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87–277 2014

FIELD HEARING IN QUEENS, NEW YORK: UNDERSERVED SMALL BUSINESSES: PROVIDING 

ACCESS TO FEDERAL PROGRAMS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

WORKFORCE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

MARCH 11, 2014 

Small Business Committee Document Number 113–058 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMER, Missouri 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Richard Hanna ................................................................................................ 1 

Hon. Grace Meng ..................................................................................................... 2 

WITNESSES 

Mr. Bill Imada, Chairman and CEO, IW Group, West Hollywood, CA, testifying on behalf of Asian/Pacific Islander American Chamber of Commerce 

& Entrepreneurship (ACE) .................................................................................. 4 

Ms. Joyce Moy, Executive Director, Asian American/Asian Research Institute 

at Queens College, New York, NY ...................................................................... 8 

Mr. William Wilkins, Director of Development, Local Development Corporation for East New york, Brooklyn, NY ............................................................... 10 

Ms. Michele Chang, Acting Chief of Staff, United States Small Business 

Administration, Washington, DC ........................................................................ 12 

APPENDIX 

Prepared Statements: 

Mr. Bill Imada, Chairman and CEO, IW Group, West Hollywood, CA, 

testifying on behalf of Asian/Pacific Islander American Chamber of 

Commerce & Entrepreneurship (ACE) ........................................................ 31 

Ms. Joyce Moy, Executive Director, Asian American/Asian Research Institute at Queens College, New York, NY ....................................................... 38 

Mr. William Wilkins, Director of Development, Local Development Corporation for East New York, Brooklyn, NY ................................................ 41 

Ms. Michele Chang, Acting Chief of Staff, United States Small Business 

Administration, Washington, DC ................................................................ 42 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Statement of Kenneth H. Ryesky, Esq. .......................................................... 45 

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SBREP-219 with DISTILLER

(1) 

UNDERSERVED SMALL BUSINESSES: 

PROVIDING ACCESS TO FEDERAL PROGRAMS 

TUESDAY, MARCH 11, 2014 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, SUBCOMMITTEE ON CONTRACTING AND WORKFORCE, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:05 a.m., at 

Queens College, Rosenthal Library, Room 230, 65–30 Kissena Boulevard, Queens, New York, Hon. Richard Hanna [chairman of the 

Subcommittee] presiding. 

Present: Representatives Hanna, Meng, Vela ́zquez, and Clarke. 

Chairman HANNA. I call this hearing to order. I am going to start 

by thanking Ranking Member Vela ́zquez, the Ranking Member of 

the entire Committee, for being here today, and Ms. Meng, who is 

a great and thoughtful partner, always deliberate and always prepared. So it is a pleasure to work with Grace. 

Thank you all for being with us today. I would like to thank each 

of our witnesses for taking time to provide testimony on ways we 

can all work together to increase access to Federal programs for 

underserved small businesses. 

Small business growth is essential as the United States still 

struggles with high unemployment. We know that small businesses 

are the catalyst for job creation, creating more than half the net 

new jobs between 1993 and 2011. The Small Business Administration, or SBA, is tasked with aiding small businesses to promote full 

and free competition. This aid comes in a variety of forms, such as 

increasing access to capital; providing technical assistance, such as 

counseling; and promoting small firms’ ability to promote compete 

for Federal contracts. 

Today, we look forward to hearing from the SBA about how they 

are making sure these resources are accessible in underserved communities. As chairman of the Subcommittee on Contracting and 

Workforce, I understand the importance of ensuring that small 

firms do not face undue barriers in utilizing the SBA’s programs. 

Recently, our Committee approved legislation to ensure greater 

opportunities for small businesses in the Federal procurement marketplace. Notably, one of these bills, H.R. 776, which Ranking 

Member Meng was kind enough to cosponsor, increases the guarantee rate for the SBA Surety Bond Guarantee Program, which 

strengthens small businesses ability to compete for Federal contracts. 

At the legislative level, Congress can effectively improve programs and give SBA better tools to assist small businesses. But 

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2 

there is a disconnect when the SBA implements these tools and 

they do not reach the maximum possible number of small businesses. 

If barriers exist to accessing these programs for firms in traditionally underserved areas, even the best designed programs are 

ineffective. 

Currently, the SBA does not have an official definition of underserved communities, but I understand underserved communities 

come in a variety of shapes and sizes, whether it is in my district 

in upstate New York where rural firms face countless challenges, 

or here in Queens and urban areas, where small businesses face 

the same barriers to accessing the SBA’s programs. 

In light of that, today’s hearing will look at what can be done to 

ensure small firms in underserved communities can access Federal 

programs meant to promote economic growth and foster job creation. 

Again, I want to thank the witnesses for being here today. As 

you know, you have 5 minutes, but we will be lenient. We want to 

hear what you have to say. 

And with that, I invite Ranking Member Meng to give her opening statement. 

Ms. MENG. Thank you, Mr. Chairman, for your tremendous leadership and your willingness to hold this important hearing right 

here in Queens, New York City. 

I also want to thank the ranking member of our entire Small 

Business Committee, and my good friend, Nydia Vela ́zquez, and 

Congresswoman Yvette Clarke, who is on the way. 

I also would like to extend a big thank you to Queens College 

and our new interim president, President Gizis, for hosting us 

today and for allowing us to hold this hearing here. 

And thank you to each and every one of our witnesses for being 

here today. 

There are a number of programs at the Small Business Administration and Department of Commerce that are able to help small 

businesses achieve success and grow. I have heard from business 

owners in Queens and business organizations that there is insufficient outreach from the Federal Government. These programs, including loans, government contracts, the Export-Import Bank, and 

guidance through Small Business Development Centers, and mentor protege programs, prove to be successful once they are accessed. 

Today, I hope to learn more about how we can ensure better access to these programs, which will help our local economies grow 

and provide jobs to our communities. 

Small-business ownership and entrepreneurship have a long 

track record of helping Americans achieve self-sufficiency. Entrepreneurs launch new ventures for a range of reasons—a change in 

career, to bring a new idea to market, to support their families, 

supplement their income, or simply to pursue a lifelong dream. 

Here in New York, we have a particularly vibrant culture of entrepreneurship. This commitment to small business formation and 

growth makes our city great and diverse, with new ideas constantly 

being brought to fruition, whether it is a new food truck or a 3- 

D printing factory. 

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Entrepreneurship in New York is largely characterized by diversity. Here in New York, there are 607,000 businesses owned by minorities. Women own 595,000 enterprises throughout the State. 

More than 69,000, almost half, of New York City businesses are 

owned by immigrants. 

Throughout the country, like in New York, women-, minority-, 

and immigrant-owned businesses are thriving. Yet even as these 

important populations become more involved in entrepreneurship, 

challenges remain. 

Our Committee has done significant work looking at the challenges faced by these underserved entrepreneurs. While access to 

affordable capital is a perennial challenge for all small businesses, 

for underserved communities, this obstacle can be particularly 

daunting. 

The Committee held four hearings in the last 2 years looking at 

capital access challenges and new opportunities for financing. This 

is an area where we know underserved firms face unique challenges. 

Although women own 38 percent of businesses, just 2 percent of 

venture capital goes to female-owned firms. For ethnic minorities, 

securing capital is also a challenge. 

Minority firms with assets of less than $500,000 are three times 

more likely to be denied a loan than nonminority firms. 

The Committee has also done significant work examining how 

businesses from these demographics interact with the procurement 

process. Our contracting Subcommittee held four hearings looking 

at how we might improve government procurement programs so 

that small businesses and women- and minority-owned firms can 

secure their fair share of Federal projects. 

In particular, we heard from representatives from the women’s 

business community, who discussed how challenging it can be to 

break into the Federal marketplace. These hearings led to a raft 

of legislation aimed at improving the situation, which the Committee finally approved just last week. 

It is my hope that today’s hearing will shed additional light on 

how we can help these types of firms win the Federal Government 

as a client. 

Additional opportunities exist for these firms by breaking into 

new markets, both here and abroad. Our Committee has looked 

closely at how trade policy affects small businesses. And we have 

seen that, in many cases, underserved businesses could benefit 

greatly, if they had the tools, by marketing their products abroad. 

In all of these areas, the Small Business Administration’s programs can play a vital role in giving these firms a hand up. The 

agency’s Capital Access Programs are critical to helping small businesses secure loans and equity investment. It has a series of contracting initiatives that can help these firms navigate the Byzantine Federal procurement process and land Federal projects. 

The 8(a) program provided valuable mentoring services for disadvantaged companies, including assistance landing contracting 

work. The agency’s Entrepreneurial Development Programs offer 

vital guidance and technical assistance for prospective entrepreneurs looking to start a new venture. 

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4 

The same centers can be a useful resource for growing businesses 

looking to expand into new markets, both domestically and internationally. 

It is important that these programs are providing maximum 

value and proactively reaching out to traditionally underserved demographics, like women and minorities. 

A series of hearings in the Committee have examined duplication 

among entrepreneurial development services. It is important that 

different Federal agencies are coordinating their efforts effectively 

to underserved small businesses and entrepreneurs can maximize 

use of these programs. 

Likewise, we previously examined how private sector entrepreneurial education services can complement the SBA’s work. We 

have a number of such programs here in New York and I hope to 

hear more about them today. 

While the SBA does many things well, there have been concerns 

about how well its programs are tailored to underserved communities. With the face of small business changing, it is vital that the 

agency keep pace, conducting meaningful outreach to those entrepreneurs who could most benefit from this type of assistance. 

It is very fitting that we are holding this hearing here in New 

York City and Queens. As one of the most diverse areas in the Nation, we have small businesses that represent every strand of 

America’s national tapestry. It is my hope that today’s discussion 

will educate our Committee about how these programs can be improved while helping educate local entrepreneurs about the various 

services available to them. 

I yield back. 

Chairman HANNA. Do you want to introduce the witness? 

Ms. MENG. It is my pleasure to introduce one of our witnesses, 

Mr. Bill Imada, the chairman and CEO of the IW Group, testifying 

on behalf of Asian/Pacific Islander American Chamber of Commerce & Entrepreneurship. 

Mr. Imada has previously served as a human resources manager 

for a major national subleasing company and worked as an employment recruiter for a small startup placement agency. He has more 

than 20 years of experience in marketing and public relations and 

has represented some of the top global and domestic brands in the 

world and the United States. 

Welcome, Mr. Imada. 

STATEMENTS OF BILL IMADA, CHAIRMAN AND CEO, IW 

GROUP, WEST HOLLYWOOD, CALIFORNIA; JOYCE MOY, EXECUTIVE DIRECTOR, ASIAN AMERICAN AND ASIAN RESEARCH INSTITUTE, QUEENS COLLEGE, NEW YORK, NEW 

YORK; WILLIAM S. WILKINS, DIRECTOR OF DEVELOPMENT, 

LOCAL DEVELOPMENT CORPORATION FOR EAST NEW YORK, 

BROOKLYN, NEW YORK; AND MICHELE CHANG, ACTING 

CHIEF OF STAFF, UNITED STATES SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C. 

STATEMENT OF BILL IMADA 

Mr. IMADA. Thank you, and thank you, Mr. Chairman, and ranking members of Congress, Congresswoman Meng and CongressSBREP-219 with DISTILLER

5 

woman Vela ́zquez. I appreciate you inviting me today for this meeting. 

For the record, I am the chairman and founder of the IW Group. 

We have offices all over the country, including New York, and we 

have been in business for 23 years. 

I am also the chairman of the Asian/Pacific Islander American 

Chamber of Commerce & Entrepreneurship, which is a mouthful, 

so I apologize. We call ourselves ACE, and ACE is the primary 

voice for the Asian-American and Pacific Islander communities focusing on business-related issues, and we are based in Washington, 

D.C. 

ACE was established to be a visible and credible voice in the 

halls of government. Last October, we convened several Chambers 

from 16 different States and the District of Columbia to talk about 

some of the issues that impact our community. 

The key areas that we focused on were access to capital, Federal 

contracting, and small businesses development assistance. We also 

agreed, all these different Chambers from around the country, after 

meeting with both Republican and Democratic leaders, that we 

need to develop a system for collecting, monitoring, and verifying 

data on federally supported programs addressing the needs of AAPI 

businesses. 

We also want to reduce the language barriers and the cultural 

barriers that impede small businesses from seeking help from organizations like the SBA and the Minority Business Development 

Agency. 

We also want to make sure that SBA and MBDA add business 

development centers specifically in places where there are large immigrant and minority communities, and one of those areas is specifically here in Queens. 

And we want to also hold Federal agencies and prime contractors 

that work with these Federal contracts accountable for meeting all 

minority business development goals. 

So I am going to start by addressing some of these areas separately. 

Access to capital: Although the SBA encourages more AAPI business owners to apply for Government-guaranteed loans through 

their preferred lenders, we believe a large percentage of businesses 

do not. A full 33 percent of small businesses do not apply because 

they fear rejection from the organizations that are lending to them. 

