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94–130 PDF 2004

WOMEN’S ENTREPRENEURSHIP: SUCCESSES AND

CHALLENGES

HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

WASHINGTON, DC, MAY 12, 2004

Serial No. 108–64

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

JIM DEMINT, South Carolina 

SAM GRAVES, Missouri 

EDWARD SCHROCK, Virginia 

TODD AKIN, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

TRENT FRANKS, Arizona 

JIM GERLACH, Pennsylvania 

JEB BRADLEY, New Hampshire 

BOB BEAUPREZ, Colorado 

CHRIS CHOCOLA, Indiana 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

FRANK BALLANCE, North Carolina 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

GRACE NAPOLITANO, California 

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

DENISE MAJETTE, Georgia 

JIM MARSHALL, Georgia 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

BRAD MILLER, North Carolina 

[VACANCY] 

J. MATTHEW SZYMANSKI, Chief of Staff 

PHIL ESKELAND, Policy Director 

MICHAEL DAY, Minority Staff Director

(II) 

C O N T E N T S 

WITNESSES

Page 

Sabelhaus, Hon. Melanie, Deputy Administrator, U.S. Small Business Administration ................................................................................................................. 3

Pike, Ms. Judy, President, Production Tool & Supply .......................................... 6

Byron, Ms. Norma Powell, President, The Ashlawn Group, L.L.C. .................... 8

Welch, Ms. Maria, CEO, Respira Medical ............................................................. 10

Mosier, Ms. Cheryl on behalf of Ann Belus, Cable Pipe and Leak Detection .... 12

Hilliard, Ms. Isabelle, RN., NHA, Old Dominion Home Health Services ........... 14

Williams, Ms. Terry, President, U.S. Women’s Chamber of Commerce .............. 15

APPENDIX

Opening statements: 

Manzullo, Hon. Donald A. ................................................................................ 28

Velazquez, Hon. Nydia ..................................................................................... 32

Prepared statements: 

Sabelhaus, Hon. Melanie, Deputy Administrator, U.S. Small Business 

Administration .............................................................................................. 34

Pike, Ms. Judy, President, Production Tool & Supply .................................. 41

Byron, Ms. Norma Powell, President, The Ashlawn Group, L.L.C. ............. 46

Welch, Ms. Maria, CEO, Respira Medical ...................................................... 51

Mosier, Ms. Cheryl on behalf of Ann Belus, Cable Pipe and Leak Detection ................................................................................................................. 56

Hilliard, Ms. Isabelle, RN., NHA, Old Dominion Home Health Services .... 62

Williams, Ms. Terry, President, U.S. Women’s Chamber of Commerce ...... 67

(III) 

(1)

WOMEN’S ENTREPRENEURSHIP: SUCCESSES 

AND CHALLENGES 

THURSDAY, MAY 12, 2004

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS

Washington, D.C. 

The Committee met, pursuant to call, at 2:05 p.m., Room 2360, 

Rayburn House Office Building, Hon. Donald A. Manzullo presiding. 

Present: Representatives Manzullo, Velazquez, Akin, MillenderMcDonald, Napolitano. 

Chairman MANZULLO. Good afternoon and welcome to this hearing of the Small Business Committee on Women’s Entrepreneurship: Successes and Challenges. Women-owned businesses are a dynamic and thriving force in the U.S. economy. In fact, there has 

never been a better time for women to be in business. That is a 

nice line that you put in there, pretty good. Thank you. 

Women own 40 percent of all small businesses. Furthermore, 

women-owned businesses are growing at twice the rate of all other 

businesses. America’s 9.1 million women-owned businesses employ 

27.5 million people and contribute $3.6 trillion to the economy. 

Business ownership has been one of the most effective means of improving women’s economic well being. Women’s participation in 

business ownership at all levels is climbing, showing an increasing 

presence in the U.S. economy, yet women still face many obstacles 

and challenges. Access to credit, access to affordable quality health 

care for themselves and their employees, procurement opportunities, regulations and taxes. 

We look forward to the testimony of all the witnesses here this 

afternoon to learn more about their perspective. And I now turn to 

my colleague, the ranking member, Congresswoman Velazquez, for 

her opening statement. 

[Chairman Manzullo’s statement may be found in the appendix.] 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. Throughout the past 

decade, women-owned businesses have flourished in the United 

States. Since 1997, women-owned firms have grown at nearly twice 

the rate of all businesses and growth in employment by womenowned businesses has been even more dramatic, 24 percent versus 

12 percent for all other firms. It is quite obvious that women entrepreneurs are an increasingly important sector of our economy and 

their contributions are priceless. Nearly half of all privately owned 

businesses today are owned 50 percent or more by women, totalling 

10.6 million enterprises. 

2

As these women entrepreneurs experience overwhelming growth 

and expansion, it is unfortunate the Bush administration policies 

failed their firms. The failure of this administration to provide access to health care, capital and the federal marketplace strongly 

impact women-owned business, since their firms tend to be smaller. 

These are the same businesses capable of putting us out of the current economic downturn and, unfortunately, these administration 

policies are not creating conditions conducive to enabling these 

women-owned firms to do so. 

For example, the SBA has several programs geared toward assisting women entrepreneurs in starting and growing their businesses. The programs that target entrepreneurial development 

have been either flat funded or cut in President Bush’s latest budget proposal. 

Another challenge facing women business owners is the lack of 

access to the federal marketplace. The Women’s Procurement Program, which was actually signed into law in 2000 would have allowed federal agencies to lessen competition for contracts by restricting a portion for women-owned businesses. Sadly, it was 

never implemented by SBA. 

Therefore, in 2001, women-owned businesses lost more than $5.5 

billion in federal contracting opportunities and an addition of $4.9 

billion in 2002. These are opportunities that women-owned firms 

cannot afford to lose. Another major barrier for women entrepreneurs is a lack of access to capital. Access to affordable capital 

determines their chance of survival among their competitors and 

without it, women-owned firms can be devastated. That is why the 

SBA loan programs are a vital tool for women business owners, enabling them to gain access to capital. 

Last year, these loan programs provided $20 billion to our nation’s entrepreneurs, accounting for 40 percent of all long-term 

small business lending. Yet, the Bush administration proposed to 

eliminate funding for several of these initiatives including two distinct funding sources for women entrepreneurs, the 7(a) and Micro 

Loan programs. This is a huge loss of the funds provided by the 

Micro Loan programs that were targeted towards these women 

business owners. There is no getting around the harsh truth, that 

our country’s women business owners are facing an uphill battle. 

Despite their tremendous economic growth and strength over the 

past ten years, this administration continues to fail them by passing policies that do little, if anything, to provide the relief they deserve. 

If we want women entrepreneurs to thrive and to create the jobs 

our economy needs right now, then we must ensure they can overcome these challenges. Our nation’s women entrepreneurs are 

among the fastest growing economic sectors today and we must recognize how the Bush administration policies are negatively affecting their growth and ability. 

As we acknowledge the accomplishments and growth of womenowned businesses, we must work to guarantee they are successful 

and strong. The vitality of our economy depends on it. Thank you, 

Mr. Chairman. 

[Ranking Member Velazquez’s statement may be found in the appendix.] 

3

Chairman MANZULLO. Thank you. The light here gives you five 

minutes to give your testimony. Deputy Administrator Sabelhaus, 

we’ll give you seven minutes. I think you have a little bit longer 

there because of the details you have to go into. But Deputy Administrator Sabelhaus came out to our district about a year and a 

half ago and she made sure that she came into the district so she 

could be there on a Monday, because she wanted to stop at 

Manzullo’s Famous Foods on a Sunday evening. I think about five 

of you came in and we had a pretty wild time there at the restaurant. That is the family restaurant. 

Ms. SABELHAUS. Fabulous food. 

Chairman MANZULLO. They specialize in fish on Friday night, 

lasagna on Saturday night. And it was growing up in the restaurant business where I really learned who ran the Ma and Pa 

operation. My dad did the general repairs and Ma did the ordering, 

paid the bills, did the hiring, did the firing. She ran the restaurant 

and it was a very delightful opportunity in my life to grow up in 

that business and to see that take place. So Melanie, we really look 

forward to your testimony and the written testimonies that you 

have submitted will all be made part of the record. You are not 

bound to follow them. This is a very conversational type of atmosphere and let us have some fun this afternoon and discover the 

great things that are going on with women entrepreneurs in America. 

STATEMENT OF MELANIE SABELHAUS, U.S. SMALL BUSINESS 

ADMINISTRATION 

Ms. SABELHAUS. Thank you. Chairman Manzullo, Ranking Member Velazquez and Members of the Committee, I appreciate the opportunity to testify today before you and discuss both the successes 

and the challenges of being a women in small business in this marketplace. 

