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[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]

                   SBA'S ENTREPRENEURIAL DEVELOPMENT 
             PROGRAMS: RESOURCES TO ASSIST SMALL BUSINESSES

=======================================================================

                                 HEARING

                               BEFORE THE

               SUBCOMMITTEE ON CONTRACTING AND WORKFORCE

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             MARCH 30, 2017

                               __________

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            Small Business Committee Document Number 115-013
              Available via the GPO Website: www.fdsys.gov
                  
                  
                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
24-760 PDF                  WASHINGTON : 2017                     
          
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                  HOUSE COMMITTEE ON SMALL BUSINESS

                      STEVE CHABOT, Ohio, Chairman
                            STEVE KING, Iowa
                      BLAINE LUETKEMEYER, Missouri
                          DAVE BRAT, Virginia
             AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                        STEVE KNIGHT, California
                        TRENT KELLY, Mississippi
                             ROD BLUM, Iowa
                         JAMES COMER, Kentucky
                 JENNIFFER GONZALEZ-COLON, Puerto Rico
                          DON BACON, Nebraska
                    BRIAN FITZPATRICK, Pennsylvania
                         ROGER MARSHALL, Kansas
                                 VACANT
               NYDIA VELAZQUEZ, New York, Ranking Member
                       DWIGHT EVANS, Pennsylvania
                       STEPHANIE MURPHY, Florida
                        AL LAWSON, JR., Florida
                         YVETTE CLARK, New York
                          JUDY CHU, California
                       ALMA ADAMS, North Carolina
                      ADRIANO ESPAILLAT, New York
                        BRAD SCHNEIDER, Illinois
                                 VACANT

                   Kevin Fitzpatrick, Staff Director
          Jan Oliver, Deputy Staff Director and Chief Counsel
                Adam Minehardt, Minority Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Steve Knight................................................     1
Hon. Stephanie Murphy............................................     2

                               WITNESSES

Mr. W. Kenneth Yancey, Jr., CEO, SCORE, Herndon, VA..............     5
Ms. Antonella Pianalto, President and CEO, Association of Women's 
  Business Centers, Washington, DC...............................     6
Mr. Charles Rowe, President & CEO, America's Small Business 
  Development Centers, Burke, VA.................................     8
Mr. Joseph C. Sharpe, Jr., Director, National Veterans Employment 
  & Education Division, The American Legion, Washington, DC......    10

                                APPENDIX

Prepared Statements:
    Mr. W. Kenneth Yancey, Jr., CEO, SCORE, Herndon, VA..........    22
    Ms. Antonella Pianalto, President and CEO, Association of 
      Women's Business Centers, Washington, DC...................    35
    Mr. Charles Rowe, President & CEO, America's Small Business 
      Development Centers, Burke, VA.............................    45
    Mr. Joseph C. Sharpe, Jr., Director, National Veterans 
      Employment & Education Division, The American Legion, 
      Washington, DC.............................................    55
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    None.

