U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

66–427 PDF 2011

S. HRG. 111–1092 

ENTREPRENEURIAL DEVELOPMENT: INVESTING IN 

SMALL BUSINESS TO STRENGTHEN OUR ECONOMY 

ROUNDTABLE 

BEFORE THE

COMMITTEE ON SMALL BUSINESS AND 

ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JUNE 11, 2009 

Printed for the Committee on Small Business and Entrepreneurship 

( 

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

(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED ELEVENTH CONGRESS 

MARY L. LANDRIEU, Louisiana, Chair 

OLYMPIA J. SNOWE, Maine, Ranking Member 

JOHN F. KERRY, Massachusetts 

CARL LEVIN, Michigan 

TOM HARKIN, Iowa 

JOSEPH I. LIEBERMAN, Connecticut 

MARIA CANTWELL, Washington 

EVAN BAYH, Indiana 

MARK L. PRYOR, Arkansas 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

KAY HAGAN, North Carolina 

CHRISTOPHER S. BOND, Missouri 

DAVID VITTER, Louisiana 

JOHN THUNE, South Dakota 

MICHAEL B. ENZI, Wyoming 

JOHNNY ISAKSON, Georgia 

ROGER WICKER, Mississippi 

JAMES E. RISCH, Idaho 

DONALD R. CRAVINS, JR., Democratic Staff Director 

WALLACE K. HSUEH, Republican Staff Director 

(III) 

C O N T E N T S 

OPENING STATEMENTS

Page 

Landrieu, Hon. Mary L., Chairman, a United States Senator from Louisiana .. 1 

WITNESSES

Boyce, Kate, Partner, law firm Patton Boggs ........................................................ 4 

Celli, Louis, Chief Executive Officer for the Northeast Veterans Business 

Resource Center ................................................................................................... 4 

Conrad, Deborah, Vice President and Business Development Manager for 

BB&T, Structured Trade Finance Group ........................................................... 4 

Jones, Jenice, Congressional Liaison, Association for Enterprise Opportunity . 4 

Keenan, Jody, State Director, Virginia Small Business Development Center 

Network ................................................................................................................ 4 

O’Donoghue, Sharon, Executive Director, Central Indiana Women’s Business 

Center and Board Chair,National Association of Women’s Business Centers 4 

Porges, Shelly, Board Chair, Count Me In for Women’s Economic Independence ........................................................................................................................ 4 

Reilly, Liz, Director, Trade Roots Program, U.S. Chamber of Commerce .......... 4 

Schick, Holly, Deputy Associate Administrator, Office of Entrepreneurial Development, Small Business Administration ....................................................... 4 

Sharpe, Joe, Director of Economics, American Legion ......................................... 4 

Wilson, Donald, President and CEO, Association of Small Business Development Centers ........................................................................................................ 4 

Yancey, Ken, CEO, SCORE .................................................................................... 4 

Triolo, Jacob, Staffer, Office of Senator Olympia J. Snowe ................................. 4 

West, Meredith, Staffer, Office of Senator Olympia J. Snowe ............................. 4 

Walker, Matt, Deputy Staff Director and Counsel, Office of Senator Olympia 

J. Snowe ................................................................................................................ 4 

Cravins, Donald, Staff Director, Senator Mary L. Landrieu ................................ 4 

Sanchez, Ami, Staffer, Office of Senator Mary L. Landrieu ................................ 5 

Morrison, Dr. James, President, Small Business Exporters Association ............ 21 

(1) 

ENTREPRENEURIAL DEVELOPMENT: INVESTING IN SMALL BUSINESS TO STRENGTHEN 

OUR ECONOMY 

THURSDAY, JUNE 11, 2009 

UNITED STATES SENATE, 

COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:05 a.m., in Room 

428–A, Russell Senate Office Building, Hon. Mary L. Landrieu 

(chairman of the committee) presiding. 

Present: Senator Landrieu. 

OPENING STATEMENT OF THE HONORABLE MARY L. LANDRIEU, CHAIRMAN, AND A UNITED STATES SENATOR FROM 

LOUISIANA 

Chairman LANDRIEU. Good morning, everyone. Thank you all 

very much for joining us this morning for this important roundtable. As we prepare to reauthorize the programs for the Small 

Business Administration, we are going through a series of these 

roundtables and we really so appreciate you all taking your time 

to join us and your testimony has been very helpful. 

So let me get right into my opening statement and we will, of 

course, have a round of questioning that we are looking forward to. 

The entrepreneurial development components of the SBA reauthorization are among the top priorities of our committee. We are 

pleased to have this reauthorization roundtable on these programs 

this morning following up on our roundtables of the SBIR and 

STTR reauthorizations last week. 

Yesterday, Senator Snowe and I introduced S. 1229, the Entrepreneurial Development Act of 2009. This legislation will reauthorize our four current programs and will outline our support for the 

three new proposed programs in this category. The bill will boost 

our Small Business Development Centers, our Women’s Business 

Centers, and SCORE, and other existing entrepreneurial development programs while creating new initiatives in support of veterans and Native American entrepreneurship. 

The bill reauthorizes several programs through 2012 and sets 

forth requirements for communication and consultation between 

agencies. It also sets requirements for training, counseling, and improvements within these programs. The bill establishes a grant 

program to provide objective information and educational materials 

2 

regarding health insurance options for small businesses throughout 

our country, which continue to be greatly challenged in this area. 

On Monday, I also introduced a bill, S. 1196, the Small Business 

International Trade Enhancement Act. This legislation makes several important changes to the SBA’s International Trade Programs, 

opening up a wide range of new opportunities for small businesses 

looking to export. It is my understanding that Senator Snowe also 

filed a bill to improve the SBA’s International Trade Programs, and 

I have heard from several other committee members interested in 

this issue, as well. So I look forward in the coming weeks to try 

to build a bipartisan compromise on this effort and move forward 

as the schedule will allow. 

To help this effort, I will be holding a field hearing in New Orleans on June 30 to discuss Federal Export Promotion Programs and 

other related issues. 

Let me take a moment to explain for this roundtable. We use a 

very simple system. When you want to be recognized, you just 

stand your card up like this. You will be recognized. We ask you 

to be as specific as possible to the questions that are asked. I am 

going to stay for the first segment and then turn it over to the 

trusted staff here, Democrat and Republican staff, to help lead this 

effort. 

Let me just make a few more key points. We have a good foundation for this year’s bill based on the work this committee did in the 

last two Congresses. If anyone has changes to recommend, today is 

the day to make the case, and I know you all have come prepared 

with documentation and supportive arguments to your positions. 

Given the breadth of areas of entrepreneurial development, I would 

like to stay focused on constructive ways to improve this particular 

legislation, which I am sure you all have reviewed the document 

and the legislation and we are asking you to comment in terms of 

improvements of that draft. 