We believe other factors may also include the following: One, 

there is a distrust of what a preferred Government lender will do 

with their personal and financial information, which is what we 

discovered with the U.S. Census; a pervasive belief that SBA officials may not have the ability to assist them in languages other 

than English; three, an overwhelming fear that rejection will lead 

to a loss of face and the potential for the loss of good credit; four, 

a strong and pervasive feeling that lending institutions do not have 

the means or the resources to explain why a loan was not given, 

and actually counseling them so they can get a loan in the future; 

and a lack of understanding and knowledge that even a Government-backed loan still requires some personal guarantees in the 

form of collateral that may be difficult for a small business to obtain; six, a lack of SBA and Minority Business Development CenSBREP-219 with DISTILLER

6 

ters in communities where small business enterprises are being established, and that specifically means places like Queens here in 

New York, as well as the San Gabriel Valley in California; and 

more must be done with ACE and regional Asian Chambers and 

business organizations to alleviate these sometimes opaque cultural 

barriers to capital. 

I will move on to Federal contracting. There needs to be stronger 

and more visible oversight on Federal contracting processes. While 

Executive Order 11625 requires Federal agencies to report their 

minority business development activities, a more comprehensive 

data collection process must be employed to ensure that more AAPI 

small businesses have opportunities to participate in the Federal 

contracting process. 

Over the past year, several AAPI business owners have recounted how they have been invited to serve as subcontractors on 

Federal contracting opportunities and through the procurement 

process. The prime contractors, often nonminority-owned firms, 

have a long history of Federal contracting deals, and they enlist diverse businesses to bolster their team’s credentials. 

However, a number of business owners, including my own firm, 

have served on winning teams only to be told that there isn’t 

enough funding in the budget to utilize all the diverse team members. In other words, the prime contractors were ultimately unwilling to allocate even a penny of funding from their budget to utilize 

diverse talent suppliers on their team. 

It is essential that once a Government contract is awarded, budget allocations are reviewed and monitored to ensure that contracting opportunities are available to all willing and able. 

Also, in order to increase the success rate of AAPI-owned small 

businesses in the Federal contracting process, and for other minority businesses, it is critically important to identify members for the 

8(a) and other business development programs early and to work 

with the regional Asian Chambers to match them with qualified 

AAPI suppliers. 

Small business development assistance: In the past few months, 

ACE has worked with the SBA and the MBDA and made great 

strides with both of them. In high-level meetings that were held in 

Washington and later on in San Francisco, ACE signed a memorandum of understanding with the SBA and continues to have ongoing dialogue with their representatives. Our MOU established a 

framework for ACE to partner with SBA on monitoring programs, 

services, and initiatives designed to address the needs of AAPI and 

other minority-owned businesses. 

Furthermore, after several conversations with the Minority Business Development Agency, two of their representatives were actually designated to work closely with ACE and the regional Chambers to advance AAPI businesses nominated by the leaders of several Chambers around the country. 

We also hold regular conversations with MBDA and SBA leaders 

to advance and promote business centers to address cultural needs 

as well as cultural barriers. 

To build on these successes, we continue to advocate for more 

small business development centers. We also encourage SBA and 

the MBDA to recruit, hire, and advance more AAPIs and other miSBREP-219 with DISTILLER

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norities with specific language and cultural skills, so that they 

could address the needs that are often important to the small business community. 

Since the majority of AAPI business owners are recent immigrants to this country, language and cross-cultural skills are needed to instill trust to provide culturally relevant consultations with 

AAPI business owners and other minorities. 

In some cities where there are MBDA and SBA offices, there are 

few if any officials or specialists of AAPI heritage. It’s often case, 

there is only one. 

In conclusion, in order to ensure that AAPI small businesses continue to have access to capital, Federal contracting opportunities, 

and small business development assistance, we must verify data 

that serves as a benchmark for their progress and the progress of 

the Federal Government—more outreach specialists with language 

and cross-cultural experience, more SBA and MBDA business development centers in growing immigrant communities, and greater 

accountability for meeting and achieving stated goals for minority 

business development. 

I also wanted to introduce some people in the audience, our new 

president, Sach Takayasu, is with us as well as a brand-new Asian 

Chamber here in New York that is being started by June Jee, 

Kevin Zhang, and Patricia Shibata, so they will be able to help support that. 

I also want to mention, since I have a few more minutes, that 

when there is in-language assistance at the SBA and MBDA centers, San Francisco implemented a program with Chinese language 

brochures and flyers to talk to Chinese business owners about the 

needs that they might have, and it was standing room only. 

And earlier in a conversation with one of the SBA offices, they 

said that the reason why they didn’t have Korean, Chinese, and 

Spanish speaking people at some of their offices is because there 

wasn’t a demand. So I just think it is very important to point out 

that even if it doesn’t appear that there is a demand, if you provide 

in-language support or in-culture support, you are going to get people to participate, because in San Francisco, it was standing room 

only, and they had to turn people away just by doing things in the 

Chinese language. 

I also wanted to accent again that there has to be very strong 

oversight, because if there isn’t strong oversight by the Federal 

Government when people get these contracts, they are not always 

given those awards. 

So thank you very much for your time. 

Ms. MENG. Thank you, Mr. Imada. 

It is my pleasure to introduce Ms. Joyce Moy, the executive director of the Asian American and Asian Research Institute and professor of small business management and entrepreneurship at the 

City University of New York. 

Ms. Moy was the first Asian-American director of the New York 

State Small Business Development Center at LaGuardia Community College, where she helped to secure $25 million in funding for 

small businesses. She is an expert on the local economy and the 

challenges facing our small businesses. 

Welcome, Ms. Moy. 

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STATEMENT OF JOYCE MOY 

Ms. MOY. Thank you, Chairman Hanna, Ranking Members Ms. 

Vela ́zquez, Ms. Meng, and Representative Clarke. Thank you for 

the opportunity to testify before you today regarding opportunities, 

needs, the outreach efforts, and technical assistance to small business communities. 

I am executive director of the Asian and Asian American Research Institute at the City University of New York. I am speaking 

today in my personal and individual capacity. 

As was stated, I was the first Asian-American director of the 

New York State Small Business Development Center, and when I 

founded the center right after 9/11 at LaGuardia Community College, I immediately saw the lack of resources for the underserved 

communities. 

I created a team that spoke English, Spanish, Korean, and three 

dialects of Chinese, in order to address the issues of these particular communities. 

Later, when I became director of economic development at 

LaGuardia, I also oversaw the Procurement Technical Assistance 

Center, which provides help to small businesses to secure contracts 

with the Federal, State, and city governments. 

I would like to focus on three issues: number one, outreach to underserved communities, particularly immigrant communities; number two, what it really means to provide meaningful and effective 

technical assistance to these communities; and then to make some 

recommendations about how we can ensure that we build the capacity for this meaningful and effective business assistance to these 

small communities. 

First in New York City, as was said earlier, we have a tremendously diverse business base. Asian businesses in New York City 

number in the 150,000s. In Queens alone, over 68,000 of the businesses are Asian businesses. 

In the black community, over 154,000 businesses are owned by 

black business owners. And in Brooklyn, there are over 52,000 of 

them. 

In the Hispanic community, the numbers are over 140,000 in 

New York City with Bronx having over 37 percent of its businesses 

owned by Hispanics. 

But when we look at the national picture with respect to immigrant businesses, we find that immigrant businesses make up 17 

percent of the small businesses in the United States. They account 

for $776 billion in revenue. They employ over 4.5 million people in 

the workforce. 

In New York City, as was said earlier, nearly 50 percent of 

small-business owners are immigrants. In the decade between 2000 

and 2011, the neighborhoods with highest concentrations of immigrants saw the largest growth in business, 23 percent compared to 

the rest of New York City at 7 percent. 

In addition, the growth of employment in these areas was 11 percent versus 4 percent for the rest of New York City. And the payrolls increased by 56 percent compared to 40 percent of the rest of 

the city, showing you just how critical these communities are. 

And in New York City, as many of you know, the population is 

37 percent foreign-born. But if you look at the underserved commuSBREP-219 with DISTILLER

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nities, 73 percent of the Asian-American community is foreignborn. Over 31 percent of the black community is foreign-born. And 

over 41 percent of the Hispanic community is foreign-born. 

Looking at these statistics show you just how imperative it is to 

provide services in-language and with cultural understanding. But 

it is not enough to do outreach in these various languages. 

When these folks show up at the door of technical assistance providers, there must be culturally competent advisers available. Otherwise, it is nothing more than a false promise. 

In addition to this, because I am running out of time, I would 

like to also mention that the SBA has done a great job, along with 

other agencies, in reaching out to community partners to try to add 

these cultural and linguistic competencies. However, that alone is 

not sufficient. 

We need to make sure that these community-based organizations 

get the financial and other resources necessary to support the work 

that they do. Without technical education of the staff of these organizations, et cetera, again, it is nothing more than a false promise. 

Let me give you an example of what happens when these community centers are asked to partner with SBA, but are not given 

proper training or proper support. Right after 9/11, I read a story 

in a Chinese newspaper about a restaurant owner in Chinatown. 

There were 11 employees in that restaurant. 

One of the owners of the restaurant, Mr. Ho, had gone down to 

a Chinatown site for help from the SBA. He went numerous times 

in the rain and in the snow, stood out in the cold, and he was 

turned away so many times that when the reporter spoke to him, 

he said that he had nothing but dry tears to cry. He was so upset 

and frustrated. He was about to lose his ability to support his entire family. 

When we looked into it, because we contacted him through the 

reporter, we found out that the problem was that the community 

translators, who had no business training, told him that they could 

not help him unless a majority shareholder signed the documents. 

This business had seven shareholders. There was no majority 

shareholder. 

The translation should have been ‘‘a majority of the shareholders.’’ But because the translator translated literally, and did 

not understand the significance of what SBA required, this man 

was turned away for weeks. 

And had we not see that article, we would not have been able 

to help him. And we helped him to secure $75,000 in assistance. 

So those are the kinds of things we are talking about. 

We have not just a duty to do things well, but I believe it is an 

ethical duty. I think it is important to provide standardized and 

professional training to all of our technical assistance providers. I 

think there need to be national standards set for technical assistance providers. If they are to get the dollars of the SBA, if they are 

to get the dollars of the Department of Commerce, let’s make sure 

that we know that all of our technical assistance providers reach 

a basic benchmark of knowledge and then proceed from there. 

Without competence in culture and language and technical assistance, all of this outreach, again, is nothing but a false promise. 

Thank you. 

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Ms. MENG. I yield to Ms. Clarke to introduce her witness. 

Ms. CLARKE. Thank you very much, Ranking Member Meng, Mr. 

Chairman, and Ranking Member Vela ́zquez. 

I would like to, Mr. Chairman, ask that my opening statement, 

as unanimous consent—— 

Chairman HANNA. Without objection, so ordered. 

[The statement of Ms. Clarke follows:] 

Ms. CLARKE. Thank you so much, Mr. Chairman. 

Mr. Chairman, it is my pleasure to introduce Bill Wilkins. Bill 

Wilkins is the director of economic development for the Local Development Corporation of East New York in Brooklyn. His responsibilities include but are not limited to managing several city and 

State economic development districts that are set aside specifically 

to bring investment, tax incentives, and employment opportunities 

to East Brooklyn. 

He is an active member of the board of directors of the Trey 

Whitfield School, former board member of the Minority Education 

Sports and Arts Organization, and a member of Berean Missionary 

Baptist Church, as well as Kappa Alpha Psi. 

A graduate of Syracuse University, he also has certifications 

from Harvard University, the American Banking Institute, and the 

New York City Department of Consumer Affairs. 

Without further ado, I would like to thank Mr. Wilkins for appearing today. We look forward to your testimony. 

STATEMENT OF WILLIAM S. WILKINS 

Mr. WILKINS. Thank you very much. Thank you to all of the 

members, and I am very pleased and honored to be here. 

As stated, I am the director of economic development for the 

Local Development Corporation of East New York. Since 1979, our 

principal mission has been to foster economic and business development in East Brooklyn and surrounding communities. 

Economic development is achieved when you have capital investment mixed with job creation or job retention. As a byproduct of 

capital investment and job growth in distressed areas, tax incentives and other programs like the SBA 504 and 7(a) are incorporated into the equation to induce or incent the required result. 

Being in harmony and in accord with our business development 

team, the LDC engages in the seamless integration of a myriad of 

activities and programs that foster both short- and long-term economic business development benefits to Brownsville and surrounding communities. 

We are funded by the SBA administration through the Women’s 

Business Center, and I give credit to Congressman Vela ́zquez for 

having the insight and belief in our ability to administer programs 

that actually are helpful to communities in the forefront of creation 

of Women’s Business Centers. We are one of the first designated 

in New York City. 

The SBA and the Women’s Business Center actually provide us 

with the economic development tools in our toolbox to assist entrepreneurs and businesses. 

We promote and use both loan types in instances when clients 

are short on equity or undercapitalized. Both loan products are necessary and needed in the marketplace by virtue of creating addiSBREP-219 with DISTILLER

11 

tional flexibility to underwriting requirements. In other words, 

many deals that are essential to the marketplace would not get 

done unless both programs were in existence. 

Post-Superstorm Sandy, the turnaround time in processing loan 

applications has been taking longer than normal. But recently, we 

are starting to see an improvement. 

Secondly, I encourage the SBA to continue to explore ways to 

streamline their loan application and support documentation requirements. 