 
 SBA'S ENTREPRENEURIAL DEVELOPMENT PROGRAMS: RESOURCES TO ASSIST SMALL 
                               BUSINESSES

                              ----------                              

                        THURSDAY, MARCH 30, 2017

                  House of Representatives,
               Committee on Small Business,
         Subcommittee on Contracting and Workforce,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Steve Knight 
[chairman of the Subcommittee] presiding.
    Present: Representatives Knight, Murphy, Evans, and Clarke.
    Chairman KNIGHT. Good morning. Thank you for coming to the 
Subcommittee on Contracting and Workforce. We are--I will state 
this quickly--we will be voting today. And we are keeping an 
eye on the votes, but we are expecting, over the next probably 
15, 20 minutes, they are going to start voting. And so I will 
normally take a recess about 5 minutes into the voting so 
everybody has enough time to walk down there and vote and do 
all those things.
    But we will get going. Entrepreneurship in our Nation is 
truly an aspect of the American Dream. It is about hard work, 
long hours, and sacrifices all in the name of creating the 
newest product, the newest service, or the next great American 
company. The risks are high, but the rewards can be even 
greater.
    From the startup company in my home district in California 
to the entrepreneurs and innovators all over the country, small 
businesses employ approximately half of all workers in the 
United States. When startups are creating jobs and growing, so 
does the United States economy. However, the Nation experienced 
a downturn after the financial crisis in the late 2000s, and we 
are only now beginning to see a recovery materialize.
    Unfortunately, despite recent business optimism, the 
challenges and obstacles confronting entrepreneurs are still 
daunting. Instead of focusing their time and energy on growing 
their endeavors and creating jobs, small businesses are faced 
with a reality filled with rules, regulations, and a 
constrained lending environment. Recent reports identify 
healthcare costs, regulatory compliance, and burdensome Tax 
Code as the top hurdles impacting the Nation's small 
businesses. Frequently short on time and wearing many hats 
within these new startups, entrepreneurs need guidance and 
assistance.
    This hearing today is about exploring the resources 
available to entrepreneurs, startups, and small businesses as 
they navigate a complex business ecosystem. We will hear about 
the technical assistance and experts' advice available to them 
through the Small Business Administration's entrepreneurial 
development programs.
    With approximately 29 million small businesses in the 
United States, the programs within the SBA must operate 
efficiently and swiftly as the entrepreneurs they seek to help.
    I am looking forward to hearing about the details of these 
programs: How do they help entrepreneurs? How do they assist 
startups traversing the regulatory environment? How can the 
programs be improved to better assist small businesses?
    And that is always our mission here, is to see what we can 
do. If it means streamlining, then that is what it means. If it 
means that programs are working and we can help them, that is 
what that means. But our mission, at least in my opinion, is 
always how we can help small businesses to achieve and do more 
and employ and do all of those things that we are hoping that 
small businesses can do on a daily basis.
    So I appreciate all of you being here today, and I look 
forward to your testimony.
    I now yield to Ranking Member Murphy for her opening 
comments.
    Mrs. MURPHY. Thank you, Mr. Chairman.
    The SBA administers a portfolio of Entrepreneurial 
Development programs, including Small Business Development 
Centers, Women's Business Centers, the Service Corps of Retired 
Executives or SCORE, and Veterans Business Outreach Programs.
    These initiatives provide aspiring entrepreneurs and 
existing businesses with invaluable counseling, training, 
technical assistance, and mentorship. Whether it is help 
creating a business plan, navigating the procurement process, 
marketing a new product, or identifying international trade 
opportunities, the SBA's entrepreneurial development programs 
provide an array of services to help small firms navigate 
regulatory obstacles, grow, and thrive.
    The agency's network of Small Business Development Centers, 
or SBDCs, is one such program. SBDCs operate in nearly 1,000 
locations across the country and are located at colleges, 
universities, Chambers of Commerce, and local economic 
development corporations, allowing them to harness local 
community resources.
    In a single year, this initiative has helped more than 
13,000 entrepreneurs launch new businesses, advise nearly 
200,000 clients, provided training sessions for over 260,000 
attendees, and helped clients obtain $4.6 billion in financing. 
Clearly, SBDCs are a vital part of our Nation's entrepreneurial 
system.
    The SBA has also undertaken efforts to connect younger 
entrepreneurs with more experienced business men and women 
through the SCORE program, an expansive network of 
entrepreneurs, business leaders, and executives who volunteer 
as mentors to small firms both in person and online.
    SCORE has grown to become one of the federal government's 
largest volunteer business advisor and mentoring programs, with 
over 11,000 business professionals at over 320 chapters 
nationwide. By offering advice from real world professionals, 
SCORE is helping many business owners within all categories of 
the entrepreneurial community.
    Small businesses are as diverse as our nation, and the SBA 
has entrepreneurial development initiatives targeted at 
specific demographic groups. Women's Business Centers, or WBCs, 
are a critical initiative for female entrepreneurs. WBCs 
provide indepth counseling, training, and mentoring to small 
firms, resulting in substantial economic impact as measured by 
successful business startups, job creation and retention, and 
increased company revenues.
    Women business owners have used this program to develop 
business plans, obtain financing, and expand their operations. 
In Fiscal Year 2015, over 100 WBCs reached 130,000 clients and 
helped 700 new businesses get up and running.
    Even though female entrepreneurship is on the rise, there 
remain significant gaps between men and women-owned businesses. 
As more women turn to entrepreneurship as a career path, it is 
critical that this initiative remain in place to close these 
gaps.
    Finally, there are a range of SBA programs targeted at our 
veterans, most notably the Veterans Business Outreach Centers, 
which serve over 60,000 clients each year. The VBOC program, 
along with Boots to Business and other veteran-oriented 
initiatives, ensure that our servicemembers have the tools they 
need to go into business for themselves.
    With respect to each of these programs, it is vital that 
taxpayer resources are being used wisely and to maximum effect. 
That is why this Committee has long pushed for clearer metrics 
and accountability, especially among the newer pilot programs 
at SBA. However, the stated goal of eliminating duplication 
should not be used as an excuse to underinvest in 
entrepreneurial development.
    I was disappointed to see that the Administration's recent 
budget blueprint calls for a 5-percent reduction for SBA. It is 
my hope that this Congress will provide robust funding for SBA 
entrepreneurial development programs that have a proven track 
record of helping small businesses create jobs and stimulate 
economic growth.
    That is why Chairman Knight and I recently wrote a letter 
to the relevant Appropriations Subcommittee in support of these 
programs. Small businesses are the backbone of the American 
economy, and we should provide our entrepreneurs with the 
critical resources that they need to succeed.
    I look forward to hearing how these programs are helping 
meet that need and what we can do to improve them. I thank the 
witnesses for being here and for their insight, and I yield 
back.
    Chairman KNIGHT. Thank you very much.
    And if any other Committee members have a statement, we 
will take that in writing.
    We are going to go vote. So I am probably going to stop it 
right here before I get into everyone's comments. And I don't 
want to cut anyone off. So what I am going to do is allow 
members to go vote, and then we will start up as soon as votes 
are over and as soon as we can get back here. And then we can 
kind of have a good meeting all together. Okay.
    And we will reconvene, I would say, 5 or 10 minutes after 
votes. And we are in recess.
    [Recess.]
    Chairman KNIGHT. Okay. The Committee will reconvene. Thank 
you very much for your patience. I think we got through that 
fairly quickly.
    And we will go through to introductions. So today we have 
four witnesses. Our first witness is Kenneth Yancey. Mr. Yancey 
is the chief executive officer at SCORE, where he has directed 
the office for over two decades. Before taking on the 
leadership role at SCORE, he was the executive director at the 
National Business Association. With years of experience, Mr. 
Yancey can often be seen on national television networks and 
heard on national radio shows discussing topics focused on 
small businesses and entrepreneurship. And we thank you for 
being here.
    Ms. Antonella Pianalto. Our next witness is Ms. Antonella 
Pianalto. Ms. Pianalto is the president and chief executive 
officer of the Association of Women's Business Centers. Having 
spent years at American Express leading legislative, 
regulatory, public policy, and advocacy efforts, along with the 
Company's Small Business Saturday Initiative, she has years of 
experience of interacting and working with small businesses.
    She has also previously been a senior adviser to the U.S. 
Ambassador to the United Kingdom, a Deputy Assistant to the 
President for Presidential Personnel at the White House, and an 
Associate Administrator for Management and Administration at 
SBA.
    We thank you for being here.
    Third, I would like to introduce Mr. Tee Rowe. Our witness, 
Mr. Rowe, is the president and chief executive officer of 
America's SBDC, the resource partner for the Small Business 
Development Centers. He joined America's SBDC in 2009 after 
spending multiple years at the Small Business Administration, 
where he first served as the Assistant General Counsel for 
Legislation and Regulation and then as the Associate 
Administrator for Congressional and Legislative Affairs. Prior 
to his time at SBA, Mr. Rowe served the House Small Business 
Committee for numerous years.
    And we welcome you back.
    Now I would like to yield to the ranking member for her 
introduction to our final witness.
    Mrs. MURPHY. It is my pleasure to introduce Mr. Joseph 
Sharpe, Jr., the director of the Veterans Employment and 
Education Commission at the American Legion. Prior to being 
director, he served as the deputy director of the economic 
division, healthcare field representative, and assistant 
director of the Veterans Affairs and Rehabilitation Commission.
    In 1982, Mr. Sharpe entered the United States Army, where 
he served as a drug and alcohol counselor for the 2nd Infantry 
Division in South Korea. He was also appointed as the 
noncommissioned officer in charge of inpatient social work and 
psychiatry service at Walter Reed Army Medical Center. Later, 
during his military service with the Army Reserve Sergeant 
First Class, Mr. Sharpe was deployed twice overseas and 
received a bronze star medal.
    Mr. Sharpe is a graduate of the Johns Hopkins School of 
Advanced International Studies in Washington, D.C., where he 
earned an M.A. in international relations and economics. He 
also has two graduate certificates in international business 
and trade and in healthcare management from Georgetown 
University. Mr. Sharpe also earned his B.A. in sociology from 
the University of Maryland, College Park, Maryland.
    Welcome, Mr. Sharpe, and thank you for testifying today.
    Chairman KNIGHT. Thank you all for being here.
    So the way this works is you get 5 minutes or so. I am 
pretty lenient on that. But as the lights start to go in the 
order of a stoplight, then you will know where you are.
    So 5 minutes, and we will start with Mr. Yancey.

  STATEMENTS OF W. KENNETH YANCEY, JR., CEO, SCORE, HERNDON, 
VIRGINIA; ANTONELLA PIANALTO, PRESIDENT AND CEO, ASSOCIATION OF 
   WOMEN'S BUSINESS CENTERS, WASHINGTON, D.C.; CHARLES ROWE, 
PRESIDENT & CEO, AMERICA'S SMALL BUSINESS DEVELOPMENT CENTERS, 
  BURKE, VIRGINIA; JOSEPH C. SHARPE, JR., DIRECTOR, NATIONAL 
VETERANS EMPLOYMENT & EDUCATION DIVISION, THE AMERICAN LEGION, 
                        WASHINGTON, D.C.

