs used to do this as well offering transition assist-
                                                              ance.
                                                                 Ms. TENNEY. Okay.
                                                                 Mr. ROWE. And we sort of got slid out of that. But really it is
                                                              just talking between organizations to make sure that the services
                                                              are there. I know, for example, our network in South Carolina has
                                                              a great relationship with the Marine Corps and has worked there
                                                              regularly over the years providing transition assistance.
                                                                 Some of it is on us. If we offer someone assistance while they are
                                                              mustering out and then, you know, they go from, say, South Caro-
                                                              lina and they go home to wherever that is, we need to do a better
                                                              job of making them aware that there can be a continuum of that
                                                              assistance. They can go from the South Carolina SBDC to the
                                                              Texas SBDC and continue getting that assistance, get all the infor-
                                                              mation they need to keep moving on.
                                                                 Ms. TENNEY. If you could pick one, Mr. Rowe, if you could pick
                                                              one policy that you would like to change by SBA to make it better
                                                              and more accessible to veterans what would it be?
                                                                 Mr. ROWE. I think probably one of the greatest things would be
                                                              allowing SBDCs to operate and compete for the Veterans Business
                                                              Ownership Center program offices. We could vastly expand things.
                                                              It has been a little bit siloed.
                                                                 Ms. TENNEY. Thank you very much. I appreciate that. I just
                                                              have a quick question for Ms. Weston. I don’t see my timer on
                                                              there, but you stated SCORE respectfully requests an increase of
                                                              9.5 million in funding for fiscal year 2022 for a total amount of the
                                                              appropriation being 21.7 million. Should the SBA recover the
                                                              713,000 and change of unallowable and unsupported costs as rec-
                                                              ommended by the SBA’s Office of Inspector General prior to new
                                                              funding?
                                                                 Ms. WESTON. Thank you for that question. We have already
                                                              paid back the amount of funding that was required from the SBA.
                                                              After more work with the SBA and the OIG report, we were able




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                                                              to provide more documentation on the allowability of contracts and
                                                              we only had to pay back half of that 713,000. It is all paid back.
                                                                 Ms. TENNEY. That is fantastic. I wanted to hear that. Great to
                                                              hear that and would like to address my next question to Ms.
                                                              Hodges.
                                                                 I am a woman-owned business. My family business has been
                                                              around since 1946. Eight out of 10 of our shareholders are women-
                                                              owned, but, unfortunately, we can’t get a woman-owned designa-
                                                              tion in New York. But I am concerned about, you know, how we
                                                              continue to outreach to women. I know there is a lot of women
                                                              mentors and leaders, but what do you recommend, you know, in
                                                              terms of especially in the lending space?
                                                                 There are a lot of issues with women being able to access money
                                                              and loans to get their business underway. I am working with a
                                                              number of women now who have got fantastic business plans and
                                                              we are struggling to get lenders to really push to get them the
                                                              money they need. What type of outreach would you do to close this
                                                              gap? And what do you recommend? If you could just pick one thing
                                                              because I know my time is short.
                                                                 Ms. HODGES. If I just had to pick one thing it would be to be
                                                              able to put money into the marketing. We just don’t have the
                                                              money to put into marketing and without dollars it is really dif-
                                                              ficult to people who don’t know that you are trying to reach them.
                                                              So, whether that is radio or billboards or other paid advertising,
                                                              definitely there. But access to capital, you are right, is the number
                                                              one barrier.
                                                                 Ms. TENNEY. Thank you. I appreciate that because it definitely
                                                              is a marketing issue. We try to mentor as many women as we can
                                                              and it is a—got great business plans, we just need the lenders to
                                                              let that money flow to them so they can create and produce jobs.
                                                                 Thanks so much. I appreciate everyone. And I yield my time
                                                              back.
                                                                 Chairman CROW. Thank you. The gentlewoman yields back. I
                                                              will now recognize the gentleman from New York, Mr. Garbarino,
                                                              for 5 minutes.