We have many policy goals and interests to balance. First, I want 

to be clear that, as Chair, my goal—one of my goals, and I would 

say it is really my top goal—is to make the programs of the SBA 

the very best and most effective and cost effective that they can be. 

I believe the Federal Government should play a role in the development and support of entrepreneurs throughout America. But that 

role is limited by the nature of what this is. It is limited by budget. 

It is limited by its nature. But the part that we do play, I want 

it to be as effective as possible and leverage other resources to accomplish that goal. 

I don’t agree with the philosophy that some have, not necessarily 

on this committee, that the government should stay out of this 

completely, that it should be up to business to develop business. I 

think it is in the United States Government’s strong interest to 

have a strong, robust entrepreneurial system in this country and 

the government can do a part and a piece. The piece we do, I want 

to be effective. 

The other goal that I have is to make sure that the government’s 

plans are reaching geographic diversity, racial diversity, and reaching out broadly to elicit and encourage entrepreneurs in America 

to grow, of course, very small and then larger and larger busiVerDate Nov 24 2008 10:45 Oct 27, 2011 Jkt 066427 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\66427.TXT SHAUN PsN: DPROCT
3 

nesses which we believe is really the underpinning of our great system that we have here in America. 

As all of you know, the Entrepreneurial Development Programs 

have been generally very successful over the years. Small Business 

Development Centers offer one-stop assistance to individuals and 

small businesses by providing a wide variety of information and 

guidance in central and easily accessible branch locations across 

the U.S. The program is a cooperative effort of the private sector, 

the educational community, Federal, State, and local governments, 

which is a strong partnership when you can build it, and it is an 

integral component of the entrepreneurial development network of 

training and counseling services. There are 11 SBDC locations in 

Louisiana. I am proud of that, and we hope to expand around the 

country and throughout our State, as well. 

SCORE is a very important organization. It has been around for 

quite some time. I am personally very familiar with it and think 

it is a great resource. It started as retired executives reaching out 

to entrepreneurs to help them grow their businesses. Now they 

have dropped the letter for ‘‘retired’’ and it is any business executives joining SCORE and I think that model is quite exciting. We 

want to support their locations and their development. 

Women’s Business Centers provide support and services to a 

range of women business owners and entrepreneurs. Founded in 

1998, this association supports development among women, which 

is one of the fastest-growing segments of entrepreneurship in 

America today. 

Senator Kerry and Senator Snowe headed a very strong effort on 

Veterans Business Outreach Centers with so many of our men and 

women returning from Afghanistan and Iraq. We would like to provide not just work opportunities for them, but entrepreneurial opportunities for them as they come back from the front line. 

The Office of Native American Affairs is also an important initiative, and the Program for Investments and Micro Entrepreneurship, or PRIME, provides intensive one-on-one business counseling 

for disadvantaged entrepreneurs or very challenged entrepreneurs. 

Through the program training and technical assistance, PRIME 

helps bridge the gap for low-income entrepreneurs who may possess business experience but have some difficulties in terms of 

credit issues and others that with the right help and counseling 

could be overcome. 

So we are excited about the current programs in the SBA and 

making them even more effective. We are optimistic about the new 

initiatives that we hope to create. 

The question that I am going to pose to the roundtable this 

morning is the—and I don’t think there are any other members 

here—I am going to pose in just a moment, but I would like each 

of the participants this morning to introduce themselves, give their 

name and the organization they represent, and then I am also 

going to ask the staff to introduce themselves as we get off this 

morning. 

So why don’t, Katharine, we start with you. You need to use the 

mike, and these mikes are very tricky. You have to pull them very 

close to you and speak almost right into them, like this. I didn’t 

4 

even do a very good job myself, but you have to speak right into 

it. 

Ms. BOYCE. Hi. I am Kate Boyce, partner of the law firm Patton 

Boggs. I am here on behalf of my client, the National Center for 

American Indian Enterprise Development, for whom I serve as 

Washington counsel. 

Mr. CELLI. Good morning. My name is Louis Celli. I am the Chief 

Executive Officer for the Northeast Veterans Business Resource 

Center. We help veterans start and grow businesses and we are 

now an SBA resource center and part of the Small Business Administration. 

Ms. CONRAD. Good morning. I am Deborah Conrad. I am the Vice 

President and Business Development Manager for BB&T in their 

Structured Trade Finance Group. 

Ms. JONES. Hello. My name is Jenice Jones. I am the Congressional liaison at Association for Enterprise Opportunity. 

Ms. KEENAN. Good morning. I am Jody Keenan. I am the State 

Director of the Virginia Small Business Development Center Network. 

Ms. O’DONOGHUE. Good morning. I am Sharon O’Donoghue. I am 

the Executive Director of the Central Indiana Women’s Business 

Center and I serve as the Board Chair of the National Association 

of Women’s Business Centers. 

Ms. PORGES. Good morning. My name is Shelly Porges. I am the 

Board Chair for Count Me In for Women’s Economic Independence. 

We are based in New York but serve women all over the country 

in every State and in most communities. 

Ms. REILLY. Good morning. I am Liz Reilly, the Director of the 

Trade Roots Program through the U.S. Chamber of Commerce, and 

Trade Roots is a trade education program for small- and mediumsized companies. 

Ms. SCHICK. Good morning. I am Holly Schick. I am the Deputy 

Associate Administrator, Office of Entrepreneurial Development in 

the Small Business Administration. 

Mr. SHARPE. My name is Joe Sharpe and I am Director of Economics for the American Legion. 

Mr. WILSON. Good morning. I am Donald Wilson. I am President 

and CEO of the Association of Small Business Development Centers. 

Mr. YANCEY. And I am Ken Yancey and I am CEO of SCORE. 

Mr. TRIOLO. I am Jacob Triolo and I work for Senator Snowe on 

entrepreneurial development issues. 

Ms. WEST. I am Meredith West with Senator Snowe’s staff and 

I handle women’s business issues and export assistance and promotion issues. 

Mr. WALKER. I am Matt Walker. I am Senator Snowe’s Deputy 

Staff Director and Counsel. I want to briefly commend the Chair 

of the committee as well as her staff for carrying on the tradition 

of this committee in working so closely with us in developing this 

bill on a bipartisan basis. Thank you. 

Chairman LANDRIEU. Thank you. 

Mr. CRAVINS. Good morning. I am Donald Cravins. I worked for 

Senator Landrieu. I am the Staff Director. And again, thank you 

all for being here. 

5 

Ms. SANCHEZ. I am Ami Sanchez. I work for Chair Landrieu on 

the Senate Small Business Committee and I handle the entrepreneurial development issues for the committee. 

Chairman LANDRIEU. Okay. Let me begin with the first question. 

The Entrepreneurial Development Act of 2009 requires certain information to be tracked and reported, particularly trying to reach 

outcome-based measures for grant recipients. As I said, it is a real 

focus of mine and I believe that Senator Snowe shares my intentions and my goals of making sure that the programs that we support with taxpayer dollars have great return for the taxpayer and 

are positioned and fashioned in such a way that small businesses 

can really access and use these services. 