I want to thank my fellow panelists right from the very beginning on their incredible commitment to women in business and for 

being here today. I feel the energy, I feel the enthusiasm in this 

room and I know I am with very good friends here. I want to especially recognize from Maria Welch from WIPP. We are fellow members of WIPP and also the Women’s Initiative. I want to congratulate her on her recent recognition as being one of Maryland’s top 

100 women. I am proud of you, Maria. 

Chairman Manzullo and Congressman Akin, by the time this 

panel is through with our testimony, you are going to all want to 

be women entrepreneurs, so just get ready. 

[Laughter.] 

Ms. SABELHAUS. I am very proud to serve as the Deputy Administrator of the U.S. Small Business Administration. it is a once in 

a lifetime opportunity to be a strong advocate for our nation’s small 

businesses. I feel it is absolutely the best job in government. I am 

passionate about the success of entrepreneurs and especially 

women entrepreneurs, the economic powerhouse of the 21st Century. 

I know how important it can be for an entrepreneur to have just 

one person stand behind them, encourage them, support them and 

make sure that they back them up. I know this because after being 

4

turned down six times for a loan as an entrepreneur, I started my 

own business and I did take it public in 1997. I did not know about 

the SBA and I do not want that to happen to another small business in America. This kind of real world experience shared by 

President Bust and Administrator Barreto has shaped the economic 

philosophy of this administration. Those of us who know what it 

is like to meet a payroll, those of us who know what it is like to 

meet a health insurance premium bring a unique perspective to the 

federal government. We know how hard small business people 

work, the risk they take and how good it feels to be an entrepreneur and your own boss. 

I agree with the President when he says, when it comes to entrepreneurship and job creation, it is becoming a women’s world. You 

bet it is. The numbers prove it. It is 10.6 million entrepreneur 

women, women again owning up to 40 percent of all U.S. businesses and generating up to $3.6 trillion in revenue. That is larger 

than the GDP of Germany. Almost 100,000 women-owned businesses in America have $1 million more in revenue. Twenty-four 

million people walk in every morning and look at that smiling 

woman’s face. Women are the purchasing officers of America. We 

are buying for ourselves, we are buying for our families and we are 

buying for our companies. We manage 83 percent of the household 

income and, gentlemen, we are going to inherit 85 to 95 percent of 

the nation’s wealth and I will tell you why. We live seven years 

longer than you do. 

[Laughter.] 

So there are five million more of us. With this comes a great deal 

of responsibility. We are responsible for purchasing 81 percent of 

all goods and services in the United States and it cannot all be 

shoes, although the women here would probably debate that. 

The point is, we are impacting our country like never before. We 

are in an unprecedented position of power. The way we think, ladies, the way we behave affects the way America does business. 

What was once seen as a glass ceiling is now the executive board 

room of most of the most successful companies in the country. 

Carly Fiorna of HP, Meg Whitman of eBay are role models and 

they are also partners with the SBA. But the real economic powerhouse sits here today on this panel, is in this room. It is the 10.6 

million women business owners of America. 

The President believes that small business is the engine that 

fuels the economy. I say that we are the heart and soul of America. 

This is why the President has a small business agenda at the centerpiece of his domestic policy. The President’s jobs and growth 

package, which I know has the support of numerous members on 

this Committee, accomplished the most important thing government can do for small business and that is let these hard working 

Americans keep more of their own money so they can earn that 

money, pay their bills, invest in their business and hire people. 

To these men and women, income tax cuts means more money 

and that is what is important. It is all about jobs, jobs, jobs. Along 

with it, we quadrupled the deduction for business expenses to 

$100,000. This allows them to invest in their businesses, in their 

futures. In fact, 79 percent of the $12.4 billion in tax relief will go 

5

to small business owners. This is real impact of tax relief. This is 

job creation and the investment in our economy. 

The latest job figures last Friday showed that these policies have 

created 280,000 new jobs. That is more than 1.1 million jobs in the 

last eight months. However, this administration recognizes that 

there are other hurdles that we need to face, such as the high cost 

of health care, the high cost of health insurance, the common sense 

tort reform, the ability to compete in the expanding global market. 

This administration is taking a proactive approach to addressing 

these issues. We are all about delivering results. Small businesses 

are telling us we must eliminate burdensome regulations, cut the 

red tape and get government out of the way. 

Over the last three years, SBA’s Office of Advocacy has saved 

small businesses over $31 billion in needless red tape. Now that is 

what I call results. Small business wants their fair share of that 

$250 billion government pie and the women at this table want the 

whole pie, the do not want a piece of it. 

Under Hector Barreto’s leadership, the SBA has launched a very 

innovative program to insure that small businesses receive their 

fair share. It is called business matchmaking. It has given the 

small businesses in America a chance to meet with the federal, 

state, and local government officials, as well as the private sector. 

What this means is results. It means contracts, it means dollars, 

it means jobs. I am proud to say that the seven matchmaking 

events have had 4,000 small business people participating and 

nearly half of them were women. And what we did is we took this 

program outside the Beltway. We have been all over the United 

States and it translated into 16,000 one on one meetings between 

small businesses and potential buyers. 

One individual said to me, Melanie, on a scale of one to ten, business matchmaking is a 15. I was very proud to report that. 

Last year we celebrated our 50th anniversary. It is scary that I 

am older than the agency, but I do not look it, do I, Mr. Manzullo? 

Do I look older than the agency? I may at this point. 

Chairman MANZULLO. I think you were born in 1972, or something like that. 

Ms. SABELHAUS. Thank you very much. But last year we celebrated our 50th celebration and it was a banner year. We were up 

30 percent in our lending, 74,000 loans, over $14 billion. But what 

does that mean? That means jobs. Over 500,000 jobs were created 

or retained. 

Loans to every sector in the marketplace increased, double digits. 

African Americans, Hispanics, Asians, Native Americans and 

women. Our work is far from finished, believe me. There is still a 

lot of work to do and there are many entrepreneurs that want to 

start businesses. They need access to capital, they need technical 

training and we are here to help. That is where the SBA comes in. 

Women last year had increased by 37 percent for fiscal year 

2003. In fact, SBA guaranteed 14,378 loans——

Chairman MANZULLO. How are you doing on time, Melanie? 

Ms. SABELHAUS [CONTINUING] I am almost ready to end. 

Chairman MANZULLO. Good, otherwise I would end you. 

Ms. SABELHAUS. Okay, let me just end quickly by saying that on 

top of this, this is important and I would like to address it. In the 

6

last three years, the percentage of federal prime contract dollars 

awarded to women has risen. Last year we saw $9.7 billion. We are 

up one billion dollars. We know we have a lot of work ahead of us, 

but we are progressing. 

So I am proud to represent this administration. I also want you 

to know I am glad you gave me this opportunity to highlight this 

administration’s successes and I want to thank you very much, all 

of you, for your dedication and determination. I certainly look forward to this panel’s testimony and I am available for any questions. 

[Ms. Sabelhaus’ statement may be found in the appendix.] 

Chairman MANZULLO. Thank you very much for that excellent 

testimony. Our next witness is Judy Pike. Judy is from Rockford. 

Judy’s husband and my brother were in the Reserve together and 

were cooks and somebody has got to do the cooking. My brother 

went in there right after high school and he has been involved in 

the restaurant business ever since. Judy, we look forward to your 

testimony. If you could pull the mike up to you closer. 

Ms. PIKE. Sure. 

Chairman MANZULLO. You do not all have to be as animated as 

Melanie. I just want you to be yourselves, okay? 

STATEMENT OF JUDITH E. PIKE, PRODUCTION TOOL & 

SUPPLY, WOMEN OF TODAY’S MANUFACTURING 

Ms. PIKE. Good afternoon, Mr. Chairman. My name is Judy Pike 

and I am from Rockford, Illinois. The name of my company is Production Tool & Supply. 

Chairman MANZULLO. Judy, could you pull the mike a little bit 

closer there? Thank you. 

Ms. PIKE. Sure. The name of my company is Production Tool & 

Supply and until December 31, 2003, I also had another company 

called Acme Grinding. Both of the companies are in the manufacturing related business. Acme Grinding is a small job shop which 

does secondary services for the fastener industry and Production 

Tool & Supply is an industrial distributor. They are a supplier of 

abrasives, fluids, cutting tools, carbide cutting tools to the metal 

working industry in our area. 

My late husband, John Pike, owned both of these companies. I 

had the honor of working with John for 29 years until his death 

in 1996. Since then, I have been the president and owner of both 

companies. 

Even though I had worked in the business for many years, upon 

John’s death, there was a period of time when we, as a company, 

had to prove we were able to provide the services our customers expected. There was the occasional let me talk to someone who knows 

something and I would rather talk to one of the guys comments. 

But for the most part, everyone we dealt with was gracious and 

helpful. The employees at both Production Tool and Acme had always been our biggest asset. Together we weathered the storm and 

grew both companies until the economic downturn in 2001. 

With the multinationals leaving our country to manufacture outside, in the next three years the manufacturing climate in Rockford 

declined and many of the companies we did business with closed 

or left the state. We tried our best to keep the business operating. 