                                                                 Mr. GARBARINO. Thank you very much, Mr. Chairman. And
                                                              thank you to all the witnesses that are here today. It has been
                                                              great testimony so far.
                                                                 My first question is for Mr. Montgomery. Small business owners
                                                              have expressed concerns regarding the proposed tax increases, reg-
                                                              ulations, inflation, labor shortages. What do you see as your biggest
                                                              barrier to growing your business?
                                                                 Mr. MONTGOMERY. Right now it is inflation hands down. I
                                                              mean, we have seen cost increases across the board on our cost of
                                                              goods just within the first 3 months of this year. And we expect to
                                                              see some more in the upcoming months, which is—it is scary, so
                                                              we are starting to kind of plan around that for probably the next
                                                              year here.
                                                                 Mr. GARBARINO. How do you plan around that? Do you have
                                                              to raise your own prices or how are you planning to address that?
                                                                 Mr. MONTGOMERY. Yeah, I mean, we—yes, sir. So, we have
                                                              done four price increases in the last year. Processing started going
                                                              up last year with the constraints on that market. I think we are
                                                              probably at the top of the consumer surplus of what, you know,




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                                                              customers are willing to pay for our product. So, now we have to
                                                              kind of think smarter and probably less money in marketing and
                                                              just to offset that cost to make sure that we are not losing money
                                                              this year.
                                                                 Mr. GARBARINO. Okay. And as a small business, you know, it
                                                              fluctuates, right? Some years you do well, some years you don’t do
                                                              well. So, if you have a profitable year, do you have to, you know,
                                                              make those profits last several years in case there is a loss? You
                                                              know, you are not guaranteed a profit every year, correct?
                                                                 Mr. MONTGOMERY. That is definitely correct, especially being
                                                              a startup, you know.
                                                                 Mr. GARBARINO. Okay. No, I appreciate that and I appreciate
                                                              you addressing the inflation issue. We have been hearing that a lot
                                                              from a lot of different people.
                                                                 I have another question. This is for pretty much any of the wit-
                                                              nesses, whoever wants to jump in. According to the NFIB April
                                                              jobs report, small business owners are experiencing the highest
                                                              ever readings of unfilled job openings since the polling started in
                                                              1973. What can BBOCs, SBDC, WBCs, and SCORE mentors do to
                                                              help small businesses find employees?
                                                                 Ms. WESTON. Well, I will start. One of the things that I believe
                                                              all of our resource partners do is really understand what the spe-
                                                              cific needs of the business are. We have seen since all of 2017 from
                                                              a SCORE Megaphone of main street report that it was becoming
                                                              more challenging to hire workers because of various trends, the gig
                                                              economy being one of them, childcare needs being another. And
                                                              what we are able to do is sit there and look at the resources and
                                                              limitations for every small business owner and help them decide is
                                                              a full-time employee best, a part-time employee, contractors. And
                                                              make sure it makes sense for them while still working towards
                                                              that goal of being profitable and maintaining profitability.
                                                                 Mr. GARBARINO. Anyone else? All right. I appreciate——
                                                                 Mr. ROWE. I think——
                                                                 Mr. GARBARINO. Oh, sorry, please.
                                                                 Mr. ROWE. Sorry, sir. I just had a quick thought on it. I think
                                                              one of the big things we work on at SBDCs is—and, for example,
                                                              some of our SBDCs colocate with the Workforce Development
                                                              Boards, is trying to understand the changes in the labor market.
                                                              You know, the pandemic has affected so much behavior that it has
                                                              almost become a marketing tool sometimes for a small business to
                                                              say, hey, we have got a safe, serious workplace and we need help.
                                                              So that is just one of the things we are trying to accomplish.
                                                                 Mr. GARBARINO. I appreciate that. And actually back to Mr.
                                                              Montgomery. What is the labor situation with your small business?
                                                              Inflation we said is number one, but are you having any trouble
                                                              filling spots?
                                                                 Mr. MONTGOMERY. We are. So, we just came out of our slow
                                                              season and seasonality is our business, so we are just now starting
                                                              to try to hire some part-time folks. Going into grilling season here.