Thirdly, the SBA should continue to work with community-based 

organizations that have boots on the ground to assist the marketing of SBA loan products. 

I would just like to speak to a couple of I think key factors that 

would have significant benefits to organizations that are actually 

working with, as Professor Moy stated, we have over a half billion 

minority entities that are functioning businesses. One thing that is 

paramount is to really provide capacity strengthening for community-based organizations. Organizations that have the required 

skill set and the benchmark, if we had a pool of money, whether 

it be $50,000 or $100,000, we could execute some of the 

deliverables that our city, State, and Federal contracts have and 

really start to assist and see some exponential benefits to those entrepreneurs. 

We need capacity-strengthening money. That is what we need. 

We know what we are doing. We have the capacity. We have the 

ability. But if we had more flexibility, I think that we would start 

to see immeasurable results. 

Secondly, I think that it is incumbent upon us to really take a 

step back and understand the entities and businesses that we are 

helping. Most businesses are family businesses, whether they are 

Fortune 100 or 500. You have the Heinzes, you have the DuPonts, 

you have the Rockefellers. It is the same thing. 

Our businesses, the money that is created in inception, is from 

friends, family, and acquaintances. That is the seed money, coupled 

with credit, that creates your seed money to engage in business. 

We on our side of the table provide the technical assistance to 

help these businesses to succeed. What we need to do, what we 

need to think about, is that we have a significant amount of homebased businesses that have reached the capacity of production in 

their homes. They don’t have the capital to move into brick-andmortar or to a commercial storefront. What we need to do is start 

to look at public land to create incubators for these individuals. 

The public land is sitting there. It is not generating any revenue. 

Right now, we are working on a project to create a retail incubator using cargo containers. Cargo containers are in Williamsburg, 

they are in Dumbo, they are in Manhattan in our more tony neighborhoods. We can also use this same concept in our at-risk communities because you are not going to have the startup costs. 

A cargo container is $2,500. You can retrofit it for another $2,500 

or $5,000. If it is food related, then it is about maybe $15,000. So 

you can actually have a business start operating with the startup 

capital of only $15,000 or $20,000. 

And it starts to create economic synergy within the community, 

because then you have businesses who employ locally and people 

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start shopping locally. That creates a microeconomic stimulus plan, 

because now the money is circulating within our distressed communities. That doesn’t take hundreds of millions of dollars. 

We are starting this project actually with about $500,000 from 

EDC and some foundation money, and we are going to have eight 

to 12 entrepreneurs and also about eight artisans and create studio 

gallery space where people start to take more pride in their community. 

This is happening in our more tony neighborhoods. It can also 

happen in our more distressed neighborhoods. 

In addition to that, I think that there is a need for more money 

for marketing, for our Women’s Business Centers, and SBDCs. 

As Professor Moy said, we have over a half billion entities. A lot 

of individuals don’t know we exist. We need money to really get the 

word out from a grassroots level that we are there, that we are 

competent, and there should be standards. There should be benchmark standards for the delivery of service, because we need some 

sort of accreditation. 

In addition to that, right now, we are working and using a model 

from the hub zone to have a designation ‘‘Made in Brooklyn.’’ 

Brooklyn is hot. We are experiencing a Manhattanization of Brooklyn, and we are also at looking at some of the standards from the 

hub zone as it relates to the address of the business, and also the 

address of the employees, to use that as part of one of the requirements to have this distinction as ‘‘Made in Brooklyn.’’ 

Lastly, I would just like to end with procurement, because in 

coming to meetings that are held, and there are always, on the 

city, State, and Federal level, you need to do business. It is extremely daunting to do business with government. We rolled up our 

sleeves and we tried. 

As a matter of fact, it was at my encouragement that I had a 

business actually secure a very small contract with the Federal 

Government. We made the widget. We are fine with it. To send our 

finished product to the Government, the book is about 3 inches 

thick as to how this Federal agency would accept this end product. 

We then had to use a subcontractor to even ship our finished product. And we said, you know what? It really just isn’t worth it. 

Thank you very much. 

Ms. MENG. It is my pleasure to introduce Ms. Michele Chang, the 

acting chief of staff at the U.S. Small Business Administration. Ms. 

Chang works alongside the SBA administrator and deputy administrator. She oversees the day-to-day operations, personnel, and decision-making processes at the agency. 

Previously, Ms. Chang was an engagement manager with 

McKinsey & Company, a global management consulting firm. I had 

the pleasure of hosting her at the Business and Leadership Summit in D.C. where 60 constituents and small-business owners listened to her valuable advice. 

Thank you and welcome, Ms. Chang. 

STATEMENT OF MICHELE CHANG 

Ms. CHANG. Thank you, Chairman Hanna, Ranking Member 

Vela ́zquez, Ranking Member Meng, and Congresswoman Clarke. 

Thank you for inviting me to testify today. 

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It is an honor to be here in New York to discuss SBA’s ongoing 

efforts to increase access to capital, counseling, and contracting opportunities in underserved communities. 

We commend the Subcommittee for highlighting this important 

topic and are grateful for your continued leadership and support. 

America’s 28 million small businesses are the engine of our economy and one of our country’s greatest assets. They employ half of 

the private sector workforce and create two out of every three net 

new private sector jobs. 

At the SBA, we are committed to ensuring that all entrepreneurs, including those in underserved communities, such as minorities, women, veterans, people with disabilities, and those in 

urban and rural areas, have the tools they need to grow their companies and create jobs. 

According to the Urban Institute, SBA-guaranteed loans are 3 to 

5 times more likely than conventional loans to go to minority- and 

women-owned businesses. We are working to fill existing market 

gaps for underserved communities across the board, with both 

microloans and smaller dollar loans. 

While we have already expanded and simplified our Community 

Advantage program and streamlined our signature Small Loan Advantage program, we are constantly looking for more ways to make 

it easier and cheaper for entrepreneurs to reinvest in their businesses. That is why this past October, we reduced fees to zero for 

borrowers and lenders for all 7(a) loans $150 and less. 

Due to these efforts, SBA has supported over $126 billion in 

lending to more than 260,000 small businesses and entrepreneurs 

since 2009. 

However, a loan can only take an entrepreneur so far. Our data 

shows that small-business owners who have long-term counselors 

are more likely to hire, grow, and increase revenue. 

To help make that happen, we have an extensive nationwide network of 900 Small Business Development Centers, over 100 Women’s Business Centers, and 12,000 SCORE volunteers. Last year 

alone, these resource partners counseled and trained more than 1 

million small-business owners across the country. 

Building on our current efforts, President Obama’s fiscal year 

2015 budget invests $7 million to support our successful Boots to 

Business initiative, which offers transitioning servicemembers intensive entrepreneur training through the TAP program. Boots to 

Business is expected to reach an estimated 25,000 veterans across 

all military branches. 

In addition to our capital and counseling programs, SBA works 

to level the playing field for small businesses to access Federal contracting opportunities. Each year, the U.S. Government spends 

about $400 billion in contracts. And it is SBA’s job to ensure that 

23 percent of those dollars go to small businesses. 

We are continually working to make sure that our minority, 

women, and veteran contracting programs are effective. In fact, we 

launched a pre-8(a) business development training series to help 

potential 8(a) firms prepare for success in the program. And we established the government contracting classroom, which is an online 

tool geared toward underserved communities. 

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As a result of these efforts, during the first term of the Obama administration, small businesses accessed more than $376 billion 

in Federal contracts. That is $48 billion more than the previous 4 

years combined, even as overall contracting spending decreased 

during those years. 

These programs and initiatives enable us to continue supporting 

underserved entrepreneurs like Tony Baird, the recipient of SBA’s 

2013 Veteran-Owned Business Achievement Award. 

With the help of our local resource partners in Syracuse and an 

SBA-guaranteed loan, Tony was able to leverage his experience in 

the U.S. Army to launch a successful electronics startup. Tony 

Baird Electronics has since been able to pursue higher value contracts with the Federal Government. 

This is a perfect example of how SBA’s capital, counseling, and 

contracting programs enable underserved entrepreneurs to pursue 

their dreams of small business ownership. 

Under this administration, SBA has become more accessible and 

created more opportunities for underserved entrepreneurs than 

ever before. We have been able to achieve this by connecting need 

with opportunity, forging new relationships with lenders and community organizations that can help us better serve the small businesses. 

We have formed partnerships with organizations such as ACE, 

which is represented today by Bill Imada, as well as the U.S. Black 

Chamber, the U.S. Hispanic Chamber, Women Impacting Public 

Policy, the National Minority Supplier Development Council, and 

the National 8(a) Association. 

These strategic alliances enable us to leverage our partners’ nationwide networks and connect us directly with the communities 

they support. 

While we are proud of all that SBA has accomplished alongside 

this Committee, we must continue to be diligent in our work to 

support underserved entrepreneurs. We know that with the right 

tools, small businesses in these communities can have significant 

impact in driving economic growth and creating jobs where they 

are needed most. 

Thank you again for having me today, and I am happy to answer 

your questions. 

Chairman HANNA. Thank you all. Thank you very much. You are 

great advocates. 

I am going to turn over the first questions to Ranking Member 

Meng. 

Ms. MENG. Again, thank you to all of our witnesses for your important testimonies. 

My question is for Ms. Chang. What is SBA doing to make sure 

its programs and services are cost-effective? And, alternatively, if 

our other three witnesses could talk about what you think the SBA 

could do to make sure its programs and services are more cost-effective? 

Ms. CHANG. Thank you. Every day, we are trying to figure out 

how we can make sure we are using taxpayer money most effectively. 

The primary focus over the last 4 years is to make sure we are 

streamlining our programs and our processes as much as possible. 

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For example, one of our main focuses over the last 4 years was 

looking at our loan programs. In the past, our 7(a) and 504 applications were quite extensive, quite long, and it was quite burdensome, not only for small businesses, but also for banks. Over the 

last few years, we have taken a very fine toothcomb, going through 

all the different paperwork and really making sure we are really 

distilling it just down to the paperwork that really needs to be 

done. 

So we have taken a number of efforts to streamline various numbers and processes not only in our capital programs, but also in our 

SBIC, our SBI programs, and also our Federal contracting side. 

We are always working with community leaders, also, to understand what more we can do. So we are excited and we went to 

learn more about what people are hearing on the ground and what 

more we can do to help. 

Ms. MENG. Anyone can start or chime in. 

Ms. MOY. In looking at finances, I would advocate for greater investment. It is important to make things more efficient. It is important to look at metrics and so on. But without the all important 

initial investment, we, in fact, wind up losing. 

For example, if we are not paying our small business development counselors sufficient salaries, so that they are able to be retained over time, we lose them. And I think many of us have seen 

the statistics. It costs almost 60 percent of a person’s salary to replace them when you look at starting from scratch with benefits 

and contributions and things like unemployment insurance, when 

you look at the ramp-up time, et cetera, and the loss of time, in 

terms of counseling clients. 

So I think we have to look at how we are funding these centers 

and making sure that the investment is adequate. And then I think 

you will see a return on investment. 

And then, with regard to metrics, the way that we measure 

things is somewhat interesting. It is important to count the number of clients that come in the door. It is also important to count 

the number of clients who have left and not come back. Retention 

is extremely important. 

Again, the investment makes the difference in whether we retain 

and ultimately graduate, if you want to use that term, successful 

entrepreneurs. 

Mr. IMADA. I would have to agree with Ms. Moy that you get 

what you pay for. So it is very important that when you are hiring 

professionals at the SBA, that you hire professionals that are going 

to stay. So I do think retention is an issue, because when the community gets used to one or two people, and those people leave, then 

the SBA has to start all over again from scratch. 

I also recommend very strongly, and we have been partnering 

with the SBA, who has been very open about this, is to work with 

some of the alumni and get the mentors, for instance, from the 8(a) 

program early, and get them to help counsel some of the new businesses that are coming in. And I think that that should be a little 

bit of a requirement of anybody that qualifies for some of these 

loans or gets in the 8(a) program, that they are mentoring the next 

generation of small businesses. And that would help immensely, 

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because I think most people would trust another small business 

person that has gone through this process. 

But I do have to applaud the SBA for the 7(a) program, because 

that is one area that we think is critically important, to provide 

lending at microloans as opposed to some of these bigger loans, 

which are a lot more attractive to the SBA lenders, but to give 

more of these microloans to these startups, because this is, typically, what they want. 

Ms. MENG. Mr. Imada talked about the need for more SBDCs 

throughout the country in certain communities, and many of you 

talked about the importance of culturally competent staff at the 

centers. 

In Queens, we have two SBDCs. Do you believe that they are 

currently sufficiently equipped? And how could they be improved? 

Ms. MOY. I do know the SBDC system in Queens quite well. 

There is one at LaGuardia Community College, and then there is 

one in York College in the southern part of Queens. Both of the 

centers, I believe, are heavily utilized. 

But I also believe that both centers could use augmentation in 

terms of their budget and staffing. It may not be necessarily a path 

to set up a brand-new SBDC, but, certainly, there should be extensions of the current SBDCs, again with additional staffing and additional funding, that could service communities. 

When you have heavy concentrations of small business owners, 

such as you do here in the Flushing area, for example, and a particularly close with community, it may warrant a specific SBDC 

with language capacity or a specific satellite of an SBDC with language and cultural capacity. 