So I believe that whenever we as lawmakers make a financial investment in public programs, we make sure that those that are receiving the funds are able to accurately account for their expenditures and are able to report to stakeholders the level of return on 

that investment. 

However, given the demands on small businesses and on your organizations, which are not that large anyway, we don’t want to 

overburden you with inappropriate or unnecessary reporting. So 

my question is, how would you suggest that we track the work that 

you are doing and what would be some ways to elicit the information that we need? How do we basically achieve those goals in 

terms of reporting requirements and reporting the outcome-based 

measures to see if they are sufficient in the bill that we have outlined? 

I don’t know who wants to start, but if anybody wants to make 

any general comments or suggestions about that—Louis. 

Mr. CELLI. Thank you, Chairwoman Landrieu, and thank you for 

having me here. As you will soon see, I am no wallflower and I 

don’t mind going first. 

Chairman LANDRIEU. Good. 

Mr. CELLI. I have reviewed some of the reporting requirements 

and we have had lengthy discussions with your staff and with Senator Snowe’s staff, and when we started the discussions, one of the 

things we found was a little bit of apprehension on the part of the 

government to ask questions with regard to our clients. We run our 

business center as if it were a business, and without sounding callous, we see our grantors, in this case, the Federal Government, as 

our clients and our veterans, the folks we serve, as our product, 

and that is just to put it in a simple dynamic. 

The client—or, I am sorry, the grantor is going to want to see 

certain outcomes, just as you expressed. With that in mind, we are 

eager, and our small businesses are also eager to get the word out 

about their business. They want to be reported about because they 

want that type of exposure. 

The only thing that—you know, as we talked about it, I am looking through—I see on page 79, line six, it talks about gross receipts. Quite frankly, we don’t ask for gross receipts because if that 

is not the reason that they are seeking assistance, we don’t want 

that information. It is too time consuming to go through it and figure out what is going on. In many cases, there aren’t gross receipts 

and that does start to get a little bit invasive with regard to what 

the small business is comfortable sharing. 

6 

Percentages, I think percentages speak volumes. We can talk 

about percentages with regard to what did your business do last 

year? What was the percentage of growth? After meeting us, what 

was your percentage of growth and what is your projected percentage of growth based on the assistance that you were able to receive 

from these programs? 

So I think that reporting is important. I think that the clients 

that we help have really no expectation of privacy. These aren’t private issues. These are business issues. And while we are not giving 

out Social Security numbers, we are not reporting to you EINs, we 

are not crossing any lines with regard to health status or medical 

conditions, we are talking about a business. 

So with that regard, I think that the only way that we can continue to grow this program is to be able to provide you with the 

proof that we are working for a living and that our clients are receiving a benefit from our existence. 

Chairman LANDRIEU. Okay. And I do want to really encourage— 

I mean, this is what the roundtable is, a lot of back and forth— 

if anyone has anything to add to that or suggest. Shelly, and then 

I will get you, Donald. 

Ms. PORGES. Thank you. Thank you so much, and thanks for including us, Senator, on such short notice. We crossed paths on 

Monday and here we are—— 

Chairman LANDRIEU. I was very impressed with what you had 

suggested, so go ahead. 

Ms. PORGES. We really appreciate being included. Count Me In 

for Women’s Economic Independence began as a microlender about 

ten years ago. Over the years, we discovered that one of the key 

reasons that women-owned businesses get stuck in what we call 

the missing middle, that $250,000 to $750,000 range, and there are 

about two million, or 1.8 million of those, one of the reasons that 

they get stuck is not just access to capital, although that can be 

an issue. It is more about the knowledge and training. 

Our whole focus is getting those businesses to grow, and with our 

program, Make Mine a Million Dollar Business, that we launched 

about three years ago, we have had huge success. Overall in the 

country, only 2.8 percent of women-owned businesses get to a million dollars in revenue. Now, we are not even talking profit. We are 

just talking revenue. 

Through our program, when they have come through our program, so far in the three years, over 30 percent have already gotten 

to the million dollar mark. Now, granted, some of that is self-selection, very growth-minded, very aggressive businesses, but many of 

them—most of them were stuck in this missing middle. They were 

stuck in this range. 

A good example is Garnett Newcombe from Southern California. 

She has got a great business. Is it called Human Potential, Inc. She 

puts veterans to work. She helps coach veterans in getting jobs. 

She helps other folks, whether they are coming out of prisons or 

with handicaps, get jobs. That was her business. But she was stuck 

with ten employees and about $350,000 in revenue for six years. 

She did our program three years ago. Today—last year, she did 

$5.2 million. Next year—I mean, this coming year, she is on track 

7 

to do about $14.1 million through the coaching, resources, peer 

mentoring, and other access. 

Our whole reason for being is to grow these businesses, which 

wouldn’t make any sense, therefore, if we didn’t collect the information, and we do. We require it. And I am not saying it is easy. 

We are looking at a number of different models to overcome some 

of these issues, whether it is a model like mint.com, that goes and 

scoops up all your information, or whether—there are a range of 

possibilities here. So these are challenging issues. 

But if these businesses don’t grow and if they are not creating 

jobs—and that is part two of what I wanted to comment on—our 

businesses have grown their revenues by over 40 percent. They 

have grown jobs by over 40 percent, on average. That is four to five 

jobs apiece. 

Chairman LANDRIEU. And Shelly, what kind of information do 

you require, just briefly, because we want to have other people 

comment—— 

Ms. PORGES. Right. We require what you could call a top-line 

P&L, an absolutely cashless statement, because these are the key 

things that they get coached on. And if we find that they are unable to find it, we delve further to understand. Our coaches delve 

further to understand, what is it? And more often than not, we 

have issues of financial illiteracy going on. 

So when you say they are reluctant, sometimes they have reasons for being reluctant and they are totally legitimate. But often 

in our case we find that there is training and coaching that needs 

to go on in order to empower and enable these women to grow their 

businesses. 

So for us, we are thrilled that you are asking for it. We consider 

ourselves an evidence-based program. We track it and—— 

Chairman LANDRIEU. And are you a for-profit organization or 

not-for-profit? 

Ms. PORGES. We are a not-for-profit organization. We have—— 

Chairman LANDRIEU. And you have been in business how long? 

Ms. PORGES. The organization has been in business for over ten 

years. 

Chairman LANDRIEU. You have been operating—— 

Ms. PORGES. I am sorry. Not in business. We have been operating for over ten years, exactly. And as I said, we have evolved 

in terms of our focus from a microlending organization. We still do 

some microlending, but we predominately focus on the coaching, 

the training, the peer mentoring, which women has told us that 

has been their breakthrough. And then we partner with companies, 

great companies like American Express Open and others to fund 

the loans when the women need them. So—— 

Chairman LANDRIEU. Fabulous. Thank you so much. 