7

We worked two years and trimmed schedules of 32 hours a week. 

My family wanted me out while there was still something to salvage, but when you have worked with people for 34 years, you owe 

some loyalty to your employees. 

I could not see closing. What were these people going to do? 

There were no manufacturing jobs in Rockford. I had an employee 

willing to give up his medical insurance so if people left, we could 

keep the business open a little longer. Health care for small business is in major crisis. But in December, 2003, after months of declining sales and cutting employees’ hours and seeing no relief in 

the future, I decided to sell the manufacturing part of our businesses, which was Acme. If I had been 45, I would have gone to 

the bank and tried refinancing to keep the business going, but that 

was not an option. At 64, my financial future was at risk. 

As a woman business owner, I have not run into the obstacles 

that some women seem to have been running into. I believe my situation has been different. My business was in place and I didn’t 

have to go to anyone for help, so I thought. Maybe I should have. 

In the latest figures I could find on women owned businesses, 

only two to three percent of them are in the manufacturing industry, but I believe these numbers are on the rise. I know in Rockford 

there are several companies that are owned and run by women. 

With a couple of women I have talked to, the most challenging part 

of their business was not so much being a woman, but being in the 

manufacturing industry. The banks are not real kind to the manufacturing world in Rockford, Illinois. 

After one of the women said that she had gone to an agency and 

asked just for a loan, but they never even returned her call, after 

the move was complete, she did it all on her own and she called 

the person at the agency and thanked them for nothing. And we 

wonder is it being a woman or in the manufacturing industry? 

In our area, we really are trying to mentor and assist other 

women who are interested in getting into the manufacturing world. 

We have taken up the challenge of getting women involved in our 

industry. In the last year and a half, Melba Bradberry from S&B 

Jig Grinding, Teresa Beach-Shelow with Superior Joining Technologies and myself have incorporated a not-for-profit organization 

called Women of Today’s Manufacturing. It is an educational organization dedicated to serve the manufacturing in our area. We have 

now grown to 75 members. 

Teresa had an idea of having a camp for kids to introduce them 

to manufacturing in Rockford. We held our first Manufacturing 

Camp last summer. We signed up ten boys and girls and took them 

through a week of introduction to our industry. They are boys and 

girls that are in the eighth, ninth and tenth grade. It was a hands 

on week of learning how to operate various machines and software 

programs. They generated prints on their computers and they actually made their own little hammer to take home at the end of the 

session. 

They toured local manufacturing plants and by the end of the 

week they were excited to see things that had been made in Rockford and to be aware of their surroundings around them. The group 

has established our scholarship program through the community 

8

foundation and we are giving out our first scholarships this month, 

$500 each, and both boys are going into the engineering industry. 

We have to mentor. With nothing but discouraging news in the 

media——

Chairman MANZULLO. How are you doing on time, there, Judy? 

Ms. PIKE [CONTINUING] Oh, geez, I am sorry. 

Chairman MANZULLO. That is all right, just finish your thought. 

That is okay. 

Ms. PIKE. Okay, what we have done in our area is Teresa BeachShelow has started another location called Manufacturers Alliance 

of Rock River Valley, just to deal with the federal government. You 

cannot, as a small business owner, deal with the federal government. So they have started this group to deal with the Lockheed 

Martin, the Defense Department and Caterpillar. 

In the business world of today, we have been asked to be more 

productive, more cost efficient and in most cases, to reinvent ourselves. Hopefully in Rockford, Illinois, we are giving it our best shot 

and our best effort. Thank you for your time today. 

[Ms. Pike’s statement may be found in the appendix.] 

Chairman MANZULLO. Thank you. Our next witness is speaking 

on behalf of Women Impacting Public Policy and Norma Powell 

Byron, we look forward to your testimony. Byron is the nearest, 

biggest town to where my farm is. I do not know if you are aware 

of that. 

STATEMENT OF NORMA POWELL BYRON, THE ASHLAWN 

GROUP, LLC, WOMEN IMPACTING PUBLIC POLICY 

Ms. BYRON. Where is your farm? 

Chairman MANZULLO. It is near Egan, Lightsville and Myrtle. 

Ms. BYRON. Oh, great. 

Chairman MANZULLO. You do not know where that is either, do 

you? 

Ms. BYRON. I have no idea where that is. 

Chairman MANZULLO. Yes, we raise beef cattle about 25 miles 

south and west of where Judy lives. 

Ms. BYRON. Oh, great. I have been to Rockford. I know where 

that is. 

Chairman MANZULLO. Good. We look forward to your testimony. 

That will not count towards your time. Go ahead, please. 

Ms. BYRON. Good afternoon. Mr. Chairman and Members of the 

Committee, I am Norma Byron, President of the Ashlawn Group, 

located in Alexandria, Virginia. I am appreciative you are holding 

this hearing and its focus on women’s entrepreneurship. I am testifying on behalf of Women Impacting Public Policy and the National 

Association of Women Business Owners. 

My entrance into the world of entrepreneurship came about in a 

sudden and unconventional way. After spending over 20 years in 

the munitions industry for small and large companies, I was thrust 

into running a munitions company when my boss died in a small 

plane crash in the Shenandoah Valley. He had no will and no succession plan, so it was up to me to keep the company running and 

fulfill its contractual obligations. Since his family did not have any 

interest in continuing the business in the long term, they suggested 

9

to me that I start my own company and take the existing customers with me and that is how Ashlawn Group was born. 

Mr. Chairman, the Ashlawn Group is really one of a kind. There 

are no other women-owned businesses in this country who design 

munitions for weapons systems. Thanks to the program managers 

and contracting officers at the Department of Army’s Picatinny 

Army Arsenal facility, we are slowly but surely building this business to expand its customer base to other services and government 

agencies. If Picatinny had not been willing to work with us, my 

business surely would have failed. 

So while you hear horror stories of small businesses who contract 

with the DoD, you should also hear stories such as mine that are 

positive. Since my first contract with Picatinny, my company’s annual contracts doubled after the first year and have continued to 

hold steady since then. Our newest initiative is our fuel cell for munitions programs. We are capable of reducing a fuel cell to a D size 

battery and even smaller for weapons usage. This is critical, because it has been shown that standard batteries for weapons are 

not holding up as needed in Iraq. We have asked Congress for 

funding in FY 2005. If we secure the necessary funds, we will be 

able to produce these cells within 24 months. In doing so, we will 

create much needed manufacturing jobs in this country and insuring our weapons work. They are the first manufacturing jobs in 

fuel cells in America. 

Now let me address the challenges we face going forward. First we have applied for and hope to be awarded 8(a) status. Mr. Chairman, this is absolutely critical to our success in the government 

contracting arena. Clearly, we are not capable of competing in an 

open competition with large munitions companies with enormous 

resources. Without 8(a) status, we lose the ability to grow at a rate 

necessary to compete effectively. 

Second, small businesses like mine are at the mercy of federal 

contracting policy decisions which can be disastrous for them. Contract bundling continues to create barriers for small business. 

Small business must win each order separately on a case by case 

basis, while their large counterparts can win large bundle contracts. This places small government contractors at an immediate 

disadvantage in seeking contracts with the government. 

I know this Committee has been vigilant in its review of federal 

contracting policy and fought for changes important to small business, such as contract bundling. 

Third, the enforcement of Federal Acquisition Regulations and 

increased scrutiny of subcontracting plans is a key component of 

whether businesses such as mine will be able to be successful. Unless the secretary of each agency places a high priority on enforcement and attainment of small business goals, nothing will change. 

By increasing small business participation, we are in many cases 

asking contracting officers to do things differently. If contracting officers and program managers are not held to their small business 

goals and if contracting is largely left in the hands of the primes 

without the proper oversight, small business might well continue 

to struggle to get its fair share of federal contracts. 

Another issue for small business is payment in a timely fashion. 

As you are aware, cash flow is at the heart of any business. My 

10

experience has been difficult working with the contracting officials 

to allow for critically needed advance payments or partial payments for work in progress. Of course, the difficulty of collecting 

payments for work completed becomes even more difficult in a subcontracting relationship. 

The other challenge for women in small business is access to capital. The perception that you can only get an SBA loan if you do 

not need one is still the perception among women business owners 

and that one needs to change. As women who own businesses mature and move to the next level of growth, access to capital is a 

critical component. Thankfully, we no longer have to take our husbands with us to get a loan, but from my personal experience, the 

amount of loan offered to a woman-owned business in a financial 

institution can still differ significantly from one given to a male 

counterpart. I encourage your Committee to continue its good work 

in ensuring that the SBA loan programs remain intact and percentages loaned to women-owned businesses increase. Thank you for 

giving me the opportunity to testify and tell my story. I am happy 

to answer any questions. 

[Ms. Byron’s statement may be found in the appendix.] 