                                                              We did a $3 across the board increase on our hourly wage, going
                                                              from 12 to a minimum of $15 an hour, going up to 18 based on ex-
                                                              perience, and we are still not getting applicants. So, it is a problem
                                                              we are working right now and I don’t think I have a good solution
                                                              yet, so.




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                                                                 Mr. GARBARINO. No, I appreciate that and I hope you are able
                                                              to fill those slots so you can remain to be profitable. But that is
                                                              it with all the questions I have. Thank you, Mr. Chairman, and I
                                                              yield back.
                                                                 Chairman CROW. Thank you. The gentleman yields back. I will
                                                              now recognize the gentlewoman from Georgia, Ms. Bourdeaux, for
                                                              5 minutes.
                                                                 Ms. BOURDEAUX. Thank you, Chairman Crow and Ranking
                                                              Member Kim. The SBA’s resource partners provide entrepreneurs
                                                              with some wonderful resources and really advanced this Commit-
                                                              tee’s shared interest in promoting entrepreneurship and small busi-
                                                              ness growth. My office worked closely with our local Small Busi-
                                                              ness Development Centers and have greatly appreciated their ef-
                                                              forts during the pandemic.
                                                                 Just a follow-up question, though, on that for Mr. Rowe. One of
                                                              the questions we received from our Small Business Development
                                                              Center and we are interested in what your answer might be, is
                                                              that given how the pandemic has really increased the SBDC’s pro-
                                                              file in our community, they are concerned about what is going to
                                                              happen after the pandemic when all of a sudden they are very,
                                                              very well-known for this great assistance that they have provided?
                                                              And wanted to get your thoughts about what resources might be
                                                              needed going forward.
                                                                 Mr. ROWE. Thank you, ma’am. Appreciate the question. What
                                                              we are looking for, and I appreciate the many Members who co-
                                                              signed the letter that Congressman Larson and Mr. Balderson and
                                                              Congressman Young initiated, we are looking for an appropriation
                                                              of $150 million. What that would do is essentially help us not fall
                                                              off a resource cliff, if you will. We have our regular appropriation
                                                              and then the very generous additional appropriation under the
                                                              CARES Act. We have beefed up staff and resources and we want
                                                              to be able to maintain those resources because, frankly, we don’t
                                                              see a diminishing amount of demand. Like the Women’s Business
                                                              Centers, very often we are having to, you know, schedule people
                                                              several weeks out because there is just so many hours in a day.
                                                                 Ms. BOURDEAUX. Okay. In your testimony, well, another issue
                                                              we have is we have a diverse community in the Seventh District.
                                                              About 25 percent of the people in my district were born outside of
                                                              this country. And so we are very, very interested in the Community
                                                              Navigator program and really working on building our capacity to
                                                              reach out to these diverse communities, many of whom are very en-
                                                              trepreneurial, they have got small businesses, but they may speak
                                                              a different language. There may be all sorts of different barriers.
                                                                 In your testimony you mentioned that several SBDCs have al-
                                                              ready engaged in pilot programs for the Community Navigator pro-
                                                              gram. And I was just curious how those efforts are going. Do you
                                                              see a use for the Community Navigator model at SBA in reaching
                                                              small businesses in underserved communities, like the ones I am
                                                              talking about in my district, beyond the pandemic?
                                                                 Mr. ROWE. Well, I think there is obviously a need. That is why
                                                              we are working on our own on the inclusivity challenge. The simple
                                                              fact is there are 30 million small businesses and I don’t know how
                                                              many aspiring entrepreneurs in this country. And it is going to
                                                              take a massive effort for us to make sure we are hitting everyone.




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                                                                 Community Navigators is a great start. We work hard to find the
                                                              associations and the organizations that we can work with to get out
                                                              to those communities. And it is a constant effort.
                                                                 Ms. BOURDEAUX. Do any of the other panelists have any
                                                              thoughts on this? I saw you, Ms. Hodges, nodding on that.