Mr. IMADA. I would say it is important to have a new center, provided that the hours are different. Part of the complaint the small 

business community has is that these centers run regular hours. 

But when you are a business, a Dominican business or a Korean 

business or a Chinese business or a Haitian business or a Russian 

business, you work 80 hours a week. And so coming to the center 

at 10 o’clock or 1 o’clock isn’t always possible. 

So it would be great, if we open another center in the Queens 

area or in Bronx or in Brooklyn, that it has staggered hours, because some of the business owners would like to arrive and get the 

counseling later in the evening, as opposed to during regular business hours. 

So I would encourage that, if you do that, to not only put some 

resources behind it, but to look at staggering the hours so that 

more people could take advantage of these development centers. 

Ms. CHANG. Just one point of clarification, the Small Business 

Development Centers are SBA resource partners, so technically, 

their employers are not SBA staff. 

However, we work very closely with them to make sure that they 

are representing the communities that they serve. 

One point I would like to also address, Mr. Imada’s point about 

making sure we are being responsive to small business owners. We 

understand, a small business owner, it is a hard job. You work all 

hours of the day. It is your lifeblood. Any hour is fair game. 

So one of the things that we are doing at the SBA to try to be 

more cost-effective is to provide more training and webinars online 

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that are accessible at any hour of the day. We understand that it 

is not the same as an in-person touch, but it is something that we 

have been trying to do to make it a free, easy way for folks to get 

access to free counseling. 

We have what we call the Online Learning Center, which has a 

number of different webinars and training tools that help small 

businesses learn about not only the services SBA provides, but also 

basic questions about how do I build a business plan, how do I find 

financing. So we encourage folks to check that out at SBA.gov 

Ms. MENG. Thank you. 

Before I yield to Congresswoman Vela ́zquez, I would just like to 

echo the sentiments of Mr. Imada and would welcome, I believe, 

with many of our constituents and small businesses, a center within the Sixth Congressional District. 

Thank you. I yield back. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman Hanna, and Congresswoman Grace Meng, for the incredible job that you are doing 

as ranking on this important Subcommittee, and Congresswoman 

Clarke, a very active member of our Committee. 

This Small Business Committee is one of the few that really 

work in a bipartisan way. Just last week, we reported out seven 

bipartisan bills, and I am proud of the work that we do, because 

we really understand that there is no Republican or Democratic approach to deal with issues that are important to small businesses. 

And the work that small businesses do is very important for our 

economy, particularly at a time when our economy continues to 

struggle. We know that small businesses are the job creators. So 

if we want the economy to grow, we have to create jobs. But in 

order for small businesses to create jobs, there has to be a climate 

that is conducive for businesses to do what you do best. 

The face of small businesses in America is changing. There are 

more women. There are more brown faces. There are more Asians. 

There are more immigrants. 

And so we need to bring the Small Business Administration to 

its core mission, and that is to help small businesses either access 

credit or capital, at a time when financial lending since 2007 has 

been ineffectively providing capital to small businesses, because 

credit standards are being tightened. And yet even those who partner with SBA, because SBA doesn’t make loans, SBA partners with 

those financial institution. 

One thing that SBA needs to get into its mentality is ... what are 

the types of capital that we need to focus on? Are those the big 

loans, the $5 million loans, the $7 million loans? Or microlending? 

For immigrants and for those startups, the portfolios show that 

it is between $50,000 to $250,000. When we do not demand that 

banks make those smaller loans because they are not profitable, 

that is a disservice. And so we expect for SBA and the new administrator to focus more on those types of loans. 

In terms of procurement and accessing the federal marketplace, 

for years, as ranking member of the Small Business Committee, 

and as chair of the Small Business Committee, I took it upon myself to put together a scorecard grading all the federal agencies on 

whether or not they fulfill the contracting goals set up by Congress. 

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When some in the administration said that yes, they achieved 

the 23 percent, we discovered through investigations conducted by 

GAO that those contracts they said were given to small businesses 

were miscoded and given to big businesses. 

I am really excited about the fact that under President Barack 

Obama and the previous administrator, she instituted, she adopted 

my scorecard. And for the first time this year, we are seeing that 

it might achieve the contracting goal of 23 percent for small businesses. 

Look, it is the largest purchaser of goods and services in the 

world, the federal government. So it is a market for small businesses, and we have to make sure that there is a level playing field 

and that the federal government’s message to small businesses is 

that we are open for business, and we want small businesses to 

participate in the federal marketplace. Because when you do, we 

all win. 

Competition is good, even for the government and for taxpayers, 

because no one produces and provides better services than small 

businesses. Even the private sector, corporate America, turns to 

small businesses to be able to provide the work that they need. 

So I am happy and expect the new SBA administrator to continue to focus on making sure that all the federal agencies, starting 

with SBA, because it will be quite embarrassing if we produce a 

report that shows that even the SBA—that used to happen before—didn’t comply with the statutory goal of 23 percent. 

In terms of SBDC, I agree with you. 

Ms. Moy, you have experience. You know what works, what 

doesn’t work, with the Small Business Development Center. I believe that is one of the most important investments that we make 

in the federal government. 

For every dollar that we spend in services that we provide through SBDCs, the government gets $2.62 in tax revenues. So it 

is a great investment. 

You are right, we need to have more staff. We need to pay better. 

Otherwise, we are going to train them and they are going to leave. 

What we need to do is not cut like we did, that the administration 

proposed cutting—I don’t even remember the amounts—but proposed cutting the funding for SBDC. My reaction to the administration is don’t cut the funding to those institutions and those partners that have a proven record, that have been tested, just because 

we want to create pilot programs that have not been authorized by 

us, that are untested, and that do not have a track record. 

Just last week we passed legislation, my legislation, that will 

prohibit the creation of any pilot project that has not been authorized by Congress. And use that money to fund SBDCs that have 

a proven record in their communities. 

So my question, based on my comments, to Ms. Moy and Mr. 

Imada, do you believe that, in terms of the needs for businesses, 

immigrant businesses, is it the big loans or the smaller loans that 

SBA needs to focus on? 

Ms. MOY. I would agree with you, Congresswoman Vela ́zquez, that it is the smaller loans between $50,000 and $250,000 that will 

really seed the capital that is needed by these smaller businesses 

and will allow them to grow to the next level. 

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19 

There are a lot of services for the startups, not enough service 

and concentration on these growing businesses for whom the 

$50,000 and $250,000 would be particularly important. 

I also want to take the opportunity to just clarify something 

about my comments. I do agree that a Small Business Development 

Center right here in a location such as Flushing is extremely important. But my comments about the possibility of a satellite office 

was based partly on my fear that funding would be taken away 

somehow from the two existing centers, which are extremely needed. 

But a third center in Queens, particularly with Asian and Hispanic language capacity, is urgently needed as well. 

Mr. IMADA. I would have to say that we need to have both loans, 

and I will tell you why we also have to have the larger loans. It 

is that it is very important for us to create jobs. And so some of 

the successful businesses, they are making $10 million, $20 million, 

$30 million per year, but then they hit a wall. 

So a lot of these women-owned businesses, in particular, they are 

very successful, they have done extremely well over the years, but 

they ultimately get to this place where they don’t know how to 

scale up their business, and that is where they need a loan. So I 

do think that once those minority businesses do well, particularly 

women minority businesses, then we need to have some system in 

place where they can get those loans. 

But I am also concerned about the smaller organizations, because 

we have a lot of organizations that come here, a lot of minorities 

coming from all over the world, and they just need a break. And 

most of the lending institutions, even if they are preferred lenders 

and are supported by the SBA, they still have to come up with a 

certain level of personal collateral. And many of these small businesses don’t know how to do that. 

And as Ms. Moy said, when they are going to these centers, if 

there is no one who can speak Espanola, or Korean, or Chinese, or 

even some of the language out of the Caribbean and Eastern Europe, then they can’t get access to that information, because most 

of these lending institutions do not provide that support. 

And even worse, when they are turned down for loans, there is 

no one there to explain why they didn’t get the loan and what they 

need to do in order to get it. So I think it is both. 

Ms. VELA ́ ZQUEZ. Thank you. 

I yield back. 

Chairman HANNA. Thank you. 

Ms. Clarke? 

Ms. CLARKE. Thank you very much, Mr. Chairman. Let me add 

my voice in thanking you and Ranking Member Meng, as well as 

the ranking member for the full Committee, Ms. Vela ́zquez, for 

holding this field hearing in here in New York City. 

We have a very unique business climate here in New York City, 

and I think it can serve as a model for other regions that have the 

diversity that we have here in the city of New York, in terms of 

our entrepreneurs. 

One of the things that I would like to raise with you, Ms. Chang, 

and just get feedback from our panelists about, is the whole idea 

of cultural competencies. I think that it is a scenario where we are 

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actually losing money, losing opportunity, because we are not able 

to create the nuances within programs, agency policies and procedures, that capture the full breadth and depth of entrepreneurial 

spirit that exists within our communities. 

And I was taken by Ms. Moy’s testimony about cultural competencies in the agency itself among its executives and its professionals, and how we address that in a way in which it doesn’t take 

us beyond the mission of the agency, but enhances the mission of 

the agency in the regions in which SBA operates. 

I think if we break it down to sort of the microlevel and look at 

how our partnerships with our community-based organizations, 

and our collaborations, are just that, collaborations. It is one thing 

to offer the Local Development Corporation of East New York a 

contract to do some services, but as Bill has stated, it is another 

thing to truly partner and look at the resource allocation and how 

those connections are made to be effective on the ground in the 

communities that we operate in. 

So I would like to ask the panelists, in your experience, without 

any major law or regulation having to be changed, what are some 

of the nuts and bolts, or nuanced ways in which you would like to 

work with the SBA? 

Bill, do you want to start? 

Mr. WILKINS. Yes, I can weigh in on that. I think it touches on 

a previous question that the member raised as far as cost-effectiveness. One of the difficulties that we encounter is the human hours 

spent with reporting with the documentation. We just went 

through, actually, an audit and there is a constant interaction with 

our office, with SBA, and it is positive. But on the reporting side, 

because, as you know, the director of the Women’s Business Centers, they have to be vetted. Our director spends a considerable 

amount of time on the reporting of interface with SBA. This is a 

very bright woman, an MBA who is extremely proficient as far as 

her technical assistance and being a counselor. We find it extremely effective when she can teach. 

When she is able to teach and we are not doing the one-offs anymore, we do trainings for a multiple of people, whether it be 

QuickBooks, whether it be marketing, whether it be using social 

media. So now an hour or two that she spends on reporting, that 

hour or two can actually help 20 or 30 individuals in the classroom. 

So to come back to the point of cost-effectiveness, I think that is 

very important. 

To Congresswoman Vela ́zquez, we have to have SBA play in the 

micromarket. As you know, banks, it is just not profitable. We have 

to figure out ways in which we can go back to something of the ’60s 

or ’70s and go to character lending. Direct lending, character lending with the support, and I am trained by Professor Moy as far as 

credit, and we know the ins and outs. Actually going through one 

of her trainings, we were taken aback by the skill set, inherently 

the skill sets of the people who were taking her curriculum, and 

sending these people out into the marketplace as professionals. 

They really didn’t have that type of background. The curriculum 

was great. It was a great manuscript. But they didn’t really have 

the skill set to really advise someone on something as important 

as credit. 

SBREP-219 with DISTILLER

21 

I mean, credit is essential for all of us. It is a beginning framework to really manipulate yourself through the marketplace so you 

not paying more than what you have. 

What I find is that our ethnic communities have come up with 

their own solutions. Whether it be a Caribbean with the susu, 

whether peer lending. Also hard-money lending, I recently had one 

of our businesses on Jamaica Avenue, an apparel manufacturer, 

borrowed about $18,000 from a hard-money lender. He was paying 

about $250 interest a month. So I was thinking, well, you borrowed 

$18,000; you’re paying back $22,000, we then invoked City National Bank into the equation, which actually gave him a line credit and also a credit card. And now he is able to sustain himself during his down period. 

So I think that we have to look at the nuances. We have to look 

from not the top down but from entrepreneur, and also from the 

vantage point—it was stated that an entrepreneur spends about 80 

hours a week in their business. It is very difficult to pull these people into our centers for training. It is an interesting dichotomy, because you have ownership and you have rank-and-file. There is no 

middle management. 

When you leave the shop, you are not talking to your vendors, 

you are not talking to your suppliers, you are not producing for 

your customers. Their time is invaluable. So we have to make sure 

that our approach is insightful, and it is extremely valuable that 

we are able to penetrate. 

What we do is a before-business breakfast so that way everybody 

can be at their desk by 9 o’clock, or open the store at 9, so we look 

at that 7 to 9 o’clock in the morning to really provide the training 

that the business community needs. 

Ms. CLARKE. So the question is, is this a 21st century model? We 

are sort of hardwired on the 9 to 5 as employees, oftentimes, but 

the entrepreneur is the element that we are trying to focus on. So 

how does our agency respond to the world of the entrepreneur that 

doesn’t transpose an employee’s template on top of them. Because 

if our workforce is working 9 to 5 and the assistance that is needed 

is needed either before 9 or after 5, then it almost becomes a 

daunting task for those individuals. And those individuals that 

don’t get help when they need it, it is too late after the fact. They 

are out of business. 