Chairman MANZULLO. Thank you. We might get a series of four 

votes that could take an hour somewhere between two and three 

o’clock so I want to get through the testimony in chief here, so if 

you could keep your remarks to the five minutes, that would help 

out. 

Our next witness is Maria Welch, CEO of Respira Medical, Inc. 

and we look forward to your testimony. 

STATEMENT OF MARIA WELCH, RESPIRA MEDICAL, 

BALTIMORE HISPANIC CHAMBER OF COMMERCE 

Ms. WELCH. Thank you. Mr. Chairman and Members of the Committee, good afternoon. My name is Y. Maria Welch. I am appearing before you today as a national founding partner of Women Impacting Public Policy and a member of the Baltimore Hispanic 

Chamber of Commerce. I am the CEO of Respira Medical, a respiratory and home medical equipment company located in Baltimore, Maryland. Here is my story. 

Three years ago, I applied to Women Entrepreneurs of Baltimore, 

WEB, an SBA-funded women’s business center, which is also funded by the SBA Prime Program. Prior to entering the WEB program, I experienced difficulties including domestic violence, resulting in my becoming homeless. Prior to becoming homeless, my father, Miguel Better, was dying of chronic obstructive pulmonary 

disease, COPD. He was a career iron worker and was exposed to 

environmental hazards, such as asbestos, causing his COPD. COPD 

is a horrible disease which prevents ones lungs from expanding and 

contracting and results in a long, slow and painful death. The toll 

of this disease on a patient and caregivers is enormous. As a result 

of assisting in the care for my father, I realized the difference in 

services patients received from caring, qualified respiratory therapists as opposed to home medical equipment companies who provide only mediocre services. 

Faced with the dual challenge of supporting my family and finding meaningful work, I decided to go into the home health resVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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piratory business so I could help people like my father and caregivers like my mother enjoy a much higher quality of life during 

the precious time they had remaining with us. 

When I applied to the WEB program, I expected to learn how to 

write a business plan and open a business. At that time, I was 

dealing with a lot of issues which affected my self-confidence and 

self-esteem. Not only did I learn how to write a great business plan 

and open my business, I also received immense support, encouragement, resources and tools to overcome my lack of self-confidence 

and to build my self-esteem. 

I am happy to report that in just three years, I employ 24 individuals and have cared for over 4,500 patients throughout a broad 

geographical area. We have grossed over $1.4 million this past year 

and have been honored with numerous awards, including the Small 

Business Administration Outstanding Woman Entrepreneur. 

I can assure you that none of this would have been possible without the highly effective and comprehensive program of WEB. There 

are no other programs that provide the in-depth and comprehensive training that WEB provides. The Senate recently passed 

S.2267 and I urge the House to agree to its passage. It is vitally 

important to the existing women business centers to be able to continue their much needed services. Fifty-three centers are in jeopardy of losing their funding as of July 1, 2004 if this legislation is 

not passed. 

Now that I have addressed my successes, let me address some 

of the challenges that lie ahead for Respira Medical. An element 

of the new Medicare law contains a component of the law that can 

close the doors of Respira forever. The new law requires national 

competitive bidding for durable medical equipment, which can include oxygen related equipment that Respira Medical provides to 

its patients. While well intentioned to promote competition among 

providers and thereby lower prices, I believe it will have unintentional consequences for patients and small businesses. The consequence to small businesses is that service to patients such as my 

small company can provide will be lost in the frenzy to provide the 

lowest cost equipment. Patients will not only lose services but will 

also lose consumer choice. 

Respira Medical serves many individuals in isolated locations. 

We do not pick and choose whom we serve based on the amount 

of reimbursement for services. We fear that national competitive 

bidding rules will be set up to favor large, well capitalized providers and jeopardize small companies like mine. We fear patient 

choice will be limited to a few large companies and, in the end, the 

patient will lose. 

As is the case in many industries, it is a mistake to assume that 

size and capitalization assure appropriate, timely or legitimate 

services. After overcoming so many obstacles to be successful, I fear 

that the government will undo these efforts by imposing an insurmountable obstacle, a federal regulation which is not within my 

power to change. 

Currently, the Centers for Medicare and Medicaid Services are in 

the process of putting together an advisory Committee to determine 

the direction of this new requirement. We urge this Committee to 

protect the interest of small business as the CMS begins this procVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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ess and develops its advisory Committee. At Respira Medical, we 

consider it a privilege to care for a patient. They have chosen us 

to provide their care. The secret to our success is that we do the 

basics very well. I hope my competition hears that loud and clear. 

Mr. Chairman and Members of the Committee, thank you for 

giving me the opportunity to speak today and I am happy to answer any questions. 

[Ms. Welch’s statement may be found in the appendix.] 

Chairman MANZULLO. Thank you very much. Our next witness 

is Cheryl, is it Mosier? 

Ms. MOSIER. Yes. 

Chairman MANZULLO. Pinch-hitting for her mom, Ann Belus, 

who is ill, is that correct? 

Ms. MOSIER. Yes, she is. 

Chairman MANZULLO. Cheryl, thank you for coming out on such 

very short notice, speaking on behalf of the Plumbing, Heating, 

Cooling Contractors of America and we look forward to your testimony. 

STATEMENT OF CHERYL MOSIER, FOR ANN BELUS, PRESIDENT OF CABLE PIPE AND LEAK DETECTION AND PLUMBING, HEATING, COOLING CONTRACTORS OF AMERICA 

Ms. MOSIER. Okay, thank you, Chairman Manzullo, Ranking 

Member Velazquez, Members of the Small Business Committee 

Members and other distinguished guests. First, let me offer that it 

is a thrill for me to be considered as an entrepreneur and it is indeed a privilege to be serving on a panel with other women that, 

in your view, have tremendous entrepreneurial spirit. Mr. Chairman, I applaud your Committee’s scheduling of a hearing on this 

topic. It is a most gratifying experience for me to be here representing my company, Cable Pipe and Leak Detection, in Spring 

Valley, California and for the association of which I am a member, 

the Plumbing, Heating, Cooling Contractors National Association. 

My entrepreneurial vision began in 1976 when my husband, 

John, was employed as a journeyman plumber for a major contractor. At the time, I was employed as an administrative assistant 

for a civil engineer. We had comfortable incomes but had higher aspirations, both of us keeping alert for new business opportunities. 

In John’s line of work, he came across the need for a specific, specialized type of work related to plumbing. In Southern California, 

most of our homes are built on slabs, with the plumbing installed 

under the foundation. If a problem in the piping, such as leaks or 

stoppages develop, there was no alternative but to dig and keep 

digging until the problem was found. He thought there had to be 

an easier way. 

Since his job was more financially lucrative than mine and we 

had four children under 12 years old to support, we decided he 

would keep his job and I would do the footwork to see if a business 

of this type would work. I would like to add at this point that even 

though my mom was starting her business, she always had time 

for us. She never missed any of our sporting events and was always 

there whenever we needed her and she still is to this day. 

I spent days researching manufacturers’ directories at the library 

to see if there were instruments being made that could be used to 

13

trace underground pipes. The vision for my company would be to 

specialize in tracing underground plumbing and pinpointing leaks 

in those lines. We leveraged ourselves to the maximum by taking 

out a second mortgage on our home and went out to purchase the 

equipment and a truck. We settled on taking small steps and went 

out and hired our first employee, a technician, and trained him on 

how to use the equipment. Our vision was forming—little did I 

know at the time that I was well on my way to becoming a successful entrepreneur. 

The first two years were extremely difficult to keep my company 

alive, but I would not give up. I operated in the red but never gave 

up as I literally pounded the pavement, went door to door visiting 

anyone that I thought could benefit from my services. I tried all 

types of advertising, newspaper ads, radio and flyers, but found 

that word of mouth from satisfied customers worked the best. I established a foundation of sound business practices and committed 

to my customers a quality product. Eventually my company started 

to grow. 

I never felt that being a woman in a predominantly male-oriented line of work was any disadvantage. I studied hard and 

learned quickly all the aspects of the plumbing trade so that I 

could converse with any contractor on an equal basis. When I approached a potential customer, I knew my facts and promised great 

service. 

My small company continued to grow until it reached the point 

where my husband could quit his job and come work for me. I continued to run the business from all aspects while he worked as a 

technician. Perhaps the biggest issue affecting my company today 

is the high cost of health care. It has always been a priority for me 

to offer my employees the best in health care insurance. The exorbitant increases in my health care premiums are forcing me to consider whether can continue to provide this benefit to my employees. 

My company firmly supports Association Health Plans and I am 

pleased to learn that both Chairman Manzullo and Ranking Member Velazquez support this legislation with Representative Velazquez taking a leadership role in sponsoring this legislation. 

I understand that this week being labeled covering the insured, 

so it is a thrill for me to be here in town while such an important 

issue is generating headlines. One would think that with small 

business providing nearly 70 percent of the economic growth in the 

country, it seems only fair that we should be able to obtain affordable health care such as that offered by large companies. 