Sharon. 

Ms. O’DONOGHUE. Good morning. On behalf of Ann Marie 

Almeida, I would like to thank both staffs here, and she is sorry 

she is not able to attend. I am glad to be here on behalf of the National Association of Women’s Business Centers. I also wear the 

hat, as a grantee at the SBA Director of Women’s Business Center 

program for the past five years and I came into that position because I was a woman business owner. I ran a terrazzo restoration 

8 

business and we restore the floors in courthouses, airports throughout Indiana, Michigan, Kentucky, and Ohio, and in four years, we 

went from $200,000 to $1.4 million, you know, and government 

helping in a previous life. But it was not an easy trade to put on 

cement boots and that is what we are here to ask. 

On the reporting, and specifically to answer the questions, the 

feedback we receive from our members who are the Women’s Business Centers is it is vital and critical not only for the SBA and the 

government’s investment in the Women’s Business Centers, but to 

all of the other funders. As you know, Women’s Business Centers 

are not-for-profit organizations and we raise often more than 70 

percent of the rest of our budget—the SBA just being one grantor— 

from foundations like Lilly Endowment and Kauffman and others, 

and they, too, have the same reporting requirements. 

It is important as a not-for-profit to have client metrics. The client metrics, however, that we see with sole proprietors or microentrepreneurs are a little bit different than what we might use for 

what we would call middle or mature businesses. One of the issues 

that we ourselves have as centers in measuring the traction, how 

far the Dow goes to the right, with our clients is sole proprietors 

often take a little bit longer to get traction. 

We applaud and support and thank the SBA for, as painful as 

it has been, the EDMIS system, which has allowed us over the past 

three years to better track our client outcomes. It has been a tool 

that we have used. But what we notice is that in a system that reports quarterly, your records often walk over the previous data so 

you don’t have that historical look. So if somebody is giving me 

gross receipts, all I have is the current snapshot when I look at a 

client database. I don’t see what they have reported every time 

they came in for a visit. 

The second issue with some of the tracking or just capturing 

metrics in whole is clients come in when their tails are on fire. 

They don’t often come and share you the good news. So the snapshot we have in time is when they need the help and when the tail 

is on fire. That often is not the best news. We do not have resources as Small Women’s Business Centers to dial for dollars to 

call our clients and to say, so, what is the report this month and 

how are you doing? Or, we haven’t seen you for six months and it 

is because now all of the sudden everything is fine, and we could 

get an update that now they are at a negative net profit, not the 

negative loss that we have on our records from the last time they 

saw us. So there are obviously systems issues as well as measurement issues. 

Last but not least, one of the most important things that we believe we are tracking in the communities, especially in this high 

unemployment, is in those households where self-employment or 

business ownership is seen as a supplement to household income, 

not a replacement. A lot of business ownership and microenterprise 

tracking is set up looking at the measurement of the business as 

being the sole source of income for a household or for that individual when, in fact, that might just be one of two or three employment opportunities that individual is using. 

We don’t then clearly understand for the government’s investment in us or for any foundation’s private investment—and we are 

9 

wrestling with this in Indiana—we aren’t better able to grab the 

metrics of what other Federal programs these individuals have 

been able to come off of because the business ownership or the microenterprise is supplementing income, because it is all rolled up 

into household income and somebody doesn’t think of grooming 

dogs or auto detailing cars as a separate way to keep track of their 

money, but it now allows them not to have to receive assistance 

from other Federal programs. 

So here are some of the tracking that our centers said that they 

are doing that the government is not asking us for which we think 

are important. One, we track how many people are working paid 

or not paid. When a business often starts, family members are unpaid. 

Second, we track is it part-time or is it full-time? If it is parttime, how many hours are expended by the individual? 

We also track total growth income on a monthly basis. That allows us not to get locked in with somebody reporting a gross annual receipt but basically give us an average of what the doggie 

grooming or the catering is throwing off on a monthly basis. 

Last but not least, we try to get people to articulate and we have 

what might be called the social services checklist of where else in 

their life now are they achieving sustainability. Are they no longer 

getting child care vouchers? Are they no longer getting a housing 

voucher? So we get folks to list all of the other government assistance they are receiving. Those are some of the suggestions we have 

to help make the metrics. 

Chairman LANDRIEU. Thank you, Shelly and Sharon. Those were 

excellent, excellent. 

And Donald. 

Mr. WILSON. Yes. Thank you, Madam Chair. ASBDC, as you 

know, has long advocated measuring results. We have worked very 

cooperatively, may I say, with ED at SBA in trying to strengthen, 

improve, and provide better reports through the EDMIS system. 

There have been ups and downs, as Sharon mentioned. But there 

is no question it is improving and we are bringing to the agency 

a number of recommendations the next few weeks that our EDMIS 

subcommittee has developed over the last year. I think the taxpayers, I think the Congress who invest in these programs have 

every right to know what the results are from the dollars spent. 

As your staff and I think you also know, we do the ASBDC economic impact study every year. We measure sales. We measure 

new business starts. We measure jobs created. We measure jobs 

saved, et cetera. I think there is room for improvement at EDMIS. 

I think there has to be an awareness of the confidentiality issues 

for clients. I think there is a real reluctance on clients to see a list 

of names, a list of names and addresses and so forth in computer 

databases. We have seen those get released and so forth. 

A very real life situation. Take, for example, someone who comes 

to an SBDC to get an evaluation of the value of the business if they 

want to sell. A lot of the public perceives that when someone comes 

to an SBDC or to a SCORE counselor or even the WBC, they are 

coming because they are in trouble. The house is on fire, as Sharon 

so articulately said. 

10 

But that is not the only reason they come. It may be an extraordinarily successful business coming to get an evaluation. They have 

never sold their business before. They have been in business for 30 

years. I need to know how to value it for sale. If their name is on 

a list that they are coming down to SBDC and somebody sees that, 

it is like, oh, their business must be in trouble. I was thinking of 

offering $5 million for the business, $20 million for the business, 

but I am not going to offer that. 

You see people come for training about starting up a business. 

Their employer finds out, they may say, oh, you are thinking about 

leaving me. Well, you are going to leave me. You are fired. That 

has happened. So there has got to be a balance between getting the 

data that the government needs and deserves and the taxpayer and 

folks can see whether these programs are working but without 

being invasive in the privacy of the client. 

Chairman LANDRIEU. Well, let me just say, and I would like anybody else that wants to comment—Holly, I will get you in a 

minute—not only do I want us to have the adequate data that we 

need, not any more, not any less, I also want it to be streamlined 

and uniform so that small business owners aren’t filling out one set 

of documents for the IRS, another set of documents for the SBA, 

another set of documents for this and this and that. So I need everybody to really focus on what are the core essential—what is the 

core essential data that we need. 