Would you say, Ms. Chang, that there is a desire within the 

agency to embrace some nuances, and to work with community 

based, with our organizations that are focused on business, to create the space for these nuances? 

Ms. CHANG. I would say absolutely. This is something that we 

strive and work to do every day. 

And I think what you all are highlighting is the same thing we 

are struggling with every day. How do we, as a Federal agency, 

continue to stay nimble and innovative, and keep up with the 

changing population that we are serving, which are small businesses? 

And as you rightly highlighted, they are an evolving population, 

which is often changing. So we are always trying to make sure that 

we are keeping a pulse of what is on their minds, how do we make 

sure that we are serving them appropriately. 

SBREP-219 with DISTILLER

22 

So conversations like this are extremely helpful. What has also 

been helpful for us is that some of our partnerships that we have 

done with very community-based focus groups. I mentioned the 

Chambers that we have partnered with, and through those partnerships, we have partnered with their local chapters within all the 

different communities. And we really do rely on those partnerships 

to help us make sure that we are not losing sight of what people 

are really experiencing on the ground. I think it is very easy for 

folks to think in D.C. that you are not thinking what is happening 

on the ground. But that is what why it is so important for us to 

utilize our field network, our resource partners, as well as these 

partnerships, so we can continually make sure that our services are 

providing the need that people need. 

Ms. CLARKE. And is there a place in the agency where you can 

actually do an analysis of practices, and whether, in fact, these 

practices have yielded far more in terms of business assistance 

than perhaps a previous practice has? 

Ms. CHANG. That is a great question. And we are very fact-based, 

data-driven agency. We try to make sure that, whenever possible, 

we are making policy and programmatic decisions based on facts. 

There actually is the SBA’s Office of Advocacy, which is an independent office of the SBA, which is mandated with doing research 

and analysis of what are the changing trends within the small 

business community. So that seems like a natural fit for that office. 

And I am happy to bring this back to those folks and say this 

is a pressing issue. 

Ms. CLARKE. We actually have a representative sitting here with 

us. Ms. Teri Coaxum is here from the Office of Advocacy. 

And it is great that that independent office exists. What becomes 

even greater is if their findings find their way into policy. 

Ms. CHANG. Absolutely. 

Ms. CLARKE. Because at the end of the day, we should not come 

here again next year for a field hearing after receiving this information without there being some steps taken to verify the facts 

that have been presented here today, and then make the necessary 

adjustments to address these very concerns. Because if they are 

concerns here, they are concerns in other parts of the country as 

well. And perhaps there are environments similar to ours, in terms 

of entrepreneurship, the markets, that can benefit from what we 

have learned here today. 

So I wanted to share that with you. 

And just one final question, Mr. Chairman, if you will just indulge me, because I want to talk about the credit markets. That 

has been something that has just been so devastating for so many 

entrepreneurs, so many families, because, quite frankly, we are all 

counting on the market and entrepreneur to be the breadwinners 

for our families. 

As the credit market begins to loosen, are you noticing any difference in those who come to you seeking assistance, or have you 

begun to see a return to normal credit markets? I am just going 

to put that out to the entire panel. 

And I yield back after their answers, Mr. Chairman. 

Ms. MOY. First, I want to commend the SBA for its partnership 

outreach in working with the Hispanic Chamber and the other ethSBREP-219 with DISTILLER

23 

nic Chambers, for example. But that is not a substitute for providing substantive day-to-day technical assistance, because, again, 

many of these Chambers do wonderful work. They are great in 

terms of convening conferences and seminars, and so on. But they 

are not in a position to handhold. 

Many of these Chambers are made up of volunteers, or they are 

made up of very small staff. So that again is not a substitute for 

funding and total and complete support for organizations like the 

LDC of East New York who do the day-to-day hard, grappling 

work. 

And then secondly, in terms of the credit markets, I think that 

over the past several years, entrepreneurs have taken a tremendous beating. They have, more than ever, relied on credit cards and 

other things to fund their businesses, to keep the cash flow going, 

to try to hold on until the economy turns. 

And so the course that Mr. Wilkins mentioned is a class that I 

have done for over 300 counselors who are embedded with community-based organizations throughout New York City. And the kind 

of credit reports that we are seeing show people whose credit has 

been battered. 

And I am wondering whether or not there is a way to help underwriters begin to look at shorter credit histories, going back 3 years 

instead of 7. That could actually help to turn the tide, because I 

think if you look at a business, and you see a positive trajectory, 

a constant increase in credit—in other words, their credit scores 

are getting better over a 3-year period of time—that might in fact 

enable these people to access credit where they can’t, because the 

credit reporting agencies bury these people in 7 years of bad history. 

Mr. IMADA. I would have to agree 1,000 percent with Ms. Moy, 

because when I started my own company, it took me 7 years to convince a lender that I was worthy. And most businesses do fail, a 

lot of businesses do fail within the first 2 to 3 years. But once you 

pass that 3-year threshold and you have a positive cash flow, even 

if you have a little bit of a negative credit rating, there should be 

a little bit more access to credit from the banks, particularly from 

the preferred lenders that support the SBA program. 

One thing I wanted to mention about what Bill had to say, and 

what Ms. Chang had to say, is that it would be great if we could 

get more people in the SCORE program. The SCORE program is 

excellent, but we need to get more people that graduate from the 

8(a) program, more corporate executives who are people of color. 

And one area where that might happen is a lot of these lenders 

actually have employee resource groups. And to get those employee 

resource groups, the African-American, the Latino, the Asian, the 

disabled, the veteran resource groups, to serve as mentors for these 

small businesses, I think that is a really good place to get the corporations involved, get businesses involved, to help support these 

businesses in the community. 

Mr. WILKINS. Just to weigh in, I think, as far as your question 

as it relates to the credit markets, it is an interesting dynamic, because I think our first-tier lending institutions have sort of ignored 

the market unless you are really a middle-market client. We have 

the secondary lenders, whether it be Project Enterprise, Accion, 

SBREP-219 with DISTILLER

24 

and other community-based credit unions, they sort of fill the void 

and also the SBA. 

But the paradigm is that businesses fail because they are undercapitalized. They don’t have enough money. And the first thing 

that suffers is your credit. 

And then you go to lending institutions that are looking at your 

credit. And they are going to feel that they can’t help you. 

Prior to that, the businesses, the principals had a 700 credit 

score, and they were flush with cash. The issue is that that money 

was not married with institutional money being bank money. That 

is the problem, because there are always mitigants to getting started. 

And you think that your cash register will start to jingle after 

3 months, and it takes you then 7 months to get your permits from 

the Department of Buildings. You don’t have enough of a buffer to 

sustain that extra 4 months of paying a lease and paying employees and utilities because you don’t have the cash flow. 

And because now you don’t have the cash flow, you don’t have 

the ability to market and be successful. 

So I think what is needed is that, institutionally, we have to 

start looking at more creative credit opportunities, because if you 

have an individual working 80 hours a week doing something, I 

think they are going to be successful. We need to have money to 

support these individuals and look at it differently, especially when 

we are working in distressed communities. 

Chairman HANNA. Thank you. 

Ms. Meng, do you have a question? 

Ms. MENG. Just a final question for all of our panelists. If you 

could come up with a wish list for SBA, what are some of your biggest challenges, and how could Congress be helpful in the imminent future? 

And to our other panelists, what are some ways that Federal 

agencies can immediately advertise or better market their services, 

in your opinion? How can they do even better? 

Ms. CHANG. We probably want a lot of things on a wish list, but 

I think some of the things that you highlighted today are really 

what we are trying to figure out. How do we make sure that we 

are continuing to evolve and be able to stay up with the changing 

needs of small businesses? 

So some of the different things that we at the SBA have looked 

at are different ways to make sure that we are tailoring, particularly our entrepreneurship training program, to different segments 

of the group. 

So as you will see in President Obama’s fiscal year 2015 budget, 

in there are a number of requests for very specialized entrepreneurship training. I mention the Boots to Business program that 

we have highlighted. We also have training around entrepreneurship education, which traditionally has been known as our emerging leaders program, which is an intensive mini-MBA type course 

for existing small businesses. 

We would love to make sure that we are able to continue to provide these services to small businesses across the Nation, and we 

have always enjoyed the support of this Committee and look forward to that going forward. 

SBREP-219 with DISTILLER

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Ms. MOY. Since access to capital is so critical for small businesses, I would like to look at whether or not a fund could be created specifically in the $50,000 to $250,000 range, where the underwriting criteria could be loosened a bit, providing that people in 

this program are paired with technical assistance. So that when 

they apply for the money, they work through very carefully as to 

how that money will be applied, because a lot of the problems, for 

example, that Mr. Wilkins cited were really cash flow problems. 

They didn’t have sufficient reserves in the beginning, and so forth. 

And we have seen programs where people working with technical 

assistance providers learn to apply the funds in the right way, so 

that they don’t blow through it, putting it all into marketing when 

there are other things to balance in the business as well. 

So again, a small fund that could provide these amounts, helping 

them to build credit. There are things in New York City, for example, called credit builder loans where somebody could borrow—well, 

actually, the amounts are quite small, $300. The amount of money 

is actually put into a bank account and each and every month, the 

payment is drawn from that, so that these folks have a track 

record of perfect payments for a period of time, like 1 year, and it 

helps to rebuild their credit. 

So something of that nature that can help a business owner 

quickly ratchet up and better his credit will then allow him to go 

and connect back into the traditional banking world. 

Ms. VELA ́ ZQUEZ. Will the gentlelady please yield? 

Ms. MENG. Yes. 

Ms. VELA ́ ZQUEZ. Ms. Moy, why is it that you don’t believe that 

the microlending program fits the bill? It is a combination of capacity building, plus money from $500 to $50,000, and in some instances to $100,000. 

And it is a very effective program. In fact, it has the lowest default rate of only 2 percent, and 62 percent of those microborrowers 

are women, where we fill an incredible vacuum, because when you 

talk about access to capital, women are really shut out of the financial institutions. 

Ms. MOY. So I do believe that the microfunding programs have 

been very effective. And programs like Accion that look at nontraditional criteria for making loans, such as paying rent on time 

and so forth, the kinds of things that the traditional banks may not 

look at, have been extremely effective. 

But I think that the rapport and the technical assistance have 

to be paired, and that this relationship is an ongoing relationship, 

so it is not the kind of relationship where you go to the technical 

assistance provider to get through the crisis, and then you don’t 

come back. 

The point is to have the relationship established at that point, 

and then for it to continue, so that we can make sure that these 

businesses get to the next level, because to fund them, and allow 

them to stabilize and then to watch them fail a year or two later, 

is not what we are looking for. We are looking for that sustained 

growth. 

Ms. VELA ́ ZQUEZ. But in the order for them to go to the next level 

and get a larger amount, they have to continue to go through technical assistance. 

SBREP-219 with DISTILLER

26 

Ms. MOY. I think that would be key to success, because, again, 

they have to be able to develop the skills necessary to move on to 

the next level. These classes like the mini-MBA training is exactly 

the kind of thing they need, but we have to stabilize the business 

to the point where they can step away from the business in order 

to acquire those skills. 

Mr. IMADA. My wish list is very simple. I think that what would 

be great is to have more of the successful businesses come back and 

mentor the community. I do think that the access to the microlending is critically important. 

But I also think that some of these Dominicans and Nicaraguans 

and all these people that are starting businesses, Koreans and Chinese and Russians, they don’t necessarily want the Government to 

help them, but they want to know that the Government is behind 

them if they need support. 

So the microlending is important. Give them the tools and the 

apparatus to be able to manage that. Give them the tools and apparatus that is within those communities where they can have 

mentors. And the SBA should be looked at as a convener, a convener of talent, a convener of information, a convener of access to 

different types of lending programs and technical assistance, if they 

want. And that requires a lot of patience, some partnerships, and 

some people who are culturally interested in these communities 

and are aware of what their needs are. 

Mr. WILKINS. As far as my wish list, I will just highlight the fact 

of the capacity-strengthening grants maybe can be proportionate to 

what the Women’s Business Centers or SBDCs receive. I think that 

we would start to actually experience a significant growth in being 

able to help entrepreneurs. 

Secondly, as we look to streamline applications for the 504 or the 

7(a), also to streamline the reporting requirements for these centers. It really takes a considerable amount of human hours to be 

able to address some of the deliverables that we have, which are 

important. But we need to be able to streamline it. 

Thirdly, the underwriting criteria and personal guarantees for 

SBA have to be looked at. We recently went through an experience 

with a very successful business in Coney Island, actually. I am not 

going to say their name. But basically, they had the capacity to do 

all of the rehabilitation for their business post-Superstorm Sandy, 

about $2 million. On the back end then, they were trying to receive 

a loan from SBA. 

There were seven equity owners. Four of them, their assets were 

about $17 million. SBA was dogged for the fact that they wanted 

all seven to sign. The three minority equity holders really were not 

involved in the business, and they didn’t want to pledge personal 

guarantees. 

That particular loan was overcollateralized. They only needed $2 

million. The four people with assets were about $17 million. It took 

us about 2 to 3 months to go through this. And this is after you 

have a victim of Sandy. 