In many ways, health care is a job issue. I would like to employ 

more technicians to meet the growing needs of my company, but I 

am somewhat reluctant to do so until we can hopefully control 

these ever increasing health care costs. 

In summation, having my own business has indeed been extremely satisfying for me. There have been tough times, good years 

and bad, problems encountered along the way, but I feel that I 

have provided a valuable service to society and provided a good 

working environment for all my employees. I now look forward to 

my retirement and letting my children take over the business operations. Perhaps now would be a good time to put in my plea for 

Congress to do away with the death tax, once and for all. I am forVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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tunate to be in this industry and I truly value the services I provide, including health, comfort and safety to citizens across the 

country. Thank you, Mr. Chairman, for the opportunity to allow me 

to share the story of my dream come true. 

[Ms. Belus’s statement may be found in the appendix.] 

Chairman MANZULLO. Well, thank you very much. Our next witness is Isabelle Hilliard, President and Chief Executive Officer of 

Old Dominion Home Health Services. We look forward to your testimony. 

STATEMENT OF ISABELLE HILLIARD, OLD DOMINION HOME 

HEALTH SERVICES, U.S. CHAMBER OF COMMERCE 

Ms. HILLIARD. Thank you, Chairman Manzullo, Ranking Member 

Velazquez and members of the Committee. I am Isabelle Hilliard, 

President and CEO of Old Dominion Home Health Services, a 

small business headquartered in Richmond, Virginia with another 

center located in Petersburg, Virginia. Our firm currently employs 

125 individuals dedicated to providing highest quality home care 

services to clients in their homes. 

My businesses offer a myriad of health care services, including 

free home care evaluation, medical skill nursing, Medicaid home 

health, Medicaid personal care, technology assisted waivered, respite care, sitters, live in and companion services, as well as physical, occupational, speech and respiratory services. My business includes a durable medical supply and equipment company and an 

adult day care center. 

I also come to you as a member of the U.S. Chamber of Commerce’s Small Business Council. I am deeply honored to speak to 

you today on issues that are very important to me. I cannot help 

but think of the millions of women-owned businesses that share 

similar concerns and challenges as I have in the years of my being 

in business. 

Succeeding as a women-owned business, small business, are not 

much different than the hurdles presented to all small businesses, 

though at times they are exaggerated by my gender. Access to capital or the lack of it, the deluge of government regulation and paperwork, navigating through a complicated regulatory process and 

the ability to attract and keep qualified personnel serve to headline 

my difficulties in business over the years. 

I would like to make the following recommendations to Congress 

that would not only help my industry but would also help other 

business owners like myself start, run and expand our businesses. 

First, this Committee and the House of Representatives should 

pass S.2267, the Business Centers Sustainability Recovery Act of 

2004. This bill would enable the Small Business Administration to 

reprogram currently appropriated funds and tap into a pool of 

funding normally reserved for initial grants to newly-established 

Women Business Centers. WBCs have been successful in providing 

assistance to women in all walks of life, including women who once 

received public assistance and are now operating businesses and 

creating jobs. Congress must appropriate enough funds to provide 

a consistent and predictable SBA 7(a) loan program. The SBA 7(a) 

program and the 504 guaranteed loan programs play a vital role 

in alternative sources for capital when funding through convenVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
15

tional methods is not available, especially for women business owners. 

Third, the Senate must follow the lead of the House and pass association health plan legislation. Access to affordable, high quality 

health care coverage for small business owners and their employees 

must be improved, without adding new mandates that require specific coverage. 

Chairman MANZULLO. Isabelle, could I interrupt you there? If I 

could go on to Terry to get her testimony in before we have to run 

off for some bells, would you mind if I do that? 

Ms. HILLIARD. I do not mind at all. 

Chairman MANZULLO. Then we will come right back and to the 

question time, okay? 

Ms. WILLIAMS. Talk to me in the future———. 

Chairman MANZULLO. Terry, go ahead. I am sorry about these 

bells, but we will make sure everybody gets enough time. 

STATEMENT OF TERRY WILLIAMS, U.S. WOMEN’S CHAMBER OF 

COMMERCE 

Ms. WILLIAMS. Chairman Manzullo, Ranking Member Velazquez, 

Members of the Committee, thank you for the opportunity to appear before you today. My name is Terry Williams and I am President of the U.S. Women’s Chamber of Commerce, representing the 

over 10 million women business owners of America. 

We are pleased to know the Committee on Small Business is 

looking at the successes and challenges of women in business because, frankly, we need your assistance. The growth of womenowned businesses in the U.S. over the last decade has become one 

of the great business headlines of our time. Driven by individuality 

and independence, necessity and practicality, women by the thousands have abandoned the safety net of employment for the new 

frontier of entrepreneurism. With this feminine entrepreneurial expedition came headline stories and the growth and successes of 

women in business. 

Corporations lined up to fund reports and send press releases to 

generate headlines about women in business and political leaders 

held women’s summits and gatherings to celebrate the successes of 

women. 

Unfortunately, the financial realities for women business owners 

are not really so bright. Even though privately held majority, 51 

percent or more women-owned businesses make up nearly 30 percent of all privately held firms in the U.S., between fiscal year 1998 

and 2003, there was a 7.5 percent decrease in the average value 

of loans made to women-owned businesses. The share of dollars 

lent to women-owned businesses increased from an already low of 

13.2 percent in 1998 to only 14.3 percent in 2003, while the share 

of the number of loans and equity investments decreased from 23 

percent to 20 percent over the same period. 

Women-owned businesses struggle continually to reach through 

the federal procurement market, reaching the artificial five percent 

nickel ceiling. The 2001 U.S. Small Business Administration Office 

of Advocacy Women in Business reports 98,870 women-owned firms 

or 1.8 percent had receipts of more than $1 million, compared to 

16

five percent of the market whole. So women-owned businesses are 

much smaller than the market whole. 

The struggle women-owned businesses are facing as they strive 

to reach strong levels of revenues is hindered by their ability to 

compete for larger market share. The majority of women-owned 

firms in the U.S. generate $1.19 trillion in sales and employ 9.8 

million people nationwide. This sounds wonderful, but when the receipts of women-owned businesses are compared to the market 

whole, we gain a clearer perspective of the constraints women face. 

A representative sampling of the top metropolitan areas reveals 

that while there are a significant number of women-owned businesses, their receipts remain small. 

For example, the D.C., Maryland, Virginia, West Virginia metro 

statistical area. In that area, women own 32.3 percent of all firms 

but their annual receipts are only 10 percent, so they are one third 

of the size of the market whole. 

In Detroit, you can see the numbers are about the same. Detroit, 

Atlanta, Georgia, they are all in the 30 percent range, while their 

businesses generate less than ten percent of the receipts. 

The question we ask today is, while celebrating the successes of 

women in business, why is not the President, Congress and the 

Small Business Administration addressing the clear, competitive 

issues that our new pioneering women business owners are facing? 

Women owned businesses receive fewer and smaller SBA loans. 

Women owned businesses receive far fewer and smaller government procurement contracts. In an unconscionable lack of support 

for women-owned businesses, the SBA has failed to implement the 

Women’s Procurement Program that was established in 2000. And 

this Committee has not acted to intercede on our behalf. 

I have grown successful businesses and I can attest that without 

access to markets, capital and technical expertise, businesses flounder. Our dynamic, committed women business owners need you to 

support them. In this time of focus on job stability, job growth, stability and fostering in competitive America, it is incomprehensible 

that we are not doing everything within our power to foster and develop this new wealth of entrepreneurial talent. 

To date,much has been promised and very little delivered. Modest tax cuts really do very little to help very small businesses. 

Chairman MANZULLO. I am going to have to stop you there. We 

are going to come back. It could be 45, 50 minutes. When we come 

back, Terry, I will let you finish and then Isabelle, I am going to 

go back to you, okay. I am not forgetting about you, I just wanted 

to get everybody in before we go down for what appears to be about 

four votes. So hopefully, about 45 minutes. Yes, and we will be 

back. 

Oh, no, you do not have to stay seated. If anybody has to catch 

a plane, feel free to go, okay. I mean, if you are not here, we will 

understand you are on an airplane. We will be back. 

Ms. WILLIAMS. Thank you. 

[Whereupon, a short recess was taken.] 

Chairman MANZULLO. Call the hearing back to order. Sorry 

about that. We were in the midst of testimony with Terry Williams 

and then we want to finish with Isabelle Hilliard. 

17

Deputy Administrator Sabelhaus has to leave at 4:15, is that 

your calendar there? 

Ms. SABELHAUS. Sorry. 

Chairman MANZULLO. Let me do this. Let me defer to you, Ms. 

Velazquez, for some questions, because I know you have some of 

Ms. Sabelhaus. 

Ms. VELAZQUEZ. I have a lot. 