              STATEMENT OF W. KENNETH YANCEY, JR.

    Mr. YANCEY. Subcommittee Chairman Knight, Ranking Member 
Murphy, members of the Subcommittee, thank you for inviting me 
today and for the opportunity to offer testimony updating the 
Committee on SBA entrepreneurial development programs, and 
specifically SCORE. I would ask that my written testimony be 
read into the record, please.
    As an independent board-directed nonprofit, SCORE is the 
Nation's largest network of volunteer expert business mentors, 
with more than 10,000 volunteers across 300 chapters. We offer 
free and confidential mentoring and advice to current and 
aspiring small-business owners, as well as low-cost or no-cost 
educational workshops.
    In 2010, SCORE made the decision to become data-driven. 
Since then, SCORE has developed measurement capability with a 
focus on quality and service metrics. We have developed systems 
and software that allow us to run all aspects of our operations 
in a more businesslike manner.
    Today, I will share just a few of the statistics that we 
use to measure our success, our impact, and our value to small-
business owners and to the American economy.
    In 2016, SCORE helped clients create 54,000 new jobs--new 
businesses, excuse me, and add 79,000 new jobs. During 2016, 
during fiscal year 2016's SCORE's clients stayed in business. 
Ninety-six percent of SCORE's clients who were operational for 
more than a year when they came to SCORE remained in business 
in 2017.
    SCORE is the most efficient, most effective business 
formation and job-creation engine funded by the Federal 
Government. Our cost to create a job is estimated at $133; our 
cost to create a business, $194. In 2016 alone, SCORE clients 
returned an estimated $46 in new tax revenue to the Treasury 
for every dollar appropriated to SCORE.
    Last year, SCORE volunteers donated 2.2 million hours and 
provided 542,000 total chapter services, nearly a 9-percent 
increase over the previous year. SCORE's client satisfaction 
metrics have steadily improved over the last 6 years. SCORE's 
2016 client engagement and impact survey showed that 83 percent 
of clients are likely to recommend SCORE.
    SCORE's 10,000 volunteer mentors represent approximately 
300,000 years of business experience and provide the practical 
knowledge and long-term emotional support that clients need to 
thrive in the small-business arena. SCORE recruits more than 
3,000 new volunteers annually. In 2016, 12 percent of our new 
volunteers were former clients. All new volunteers participate 
in extensive training and are certified in SCORE's mentoring 
methodology.
    Diversity is a core value at SCORE. SCORE is working with 
diverse organizations to attract new clients and volunteers 
from underrepresented communities. Organizations include the 
National Urban League, African American Mayors Association, 
Immigrant Business, Veterans Business Network, the Latino 
Coalition, and the U.S. Black Chambers.
    Fifty-eight percent of SCORE's clients were women last 
year; 35 percent were minorities; and 11 percent were veterans. 
On the volunteer side, 27 percent of SCORE volunteers are 
minorities; 20 percent are women, compared to 17 percent in 
2015. The average volunteer age has decreased from 72, in 2012, 
to 67, in 2015, reflecting SCORE's increased efforts to recruit 
active as well as retired entrepreneurs.
    As SCORE plans for the future, we continue to provide 
innovative solutions to meet our clients' needs. Last year, 
SCORE produced two virtual conferences that helped more than 
2,500 attendees. Participants learned from speakers in a 
virtual environment, met sponsors and mentors, networked with 
each other in real time, and asked questions via live chat. 
Ninety-seven percent of the attendees of both conferences 
reported that the conference helped them.
    SCORE also successfully piloted video mentoring with 
support from the Kauffman Foundation. The program connects 
mentors and clients using services such as Skype to provide 
remote face-to-face experience for entrepreneurs. Video 
mentoring clients showed the highest level of client engagement 
in SCORE, reporting client satisfaction of 4.3 out of 5. Based 
on SCORE's demonstrated impact, we respectfully request support 
for a $13 million appropriation for SCORE in fiscal year 2018. 
This represents a $2.5 million increase. SCORE is scalable. 
With a relatively small investment, we can provide even greater 
value to the Federal taxpayer and to our Nation's economy.
    Thank you again for your long support of SCORE and for 
allowing us to testify. I will be happy to answer questions at 
the appropriate time.
    Chairman KNIGHT. Very good.
    And, Ms. Pianalto, you are now recognized for 5 minutes.

                STATEMENT OF ANTONELLA PIANALTO

    Ms. PIANALTO. Thank you.
    Chair KNIGHT, Ranking Member Murphy, and distinguished 
members of the Subcommittee, thank you for the opportunity to 
testify before you today.
    My name is Antonella Pianalto, and I serve as the president 
and CEO of the Association of Women's Business Centers, or 
AWBC. We support Women's Business Centers, or WBCs, by 
providing training, programming, and advocacy to improve their 
services to women entrepreneurs. As the advocate for this 
critical program, it is an honor to be here today.
    The Women's Business Center Program is a public-private 
partnership with more than 25 years of success in providing 
training, counseling, mentoring, and access to capital to women 
entrepreneurs. The WBC program was created by Congress as part 
of H.R. 5050, the Women's Business Ownership Act of 1988. The 
bill noted that women as a group are subjected to 
discrimination in entrepreneurial endeavors due to their 
gender. Congress sought to remedy this with the creation of the 
WBC program.
    WBCs are the only resource partners mandated to serve 
socially and economically disadvantaged individuals. The 
program has increased from four demonstration sites to a 
network of 113 grants, leveraged to more than 150 locations in 
48 States and territories.
    Unfortunately, resources for the program have not grown in 
parallel, and the more than 50 percent increase in centers over 
the last 15 years has been matched by only a 25-percent 
increase in funding. Nonetheless, WBCs have continued with 
their mission. In the last decade, WBCs have served more than 2 
million women entrepreneurs leading to the creation and 
expansion of tens of thousands of new businesses and jobs.
    In 2016, our centers reached more than 145,000 clients and 
conducted over 93,000 hours of counseling and over 15,000 
training sessions. Nearly half of the WBCs are direct lenders 
and, in 2015, assisted with nearly $429 million in capital 
infusion and, last year, helped to secure nearly $40 million in 
government contracts. In 2015, 96 percent of clients reported 
revenue growth totaling $658 million, creating nearly 25,000 
jobs.
    WBCs make a concerted effort to reach underserved 
populations. Forty-five percent of clients in 2016 were 
minorities, and a recent survey found that 64 percent of 
clients were economically disadvantaged. The majority of WBCs 
provide programming in two or more languages, and overall 
services are provided in more than 35 languages.
    Finally, the WBC program has been a good investment of 
taxpayer dollars. Federal dollars are matched more than three 
to one, surpassing the required match. For every invested 
dollar, the program returns $46 to the economy.
    As the program has grown in size and influence, some have 
expressed the opinion that WBCs duplicate services provided by 
other resources. I would like to address that. What makes WBCs 
unique is the depth and breadth of our services. Women come to 
WBCs because we address four critical areas: competence, 
confidence, capital, and connection.
    Women view their local WBC as a trusted advisor and partner 
for the lifetime of their company. Clients consistently say 
that they come to the WBCs not just for the business education 
but for the supportive environment that helps build self-
efficacy and confidence in their ability to succeed. Evaluation 
data indicate that women who receive business assistance from 
WBC programs build larger businesses, create more jobs, and 
have a significantly higher survival rate than the national 
average.
    For example, Chair Knight, Women's Economic Ventures, which 
serves the Simi Valley, developed the Thrive in Five program. 
Clients participating in this 5-year program show median sales 
of $400,000 and have created an average of five jobs. Moreover, 
95 percent of the clients who were in poverty at intake have 
moved out of poverty. More examples from dozens of centers are 
included in my written testimony.
    The program does need modernizations. Since the early years 
of the program, the grant amount from SBA has decreased as much 
as 15 percent. Similarly, while the networks of centers span 
the country, too many communities do not have access to the 
unique services provided by WBCs. In addition to allowing for 
the expansion of existing centers, new centers are needed in 
geographies unaddressed by the program.
    Finally, the program continues to suffer from burdensome 
requirements. For example, up until 2015, OMB regulations 
forbade WBC directors from fundraising while on the job, even 
though they were required to match the Federal funds. The 
challenges the program faces have legislative solutions. The 
AWBC is tremendously grateful to Chair Knight's recent 
introduction of H.R. 1680 and to Representative Lawson for 
cosponsoring. We endorse it wholeheartedly.
    The AWBC supports the recently introduced H.R. 1774 
sponsored by Ranking Member Velazquez and cosponsored by Chair 
Chabot. Many of this Subcommittee's members have cosponsored 
similar legislation in the past, and for that, we are grateful.
    The legislation strengthens centers in three ways: It 
increases the program authorization to $21.75 million, 
modernizes grant levels to $185,000, and streamlines certain 
administrative requirements. In addition to reauthorization, 
the upward trajectory of the program is deserving of more 
Federal funds. While not the purview of this Subcommittee, we 
have requested $21.75 million for fiscal year 2018.
    In the formation of the WBC program, Congress determined 
that barriers warranted the creation of a network of centers to 
assist women entrepreneurs. Those challenges persist, as must 
the commitment of the new Congress to advancing policies that 
foster women's business ownership.
    We appreciate this Committee's dedication to the 
modernization of SBA's resource partners and your willingness 
to hear from us. The WBC program is a proven and effective 
public-private partnership and fills a growing need for the 
distinct population we serve.
    Thank you for the opportunity to testify, and I am happy to 
answer any questions.
    Chairman KNIGHT. Thank you very much.
    And we will go to Mr. Rowe.