So we need to look at some of the underwriting criteria, because 

it creates a disdain for the SBA that is not deserved. 

Ms. MENG. Thank you. I yield back. 

Chairman HANNA. Thank you. 

SBREP-219 with DISTILLER

27 

Mr. Wilkins, Mr. Imada, you mentioned the lack of personal collateral is a problem to start up a business. 

Mr. Wilkins, you spoke of character loans. You also talked about 

additional flexibility. 

Ms. Chang has a responsibility to see to it that this money is 

paid back, that the Government’s risk is at a minimum. So knowing that there is a large default rate with small businesses, startup 

businesses, and Ranking Member Vela ́zquez mentioned the 2 percent loss rate for the microloans, how do you reconcile Ms. Chang’s 

responsibility to see to it that she does her job and the public trust 

is respected, and Mr. Wilkins’ notion, and I am not faulting it, that 

somehow we have character loans? 

And we have people with no equity, and yet we all want to grow 

businesses, that all sounds wonderful, right? But how do we do 

that in a world that protects Ms. Chang from not writing a bunch 

of bad loans, and Mr. Wilkins who would like to see people with 

very little equity, but good character, hardworking people, get a 

business, and you who have people with no equity? 

I was in business for 30 years. That is a tough recipe for Ms. 

Chang. So what do we do? Do we increase the loss ratio to 5 and 

accept it? 

I am just interested, especially from Mr. Wilkins, because I sympathize with you. However, I don’t see how we can just hand 

money out to people based on character. Character is important, 

but character is also a function of paying your bills over time, and 

accepting responsibility and proving that you have a product that 

people want, and you know how to manage things. 

So I am just curious, how do we accomplish what we all want 

to do here and grow small businesses, particularly with minorities? 

That is what we are talking about today. How do we get there from 

here? 

Mr. WILKINS. I think you just have to take common sense to a 

high place as it relates to character lending. It could be as simple 

as you have SBDCs and WBCs, allow them the flexibility within 

their client base to choose two or four entities to engage in these 

character loans, because the centers have worked with individuals. 

Someone that is coming into my center every week to receive 

counseling, those are the people that repay loans. The individuals, 

when you say, ‘‘Well, you know what? I need to see 2 years of your 

personal tax returns and 2 years of your business tax returns and 

your certificate of incorporation.’’ The individuals that give you that 

information back timely, those are the people who repay loans. 

I am a prior loan officer for a community development credit union, and I had a portfolio of over $1.5 million. When you have 

individuals who are experienced in lending, there are certain steps 

and mandates that you can create in the lending process where you 

have a higher rate of success. 

On the backside, it is a very difficult space, as far as lending to 

individuals on a character basis. But then, on the other side, we 

will have $100 million loans to very successful entities also fail. 

So there also has to be a tolerance. And if we look at that every 

dollar that we lend, the Federal Government is getting $2.62 back, 

then I think we have a little flexibility to underwrite some bad 

loans. 

SBREP-219 with DISTILLER

28 

Mr. IMADA. Well-said. That is all I have to say. 

Ranking Member Vela ́zquez gave a very important statistic, and 

it is 2 percent. We are talking 2 percent of that large group of people who are getting these microloans who are not paying them 

back. This is actually a very small amount of lending. 

If we look at some of the bigger loans that are going out and 

those failed, we are talking about significant amounts of money. 

This is a very small and insignificant amount of money. 

But one thing that I think it is important to know about immigrant businesspeople, and I work with day in and day out, regardless of where they are from, is that they do not want to lose face 

in the community. Not repaying even the smallest loan loses face 

in the community. 

And I think that that is something that is not necessarily discussed in halls like this, but these small businesses take their businesses very seriously. That is why we have such a low rate of default, because they want to make sure that if they are borrowing 

from institutions that are backed by the Government, that they are 

going to return every single dime of that money, because the Government has provided them an opportunity to live in this country 

and thrive. 

So I think we do need to give a little bit of leeway to those immigrants. 

But I also agree with Bill, because you empowered some of these 

organization and entrusted these organizations to work with 

women- and minority-owned businesses. Give them a little bit more 

leeway to make those decisions, because they work with these people day in and day out. They know their record of returning calls, 

paying bills, meeting their deadlines. 

So, I would say, if you are going to entrust them with support, 

with Federal dollars, then entrust them with the support in being 

able to pick and choose some of the people who need those funds. 

Chairman HANNA. Thank you. 

So just to paraphrase what you have both said, because to me, 

it is very interesting, you are asking to give the SBA latitude to 

make loans that don’t fit the traditional notion of those things required to make a loan. So Ms. Chang would say I have an allowance, a portion, if you will, as an opportunity, without retribution 

from her bosses, to make loans to people who don’t fit the bill. 

Is that what you are saying, too, Mr. Wilkins? 

Ms. VELA ́ ZQUEZ. Mr. Chairman, I just would like to call attention 

to the fact that SBA doesn’t make loans. SBA guarantees loans. 

Chairman HANNA. Correct. 

Ms. VELA ́ ZQUEZ. So it is the bank, ultimately, that will make that 

final decision whether or not they have the requirements—— 

Chairman HANNA. But the bank’s loan is based on the guarantee, 

so it is all interconnected. And, certainly, the backup for the bank 

being the SBA matters a lot. 

I find it interesting, and I don’t disagree with you. If you look 

at projects around the world, and things like that, places around 

the world that don’t have the kind of protection of property rights 

that this country has, they managed to go through those in different ways. 

SBREP-219 with DISTILLER

29 

Mr. IMADA. Chairman Hanna, I do have to say I agree with Representative Clarke. We have to look at different ways to look at 

lending. We can’t do the same thing that we have been doing day 

in and day out. We have to look at small business as an opportunity for growth, as you have all stated, as everybody here has 

stated on this panel. 

Small-business people take risks each and every single day. 

Many of these small businesses, frankly, would be dependent on 

the Government if they didn’t have an opportunity to start a small 

business. And most of them do not want to. They want to make a 

living for their friends and their family. They want to contribute 

to their communities. They want to do things that are going to benefit society as a whole. 

So I believe that we have to look at how we lend differently with 

keeping in mind how the demographics have changed in this country. 

Chairman HANNA. Thank you. 

Ms. MOY. Pardon me, Chairman Hanna, if I may, character loans 

have been in existence in these communities for generations. The 

susu that was mentioned by Mr. Wilkins, in my own community, 

family associations, people from the same village, have pooled 

money together, and members who have the same surname draw 

a lottery and they are allowed to borrow from this fund to start 

their businesses. That is how my family started its businesses 

three or four generations ago. 

And those are character loans, because if you don’t pay them 

back, everybody, not only here in the United States in your community hears about it, but your great-grandmother in the village 

hears about it. So you pay it back. 

Organizations like Project Enterprise, for example, you are put 

forth as a candidate to borrow money based on the group that you 

formed and the community support that you have from other business owners. This model works. 

And whether it is face or business reputation, et cetera, there are 

things that we can adopt from this. Indications of character do 

come from things like paying your rent on time, paying your phone 

bill on time. These are not traditional measures that have been 

captured by the credit bureaus. Accion USA has used this very successfully. 

Chairman HANNA. That is Mr. Wilkins point, that they need to 

be, correct? 

Mr. WILKINS. Yes. 

Ms. MOY. Thank you, Mr. Chairman. 

Chairman HANNA. Thank you. 

If there are no further questions, I want to thank Queens College 

for hosting us, and thank you all for participating today. I appreciate your insights into the challenges facing the underserved small 

businesses and in ways to reduce barriers to accessing Federal programs. 

I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting material for the record. Without objection, so ordered. 

Chairman HANNA. This hearing is now adjourned. Thank you 

very much. 

SBREP-219 with DISTILLER

30 

[Whereupon, at 12:39 p.m., the Subcommittee was adjourned.] 

SBREP-219 with DISTILLER

31 

A P P E N D I X 

SBREP-219 with DISTILLER


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Testimony 

House Subcommittee on 

Contracting and Workforce 

U.S. Small Business Field Hearing 

March 11, 2014 

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Asian/Pacific Islander American Chamber of Commerce and 

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32 

Distinguished Members of the U.S. House of Representatives 

Committee on Small Business and Subcommittee on Contracting 

and Workforce: 

Thank you for extending me the opportunity to offer my testimony today. It is truly a great honor and privilege to be with you 

today. 

For the record, my name is Bill Imada and I am one of the cofounders of the Asian/Pacific Islander American Chamber of Commerce & Entrepreneurship, which is also known by its acronym, 

‘‘ACE.’’ ACE was established in January 2013 and is based in 

Washington, D.C. Our mission is to address the needs, interests 

and aspirations of business owners, entrepreneurs and corporate 

leaders of Asian American, Native Hawaiian and Pacific Islander 

American heritage. I am also the founder, chairman and chief collaboration officer of a certified minority-owned and operated small 

business that focuses on marketing and communications to the 

greater Asian-American and Pacific-Islander (AAPI) communities. 

ACE was established as a business advancement organization 

and strives to be a visible and credible voice for the AAPI business 

sector in the halls of government in our nation’s capital. For the 

past year, our 22-member board of directors met with and listened 

to the leaders of dozens of AAPI business organizations from more 

than 25 states to learn from their experiences as small-business advocates. What we heard reinforced our resolve to be a representative voice for AAPI small-business owners and entrepreneurs with 

elected and officials and federal agencies such as the U.S. Department of Commerce, U.S. Department of Labor, U.S. Department of 

Education, U.S. Small Business Administration and others. 

The AAPI community represents some of the most recent immigrants in the United States all the way to some of the oldest communities that were instrumental in the development of this country. As entrepreneurs, AAPI-owned businesses represent the gamut 

of large companies that manufacture products and distribute across 

the nation or around the globe, to the smallest businesses around 

the block from your own neighborhood. Yet too often, it seems as 

though many AAPI entrepreneurs must start from square one and 

are often overlooked as key stakeholders in the business community and are rarely acknowledged by policy makers as contributing 

more than $500 billion in annual economic output and nearly three 

million jobs. 

It is critical to state that we can only be successful in advancing 

economic development, business growth and new job creation if the 

federal government and federal agencies work in tandem with community-based AAPI chambers, business organizations and professional associations. Last October, ACE convened a meeting with 

more than 200 AAPI chamber leaders, business owners, entrepreneurs and corporate officials representing 16 different states 

and the District of Columbia. This was the first time these business leaders had ever met in person to address the needs of the 

AAPI-business community. During this and subsequent meetings, 

we were able to review and discuss several topics of mutual interSBREP-219 with DISTILLER

33 

est and concern. As a direct result of these meetings, we identified 

three specific areas to address: 

1. Access to Capital 

2. Federal Contracting 

3. Small Business Development Assistance 

We also agree that we can only make progress in these areas by: 

1. Developing a system for collecting, monitoring and 

verifying data on federally supported programs addressing the 

needs of AAPI and other minority small businesses; 

2. Reducing language and cultural barriers for small businesses and entrepreneurs that impede them from seeking assistance; 

3. Adding SBA and MBDA business development centers in 

growing immigrant and minority communities; and by 

4. Holding federal agencies and prime contractors accountable for meeting all minority business development goals. 

I would like to start by addressing each area separately. 

Access to Capital 

According to the U.S. Census, more than two-thirds of the AAPI 

populations immigrated to this country and now consider America 

their home. Due to language and cultural issues—which set many 

of these immigrants and their families apart from the American 

mainstream—starting a business is often viewed as the best (and 

only) way to earn an income and to make ends meet. Today there 

are over 1.54 million AAPI-owned businesses in the country, with 

m ore than 80 percent of them small, family-run operations with 

no paid employees. These businesses, according to U.S. Census Bureau’s 2007 Survey of Business Owners (SBO) conducted as part of 

the 2007 Economic Census, generated $514.1 billion in annual economic output and support more than 2.84 million jobs. Seven years 

later, we can only assume these figures are higher today. 

However, as a result of the chaos and confusion caused by 

subprime mortgage lending to individuals and families who could 

not qualify for prime-rate loans, and the ultimate crash of the real 

estate and mortgage markets, the banking industry began lending 

money only to individuals who posed the least financial risk, leaving many small-business owners and entrepreneurs without the 

capital needed to expand their operations, hire new talent, open 

new offices, advance sales and marketing, or invest in new equipment that would allow them to compete successfully in an increasingly competitive marketplace. This lack of capital has also constrained the ability of small businesses to increase production, introduce new products or develop new services that would allow 

them to accommodate larger corporations or compete for federal 

contracts. 

There are signs of progress. The U.S. Small Business Administration (SBA) has made historic gains with AAPI-owned and operated small businesses, as well as with other minority groups and 

women. From January 2009 to March 2013, more than $19 billion 

SBREP-219 with DISTILLER

34 

or 27,485 SBA loans were granted and distributed to AAPI small 

businesses. The San Francisco SBA District Office held seminars in 

Chinese, attracting a capacity crowd of Chinese-American business 

owners eager to learn more about fiscal management, loans, 

mentorship programs, and business development training. We believe these gains can be improved significantly in the months and 

years ahead through stronger, more-targeted outreach and through 

education and partnerships with AAPI chambers and business organizations. 