Chairman MANZULLO. Okay, we will give you ten minutes there, 

then at 4:15 I will excuse you. Then we will come back to you ladies and finish your testimony. 

Ms. Velazquez? 

Ms. VELAZQUEZ. Thank you. And thank you all for being here. It 

is great to have all these success stories and for my part and I 

know the Chairman, we are committed to make sure that SBA provides the tools that you need in order to grow and expand. 

Ms. Sabelhaus, you know, listening to your testimony and listening to the rest of the witnesses here, I feel like I am in two different hearings. On the one hand, they are talking to us about all 

the needs of women-owned businesses and the commitment that we 

need to have in providing the tools that they need for succeeding. 

In your testimony and, you know, you are sitting here, you are 

representing the administration. I know that you are a charming 

lady, but these are issues that are important to me and to womenowned businesses in this country. In your testimony, you gave the 

impression that the SBA is meeting capital needs of women entrepreneurs more than ever. However, the average size of the 7(a) 

loan program, loans to women businesses has declined from 

185,000 to 133,000. This is largely due to SBA’s single focus on increasing the number of loans that it is making, while not calling 

for a corresponding increase in funding. 

As a result, women entrepreneurs must look to other, more costly 

sources of capital to compensate for this shortfall. What is SBA 

doing to insure that it fully meets the needs of women entrepreneurs, rather than just talking about the number of loans that 

it is making? 

Ms. SABELHAUS. Thank you very much for your question and I 

will respond by saying, I listen, as I do every week, Congresswoman, as I go out into the field and talk to women about what 

is on their mind and what do they need. 

Ms. VELAZQUEZ. Can you answer the question? 

Ms. SABELHAUS. Yes, I will. I will answer the question, absolutely. I will just say this to you. This is my focus, Hector and myself, this is what we are driving, is that we can have more access 

to capital for women entrepreneurs. I will say that the numbers 

truly speak for themselves and I think that is important to note. 

Last year, our lending was up 30 percent to women. 

Now you mention the fact that loans are lower. The market 

drives. The women here in this room are driving what they need 

as far as access. What I am proud to say is what small business 

owners are saying, they do not need a $250,000 loan. When we 

came into office, both Hector and I, that was the average size of 

a 7(a) loan. We brought that loan size down to $190,000. 

Ms. VELAZQUEZ. Ms. Williams, how do you feel about that, in 

terms of evidence that you have in front of you and anecdotal expeVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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rience? Is this is what we hear from women entrepreneurs, that 

they need less money, not a larger amount of money? That it is 

okay that we cut the 7(a) loan from 1.5 to 750 and reinstate it because of all the publicity that was generated? 

Ms. WILLIAMS. Thank you, Congresswoman, for the question. Actually, our statistics show that women-owned businesses continue 

to be about a third of the size of the market whole, which means 

they cannot compete. And to compete, you need money. You need 

the same sort of money that the whole market has and that means 

getting the same size loan. Thank you. 

Ms. VELAZQUEZ. Thank you. 

Ms. SABELHAUS. Can I respond to that? 

Ms. VELAZQUEZ. I have too many questions. Currently through 

the 7(a) program, SBA guarantees—I asked a question. 

Chairman MANZULLO. No, I understand, but she wanted to make 

a response. We can give you a couple more minutes. Just let her 

respond to this. 

Ms. SABELHAUS. I was just going to say that women are starting 

businesses and they are smaller businesses, so they require less as 

far as a loan size is concerned. That is what I am hearing. I am 

hearing small businesses say that the lower loan size is what is 

very important. And that is why they want access to $35,000 or 

less loans and that is why the average size, which I think I am 

very happy to say, is about $190,000. 

Ms. VELAZQUEZ. That is exactly why you zero out the micro enterprise——

Ms. SABELHAUS. No. 

Ms. VELAZQUEZ [CONTINUING] What you are telling me right here, 

right now, less amount of money, not more. And so what is the 

micro loan program? What is it? 

Ms. SABELHAUS. Okay, the micro loan program——

Ms. VELAZQUEZ [CONTINUING] It is okay. 

Ms. SABELHAUS. Do you want me to answer that or not? 

Ms. VELAZQUEZ. No. 

Ms. SABELHAUS. Okay. 

Ms. VELAZQUEZ. Through the 7(a) program, SBA guarantees up 

to 85 percent of a loan. If the maximum guarantee is revised to be 

50 percent as SBA proposes, what effect will this have on the availability of capital to women entrepreneurs? 

Ms. SABELHAUS. With the zero subsidy, which is very important, 

we are going to be able to offer $12.5 billion in our FY 2005 budget. 

What this means is there is no cap. We will never cap, we will not 

close it. We will not have to go for appropriations, we will not have 

to operate under a CR. We will have, at no cost to the taxpayer, 

$12.5 billion worth of lending, which means we can go up to 90,000 

loans, which means women are included in that and that——

Ms. VELAZQUEZ. Okay, I get it. Have you been listening to the 

banks? Did you hear what they are saying? 

Ms. SABELHAUS [CONTINUING] Yes. 

Ms. VELAZQUEZ. What does it do in terms of not using taxpayers’ 

money if the banks will not be willing to lend? You know and I 

know that the biggest problem that small businesses have is accessing capital through conventional loans with commercial banks. 

19

That unless we have a guarantee like the 7(a), we are not going 

to have those loans. 

So do not tell me that if we reduce the guarantee from 85 to 50, that small businesses will be able to access capital through the 7(a) 

loan program. 

Ms. SABELHAUS. What is interesting is that right now, we did 

come up with a compromise which, I thank you very much, we felt 

was a very good solution to this plan. And that was, of course, that 

we were able to offer $3 billion more in the loan appropriation so 

that we can have a $12.5 billion loan program. 

But the point I was——

Ms. VELAZQUEZ. Are you willing to support extending that to 

them next year? 

Ms. SABELHAUS [CONTINUING] Our most popular program—we 

want to go to zero subsidy and then we have the program. We have 

the $12.5 billion. That is what is key, that is what is important. 

We do not have to beg for appropriations. We have the money to 

lend to these women at this table and all the women entrepreneurs. 

Ms. VELAZQUEZ. You know that we reach a compromise because 

you knew that you would not be able to get the reauthorization 

passed under suspension, because I would have opposed it. We cannot come here with a great rhetoric while the numbers do not 

match it. 

Ms. Williams, as you know, the administration has proposed to 

eliminate funding for the micro loan program, with the understanding that such low income entrepreneurs can be readily served 

through other avenues. The micro loan program is the only SBA access to capital program where nearly 50 percent of its funds find 

their way to women entrepreneurs. 

Given this reality, how do you believe this cut will affect women 

entrepreneurs? 

Ms. WILLIAMS. We believe this cut, and our members believe this 

cut would be highly detrimental to the growth of women in business. We don’t just need women entering businesses, we need 

women able to access the funds that they need to get to the next 

level. 

These small loans also come also with technical assistance and 

other things that are really an intricate part of the micro loan program and we need not to remove these from the opportunities for 

women. 

Ms. VELAZQUEZ. Melanie, most, if not all borrowers obtaining 

funds through the micro loan program have been turned down by 

conventional lenders, including those that make 7(a) loans. With 

this in mind, is it not a bit disingenuous to suggest that the typical 

micro loan borrower, with a credit score well below what banks will 

accept, can be served through the 7(a) program? 

Ms. SABELHAUS. I would like to say to you that when I look at 

our numbers last year, I think it is important to note that we did 

23,000 7(a) loans that were under $35,000. We did 2,400 loans, 

micro loans, that were under $35,000. So what you are looking at 

is a program which is 7(a), which is ten times, which means we are 

getting the program out to the women. We are reaching out to 

them and in addition to that, I think it is important to note that 

20

when we work for a flagship program, which is the 7(a) SBA express, it is a 50 percent guarantee and the banks are willing. It is 

the most popular program we have. Forty-seven percent of all the 

loans that we did with women were through the 7(a) SBA express. 

Ms. VELAZQUEZ. That is only five minutes——

Chairman MANZULLO. I gave you ten minutes. I want to conclude 

this hearing hopefully within a short period of time, but I want to 

go to Terry to have you finish your testimony and then to Isabelle 

to have you finish your testimony. 

Ms. VELAZQUEZ [CONTINUING] Well, I will come back. 

Ms. WILLIAMS. Thank you, Chairman. 

Chairman MANZULLO. Thank you. I am sorry for the disruption 

with the bells, but this is our constitutional obligation——

Ms. VELAZQUEZ. Chairman, I have a question to you. 

Chairman MANZULLO [CONTINUING] Well, let them finish their 

testimony. 

Ms. VELAZQUEZ. Well, she is going to leave at 4:15. 

Chairman MANZULLO. That is correct. 

Ms. VELAZQUEZ. Okay, so I want to ask a question, not a question to her. I have other questions and I will be submitting those 

questions to you, for you to send the responses in writing. 