                   STATEMENT OF CHARLES ROWE

    Mr. ROWE. Thank you, Mr. Chairman, Ranking Member Murphy, 
members of the Subcommittee. My name is Tee Rowe, president of 
America's SBDC representing the 63 SBDC networks, their nearly 
1,000 centers, and over 4,500 professional staff.
    SBDCs are primarily hosted by colleges and universities and 
have a mandate to cover the entire State they operate in. Our 
host institutions and partners contribute matching funds to 
exceed the Federal funding by some $20 million every year. SBDC 
funding is allocated as a result of the statewide mandate on a 
population basis with a minimum funding level for smaller 
States.
    We serve small businesses at all stages: About 60 percent 
are existing businesses; 40 percent are startups; 45 percent of 
SBDC clients are women; 38 percent are minorities; and 10 
percent are veterans.
    Last year, the SBDC served over 192,000 counseling clients 
and delivered over 1.2 million hours of counseling. The 
majority of our advisers have business degrees and past 
entrepreneurial experience; many, in fact, have been serial 
entrepreneurs.
    SBDC services are not monolithic. They are basic services 
that SBDCs offer: business planning, marketing, et cetera. But 
it is the specialized offerings that make SBDCs different. Our 
accreditation process requires SBDCs to survey the needs of 
small-business community and tailor their services accordingly. 
In essence, SBDCs are 63 laboratories dedicated to small-
business growth. I can't list everything they offer, but I 
would like to share some of the specialized services.
    Intensive entrepreneurship. These programs offer weeks of 
training and counseling and are geared to businesses with high-
growth potential. They aren't limited to a certain size of type 
of business, and SBDCs often find that certain startup 
businesses can benefit a lot from intensive training.
    Incubators and accelerators. SBDCs support and host 
incubators and accelerators all across the country, just to 
name a few: Pennsylvania, Kentucky, Colorado, Arizona, 
California, and the list goes on. I googled it, and I got 
shocked by how much my guys are doing. And with an SBDC, an 
incubator client receives not just the peer mentoring but 
engagement with a highly trained adviser and that higher 
education is a critical component in today's economy.
    Export assistance. Under the JOBS Act a few years ago, 
SBDCs expanded their capacity, certified more export counselors 
than were required by the act, and retained those staff when 
the funding lapsed. We now have over 640 export counselors and 
many are NASBITE-certified global business professionals.
    We also offer training in export regulations, shipping 
compliance, and the like, and we are working in Latin America 
and the Caribbean to help those countries develop their own 
Small Business Development Center networks.
    Veterans assistance. SBDCs have assisted hundreds of 
thousands of veterans. In 2015 and 2016, SBDCs counseled and 
trained over 60,000 veterans. Several of our States have 
specialized programs. New York has a comprehensive veterans 
program that includes an online training program with 
coursework and live SBDC advising at the same time.
    A sample of the impact from that at the Watertown SBDC--and 
that is a small one--they assisted 884 veterans in the last 4 
years resulting in 31 business starts and 197 new jobs. And we 
also work proudly with SBA to carry out the Boots to Business 
program, which is a great first step for vets interested in 
small business.
    Disaster assistance. SBDCs are an integral part of SBA's 
disaster assistance effort. We set up the business recovery 
centers and help staff them in support of SBA. But we also do 
more than that, and an example of SBDC innovation and disaster 
is the Florida SBDC's app ``Disaster,'' which features 
resources to help small businesses prepare for and recover from 
disasters, and you can download that off of Google Play for 
free.
    Finally, procurement assistance. SBDCs offer assistance in 
certifications, searching for contract opportunities, and bid 
proposal compliance. We have got a longstanding relationship 
with the Procurement Technical Assistance Centers. Many PTACs 
are actually part of or colocate with SBDCs, leveraging all of 
our infrastructure.
    And the results, well, in 2015, our most recent impact 
survey, SBDCs helped their clients access $4.7 billion in 
capital. The long-term clients alone created over 100,000 jobs 
that year and $6.8 billion in sales. That generated $607 
million in revenue for States and the Federal Government, about 
$2.50 for every dollar spent on the program, and that is just 
the long-term clients who are a third of the total clientele.
    Now, SBDCs don't exist in a vacuum. We work with SCORE, 
Women's Business Centers, and VBOCs every day. We share space. 
We refer clients. And we believe that SBA has the best toolbox 
of entrepreneurial assistance around. This hearing couldn't be 
better timed, in my opinion.
    The new Administrator has an opportunity to assess our 
programs and work with us to maximize their effectiveness. We 
need to evaluate our goals, metrics, and data systems to see if 
we are providing the best assistance possible and work toward 
that goal.
    Again, thank you very much for inviting me to testify. I 
look forward to your questions.
    Chairman KNIGHT. Thank you very much, Mr. Rowe.
    And, Mr. Sharpe, you are now recognized for 5 minutes.