                                                                 Ms. HODGES. Thank you, Representative Bourdeaux. So many
                                                              fond thoughts of Georgia. I spent many years there and we have
                                                              a very strong Women’s Business Center presence in Georgia and a
                                                              new one that opened in Savannah. And I think about how the
                                                              Community Navigator program can complement and can also chal-
                                                              lenge as we think about our program.
                                                                 We know that the Community Navigator challenge has a tremen-
                                                              dous funding instrument attached, $100 million. And really, how
                                                              can you put a price tag on the health of small business in our econ-
                                                              omy?
                                                                 However, our experience in working with the Small Business Of-
                                                              fice of Entrepreneurial Development is that they are themselves
                                                              somewhat taxed in terms of levels of staff and resources. It is not
                                                              their fault. This is a situation not by their making or their design.
                                                                 And so, in some ways, we find it can be somewhat of a competi-
                                                              tion for resources, for attention to do the things that, quite frankly,
                                                              Women’s Business Centers have been doing for three decades and
                                                              have been doing extremely well with many fewer resources. If you
                                                              compare the $30 million ask of Women’s Business Centers with
                                                              $100 million ask of a brand-new, never tested Community Navi-
                                                              gator program, one can ask a lot of questions.
                                                                 That being said, we embrace every opportunity to partner. We
                                                              canvass every community for every asset, for every opportunity to
                                                              reach into those communities and serve. And so as soon as the
                                                              Community Navigator program officially launches, we will embrace
                                                              it and we will make the most of it as we do every dollar and every
                                                              resource we have ever gotten.
                                                                 Ms. BOURDEAUX. Good. Thank you so much. And I yield back.
                                                                 Chairman CROW. Thank you. The gentlewoman yields back. I
                                                              will now recognize the gentleman from Minnesota, Mr. Phillips,
                                                              Chairman of the Subcommittee on Oversight Investigations and
                                                              Regulations, for 5 minutes.
                                                                 Mr. PHILLIPS. Thank you, Mr. Chairman. And thank you to our
                                                              witnesses today.
                                                                 Mr. Montgomery, I would like to start with you. I celebrate your
                                                              story and am particularly intrigued by your testimony regarding a
                                                              lack of lending options available for startups and new businesses
                                                              compared to the SBA programs that exist that seems to be more
                                                              focused on existing businesses or incumbent businesses, as politi-
                                                              cians would probably prefer to say.
                                                                 I have authored legislation myself, called the New Business Pres-
                                                              ervation Act, that would enable states to set up pools of capital
                                                              alongside private investors and venture capital to support scalable
                                                              high-growth companies headquartered particularly in America’s
                                                              heartland.
                                                                 So, if you would take a moment and provide some more detail
                                                              on your proposal to increase financial support for individuals pur-
                                                              suing new business ideas and how a program like the New Busi-
                                                              ness Preservation Act might play a role in addressing this gap.




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                                                                 Mr. MONTGOMERY. Thank you, Representative Phillips. I ap-
                                                              preciate the question.
                                                                 First, I will kid of start with my experience. Like I was referring
                                                              to in my testimony, you know, we are asking for a quarter-million
                                                              to kind of make it through those first 3 years of creating a viable
                                                              business. Obviously, it proved almost impossible. I think the USDA
                                                              subsidized loans through the FSA office. They offered me 16,000,
                                                              which was kind of enough to drown myself without actually suc-
                                                              ceeding.
                                                                 So, I think what you are proposing is exactly what I am thinking.
                                                              There needs to be capital for people with good ideas, that have a
                                                              solid business model. Because there is definitely plenty of advice
                                                              out there for aspiring entrepreneurs, but the capital is not always
                                                              as easy to come by. And I think that is imperative because you
                                                              need both those things to get off the ground.
                                                                 Mr. PHILLIPS. All right. I appreciate that. And thank you once
                                                              again.