Ms. SABELHAUS. And I will do that. 

Chairman MANZULLO. How much time would you like to respond 

after you receive? 

Ms. SABELHAUS. What would be appropriate? 

Ms. VELAZQUEZ. Three days? 

Ms. SABELHAUS. Three days? That would be fine. 

Chairman MANZULLO. Terry? 

Ms. WILLIAMS. Thank you, sir. 

Chairman MANZULLO. Deputy Administrator, you have to leave 

at 4:15. You are excused. 

Ms. SABELHAUS. Thank you very much. 

Chairman MANZULLO. Thank you for participating. If anybody 

else has to catch an airplane, please, you know, do not miss a plane 

because of us. Go ahead, Terry. 

Ms. WILLIAMS. Thank you very much. I was just——

Chairman MANZULLO. Where were we? Okay. 

Ms. WILLIAMS [CONTINUING] I was just getting to delivering on 

the promise. 

[Discussion held off the record.] 

Chairman MANZULLO. That would be fine, thank you. 

Ms. WILLIAMS. Thank you, sir. Today, much has been promised 

to women-owned businesses and very little delivered. A modest tax 

cut does little to promote the growth of a very small business. The 

attempt to eliminate micro lending and adding more purloin costs 

to other loan programs does not help women in business. 

Cutting back the budget of important Small Business Administration programs does not help. Eroding the number of procurement center representatives does not help. Cutting the funding for 

Women’s Business Centers does not help. Not implementing the 

Women’s Procurement Program does not help. Failure to provide 

affordable health care does not help. 

Congress has not adequately served women-owned businesses. 

We strongly need real assistance with access to quality affordable 

21

health care so women business owners can secure and retain quality workers and remain competitive. Tax relief that truly supports 

the small business marketplace, access to the government marketplace with more realistic goals that are on par with the number of 

women-owned businesses rather than a portion of a portion of an 

already too small pie. We need a truly competitive marketplace 

that fosters competitiveness at all levels of contracting. 

Access to capital that is representative of our numbers and growing influence in the marketplace, reductions in the regulatory compliance work to relieve small businesses of wasted time and money 

so they can focus on growing and sustaining their businesses. 

More than anything, this dynamic market needs you to step up 

to the plate and truly embrace women-owned businesses for all 

that they can mean to the financial prosperity of our country. 

Mr. Chairman, we greatly appreciate your desire to hear of the 

successes and challenges of women in business. We hope that you 

and the Members of this Committee will finally help us take these 

successes to the next level. We hope you will move beyond handshakes and headlines to concrete action that will fully maximize 

the growth opportunities of women-owned businesses throughout 

the U.S. Help us complete the great entrepreneurial expedition and 

bring women-owned businesses to maturity and full contributing 

partners to a robust and flourishing U.S. economy. 

On behalf of the over 10 million women business owners in the 

United States, thank you for considering our challenges along with 

our successes. 

[Ms. Williams’ statement may be found in the appendix.] 

Chairman MANZULLO. Thank you. That had to be the longest testimony, yours and Isabelle’s stretched over a period of time. 

Isabelle, we look forward to your concluding your testimony. Do 

you know where you left off? 

Ms. HILLIARD. Yes, sir, I do. 

Chairman MANZULLO. Why do you not go ahead? Again, thank 

you for patience. Please go ahead. 

Ms. HILLIARD. I was at number three. The Senate must follow 

the lead of the House and pass the association health plan legislation. Access to affordable, high quality health care coverage for 

small business owners and their employees must be improved without adding new mandates that require specific coverage. 

Four, Congress must pass medical malpractice reform. Excessive 

litigation and high medical malpractice rates have added to employers’ health care costs, reduced access to quality medical care—

especially in the rural areas—and prompted unnecessary tests by 

physicians that further drive up health care costs. 

Five, federal agencies must reduce excessive federal paperwork 

burdens. One complete example of an agency where regulation and 

paperwork has limited my ability to hire people and expand my 

business is the Centers for Medicare & Medicaid Services. I have 

found many of the forms by CMS to be duplicative, excessive and 

unnecessarily time consuming. 

Six, over the last three years, Congress has passed and the President has signed into law tax reforms that have reduced marginal 

income tax rates, eliminated the death tax and increased small 

business expensing. These reforms must be permanent, thus freeVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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ing women business owners like myself to make investment decisions based on tax laws that are consistent and predictable from 

year to year. 

Again, I want to thank the Chairman and Ranking Member for 

allowing me to testify at this hearing. 

[Ms. Hilliard’s statement may be found in the appendix.] 

Chairman MANZULLO. Well, thank you. I have some questions 

here. Let me start first of all with you, Isabelle. Has your company, 

and you have what, 125 employees? 

Ms. HILLIARD. Yes. 

Chairman MANZULLO. Are you the sole owner of it? 

Ms. HILLIARD. Yes, sir. 

Chairman MANZULLO. Have you had occasion to take advantage 

of any of the new tax breaks with regard to purchase of equipment 

or is yours more of a service? 

Ms. HILLIARD. No, sir, I am a service company. 

Chairman MANZULLO. Okay. 

Ms. HILLIARD. I provide service to clients and I have a medical 

supply equipment company that also, we purchase wheelchairs, 

walkers, canes and those type of supplies, hospital beds and equipments, and those are services. 

Chairman MANZULLO. Okay. In your testimony, you mentioned 

about, I think it was the last paragraph, that Congress had passed 

and the President signed tax reforms that reduced marginal income 

tax rates, limited the death tax and increased small business expensing. To anybody here, what is the significance of eliminating 

the death tax? What impact does it have on any of your businesses? 

Ms. HILLIARD. Well, I think it will help the business grow and 

expand. I think it will continue to keep employees. And if any employees in our business, we should lose employees, we will be able 

to work with those employees and their family members. I think 

that is what is relating to us as far as the death tax. 

I think it helps my company, as well as everybody else’s company, grow and expand itself. 

Chairman MANZULLO. I would venture to state that everybody 

here is having a horrible experience of the increasing and escalating cost of health care. How do any of you feel about the relationship between the medical malpractice premiums for physicians 

and the high cost of insurance? Does anybody want to comment on 

that? Norma? 

Ms. BYRON. Well, it is hard for us to say, I think. I mean, unless 

you are in the health care industry. Maybe they would know. It is 

sort of invisible to us. We do not know why they are going up, but 

those things, they are not within our control to change our behavior in any way to affect that. I am sure it has certainly an impact, 

but it is not something that we see. 

Chairman MANZULLO. That is something that you cannot quantify because you cannot draw the distinction on it? 

Ms. BYRON. That is right. 

Ms. WILLIAMS. And, Chairman, one of the large challenges is 

really just even the scale of small businesses and their access to 

health care. We really do not have the ability to have scale in 

terms of purchasing health care for our businesses. 

23

Chairman MANZULLO. Well, that is what association health plans 

will do, right. 

Ms. WILLIAMS. It will really make a difference with that. 

Chairman MANZULLO. And that has been bottled up in the Senate, by the Democrats. 

Ms. WILLIAMS. We hope that this will pass. 

Chairman MANZULLO. Right, well, we appreciate that, even 

though Ms. Velazquez and I both are in favor of the association 

health plans, but it has been an issue that has really stagnated in 

the Senate and it has hurt us tremendously. 

Ms. Napolitano? 

Ms. NAPOLITANO. Thank you, Mr. Chairman. I apologize, I had 

other commitments and somebody twisted my arm to make sure 

that I got here. Being a micro small business owner myself, I have 

had the opportunity to ask questions of some of my women-owned 

business in my area, and I have part of the Los Angeles area, 

which as you well know, is very diverse. 

What I am finding out is that women are having a hard time 

convincing banks and other lending institutions to loan money to 

them, because, number one, they are women. Number two, they are 

small. And number three, they do not want to handle a small loan 

that is going to cost them in time and money the same as it would 

a large loan. 

What say you to that? How do you feel that we need to put pressure on the banks, whether through the FDIC, which they have 

been here before us before, this Committee, where we have applied 

pressure to them and said, look, if you want the protection of the 

federal government, you need to work with small business. 

Now the other thing that I am finding out is that credit unions 

are beginning to get involved in small micro and small business 

loans, with the blessing of SBA to a certain point. That, to me, is 

going to be a boon for women, because those are local vendors, local 

owners, local business people that know the community. 

I would like to hear from you how we can expand this to include 

other women entrepreneurs that will help our economy rather than 

hinder that ability, not only to get started, but develop products 

that will be able to employ and provide the jobs that we so desperately need in this country. Any one of you? 

Ms. WILLIAMS. I can speak personally from the lending side for 

business that I had on my own. SBA was wonderful to work with. 

We were one of the businesses that qualified for the very high level 

of backing from SBA and the banks really did not care. And the 

SBA in our region had very little ability to really coax those folks 

to really support the program. What we were told was that these 

programs were costly to the bank, that our loans were very expensive for them and that it was really nothing of importance for 

them. 