And keep in mind the new opportunities for this to be online and 

through really very convenient tools. We want to keep this as convenient and as easy, informative, because taxpayers do have a 

right to know of every dollar we are investing in these programs, 

what is the return, and if we can’t justify it, we are going to end 

the program. It is about as simple as that. 

We don’t know how to judge, and it is going to be very interesting to me as I sort of sort and figure this out, are the SBA programs more effective than the Commerce Department programs? 

Are the Commerce Department programs running better programs 

than the Defense Department Entrepreneurship Programs? I want 

our programs to be the very, very best and I want to be able to 

challenge the Congress, because we do have the lead, basically, in 

entrepreneurship for the country and we want ours to be a model 

for other departments that this is not their central business necessarily, except maybe for Commerce. You could say business is 

their central business. Defense, their central business is defending 

the country, not developing businesses. But our central business or 

focus of the SBA and this committee is entrepreneurial development, so we need to be the very best. 

Let me get Holly. Go ahead, Holly. 

Ms. SCHICK. Madam Chair, first, thank you so much for the invitation and the opportunity for us to be involved in the roundtable 

today. I want to make a comment briefly about what other folks 

have referred to as EDMIS. It is the platform on which entrepreneurial development programs collect the data and it is very important to us that we have common sets of definitions and a common 

platform so that we can measure apples to apples where that is important. So we are working very hard moving into the future to 

have continuous improvement for this EDMIS system and we look 

11 

forward to making it more flexible and more nimble to try to collect 

other things that come up that are important. 

When we establish metrics for each program, it is important that 

we look at the goals of those programs and identify what are drivers for those programs, but also what are the appropriate outcome 

measures so that we will know, have we really hit our mark. And 

for each one of our programs, we not only identify output measures, 

but outcome measures, as well, which in terms of the business, 

what did all of this mean to them in terms of jobs created, sales 

increase. Our EDMIS system has the capability to collect baseline 

data for the company and then to measure at subsequent points 

after that. 

We also do an OED, an impact study, which is a longitudinal 

study on a selected sample from all of our programs where we collect data directly from the companies on the impact and we report 

that formally every year. 

Chairman LANDRIEU. Kate, and then I am going to have to slip 

out and I really apologize. I have got another hearing. But I really 

encourage the staff to press these issues, and for those of you that 

disagree with things that are being said, please speak up, or if you 

are not familiar with some of the issues that are being discussed, 

please feel free to ask questions. 

So Kate, I am going to ask you to be recognized now and then 

I will slip out and thank you all very much. 

Ms. BOYCE. Thank you, Madam Chair. The National Center for 

American Indian Enterprise Development runs several Native 

American Business Enterprise Centers funded by MBDA and 

American Indian Procurement Technical Assistance Centers funded 

by the Defense Logistics Agency. They are the longest serving—40 

years anniversary this year—business assistance center organization in the United States. 

Because they work with different programs, they have been subject to different reporting requirements. Some of them measure— 

and they measure different things. MBDA used to measure number 

of visits, for example, and now they don’t require that. They look 

for other metrics. 

So we think that it is important for these metrics to be collected 

and we have a good track record of, in the last four years alone, 

having helped clients capture $2.5 billion in contract awards and 

financings. That is a pretty good return on a very modest investment. 

And one of the things I am—just listening to people around the 

table, it is pretty clear that you have to have sufficient revenues 

in your organization in order to afford the staff and the software 

and everything to track these kinds of metrics. 

So for the Native American program that is proposed—first of 

all, we are delighted that you have included this and that you are 

authorizing the program—we have a number of recommendations 

we have made in a written statement. But I think you have to realize that there are a lot of organizations in Indian Country that 

have developed some form of business assistance, but they are at 

various levels. They are culturally tailored to their clientele, but 

they are not revved up to provide the type of metric and reporting 

that is required in this bill. 

12 

So I agree with Holly Schick that it is—at least she was inferring 

or implying that there are different goals—there should be different goals for different programs. And so I would recommend a 

little bit of flexibility in the Native American context in order to 

provide the additional assistance that the various providers in Indian Country already—so that they can do a better job in delivering the services that they provide. 

Chairman LANDRIEU. Well, and I appreciate that and we will 

consider that. I want to think through that a little bit more and 

we want to be very, very sensitive to different populations. But 

what I really want our group to really focus on is a very streamlined system, either online or available, accessible, where people 

can give the kind of reporting that is necessary for us to judge, 

whether they are in the Northeast, the South, or the West, or 

whether they are a one-person shop or a three-person shop or a 

ten-person shop, what kind of business opportunity they are providing. 

And I would like to ask the staff before I leave to also make sure 

to follow up on what Sharon said, because I want to be more familiar with this myself. We contribute, let us say, whatever it is, 15 

cents on the dollar of their operations, or 20 cents. I would really 

like to have, and maybe you all have this data, the foundations 

that are—the total amount of foundation support that some of you 

all are receiving because that is really the Federal Government 

leveraging other resources in the nation and I want us to count 

that because that is something that we can count. And I am not 

sure we have that. So it is not just the outcomes of the businesses, 

the jobs they are creating, the taxes that they are, but leveraging 

the other help to small business from other nongovernment sources 

of funding. I want to make sure we capture it. 

Okay. Thank you all so much. 

Mr. CRAVINS. All right. Thank you again, ladies and gentlemen, 

for being here. I am going to start off. We are going to start with 

you, Don, pick on you first with the SBDCs and just ask you a couple of questions about the SBDCs. First of all, if you could just give 

us just a background, just typically what types of businesses are 

you seeing at the SBDCs, what are the sizes, just maybe a description of who do you cater to. 

Mr. WILSON. They range all the way from start-ups to 500 employees, as you know. Obviously, primarily retail and service, increasing numbers of manufacturing clients. The SBA’s economic 

impact study indicates that I think we are probably in the ten-employee range, five to ten, if my memory serves me. SCORE, a little 

bit smaller than that. Women’s Business Centers, a little bit smaller than that, which points out to the fact that I know Congress on 

both sides of the Hill have been concerned with whether or not 

these programs are duplicative, but it is very clear from the fiveyear study that has been going on that these programs are serving 

niches, and I think Sharon and Ken and others would agree with 

that, Jody. So I think that is very important to realize that one of 

the issues that has always been a concern is about duplication and 

that does not appear to be occurring. I hope that is responsive to 

your question. 

13 

Mr. CRAVINS. It is, and Don, if you could, give us just—briefly 

explain the impact that the SBDCs have had on the economy and 

with regards to our investment, the return on the investment of 

Federal dollars. 

Mr. WILSON. Absolutely. As you know, we have done for a number of years an annual study. Holly, correct me. I think your study 

samples about 300 SBDC clients, if I recall correctly, in the impact 

study that you folks do. I think it is about 300 that you survey, if 

I remember George’s numbers. 

Ms. SCHICK. We sample across all resource partners approximately 12,000—— 

Mr. WILSON. Okay. 