               STATEMENT OF JOSEPH C. SHARPE, JR.

    Mr. SHARPE. Thank you. Chairman Knight, Ranking Member 
Murphy, and members of the Subcommittee, on behalf of the 
National Commander, Charles E. Schmidt, and the American 
Legion, we thank you for the opportunity to present American 
Legion's views on the Small Business Administration's 
entrepreneurial development programs.
    The American Legion views small business as the backbone of 
the American economy. It is the mobilizing force behind 
America's past economic growth and has given the United States 
a competitive advantage in the global market.
    Small-business development will continue to be a major 
factor in our Nation's economic national security well-being as 
we move further into the 21st century. We know that giving 
veterans the resources they need to start businesses will 
assist in stimulating the Nation's economic recovery.
    Veterans, when compared to their civilian counterparts, are 
more likely to start a business and are generally more 
successful in creating lasting small businesses. Therefore, 
encouraging and supporting veterans is the first step to 
recovering from a near 40-year low in entrepreneurship in the 
United States.
    Consequently, the American Legion supports increased 
funding for SBA's Office of Veterans Business Development. Its 
mission is to provide enhanced outreach, specific community-
based assistance to veterans and self-employed members of the 
Reserve and National Guard.
    The veteran community's demand for self-employment 
resources is outpacing the 20 VBOCs SBA currently funds. With 
additional funding, the VBOCs could expand their presence to 
all 50 States and Puerto Rico while expanding their role in 
outreach to local State and government entities to advocate for 
veteran-owned small businesses in the local marketplace.
    One example that I would like to bring to your attention is 
what is currently occurring here in the District of Columbia. 
The historic Walter Reed Army Medical Center closed a few years 
ago. The property was purchased by the U.S. State Department 
and the District of Columbia for a mere $26 million.
    As of today, the District of Columbia has hiring quotas for 
District residents but nothing for veterans. It has small-
business requirements to include special recognition for women 
and minorities, small-business owners, but again, nothing for 
veterans.
    Advocacy on the local level by a VBOC's staff could have 
alerted city officials to the need to include and notify some 
of the 9,000 small veteran businesses in the District of 
Columbia of opportunities such as Walter Reed and others.
    Shifting points, the first step to opening a small business 
is having access to capital. Even when the economy is strong, 
access to capital is one of the largest impediments facing any 
small business, hindering wishful and flourishing 
entrepreneurs.
    One of the leading barriers to small-business financing is 
requiring debt to be secured by the equity and fixed assets. 
Most veterans leaving military service lack the kind of equity 
necessary for traditional bank loans. After all, we all know we 
joined the military not to get rich but rather for the service 
of the Nation.
    One solution to aid veterans is to reintroduce legislation, 
such as the Senate bill 1870, the Veterans Entrepreneurial 
Transition Act of 2016, or the VET Act. If passed, this 
commonsense bill would create a 3-year pilot program that would 
allow veterans and servicemembers to turn their GI Bill 
education benefits into financial capital to start a veteran-
owned business. It is ideas like this that drive our economy 
forward, and it is veterans who will lead the way.
    In conclusion, the mission of the American Legion's 
National Veterans Employment and Education Commission is to 
take actions that affect the economic well-being of veterans. 
Small businesses continue to be a primary job generator and a 
major trainer for American employees.
    The American Legion reiterates that the Small Business 
Administration Office of Veterans Business Development should 
be the lead agency to ensure that all veterans are provided 
with self-employment development assistance.
    Chairman Knight, Ranking Member Murphy, and distinguished 
members of the Committee, thank you for allowing the American 
Legion to present our views on this very important issue. I 
look forward to answering any questions you may have. Thank 
you.
    Chairman KNIGHT. Thank you very much for all the testimony.
    And I am going to go into a couple questions here. I will 
take 5 minutes, and we will go down the line, and if we want to 
do a second round, we can certainly do that.
    A couple questions just came to mind, Ms. Pianalto. What we 
have tried to work on in the last year and a half or 2 years--I 
have been here just over 2 years now--is access to capital, and 
how we can make sure that women-owned businesses, disadvantaged 
owned businesses, veteran-owned businesses are getting access 
to capital, just kind of leveling out the playing field so that 
they--when they go in, that there is that ability.
    So can you give us some ideas of what you do and where we 
can go as a Committee? Again, I am speaking for myself, but I 
think that the Committee would be very good on this that--if we 
can aspire to more access to capital and making sure that 
women-owned businesses have that, then they are going to 
flourish.
    Ms. PIANALTO. Thank you for the question.
    Two things come to mind, and I will reiterate what I 
mentioned in my testimony. Almost half of the Women's Business 
Centers are microlenders. They are either CDFI or SBA 
microlenders. So, you know, focus on that is still very 
important. And we do have a concern that the CDFI in the 
current proposal, the administration's proposal, that program 
is zeroed out, and that would be devastating to the community.
    But the other thing just goes back to just education. And I 
think what is important is having the ability to help women 
through that process of what--where are the available lenders, 
especially on the smaller scale, and then helping them through 
that process for the more--you know, the businesses that are 
able to go to a financial institution.
    I am sure you know the statistic of only 4 percent of 
commercial business loans go to women-owned businesses, 4 
percent. So it is a problem.
    Chairman KNIGHT. And we appreciate that. You know, a lot of 
these--I have worked with SBDC many times, and a lot of it is 
getting the people to the group, getting them to understand 
that there is help for you, but you have got to go there. Now 
that the World Baseball Classic is over, maybe people will go 
to WBC more, and it will be higher on the Google list.
    But it is the truth that there is a lot of help out there, 
and there is a lot of government help that people just don't 
know. A lot of our job is to make sure that they have that 
access to either going to WBC, SBDC, or their VBOC or whatever.
    And so I am going to go to you, Mr. Sharpe. We have two 
VBOCs in California, and one is in the north, and one is in the 
south, and we have a big State. And I am sure that Mrs. Murphy 
would have a similar--she has got a big State too; that it is 
tough for our veterans, unless they are going to go online, 
unless they are going to do a virtual thing, which I appreciate 
Mr. Yancey telling us about the virtual conferences.
    But the VBOCs are either in Sacramento or in Carlsbad, and 
that is--about a 9-hour drive in between those two, is very 
difficult. So how can we make it so veterans have more access, 
maybe not building more VBOCs but having more access to being 
able to go in and get their help that they need on being an 
entrepreneur and expanding their business?
    Mr. SHARPE. Thank you for that question.
    When the American Legion first wrote the GI Bill back in 
the 1940s, the GI Bill was never meant to sit in a classroom. 
It was always for gainful employment. So we have always felt 
like those veterans that choose to start a business should be 
able to use their benefits to start a business. I think that is 
one of the first steps that we need to take to assist veterans.
    California and Florida are huge States. We have been very 
concerned with the veteran population in both States. That is 
why we really push SBA to put a second VBOC in California. And 
there needs to be more public/private partnerships in those two 