Although the SBA encourages more AAPI-owned small businesses and entrepreneurs to apply for government-guaranteed 

loans through their preferred lenders, we believe that a large percentage of businesses do not. A full 33 percent of small businesses 

do not apply because they fear rejection by the same lending institutions that are there to assist them. But ACE and many of the 

regional AAPI chambers believe there are other critical factors that 

may dissuade an AAPI small-business owner from applying for an 

SBA loan. These factors include: 

• A distrust of what a preferred government lender will do 

with their personal and financial information; 

• A pervasive belief that SBA officials may not have the 

ability to assist them in languages and dialects other than 

English; 

• An overwhelming fear that rejection will lead to ‘‘loss of 

face’’ in the community or adversely impact their credit scores; 

• A strong and pervasive feeling that lending institutions do 

not have the means or the resources to explain why a loan was 

denied; 

• A lack of understanding and knowledge that even a government-backed loan still requires some personal guarantees 

in the form of collateral that may be difficult for many smaller 

businesses to provide; and, 

• A lack of SBA and MBDA development centers in communities where many of these small business enterprises are established—especially in areas such as Queens, New York. 

A large number of AAPI businesses encounter these issues and 

more must be done with ACE and regional AAPI chambers and 

business associations to alleviate these sometimes opaque cultural 

barriers to capital. 

Federal Contracting 

Although tools (such as websites and webinars) are available to 

help AAPI small business owners secure information about federal 

contracting opportunities, there continues to be a lack of knowledge 

and awareness about them and about how to utilize these options. 

Nearly all of the AAPI chamber and business association leaders 

who met with us in Washington said they were unaware of these 

tools that were available to them, which meant that many of their 

members lacked the knowledge and understanding of federal contracting opportunities. Unfortunately, many ACE and AAPI-chamSBREP-219 with DISTILLER

35 

ber leaders only learned about federal contracting opportunities 

after they were officially awarded. 

One program that could be helpful to many AAPI small businesses interested in pursuing federal contracts is the 8a program. 

I can speak from personal experience that the 8a program has the 

ability to advance AAPI businesses in the federal contracting 

arena. After applying for 8a status at a local SBA office, my own 

firm achieved this designation several years ago. But once my firm 

became a bona fide 8a company, my partners and I did not know 

what to do next. Fortunately, I recognized quickly that we needed 

to actively and assertively market ourselves and our company to be 

viewed as a credible supplier to the federal agencies. This was no 

easy task when the field of potential suppliers (large and small) is 

filled with legacy firms with decades of relevant experience pursuing and securing federal contracts, and a wide cadre of 8a firms 

competing to attract attention to their products and services. Within a very short period of time, my firm was able to secure a major 

federal contract and quickly found ourselves among the ranks of 8a 

graduates. While I was successful, I believe I was the exception, 

not the rule. 

There needs to be stronger and more visible oversight on the federal contracting process. While Executive Order 11625 requires federal agencies to report their minority business development activities, a more comprehensive data collection process must be employed to ensure that more AAPI small businesses have opportunities to participate in federal contracting opportunities. Over the 

past year, several AAPI business owners have recounted how they 

have been invited to serve as subcontractors in the federal contracting and procurement process. The prime contractors—often 

non-minority-owned firms with a long history of federal contracting 

deals—enlist diverse businesses to bolster their teams’ capabilities 

and to demonstrate their commitment to supplier diversity. However, a number of business owners, including my own firm, have 

served on winning teams only to be told that there is not enough 

funding in the budget to utilize all of the diverse team members. 

In other words, the prime contractors were ultimately unwilling to 

allocate any funding from the budget to utilize the talent diverse 

suppliers bring to the team. 

Small, diverse businesses that are not given any paid contractual 

work often do not lodge a protest because they run the risk of being 

ostracized by the prime contractors and other team members that 

win many of the large federal contracts. Congressional representatives and federal agencies could mitigate this challenge by simply 

asking prime contractors to report their budget allocations before 

a contract is awarded, during the contract period, and once a contract is completed and fully executed. It is essential that once a 

federal contract is awarded, that includes AAPI subcontractors and 

other diverse suppliers, budget allocations are reviewed and monitored to ensure that contracting opportunities are available to all 

willing and able. 

Current U.S. government procurement policy needs to reinforce 

what is known as ‘‘maximum practicable’’ contracting and subconSBREP-219 with DISTILLER

36 

tracting opportunities for small businesses. This reinforcement and 

strong encouragement is critical since federal agencies missed two 

percent of their contracting goals (23 percent), resulting in a loss 

of $10 billion for small businesses. 

Mentorships and training also increase the chances that AAPI 

small businesses can secure more federal contracting opportunities. 

While the SBA does have a mentorship program in place for 8a 

firms and other diverse suppliers, very little is known about this 

program or its success rate. In order to increase the success rate 

of AAPI-owned small businesses in the federal contracting process, 

it is critically important to identify mentors early and to work with 

the regional AAPI chambers and business organizations to match 

them with qualified AAPI suppliers. 

Small Business Development Assistance 

The U.S. Department of Commerce, through the SBA and the 

Minority Business Development Agency (MBDA), offer assistance 

to small businesses and entrepreneurs who have specific financing 

and business development needs. While many of their programs 

benefit AAPI businesses, it is clear from ACE’s discussion with the 

regional AAPI chambers and business organizations that many 

more AAPI small businesses could benefit from the business loans, 

8a program, technical assistance, business counseling and business 

development programs that are offered by SBA and MBDA. 

In the past few months, ACE has made great strides with the 

SBA and the MBDA. In high level meetings that were held in 

Washington, D.C. and later in San Francisco, ACE signed a Memorandum of Understanding (MOU) with the SBA and continues to 

have ongoing dialogue with their representatives. Our MOU established a framework for ACE to partner with the SBA on promoting 

programs, services and initiatives designed to address the needs of 

AAPI-owned small businesses throughout the country. 

ACE also received an invitations to meet with former SBA Acting 

Administrator Jeanne Hulit and also met with other business associations to discuss how the SBA could enhance their outreach to diverse small businesses nationwide. As a result of our meetings with 

the SBA, we have received a myriad of information about programs 

and services that will benefit regional and local AAPI chambers 

and business association. 

After several conversations with the MBDA, two of their representatives have been designated to work closely with ACE to advance 15 AAPI firms nominated by the leaders of several regional 

AAPI chambers of commerce. We also hold regular conversations 

with MBDA leaders to advance and promote more MBDA Business 

Centers to address the cross-cultural needs of AAPIs, and were delighted to learn that five of these centers are located in communities with large and growing AAPI populations. To build on these 

successes, we continue to advocate more of these small business development centers, especially in areas such as the Queens borough 

of New York and the San Gabriel Valley in the Greater Los Angeles area. We also encourage the SBA and MBDA to recruit, hire 

and advance more AAPIs with language and cross-cultural skills to 

SBREP-219 with DISTILLER

37 

navigate the cultural barriers that arise with diverse AAPI-owned 

businesses and business organizations. Since a majority of AAPIbusiness owners are recent immigrants to this country, language 

and cross-cultural skills are needed to instill trust and to provide 

culturally relevant consultations with AAPI business owners. In 

some cities where there are MBDA offices, there are few, if any, officials or specialists of AAPI heritage. 

In conclusion, in order to ensure that AAPI small businesses continue to have access to capital, federal contracting opportunities 

and small business development assistance, we must verify data 

that serves as a benchmark for their progress and the progress of 

the federal government; more outreach specialists with language 

and cross-cultural experience; more SBA and MBDA centers in 

growing immigrant and minority communities; and, greater accountability in meeting and achieving stated goals for minority 

business development. 

ACE and the regional AAPI chambers and business organizations recognize that the federal government cannot be held fully responsible for the success of AAPI small businesses in the country. 

The AAPI small business community, in partnership with government and corporations, must work more collaboratively together to 

ensure that all AAPI and other minority companies have their opportunity to grow, develop and thrive. We also recognize that ACE 

and the AAPI business community must act assertively, but responsibly to ensure that information about government programs 

and services are made available to the greater Asian American, 

Native Hawaiian and Pacific Islander business communities. 

Once again, we can only be successful in advancing economic development, business growth and new job creation if the federal government and federal agencies develop a system for collecting, monitoring and verifying data on mentor-mentee programs, reducing 

language and cultural barriers for small businesses and entrepreneurs that impede them from seeking assistance, adding SBA 

and MBDA business development centers in growing immigrant 

and minority communities, and by holding federal agencies and 

prime contractors accountable for meeting all minority business development goals. 

Thank you for advancing the interests of AAPI-owned businesses 

and entrepreneurs. We look forward to our continued partnership 

with each of you and with the federal agencies dedicated to addressing the needs, interests and aspirations of all people living 

and working in our country. 

SBREP-219 with DISTILLER

38 

1Fiscal Policy Institute, Immigrant Small Business Owners: A Significant and Growing Part 

of the Economy, June 2012. 2Fiscal Policy Institute, FPI’s Immigration Research Initiative, October 2010. 

Written Testimony of Joyce Moy 

Executive Director 

Asian and Asian American Research Institute 

City University of New York 

March 11, 2014 

Thank you to Chairman Graves, Ranking Member Nydia 

Vela ́zquez, Congresswoman Meng and Members of the Subcommittee for the opportunity to provide testimony on the needs, 

outreach and technical assistance to underserved small business 

communities. 

I am Joyce Moy, Executive Director of the Asian and Asian 

American Research Institute at the City University of New York. 

I am speaking in my individual capacity, and the views that are 

expressed are my own. My area of focus is entrepreneurship and 

economic development. I have started and run businesses, and 

have been and continue to be a practitioner in entrepreneurship 

technical assistance and training, in addition to my teaching in the 

academy. I was the first and to date I believe am the only Asian 

American appointed as Director in the New York State Small Business Development Center (SBDC) system which is funded by the 

United State Small Business Administration and New York State. 

This was located at LaGuardia Community College, City University 

of New York. Later, in my capacity as the Director of Economic Development at the College, I oversaw not only the SBDC, but the 

federally funded Procurement Technical Assistance Center which 

works to help businesses secure federal, state and local contracts 

as well as corporate supplier diversity opportunities. 

I will focus on several issues: 1) outreach to under-served business communities, in particular immigrant communities; 2) providing meaningful and effective technical assistance to these communities and 3) recommendations to ensure that we build capacity 

and meaningful and effective assistance to help these business 

communities thrive and grow. 

Nationally, immigrant businesses make up 17% of small businesses, account for $776 billion in revenues, and employ over 4.5 

million workers or 14% of all small business employees.1

In New York City, 48% of all small business owners are immigrants.2 In the period 2000 to 2011, the neighborhoods with the 

highest concentrations of immigrants, according to the Census, 

showed growth of nearly 23% compared with the rest of New York 

City. In addition, the growth of employment of these small busiSBREP-219 with DISTILLER

39 

3Ofice of the New York State Comptroller, The Role of Immigrants in the New York City 

Economy, November 2013. 

nesses increased by 11% vs. 4% for the rest of New York City, and 

payrolls increased by 56% vs. 40%.3

As is reflected in the businesses in New York City, 37% of New 

York City’s population is foreign born, and in counties such as 

Queens, it is nearly half. Over 73% of the Asian population is foreign born, and 31% of New York City’s Black population is foreign 

born, while 41.2% of the Hispanic population is foreign born. This 

highlights the need for culturally, linguistically and technically 

competent services to these businesses if they are to grow. 

Increasingly, there has been outreach to the immigrant communities in various languages. Many agencies provide workshops on 

the services they provide in language. However, if there is not a 

culturally and linguistically appropriate service provider when the 

business owner arrives at a technical assistance center or other organization for assistance, all the outreach would be for naught. 

To be fair, SBA and other federal agencies have tried to partner 

with community based organizations that may have the cultural 

and linguistic capacity they see as needed. However, these organizations are often not given adequate support, financial and otherwise, so they lack resources and the training needed to assist the 

immigrant business owner in a meaningful and effective way. 

Many rely on volunteers who do not have adequate training. This 

may not only lead to assistance which is not sufficiently effective, 

but can in fact be detrimental. 

Let me cite one of many examples. When the SBDC at 

LaGuardia Community College was founded in response to 9/11 so 

as to get more resources in New York City, I immediately discovered that immigrant business owners were facing difficulties and 

not able to get the assistance they needed. I built a team that not 

only had the business skills and training needed, but spoke, 

English, Spanish, Korean and three dialects of Chinese. 

In reading the Chinese newspaper, I learned of a restaurant that 

employed 11 people, in Chinatown. One of the owners had gone for 

assistance at a SBA site established in Chinatown to assist business owners, partnering with a community organization. He waited 

in the rain, snow and cold numerous times, and was so frustrated 

after being turned away over and over again for improper documents that he said he cried so much that he only had dry tears 

to cry. When we located him with the assistance of the reporter we 

learned that he was turned away because he was told by volunteer 

English/Chinese translator at the SBA site that he had to have ‘‘a 

majority owner’’ rather ‘‘the majority of owners’’ sign the documents. The owner and the translators did not understand the difference between ‘‘a majority owner,’’ meaning an owner with more 

than 50% ownership, as opposed to ‘‘the majority owner.’’ This company had 7 equal owners, so they needed the signatures and information of 4 owners out of the 7. Without an understanding of the 

business context, the volunteers could not possibly have understood 

this, and it is clear they did not have the training, although they 

SBREP-219 with DISTILLER

40 

did have the cultural and language skills. Fortunately with our 

intervention, he was able to obtain $75,000 in assistance. 