Ms. SCHICK [continuing]. With the larger portion—— 

Mr. WILSON. I was thinking that the returns that George had 

were about 300 last time, when we were there two weeks ago. I 

could be wrong. 

We sample 55,000 of our clients. We sample every client that has 

over five hours of counseling within the year and we get about a 

20 percent return, so you can see the rather significant return that 

we get. 

SBDC in-depth clients, and that is the ones with five hours, generate about $250 in new Federal tax revenue—excuse me, $2.50 for 

every dollar that we expend, and I think it is critically important 

to realize that one of the things that we have always measured is 

the return on investment. But one of the things that I think has 

been missed in recent years, and I count myself remiss in that, is 

getting really good data on savings to the government in other 

areas. 

Last year, the Cristman study that was released in late September—we have another study out but Dr. Cristman—our clients, 

those 55,000 clients, reported that as a direct result of SBDC consulting, they saved 93,000 jobs. Now, if you take 93,000 jobs, as 

some of you have heard me say, and multiply it by $300 a week, 

which is the national average for unemployment benefits, and multiply it by 18 weeks, which is the average amount of time folks are 

unemployed, you come up with almost a half-a-billion dollars in 

savings to State and Federal treasuries. 

I think that is a better than five-to-one return. But once again, 

when you do static accounting at OMB, they don’t count savings, 

okay. They simply count outlays. And so when you do it that way, 

you don’t account for the true value of a program like this, but it 

is there, and we are not even talking about things like Food 

Stamps and all the other things that could be affected, as well. It 

is just immediately. 

Now, I noticed the administration released earlier this week that 

over the last three months since the stimulus package went into effect that $135 billion—$135 billion—has been spent and it has 

saved or created 150,000 jobs. Just among our long-term clients in 

2007, the Congress spent $720 million and saved or created 

165,000 jobs. So if there is any question whether government is 

getting bang for the buck—and I suspect you will see similar numbers with Ken and the Women’s Centers—if you want to talk about 

bang for the buck, I simply don’t know of any other programs. 

14 

The Agriculture Department reports that its economic development programs created jobs for about $42,000 a job. Look at the 

SBDC and Women’s Centers numbers and you will see something 

dramatically less than that. 

Mr. CRAVINS. Thank you, Don. 

Mr. WILSON. We are also spending—I don’t mean to take too 

much time—— 

Mr. CRAVINS. Sure. 

Mr. WILSON [continuing]. We are also spending—and I don’t 

criticize it at all, please understand—we are spending endless billions at Labor in job training. Look at the total amount of money 

that we are spending on economic development programs, and if we 

get people trained and they are not being hired, then you may not 

have got what you wanted. And when small business is creating 67 

to 80 percent of the net new jobs in the country, they are going to 

be hiring the people that Labor is training. So we might want to 

allocate resources a little bit differently if we want those people 

that we are training for new jobs, green or otherwise, to be hired, 

because they are going to be hired by small businesses. 

Mr. CRAVINS. Thank you, Don. 

Do you support the authorization levels that are contemplated in 

Senator Landrieu and Senator Snowe’s bill, and why is it important to maintain a strong core funding for the SBDCs? 

Mr. WILSON. Don, I thank you for that. We are very, very grateful for the work that Senator Landrieu and Senator Snowe and 

Senator Cardin have done, both in the budget process and in what 

they are proposing in terms of the authorization level. I could always say that in a type of economic downturn like this with, you 

know, the worst economic conditions in over 70 years that we could 

probably utilize more. But obviously, you don’t want to allocate so 

much that you can’t grow into it in the time. There is no sense in 

allocating dollars that are not going to be timely used. But I think 

the dollars that are in the program are accurate. 

I know that there is discussion of creating a number of other 

grant programs and so forth. Once again, we have seen SBA have 

difficulty simply from manpower issues of getting some of those 

new grants into the field in a timely manner. The affordability 

grants were one of the issues. It became that many of the affordability grants didn’t actually get out until a fiscal year later. 

SBA had to work very, very hard to get out the veterans and 

the—I mean, the energy efficiency grant. That puts a tremendous 

burden on them, and one of the things—I was just at the New England Professional Development Conference. I had the privilege of 

driving through Maine and to be in New Hampshire, Senator 

Shaheen’s State, and I was with about 150 counselors. They were 

telling me—for example, I spoke with a center director in Massachusetts—by June, she will have trained as many people as she did 

the entirety of last year, and she is on a calendar year basis grant. 

So the core funding is absolutely essential. 

You do the boutique grants for manufacturing or whatever and 

you may be, because of the pie that the appropriators have, you 

may be cutting that pie in many more slices and diminishing that 

core from a program that has had really rather astonishing returns 

15 

over the years. So I think preserving core funding is absolutely essential. 

Mr. CRAVINS. Thank you, Don, and I am going to be very brief. 

One last question and then I will get to my colleagues. 

I want to ask you, I was in New Orleans last week and met with 

the Hispanic Chamber of Commerce there. One of the concerns 

that they had about the SBDC program was sometimes not having 

a bilingual person at the SBDC served as a barrier. There are 

other groups in Louisiana that I have met with that have just expressed a concern of the lack of diversity with the SBDC programs. 

Can you comment about that and what steps we can take to alleviate some of those concerns? 

Mr. WILSON. I don’t know what they mean by lack of diversity. 

If you look at the minority clients we serve, it is in the upper 30, 

I would say, 36 percent, 33, 36 percent, which is significantly higher than the minority population in the general business population. 

So I am astounded that anybody would make that claim because 

the data over the years simply defies that. 

I will be very candid with you. SBDCs have been frustrated over 

the ability to have bilingual counselors. As you know, we primarily 

have folks with finance degrees, MBAs who have been serial entrepreneurs as our counselors because we want not only the academic 

experience, but the real world experience. We have a very difficult 

time competing with big business for Hispanic-speaking or other 

foreign language-speaking MBAs because, quite frankly, large business simply buys them away from us. 

I know in Michigan, one of the most outstanding counselors we 

had was Spanish-speaking and was also a minority counselor. 

Chrysler hired him away at about three times what he was earning. I am glad to report that after three years, he returned. He 

found our work far more satisfying. 

Mr. CRAVINS. Thank you, Don. 

Senator Snowe’s staff, do you have any questions for Don? 

Mr. TRIOLO. I have a couple of questions on the actual bill. The 

first question is for Ms. Keenan. It has always been a priority of 

Senator Snowe, and Senator Landrieu, as well now, that we do 

more to ensure that the resource partners are helping entrepreneurs on procuring health care, and one thing that we have in 

this bill is a grant program that would go through the Office of Entrepreneurial Development to help provide assistance to the SBA 

resource partners to create a national program for all of your centers to provide that type of assistance. 

I know you have read that provision. I am curious as to your 

thoughts, also maybe the SBA’s thoughts on how that program is 

created and whether or not you think the SBDCs have the capacity 

to build something that could be used on a national basis. 