States also to assist those veterans.
    We do believe that more VBOCs are necessary, and the reason 
why we believe that is basically what happened here in the 
District of Columbia with the Walter Reed Medical Center. When 
we attended one of the meetings with the developers, there 
seems to be a lack of concern with the military.
    Walter Reed has been around for 102 years. It was the 
flagship for the Army. It served thousands of veterans. There 
is a deep sentiment with veterans with that institution, and to 
not be considered to be part of the redevelopment is an issue 
that we see across the country. That is why we believe the 
VBOCs are so important because you have veterans helping 
veterans.
    Chairman KNIGHT. And I appreciate that. I appreciate you 
bringing up the VET Act. We would like to look at that more 
extensively.
    When I got out of the service 30 years ago and then went 
into college, that is what it was there for: to go into 
college. I think you have seen some changes over the years, 
that we would like people, if you are going to go and get your 
certification to be a welder, if you are going to go into a 
setting that is going to go into a job, then that is a good use 
of a GI Bill.
    College is not for everyone, and some people want to do 
other things in the automotive industry or whatever it is. In 
my district, there is a lot of aerospace. There is no doubt 
about that. And we want people to be able to transfer into 
something they want to do, and that might not mean a 4-year 
degree.
    Mr. SHARPE. Exactly.
    Chairman KNIGHT. And so I think that that is a good use of 
the money that we are trying to get our veterans into 
employment.
    So I have taken a little extra time. So everyone will be up 
to that.
    And I will go to the ranking member, Mrs. Murphy.
    Mrs. MURPHY. Thank you, Mr. Chairman.
    You know, my first question is for Ms. Pianalto. Part of 
the mission of the WBC is to expand into economically 
distressed areas. Could you explain how you make the decision 
for what areas you place a WBC and also the same question for 
the rest of the panel?
    Ms. PIANALTO. Thank you for that question. So, first of 
all, it is the SBA that makes the decisions on where the WBCs 
are placed, and it is a grant proposal process. So the SBA, if 
they determine there are funds available to open new centers, 
then they will issue a request for proposal, and they will 
identify States where they think there are gaps in Women's 
Business Centers.
    And then they hope that an organization will submit a 
proposal that will be, you know, acceptable and then they have 
to make the determination. Last year, there were three new 
centers granted a grant. They don't yet know based on the 
funding what will be available this year.
    But it is more of a process of, will there be an 
organization in a particular State that will qualify for a 
grant rather than identifying where the needs are and 
proactively looking at what we might be able to do from a 
community to establish a center there? So it is not an ideal 
process.
    Mr. YANCEY. We look at two different ways to have this 
started: First, we are requested by a community to come in and 
bring a chapter. And we would look at the community, look at 
need, look at resources that were already available. Is there 
an SBDC? Is there a Women's Business Center? How effective are 
they at serving the need? Does it make sense?
    And then we would look to an anchor organization to help us 
find local volunteer leadership that we could then build on 
with our chapters in the vicinity and support from our office.
    When we haven't been requested, we will look at areas where 
we believe that there is a need, again, based on knowledge and 
understanding of the market, resources that are already 
available, and then we will send somebody out to develop 
community partnerships and support.
    Obviously, our success is really based on finding a nucleus 
of volunteer leaders in a community and supporting them to 
grow, providing them with the tools and the materials and the 
marketing initiatives and our own support, both presence and 
dollars, if required, to help them get started.
    Last year, we opened 11 new chapters, and those--it is the 
first year that we have opened chapters in quite some time.
    Mr. ROWE. When SBDCs--as I said earlier, we have a 
statewide mandate. So we are trying to cover, say, the entire 
State of Texas or Florida or Georgia. We will try and place--
much in the same situation that Ken's in--where we can find a 
partner, a host institution.
    Now, for example, in Mississippi, we were having some 
problems, but we wanted to get coverage in the delta. And we 
worked out an agreement with Jackson State, which is a 
Historically Black College and University there. But what we 
find sometimes is we get conflicting messages from SBA.
    In our Houston regional SBDC, we had an agreement with a 
Historically Black College and University, and we started 
getting pressure because they weren't meeting the goals that 
SBA wanted out of the center. And our director for the region 
was: ``Well, I am not going to just pull out and abandon that 
area. We will work to get it up. But you just can't leave it 
and go.'' So, for SBDCs, it is always a question of finding the 
right partners and then getting as much resources as we can 
into those areas.
    I will say that rural areas are the hardest thing for us 
because we have got so much area to cover. We have the mandate, 
and we want to do it, and honestly, rural America needs more 
help, frankly, than the suburbs do.
    Mr. SHARPE. I agree with what everyone else has had to say. 
That is also a concern for us as well.
    One issue, again, is, you know, trying to reach our 
veterans. The American Legion is in, you know, all States and 
in various territories, and right now, we are really concerned 
with places like Puerto Rico. Our department there, we have an 
unemployment rate between 16 and 25 percent. We have been doing 
a lot of job fairs there, but we would like to also do some 
business development workshops. The economy is in crisis. We 
are doing a job fair May 18. We have about 65 companies that 
are coming. About 400 servicemembers usually attend National 
Guard, reservists. But the command just told us the other day 
that one out of four reservists is unemployed. And if they are 
employed, we are finding that many of them are underemployed, 
and that is including our rural areas. So that is why we feel 
so strongly that business development is the key to bringing 
our economy back.
    Mrs. MURPHY. Great. Thank you.
    And I see that I am out of time. So I yield back.
    Chairman KNIGHT. Thank you very much.
    And we will go to Mr. Evans for his questions.
    Mr. EVANS. Thank you, Mr. Chairman.
    I too would like to thank the panel and what you have 
offered today.
    The question I would like to start out with: Could each of 
you give one or two items on your congressional wish list that 
you think would immediately help small businesses?
    Ms. PIANALTO. Increased funding. That--I mean, obviously, 
if we had more funds available for the centers and the various 
resource partners, that would certainly go a long way. I think 
another--perhaps another point is SBA being--working with us a 
little bit more in terms of programming but also even metrics. 
Congresswoman Murphy mentioned clearer metrics earlier. That is 
a serious issue for SBA and the partners having to work with 
them.
    I will just note one item as an example in the Committee's 
memo. We are listed as creating more than 750 small businesses 
throughout the Nation. That metric is only on the Women's 
Business Center counseling clients, which are only 15 percent 
of our clients. SBA doesn't measure--doesn't do metrics on our 
training clients, which are 85 percent of what we do. So I 
think some work there needs to be done.
    Mr. YANCEY. It is very easy to support the need for 
funding. Programs like ours to expand and grow and serve, as we 
all want them to, do require some level of investment and we 
will all work hard to match that investment with private sector 
dollars so that we can be effective.
    Someone mentioned a little bit earlier access to capital, 
and I will divide that into access to capital and access to 
debt. Startup small businesses don't have access to capital, 
often don't have access to debt. And Mr. Sharpe mentioned in 