                                                                 Mr. Rowe, in your testimony you mentioned that the SBDC ac-
                                                              creditation process is built on the Baldrige standards. I have devel-
                                                              oped another bill that is called the Honest Enterprise Act that
                                                              would use the same framework to encourage and reward companies
                                                              for excellence in creating inclusive workplaces. And I think this
                                                              kind of stakeholder capitalism has to be baked into businesses at
                                                              the earliest stages.
                                                                 So, what kind of counsel might you provide, if any, that might
                                                              encourage prospective business owners to consider more than just
                                                              their profits and the management and benefits of their employees
                                                              and their communities and the role that they can play in protecting
                                                              the environment? How can we provide those incentives?
                                                                 Mr. ROWE. Well, I think the first thing is providing incentives.
                                                              I think it is great to want people to conserve energy, let us say,
                                                              and have a green workplace. To offer them a tax credit is even bet-
                                                              ter.
                                                                 I think as far as the workplace ethos goes, one of the things we
                                                              work on at SBDCs is succession planning. We have done a lot of
                                                              it, particularly in the state of New York, implementing Senator
                                                              Gillibrand’s bill. And that was really how do we take a current
                                                              business model and help plant it into an employee-owned model?
                                                              And that, for us, has provided a lot of ways to take both senior en-
                                                              trepreneurs and bring younger businesspeople into the marketplace
                                                              and sort of open that up.
                                                                 Now, just quick to go back to your question of Mr. Montgomery,
                                                              one of things we could think about is steering the funds in the
                                                              SSBCI program towards startup entrepreneurs. That is up to every
                                                              individual state on how they use those funds, but very often they
                                                              are tending to a venture model that really is geared toward estab-
                                                              lished businesses.
                                                                 Mr. PHILLIPS. Great. I have to say, your remarks about employ-
                                                              ees’ ESOPs, Employee Stock Ownership Programs, and how we
                                                              might use thoughtful policy to not just encourage, but provide in-
                                                              centives for businesses of all sizes. To do so is, I think, a grand op-
                                                              portunity for those of us who believe in compassionate capitalism.
                                                                 I see my time has, unfortunately, expired, but thanks again for
                                                              our witnesses. And I yield back, Mr. Chairman.




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                                                                 Chairman CROW. Thank you. The gentleman yields back. No
                                                              other members?
                                                                 Okay. It looks like we have no other members with questions
                                                              right now, so I want to thank again all of our witnesses for partici-
                                                              pating today. Thank you and your organization staff for your ef-
                                                              forts in preparing for the testimony and for your work during the
                                                              pandemic and economic downturn.
                                                                 And I want to thank in particular Mr. Montgomery for your time
                                                              because I know as a business owner and somebody who is dealing
                                                              with a lot of challenges, your time is extremely valuable, so taking
                                                              time to share your insights has been very useful to us.
                                                                 And at the beginning of the testimony you said you endeavor to
                                                              keep faith with our fellow rangers by giving earnest and honest
                                                              and good testimony, and I will say that you accomplished that mis-
                                                              sion. So, we thank you very much for your time.
                                                                 Mr. MONTGOMERY. Thank you, Chairman.
                                                                 Chairman CROW. So, with that, you know, we have identified a
                                                              number of issues that I think falls within the purview of this Com-
                                                              mittee and Congress. This Committee has a long history of working
                                                              bipartisan, in a bipartisan fashion to find practical and pragmatic
                                                              solutions to these issues. You have identified a number of things
                                                              and areas of improvement for us to continue to work on. And we
                                                              appreciate that very much. I look forward to working with all of my
                                                              colleagues to find those solutions and to make sure that we are ful-
                                                              filling what is our unified and joint mission, and that is supporting
                                                              our small businesses around the country to grow our economy, to
                                                              grow jobs, and to achieve the American dream.
                                                                 So, I would ask unanimous consent that members have 5 legisla-
                                                              tive days to submit statements and supporting materials for the
                                                              record. Without objection, so ordered.
                                                                 And if there is no further business to come before the Committee,
                                                              we are adjourned today.
                                                                 [Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]




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                                                                                                       APPENDIX




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