Mr. WILSON. I yield to Jody, but let me just simply say that we 

have discussed with the Hill for a number of years the importance 

of access to health care information. Ken and I have discussed the 

whole issue that almost every year you poll small business people 

and concern about health care costs and their ability to afford and 

provide health care costs to their employees is critical as they try 

to compete with large business on hiring. 

16 

We get inquiries and, for example, Jody, you might want to mention the work that your Alexandria Center did with some of your 

major national health care coalitions in providing information to 

clients. 

Ms. KEENAN. We partnered a few years ago with the Health Care 

Leadership Council. They had some funding from the Robert Wood 

Johnson Foundation to really—and they focused on Virginia as a 

pilot—to survey the insurance programs and options available by 

region around the State and they published a guide that they distributed through the State Department of Health and the Small 

Business Development Center Network. 

So it was a useful resource for us, really to just kind of educate 

business owners about what options they may have available if 

they needed to provide or wanted to provide health insurance for 

their employees. I mean, most of them do want to provide health 

insurance for their employees. It is a business attraction tool. But 

it can certainly be cost prohibitive. There are a range of options, 

though, for them to phase in products and tools. 

So that was a useful resource for us that we shared around the 

State, but it is pretty time-sensitive. So every couple of years at 

least, and certainly probably every few months, those price points 

change and can change pretty dramatically. So it is a time-sensitive document, but it was useful and helpful, and I actually made 

a note when you talked about it that reconnecting with the Health 

Care Leadership Council on a project like that would make sense. 

Mr. TRIOLO. Now, I know that you—the Virginia SBDC has 

worked on a program that could potentially go national. We were 

speaking about it when our staff came in and visited you a few 

weeks ago. With additional funds, would you, the Virginia Center, 

have the capability to utilize those funds to not only build a pamphlet, but also an online resource center, nationally training 

courses, etc.? Could you possibly do all that? 

Ms. KEENAN. I think so, yes. I mean, the example you are talking 

about is we have a grant from SBA for Veterans Business Assistance and we are developing—we are one of five States that won the 

grant—we are developing an online portal for veteran entrepreneurs that will have a video component and documentation, all 

this stuff. But our philosophy when we got the grant was this was 

a one-time project. We need to build something that will benefit 

our veteran entrepreneurs in Virginia. But most of the issues are 

common to any veteran entrepreneur and so we wanted to build a 

tool that we could put up that the SBA can use, that the Veterans 

Business Centers can use, that any other SBDC program can use. 

So I think the idea to have a deliverable that is not just Statecentric but that has—maybe it is regional in the health care area, 

I mean, I am not as familiar with what those particulars would be, 

but yes, I think that is something that either one or a group of 

States could work to develop a tool that would benefit the greater 

network. 

Ms. PORGES. I would just like to add to that. When we entered 

this process—obviously, I guess I would say I am the newcomer 

around the table, we don’t do this coming to the Hill on a professional basis or on a regular basis but we do appreciate the opportunity here—one of the things that we were counseled on was beVerDate Nov 24 2008 10:45 Oct 27, 2011 Jkt 066427 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\DOCS\66427.TXT SHAUN PsN: DPROCT
17 

cause we have an online offering and we invest a huge amount of 

resources also with grants that we ourselves generate, or were able 

to generate from corporations and their foundations, to create this 

online resource because most of our delivery had also been one-onone and we recognized quickly that we could never scale to fulfill 

our goal, which is a million women-owned businesses at a million 

dollars in revenue without that. There is just no way to cost effectively reach the audience without having that kind of resource. So we invested, frankly, over $1 million in resources over the last 

two years, and right now, we are partnering with the likes of the 

National Association of Women Business Owners, the Women’s 

Business Enterprise National Council, and other large women’s 

business organizations to then wholesale to them our offering, because they have already recognized us as being the lead in this online training universe—in the overall training universe because of 

the results we have already achieved and the investment we have 

made online. 

We encourage you tremendously to go in that direction. We try 

to bring ourselves forth and position ourselves as the Virtual Women’s Business Center supporting the regional centers that are already in place that do very important interpersonal, you know, sort 

of as they being the retail arm and we being the online arm. We 

understand that in this bill, there is no funding for such an initiative, or at least it is difficult to see how that could fit. But we certainly want to encourage you as you look forward—clearly, the job 

is not done yet, this is one bill, but there will be others—to really 

look at these important things for so very many reasons. 

One, the Senator mentioned reach and diversity. We have a tremendous diversity in our population, both in terms of geography, 

in terms of ethnicity, in terms of industries and so forth, and in 

terms of performance, frankly. But that is what we are working on. 

And being online allows us to do that. For the first time, we are 

not bound by having an initiative in one State or another but really 

can serve the whole country. 

Ms. KEENAN. Yes. I think the online, if I can just add, really 

complements, as you were saying, the retail outlet or the faces in 

the local communities. It is a nice complement. I don’t think there 

is a replacement, but it works very well, hand in glove. 

Mr. TRIOLO. And then my final question, and again to Mr. Wilson, included in this bill are some provisions regarding SBDCs and 

more flexibility with portability grants as well as the ability to use 

your staff in other States in the event of a natural disaster; I know 

that this has been a provision that the ASBDC supported following 

Hurricane Katrina and Rita and some problems you had in moving 

around monies and staff and I just want to ensure that that is still 

something that you endorse? 

Mr. WILSON. Absolutely, and I thank those who put the bill together on a bipartisan basis to recognize a need when there are 

major national disasters, such as we saw with Katrina along the 

Gulf Coast. It may very well come one day—hopefully not—California, whatever. But that was one of the issues we had, was the 

issue of moving people around. We had a lot of people who simply—SBDC counselors who were so concerned about what was 

going on on the Gulf Coast that they took their own vacation time, 

18 

they took their own rec vehicles and so forth, all at cost to themselves, to go there and work weeks at a time. 

And there were some States that wanted to go and under the old 

statute and the decisions of the Administrator, who tried to have 

as great of flexibility, may I say, as he possibly could under the 

statute, but on the advice of legal counsel, there were a number of 

States that had very experienced disaster counselors who were not 

able to send them because of the distance. So I think being able 

to mobilize the entire network when there is something of the magnitude of the Gulf Coast is a dramatic improvement and I commend all of those who have worked on that and we thank you for 

it. 

Mr. CRAVINS. We are going to move on. Jody, I know you drove 

some way to be here this morning, too, and we picked on Don a 

lot, but was there anything else you wanted to add about SBDCs 

before we moved on to SCORE? 

Ms. KEENAN. No. I think you have hit all the points. Thank you. 

Mr. CRAVINS. Okay. Thank you. 

Ami. 

Ms. SANCHEZ. Great. For Ken, can you just kind of briefly describe the size and type of small business concerns that SCORE 

serves and get to the complementary versus duplicative nature of 

the services? Just elaborate on what Don said. 