the veteran community how those that are separating don't have 
the collateral or the equity that is required, and that is not 
uncommon among many startup businesses.
    The opportunity to make that more available through the 
MicroLoan Program and other similar programs, I think, is very 
important. The idea of making debt more widely available for 
small businesses, our banks are doing better but still not 
fulfilling that need completely.
    Credit cards aren't a great option but used too often to 
the detriment of the small businesses. And I think that 
encouraging community lenders to be more involved and to be 
more accessible and more willing to support those small 
businesses is pretty critical these days.
    Mr. ROWE. Well, you know, I will certainly echo what 
Antonella said. What I would really like to dive in on for a 
second is I think the biggest problem we have sometimes is 
focus. We know where the problems are. We can look at studies 
from organizations like the economic innovation group, and they 
can show us the counties that are having trouble with small-
business formation and job growth, et cetera.
    But what we don't always end up with is a coordinated 
strategy to utilize all of the resources we have to focus on 
assisting those areas, whether they are rural counties or inner 
city communities. And that, in a certain way, is kind of a 
tragic waste. We are all producing great results, but sometimes 
we are getting pushed to produce results so much that you tend 
to focus where you can get results rather than focusing on 
where you really need to offer help.
    Mr. SHARPE. For the American Legion, of course, we would 
like to see more VBOCs, and we would like to see them, besides 
giving veterans training, but be more involved in advocacy. 
They need to be engaged with the local market. If we had one in 
the District of Columbia, they would have known of all the huge 
projects that are taking place here, which is not happening 
most places.
    I think that would really change the dynamics of economic 
development. If they were more engaged with what is happening 
in the local area and being able to advocate to those 
businesses that they are serving, these are opportunities for 
you. And, of course, access to capital and being able to use 
your GI Bill for capital.
    Mr. EVANS. Thank you, Mr. Chairman.
    I yield back the balance of my time.
    Chairman KNIGHT. Thank you very much.
    And we will go to Ms. Clarke for her questions.
    Ms. CLARKE. Thank you, Mr. Chairman.
    And I thank our ranking member, Mrs. Murphy, our panelists 
for your expert testimony this morning, and a pleasant good 
morning to everyone.
    As everyone on this Subcommittee knows, small businesses 
are the lifeblood of our economy. They allow hardworking women 
and men across this Nation to harness their entrepreneurial 
spirit for the benefit of themselves, their families, and our 
country.
    Indeed, the 28 million small businesses in the United 
States account for 54 percent of all U.S. sales. This would not 
be possible if it were not for the hard work and dedication of 
the women and men at the Small Business Administration.
    And at the heart of the SBA lies its entrepreneurial 
development programs. These programs include Small Business 
Development Centers, the Service Corps of Retired Executives, 
the Women's Development Centers, and the Office of Veteran 
Business Development. Each of these offices play an important 
part in ensuring that the promise of small-business ownership 
remains open to hardworking Americans across our country.
    However, this is not to say that their functioning could 
not be improved. I remain concerned that we do not have 
sufficient metrics to judge the performance of SBA programs and 
remain interested in learning how we can make the SBA as 
efficient as possible.
    And so my first question goes to Mr. Yancey. I commend the 
improvement your program has seen in increasing the racial and 
gender diversity of both clients and volunteers. However, the 
gender diversity of volunteers remains low, at just 20.3 
percent. Could you please describe the efforts you have made to 
recruit volunteers from different backgrounds and what you are 
planning to do to improve this number?
    Mr. YANCEY. Yes, ma'am. Thank you very much for a very 
important question.
    Several things are happening for us as we work to improve 
the diversity of both our volunteer corps as well as our 
clients. I think one of the most important and one of the most 
effective processes that we have found is to work with and 
partner with other organizations who represent some of these 
underserved communities: our partnership with the National 
Urban League, the opportunity to do webinars in conjunction 
with the urban league that are promoted to their members as 
well as to our clients, both organizations having the 
opportunity to refer clients back and forth, resulting in new 
volunteers and new clients for both of us. The same thing with 
the African American Mayors Association and the same thing with 
the Latino Coalition--and our friend representing the Latino 
Coalition, Mr. Gutierrez, is back here--those are good 
opportunities for us to attract both clients as well as 
volunteers.
    The other thing on the volunteer corps, I mentioned that we 
were--in 2016, 12 percent of our new volunteers are former 
clients. Our client base is diverse, and it makes sense for us 
to be reaching out to a group of people who have benefited from 
the program previously. And in so doing, we are also improving 
the diversity of the program.
    In 2016, 30 percent of our new volunteers were women, which 
is obviously higher than the percent now, the same way with 
minority volunteers. So we are making progress. Quite frankly, 
it is not fast enough for me or our board or anybody else, and 
we are open to suggestion. We are open to additional referrals, 
support, and appreciate you continuing to push on this 
important topic.
    Ms. CLARKE. Well, I thank you for the update.
    Mr. Rowe, one of the critical programs SBDCs provide is 
disaster recovery and preparedness assistance. Could you please 
describe some of the specific services you provide in this 
area? And let me just sort of preface this also by saying thank 
you, because I come from Brooklyn, New York, and in the wake of 
Superstorm Sandy, the SBDCs were really a lifeline.
    Mr. ROWE. Well, thank you, ma'am.
    One of the biggest efforts we make is helping the SBA 
identify the locations to set up their business recovery 
centers and then focusing our efforts on staffing those centers 
and helping the small businesses get organized and get through 
the process.
    I am sure all of the members on the Committee know that 
about 90 percent of the disaster loans are actually home loans. 
Only 10 percent are business loans, but that 10 percent tends 
to take about four times as long. Doing a disaster home loan is 
actually pretty simple; it is like doing a second mortgage. 
Doing a business loan is actually often incredibly complicated.
    So we spend a great deal of time with small businesses that 
have been affected, helping them through all that paperwork, 
and sometimes it is a huge forensic issue. You know, it is 
reconstructing your sales figures, et cetera, which is why we 
put a lot of effort into disaster preparedness.
    Now, in the case of Superstorm Sandy, I don't think as many 
folks were expecting it as might expect it in, say, Florida, 
when you are going to get a hurricane. But we are constantly 
pushing on the disaster preparedness front because disasters 
aren't just, you know, a natural occurrence. You could have a 
fire and wipe yourself out.
    Ms. CLARKE. Thank you.
    I yield back, Mr. Chairman. I thank you for your 
indulgence.
    Chairman KNIGHT. Thank you very much.
    And I am going to go to the ranking member. If members have 
another round of questions, we can go through these. And I am 
going to go to the ranking member, and I will bat cleanup after 
everyone is done.
    Mrs. MURPHY. Thank you, Mr. Chairman.
    As I mentioned in my opening remarks, the administration's 
recently released budget blueprint suggests reducing the SBA's 
budget by 5 percent. And while it didn't specifically name any 
of the programs for consolidation, it suggested that the 
programs should be consolidated if they are duplicative.
    Could you describe the impact of such a consolidation on 