I believe that there needs to be a stronger tie to the SBA and 

the ability to get those banks to loan. Also, I think any time that 

we can put in the hands of folks that are much closer to our community the ability to do that lending, that we are going to have a 

better response. 

So the ability to get into associations, those sort of things to do 

the lending and to some of the SBICs, these sorts of lending instiVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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tutions that might be run by women, would be wonderful for the 

marketplace. 

Ms. WELCH. If I may something on a personal note, I think unfortunately many of us women entrepreneurs, a lot of times we actually start our businesses out of need and such in my case. And 

I was in a divorce where my credit was affected negatively and that 

was a long time ago, over ten years ago, and to this day, I am still 

suffering from that. Although my credit history now is wonderful, 

but the banks look at me very badly. And if were not for my husband, who helps me with his credit, that is how we are able to do 

some of the funding. But on my own, I should be able to, and that 

is one of the issues I think many of us women face. 

Ms. BYRON. I have a situation. I went to a seminar where one 

of the leading financial institutions in the metropolitan area mentioned that virtually any business could come up and get a $50,000 

loan, but when I went to go apply for one, they would only give me 

$25,000. And they said they went to SBA and that somehow or another, I did not qualify. 

There is nothing wrong with my credit, but I just did not qualify. 

So I do not know what the problems are, but I know that there are 

some and I have them. 

[Laughter.] 

Ms. PIKE. One of the things I found after my husband died, we 

went through some transition, but what I used was his financial 

officer and I have maintained him over the last eight years. And 

so I used him as a front man and, you know, he went to the bank 

and he did the stuff and did the preliminaries. Then when it came 

down to really talking to them, you know, then I sort of would 

come into the picture. 

But I used that as sort of like to keep myself involved. 

Ms. NAPOLITANO. You were able to have somebody front for you. 

How about the dozens, thousands of women who cannot? 

Ms. PIKE. Absolutely. 

Ms. NAPOLITANO. And why are we not in SBA creating a program 

that is going to help these women who have the need? They have 

the ability, we have shown it over and over again, but yet we cannot get the funding to an agency. They were here saying, oh, no, 

we have enough money, remember that? Oh, yes, we have enough 

money for the programs. What happens? They start cutting the 

programs. 

Well, ladies, you need to stand up on your hind legs and start 

talking to these people and telling all the women business owners 

and your customers and your providers to put the pressure on 

Washington. Because without you, this economy is going to go 

down the tubes. Because women work harder and they maintain 

longer and they have the staying power that it takes to be successful. 

I am very upset because this continues to be a problem. What 

was it, last year, they came up and asked for $8 million for the 

women-owned SBDCs. Eight million for the whole United States, 

ladies. And I am saying, well, that should be ten times that. They 

were asking for three, three more, and that was not this budget 

year, I think it was the last budget. 

25

I mean, it is the way you are treated, the way women—they are 

not given the recognition of being the backbone of a lot of our economy. And you are the fastest growing segment. Why is it that we 

have to fight and plead and beg for every cent? 

So my response to you is, help. Thank you, Mr. Chair. 

Chairman MANZULLO. Let me, if I could just take a minute or so 

here. I was raised in small business and my heart is in small business. And this Congress has done a remarkable job on helping out 

the small business people. We will go through just a very short list 

here. When the tax cuts went through, that increased the bonus 

depreciation from 30 percent to 50 percent. Increase small business 

expensing from $25,000 to $100,000. And I have talked to a lot of 

guys with machine shops in Rockford and because of this provision 

whereby they could get back their money within one year of buying 

new machinery, as opposed to over a period of years, this helped 

them acquire the machinery they needed in a very short period of 

time, without having to wait years and years to depreciate it. A lot 

of shops have struggled and some have not made it in Rockford, 

but many of the guys that did make it appreciate the fact that Congress stepped up and did that. 

This death tax is extremely important. There is a figure out 

there that says something like I think it is 40 percent of small machinery, small manufacturing facilities do not get passed down to 

the children. The figure is staggering because of the tremendous 

cost of capital that is involved. You know, a father who is a lawyer 

can pass down his practice as it were to his son who is a lawyer 

at a very little cost, if any at all, because those are paper transactions. And services have a very difficult time being evaluated for 

estate tax purposes. 

But when we decided to get rid of that death tax, because it was 

killing the restaurant industry, it was killing the people with machinery and it was also killing the farmers back home. I remember 

one time when I was practicing law, when I had to tell the family 

that they had to sell one of their farms just to pay the death taxes. 

We got rid of that or at least moved down the road towards doing 

that. 

We got involved with the health savings accounts. I mean, any 

number of things that we have done. There is a difference in philosophy. Programs are good. If you have a program, you should 

fund it, otherwise you should not have it at all. That is the angst 

that we see here and I join in that. 

Personally, I would rather see small business people have access 

to capital with the ability to make their own decisions on where 

they are going to go. I mean, you can only have so many programs 

after awhile. I think the SBA should concentrate on, for example, 

making the 7(a) the best program there is, make it open for everybody, keep it at 85 percent and not have to come back here year 

after year after year. If the flagship program, which is the 7(a) 

were made so that each year was not subject to an appropriation, 

then it would be more predictable, more open for people and Congresswoman Velazquez and I would not have to, as it happens 

every year, have to get into a tango with the Administration to get 

them to write the check in order to fund it. 

26

So not everything is perfect. And we just try our best, I guess, 

based upon our philosophies. But, Terry, I am not going to let you 

leave here until you tell these people what you did prior to becoming President of the Women’s Chamber of Commerce. 

Ms. WILLIAMS. There is a big change. 

Chairman MANZULLO. There is. I want you to tell them. 

Ms. WILLIAMS. Well, you are very kind, but then I am going to 

squeeze in a response to you. 

Chairman MANZULLO. I am responding to you, Terry. All right, 

go ahead. 

Ms. WILLIAMS. I appreciate your opportunity to speak. 

Chairman MANZULLO. Go ahead. 

Ms. WILLIAMS. I was a conductor. So I——

Chairman MANZULLO. Well, not a train conductor, but an——— . Ms. WILLIAMS [CONTINUING] Orchestra conductor. No, not a train 

conductor, an orchestra conductor, it is true. So I am used to like 

making things happen, so hopefully I can make some things happen today. 

One of the things I would really lies to articulate to you, sir, I 

understand your commitment to small business. You would not be 

the Chair of this Committee if you were not. 

Something to really understand about women in business, you 

talk about, for instance, equipment, size of equipment, manufacturing. There are about two percent of all women-owned businesses 

that are manufacturers, so we are talking about two percent. About 

50 percent are service oriented businesses that do not have equipment. So it is really, really a challenge to us. 

And you talk about size and getting cuts and things. Now take 

the businesses you were talking about and make them a third of 

the size that you are used to seeing. That is a women-owned business. You know if there are a third of the businesses in the marketplace only getting ten percent of the revenues, then they are a 

third of the size of the market. 

And when we talk about just sort of standardizing loan programs, one of the challenges that we have in the market right now 

is that there is micro, small, medium, large. There is a breadth of 

businesses in the marketplace and if we standardize a program, 

then we need to make sure we are servicing the whole breadth of 

the market with that one program. That is why we fight so hard 

to make sure that there are niches of programs that serve the marketplace and serve women. Thank you. 

Chairman MANZULLO. Well, the micro loan program was abandoned because of the high rate of default on it. It became an issue 

of safety and solvency. It is not abolished yet, but that is one of 

the reasons why——

Ms. VELAZQUEZ. Can I correct the record, Mr. Chairman? The 

micro loan program has a lower default record than the 7(a) loan 

program, so that is not the reason. 

Chairman MANZULLO [CONTINUING] Well, we would disagree on 

that point. But one thing we agree on is that you ladies have been 

tremendous witnesses. You have traveled from long distances. You 

know, the purposes of these hearings is many-fold. We have to 

draft legislation that deals with lots and lots of issues and oftenVerDate 0ct 09 2002 17:04 Oct 06, 2004 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 G:\HEARINGS\94130.TXT MIKEA
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times when we are sitting there trying to figure out where to go 

in policy, we make our decisions based upon the testimony that we 

hear here in Washington, the things we see in our congressional 

districts. The beauty of a congressional hearing is the fact that we 

have an opportunity, normally within about an hour and a half, to 

hear testimonies from people all over the country. Different backgrounds, different situations, and that is what we heard today. I 

cannot tell you how much I appreciate your coming here this afternoon, traveling to Washington. What we are going to do, as I said 

before, the record will accept your complete statement and as soon 

as we get a bound volume—I do not know how long it will take—

of the testimony, we will make sure that we send it to each of you. 

Again, thank you for coming and this hearing is adjourned. 

[Whereupon, at 4:38 p.m., the Committee was adjourned.]

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