In my capacity as Director of the LaGuardia SBDC, I conducted 

a series of workshops on starting a business, legal structures and 

taxation, marketing and financing for business. When I presented 

this at an Asian American women’s business organization, I found 

in the audience the entire staff of a community based organization 

that had just partnered with SBA in Chinatown. The staff was 

there so that they could get uniform training on the issues that 

were presented. Because we presented real nuts and bolts, this 

training was needed to get everyone on the same page. Today, it 

is still clear the community partners coming on line, do not have 

much needed and standardized training available to them. Quality 

control is imperative. Many of the SBA and other agencies have 

partners who have varying degrees of knowledge, training and capacity. Again, the cultural and linguistic competence alone is not 

sufficient without the business knowledge. If these services are to 

be offered, they should come with a degree of quality control, and 

the government agencies can not only play a role in ensuring this, 

but I believe it is ethically bound to do so. 

So in conclusion: The outreach and services to the under-served 

immigrant business population must be both meaningful and effective. 

1. Culturally and linguistically appropriate outreach alone is not 

sufficient. There must be culturally and linguistically appropriate 

service providers. 

2. Community partners need better support and resources. 

3. Uniform and standardized training is needed across the range 

of technical assistance providers. We must build the capacity of our 

partners, and ensure quality across the board for the organizations 

and their volunteers. 

Thank you to the Subcommittee for this opportunity to present 

this testimony. I would be happy to take questions. 

SBREP-219 with DISTILLER

41 

Testimony of William S. Wilkins 

Director of Economic Development 

The Local Development Corporation of East New York 

My Name is William Scott Wilkins, and I am the Director of Economic Development for the Local Development Corporation of East 

New York (LDCENY). Since 1979 the LDCENY’s principal mission 

is to foster economic and business development in East Brooklyn 

and surrounding communities. Economic development is achieved 

when capital investment is coupled with job creation or job retention. As a by product of capital investment and job growth in distressed areas, tax incentives and or programs like the SBA 504 or 

7A are incorporated into the equation to induce or incent the required result. 

Being in harmony and accord with our business development 

team the LDCENY engages in the seamless integration of a myriad 

of activities and programs that foster both short and long term economic and business development benefits to the Brownsville and 

surrounding East New York (ENY) community. We are funded by 

the Small Business Administration (SBA) through the Woman’s 

Business Center and rely upon SBA programs like the 504 and 7A 

to add to our economic development tool box. 

We promote and use both loan types in instances when clients 

are short on equity or are undercapitalized. Both loan products are 

necessary and needed in the market place by virtue of creating additional flexibility to traditional underwriting requirements. In 

other words, many deals that are essential to the market place 

would not get done unless both programs were not in existence. 

Post Super Storm Sandy, the turnaround time in processing loan 

applications have been taking longer than normal but recently we 

are starting to see an improvement. Secondly, I encourage the SBA 

to continue to explore ways to stream line their loan application 

and support documentation requirements. Thirdly, SBA should continue to work with community based organizations (CBO’s) who 

have ‘‘boots on the ground’’ to assist in the marketing of SBA loan 

products. 

Lastly, I encourage SBA to introduce technical assistance providers to work with applicants and borrowers thus creating 

mentorship opportunities and increase the probability of repayment. 

SBREP-219 with DISTILLER

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Insert offset folio 41 here 87277.002

U.S. Small Business Administration 

Washington, D.C. 20416 

Testimony of Before the 

U.S. House Committee on Small Business 

Subcommittee on Contracting and Workforce 

Underserved Small Businesses: Providing Access to Federal Programs 

Michele Chang, Acting Chief of Staff 

U.S. Small Business Administration 

March 11,2014 
43 

Chairman Hanna and Ranking Member Meng, thank you for inviting me to testify today. It is an honor to be in New York to discuss SBA’s ongoing efforts to increase access to capital, counseling, 

and contracting opportunities in underserved communities. We 

commend the Subcommittee for highlighting this important topic 

and are grateful for your continued leadership and support. 

America’s 28 million small businesses are the engine of our economy and one of our country’s greatest assets. They employ half of 

the private sector workforce and create two out of every three net 

new private sector jobs. And at SBA, we are committed to ensuring 

that all entrepreneurs, including those in underserved communities—such as minorities, women, veterans, people with disabilities, and those in urban and rural areas—have the tools they need 

to start and grow companies and create jobs. 

According to the Urban Institute, SBA-guaranteed loans are 

three to five times more likely than conventional loans to go to 

minority- and women-owned businesses. And we are working to fill 

existing market gaps for underserved communities across the 

board, with both microloans and smaller dollar loans. While we 

have already expanded and simplified our Community Advantage 

program and streamlined our signature Small Loan Advantage program, we are constantly looking for more ways to make it easier 

and cheaper for entrepreneurs to reinvest in their business. That 

is why, this past October, we reduced fees to zero for borrowers and 

lenders for all 7(a) loans $150,000 and less. Due to these efforts, 

SBA has supported over $126 billion in lending to more than 

260,000 small businesses and entrepreneurs since 2009. 

However, a loan can only take an entrepreneur so far. Our data 

shows that small business owners who have long-term counselors 

are more likely to hire, grow, and increase revenue. To help make 

that happen, we have an extensive nationwide network of 900 

Small Business Development Centers, over 100 Women’s Business 

Centers, and 12,000 volunteer SCORE counselors. Last year alone, 

these resource partners counseled and trained more than 1 million 

small business owners across the country. 

Building on our current efforts, President Obama’s Fiscal Year 

2015 budget invests $7 million to support our successful Boots to 

Business initiative, which offers transitioning service members intensive entrepreneurial training through the Transition Assistance 

Program (TAP). Boots to Business is expected to reach an estimated 25,000 veterans across all military branches. 

In addition to our capital and counseling programs, SBA works 

to level the playing field for small businesses to access federal contracting opportunities. Each year, the U.S. government spends 

about $400 billion in contracts, and it is SBA’s job to ensure that 

23 percent of those dollars go to small businesses. We continually 

work to make our minority, women, and veterans contracting programs more effective. In fact, we launched a Pre-8(a) Business Development Training Series to help potential 8(a) firms prepare for 

success in the program and established an online tool, the Government Contracting Classroom, which is geared toward underserved 

communities. 

SBREP-219 with DISTILLER

44 

As a result of these efforts, during the first term of the Obama Administration, small businesses accessed more than $376 billion 

in federal contracts. That is $48 billion more than the previous four 

years, even as overall contract spending decreased during those 

years. 

These programs and initiatives enable us to continue supporting 

underserved entrepreneurs like Tony Baird, the recipient of SBA’s 

2013 Veteran-Owned Business Achievement Award. With the help 

of our local resource partners in Syracuse and an SBA guaranteed 

loan, Tony was able to leverage his experience in the U.S. Army 

to launch a successful electronics startup. Tony Baird Electronics, 

Inc. has since been able to pursue higher value contracts with the 

federal government. This is a perfect example of how SBA’s capital, 

counseling, and contracting programs enable underserved entrepreneurs to pursue their dreams of small business ownership. 

Under this Administration, SBA has become more accessible and 

created more opportunities for underserved entrepreneurs than 

ever before. We have been able to achieve this is by connecting 

need with opportunity—forging new relationships with lenders and 

community organizations that can help us better serve these small 

businesses. We have formed partnerships with organizations such 

as ACE, which is represented today by Bill Imada, as well as the 

US Black Chamber, US Hispanic Chamber, Women Impacting Public Policy (WIPP), the National Minority Supplier Development 

Council (NMSDC), and the National 8(a) Association. These strategic alliances enable us to leverage our partners’ nationwide networks and connect directly with the communities they support. 

While we are proud of all that SBA has accomplished alongside 

this Committee, we must continue to be diligent in our work to 

support underserved entrepreneurs. We know that with the right 

tools, small businesses in these communities can have a significant 

impact in driving economic growth and creating jobs where they 

are needed most. 

Thank you again for having me here today, and I look forward 

to answering your questions. 

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Insert offset folio 45 here 87277.003

Kenneth H. Ryesky Small Business Hearing of 11 March 2014 Page 1 

KENNETH H. RYE SKY, ESQ., STATEMENT FOR SUBMISSION, 

UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON 

SMALL BUSINESS, SUBCOMMITTEE ON CONTRACTING & 

WORKFORCE, HEARING ON UNDERSERVED SMALL BUSINESSES: 

PROVIDING ACCESS TO FEDERAL PROGRAMS: 

I. INTRODUCTION: 

The Contracting & Workforce Subcommittee of the House Committee on Small Business 

held a Hearing on 11 March 2014, at Queens College of the City of New York, regarding 

"Underserved Small Businesses: Providing Access to Federal Programs." The Commentator, 

who personally attended the Hearing, submits this Commentary. 

II. COMMENTATOR'S BACKGROUND & CONTACT INFORMATION: 

Background: The Commentator, Kenneth H. Ryesky, Esq., is a member of the Bars of 

New York, New Jersey and Pennsylvania, and is an Adjunct Assistant Professor, Department of 

Accounting and Information Systems, Queens College CUNY, where he teaches Business Law 

courses and Taxation courses. Prior to entering into the private practice of law, Mr. Ryesky 

served as an Attorney with the Internal Revenue Service ("IRS"), and, prior to that, progressively 

served the Department of Defense as a Branch Chief and Contracting Officer in the procurement 

of hardware, as a Competition Advocate's staff Procurement Analyst, and as Purchasing System 

Analyst conducting on-site reviews of major prime contractors' purchasing and subcontracting 

systems. In those positions, the Commentator had frequent occasions to interface with the Small 

Business Administration (SBA), and, in the former two, all the more frequent occasion to 

directly deal with small business enterprises. 

Contact Information: Kenneth H. Ryesky, Esq., Department of Accounting & 

Information Systems, 215 Powdermakcr Hall, Queens College CUNY, 65-30 Kissena Boulevard, 

Flushing, NY 11367. Telephone 718/997-5070; E-mail: kenneth.ryesky@qc.cuny.edu or 

khresq@sprintmail.com. 

Disclaimer: This Commentary reflects the Commentator's personal views, is not written 

or submitted on behalf of any other person or entity, and does not necessarily represent the 

official position of any person, entity, organization or institution with which the Commentator is 

or has been associated, employed or retained. 

III. A PERSPECTIVE FROM THE GOVERNMENT CONTRACTING FUNCTION: 

The witnesses at the Hearing, individually and collectively, described many obstacles that 

impede the SBA in carrying out its mission to foster successful small businesses. Onc such 

obstacle, alluded to ifnot addressed directly by the various witnesses, is the "red tapc" of the 
46 

Æ 

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Insert offset folio 46 here 87277.004

Kenneth H. Ryesky Small Business Hearing of 11 March 2014 Page 2 

numerous complex requisites for successful performance of a Government contract. This is most 

consistent with the Commentator's experience in the Government procurement function. 

One of the functions of a Contracting Officer is to develop new viable sources from 

which the Government might obtain goods and services. A major ifnot the primary impediment 

to developing new sources is the daunting corpus of requirements for completing the paperwork 

in order to perform on a Government contract. That which, in private sector procurement, would 

often constitute little more than the perfunctory delivery on a purchase order (or even a direct 

cash buy at the merchant's place of business) can entail far, far more complexity in the 

performance of a governmental contract for the same goods or services. Potential vendors are 

often reluctant to devote their funds and energies towards addressing the requirements for 

profitable Government contracting. 

The Commentator has had numerous personal occasions to develop alternate sources of 

supply for the Government, resulting in improved pricing, availability, quality, and/or delivery 

time. But the Commentator has often encountered hesitation and resistance from the vendor 

community on account of the special contractual requirements of Government contracts. This 

experience is shared by other Contracting Officers and Procurement Agents on the Government 

side. and, on the private sector side. by procurement personnel of prime contractors who seek to 

improve their subcontractor cadres, who must also comply with many Federal contract 

requirements in the subcontracting process. 

The salutary effects of marketplace competition to Government and to society are well 

known, and have been amply demonstrated. Small business entrepreneurship has always been a 

direct cause of prosperity for socioethnic communities that have successfully established 

themselves in America. and has always benefitted society as a whole. 

Within a short distance of Queens College can be found several districts that exude strong 

economic energy, economic energy brought about by small business entrepreneurship. This 

energy in Queens and elsewhere should be and can be harnessed to the benefit of the community 

and the Government by teaching entrepreneurs the ins and outs of Government contracting 

opportunities. But such outreach efforts would work best where the Government contracting 

personnel (and the subcontracting personnel of the large prime Government contractors) are 

likewise attuned to the habits, needs. and cultures of the private sector small businesses. 

12 March 2014 

Respectfully 

~ 

submitted, 

.. 

Kenneth H. Rycsky, Esq.