the services that you provide to clients? And this is for all 
of the members.
    Mr. YANCEY. These programs are quite different beyond just 
who we serve. The way the grants operate, the back end, the 
partnership, service-to-the-community approach, we have never 
felt that consolidation of entrepreneurial development programs 
would be a healthy process.
    In fact, I believe that often our best work is done in 
conjunction with our colleagues at the Small Business 
Development Centers or the Women's Business Centers or the 
veterans centers, where we might come in and provide very 
specific expertise around a business. If you had a high-end 
restaurant and I had a restauranteur that had a fine-dining 
restaurant, we might be able to provide specific information 
that could be useful.
    Putting them all together would, I think, create an 
administrative challenge that is well beyond the challenges 
that we face individually. And the cost would not be less than 
what you find with the programs administering themselves.
    Ms. PIANALTO. I would just absolutely agree with Ken. We do 
serve different needs, and we do work very closely together. 
And some of that is--you know, depends on the individuals in 
all of our organizations as well as with the district office of 
SBA. So there could always be improvement with coordination, 
but we all serve very different purposes, and I do not think 
consolidation would be helpful at all.
    Mr. ROWE. My concern with the whole concept of 
consolidation is, if you are seeking efficiency, that is one 
thing, but never make the mistake of thinking that small 
business is some monolithic thing. They are all different. It 
is like the little placard my sister-in-law has at the house: 
``You are unique, just like everybody else.''
    There are 28 million, 29 million small businesses in the 
United States. We probably touch, in the course of the year at 
SBDCs, a little under 1 million in various ways. That leaves 27 
million, and I don't think that Ken and Antonella or the VBOCs 
got to the other 27 million.
    You know, the problem, again, in my mind is, are we making 
sure we are all working together and thinking about what we are 
trying to achieve. You know, it is great to talk about 
efficiency. Sometimes you have to think about the economy, 
though, as kind of a big sloppy machine too.
    Mr. SHARPE. I agree with everything else that has been 
said. But the mission of the American Legion is to ensure that 
veterans, when they leave the military, that they and their 
families are gainfully employed and economically independent 
and they are also able to contribute to their communities.
    We have been a big supporter of the Veterans Business 
Development Office in SBA, and the part of that that we like 
the most is that the VBOCs are beholden to that office. So 
anytime we have issues with veteran entrepreneurship in any 
part of the country, we can always go to that office, get 
stats, find out what is happening, be able to contact those 
VBOCs directly. It's like a holistic approach to small business 
for us, and that also helps our mission in ensuring the 
veterans are taken care of.
    Mrs. MURPHY. Thank you.
    Chairman KNIGHT. And I will jump in real quick. There is a 
couple things that I am sure is on everyone's mind. Budget is 
always something that we look at. I would hope that we are 
looking at making sure that everything that is happening now is 
funded before we expand. And I think that is probably the best 
way you can do, especially when you are talking about 
government, and sometimes government is a weird animal to work 
with and finite dollars and all of those things. But we want to 
make sure that the programs that are working today are fully 
funded so that people know, okay, I know there is SCORE here. I 
know there is SBDC or WBC or VBOC here. I know that, and I am 
happy.
    The second part is working together. I think that, whether 
you are a veteran in Los Angeles and you say, ``Golly, my 
closest VBOC is, you know, 230 miles away,'' that is not okay, 
but they still have other resources that they can go to. They 
can go to their SBDC. They can go to their WBC. And they can go 
to SCORE and say, ``I need help.'' And, conversely, people can 
work throughout. So I like the fact that it is working 
together, and I like the fact that you do have different kind 
of resources that everyone brings together.
    Mr. Sharpe, did you have something? Oh, I thought you 
pressed your button.
    Mr. SHARPE. No, no.
    Chairman KNIGHT. And I think that that has kind of got to 
be the mission, especially when we go into budgets, because it 
is one of the reasons I don't sit on Appropriations, because I 
don't want to deal with that stuff. I want to deal with policy 
and what is good for America. And sometimes Appropriations are, 
``Yes, this is good for America; we just don't have the dollars 
to do it.'' And I would rather not be the bad guy on that.
    So I am going to go to Mr. Evans for his second round.
    Mr. EVANS. Mr. Chairman, I will yield. I don't have any 
other questions. Thank you.
    Chairman KNIGHT. Thank you very much.
    And Ms. Clarke.
    Ms. CLARKE. Thank you once again, Mr. Chairman.
    Mr. Pianalto, in your testimony, you mentioned that WBCs 
would be the appropriate body to provide third-party 
certification for women-owned business. Could you please 
describe some of the issues in the current certification system 
and how moving certification to WBCs would alleviate that?
    Ms. PIANALTO. Thank you for that question. And I will just 
clarify----
    Ms. CLARKE. I am sorry, Ms. I am sorry. Excuse me.
    Ms. PIANALTO. Pardon?
    Ms. CLARKE. I just wanted to make sure I got the gender 
correct there.
    Ms. PIANALTO. So the current structure is that women can be 
self-certified through the SBA, or they can go to four third-
party certifiers. The 2015 NDAA eliminated the self-
certification process, and SBA is working through the 
rulemaking on that right now.
    What we are suggesting is that, not that the WBCs take that 
over, but that you expand the availability of third-party 
certifiers. And we feel the WBCs, some of which--we have four 
WBCs who are regional partners of one of the third-party 
certifiers right now, and many of the WBCs are also helping 
with that self--the certification process. But we think the 
WBCs--it makes perfect sense for them to be--play a greater 
role in the certification process.
    Ms. CLARKE. So just to get a better sense, do you think it 
is important that women have access to programs like WBCs that 
specifically focus on increasing female entrepreneurship? And 
with those relationships with the third-party certifiers, do 
you see that as being sort of a network that would expand 
access?
    Ms. PIANALTO. We think that the current list--available 
certifiers needs to be expanded. And we think the WBCs play--
would be able to play a great role in that.
    Ms. CLARKE. Very well. I thank you.
    And I yield back, Mr. Chairman.
    Chairman KNIGHT. Thank you very much, Ms. Clarke.
    And I appreciate all the members for coming today. Of 
course, the ranking member is always here.
    Ms. Clarke and Mr. Evans, thank you very much for 
attending.
    And I want to thank the panel for their expert sharings of 
what it is to be an SBA and what it is to help small businesses 
and the entrepreneurial attitude today. I believe it is 
important to hear directly from the groups and organizations 
offering their expert advice to entrepreneurs all across the 
Nation.
    These programs are extremely important to millions of small 
businesses trying to grow and create jobs. With a burdensome 
business environment, you assist risk-taking entrepreneurs as 
they charge ahead.
    As this Subcommittee looks to enhance the workforce for our 
Nation's small businesses and the resources available to them, 
we will use this conversation moving forward, and we will 
continue to advance bills working and advancing WBCs and bills 
of that nature to try and help your work with our small 
businesses. Much like the guidance you provide to small 
businesses on a regular basis, we thank you for the advice you 
have provided us today.
    I ask unanimous consent that members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Without objection, this hearing is now adjourned.
    [Whereupon, at 11:48 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

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