Mr. YANCEY. Sure, Ami. Thank you very much for allowing us to 

be part of this roundtable. I think my colleague, Don Wilson, did 

a really nice job of describing the relationship between SBDCs, 

SCORE, and Women’s Business Centers in terms of client size. 

SCORE today serves about 370,000 different businesses and individuals each year. Those businesses are typically five employees 

and typically less than $300,000 a year in total revenue. So it is 

a smaller client. The SBDC is serving a little bit larger and Women’s Business Centers serving a little bit smaller, each a recognized 

niche and demonstrates that there is not a duplication of service 

that is there. 

The other thing that we provide and I think that Jody and Sharon and Don will show, we also find that as organizations in specific 

markets, we often do our best work when we collaborate with a client. SCORE volunteers bring real world experience. That experience typically dates back to some period of time, because most of 

our volunteers today are still retired. Bringing that to bear with 

the cutting edge information that can be provided by the SBDCs, 

the unique information that can be provided by Women’s Business 

Centers makes a really unique and valuable service to small business owners and those who would want to start in the various markets. 

So we believe and we find more and more that we work more 

closely, those stovepipes and silos that had existed in the past and 

the unwillingness to share clients across programs is far less today 

than it has been in the past. So clearly, different services, clearly, 

different programs, clearly, different markets. 

Ms. SANCHEZ. Great. And just kind of follow up on the services. 

I know there were online mechanisms mentioned. Can you speak 

to what technology, if any, that you are using in kind of maximizing the services you are providing? 

19 

Mr. YANCEY. Sure. As most of you know, we were in the online 

space counseling very early on. Our online counseling dates back 

to 1997. Odd that a very small nonprofit made up primarily of retired executives would be one of the early online advice sites. 

We continue to offer that service today. It represents about 33 

percent of our total business. We have over 1,500 counselors that 

are available. It is a keyword search capability, so a small business 

owner can come on, ask a question, and we will align them with 

an appropriate counselor, allow them to choose that counselor 

based on a skill set as well as a review of a brief bio. The e-mail 

goes directly to our system. The counselor is notified that they have 

a question. They come to the server, answer the question, and it 

goes back out. 

Today, it is working very well. We have done—our foundation 

has funded an economic—or an impact survey similar to what the 

SBA does for our face-to-face clients. We are finding the results to 

be very similar. We are getting excellent feedback in terms of quality. We measure quality in that service as well as in our face-toface service using net promoter scores. We send that survey to 100 

percent of our clients. We have over a 30 percent return. And we 

are finding year on year that our net promoter scores are improving in terms of client satisfaction and feedback. 

We have also recently launched an online community, so not only 

can—within this community can small business owners seek advice 

and ask questions of SCORE volunteers, but they can also communicate with one another peer-to-peer. They can find services. They 

can advertise for any type of service or promote their own services 

within that. We are very fortunate to have partnered with Deluxe 

Corporation, one of their subsidiaries, Partner Up, to provide that. 

There are over 100,000 entrepreneurs in that community today. 

Our online workshops have also been quite popular. Over 7,000 

people per month are taking workshops online. Obviously, if we are 

successful in achieving the funding that you have so graciously provided, we will use a lot of that to continue to build out the services 

that we can offer online. 

You know, our site has become less of an information provider 

and more of a service provider and our vision is that it becomes actually an entry portal for the client. So while today the chapter is 

the primary hub that does client intake, in the future, the primary 

hub for client intake for SCORE will be that website and we believe that we can offer the same type of choices for face-to-face 

counseling that we do for the online and we believe that we can 

have a central registration system for all of our workshops, promote those nationally, and then begin to offer counseling not just 

face-to-face and via e-mail, but also instant message and over 

Skype or some similar free service. So we have plans to build that 

out and appreciate your willingness to support that through the authorization. Thank you. 

Ms. SANCHEZ. Shelly, did you have something to comment on? 

Ms. PORGES. No. 

Ms. SANCHEZ. Okay. 

Mr. TRIOLO. Just to kind of touch on what you just said about 

the authorization levels, I am wondering if you can go into whether 

or not the authorization levels are adequate enough to meet some 

20 

of the more ambitious goals that I know that SCORE has for the 

future? Also, please go into what you hope to do with potentially 

additional funding? Thank you. 

Mr. YANCEY. Thank you, Jacob. You know, like my colleague, 

Don Wilson, in a difficult economic environment, we have the ability to scale the business well beyond the dollars that are provided 

and the limiting factor that we have today that determines our 

ability to grow from a rate standpoint is dollars. It is investment, 

and particularly investment in infrastructure. 

We appreciate the authorization. Our challenge seems to be in 

this process not in the authorization arena but in the appropriations arena. I have had the pleasure of having this seat for 16 

years, and in 16 years, we have never been funded at the authorized level. So I hope that both Senator Snowe and Senator Landrieu would write specifically to Senator Durbin and the appropriators requesting that SCORE and all the programs be fully funded 

at the authorized level. The only way that—this is a great step and 

nothing happens without this step, as we all know. But we have 

got to take it one step beyond this and any aggressive, active support that you can provide would be very, very much appreciated. 

In terms of what we would do with the additional funds, clearly, 

we would use those funds to create greater outreach to the client 

base most of that through technology, because it is the most efficient method for us to reach. We can use that method and drive 

that traffic back to our retail locations, our 370 chapters across the 

country. We are using the web now as lead generation for those. 

When someone registers for a workshop, their information is provided back to the chapter that is nearest them. We have been very 

fortunate that Constant Contact has helped us with e-mail newsletters for all of our chapters. So we begin to have regular contact, 

the permission marketing-type opportunity, with all of those folks. 

We are using, again, planning to use the web to drive traffic to 

those face-to-face workshops. We are planning to use the web to 

lessen the administrative burden on our chapters and lessen their 

cost. Our next phase in the web is to actually hose and provide a 

content management system for all chapter websites so that not 

only will they be able to customize their site, but we will be able 

to keep it refreshed with regular information, taking some of that 

burden off. 

Our desire from a technological standpoint is to use the web to 

make it easier to do business with SCORE, and as you know, we 

really have two clients. We have those small business owners and 

those that would like to start, but we also have 11,200 volunteers 

that are also our clients and we want it to be easier for them to 

do their job. And their desire is not to be engaged in administrivia. 

Their desire is to help people. And we believe that we can use 

these dollars to provide technological solutions that allow them to 

spend more time with the client and less time on the administration. 

So in addition to that, our desire is to create a consistent counseling methodology that we will apply across all 11,200 volunteers 

and 370 chapters and create a certification program around that so 

we can ensure that we have consistent service delivery across all 

of our locations. 

21 

Mr. TRIOLO. I think it is important just to note that this committee has always been supportive of ensuring that SCORE does 

receive additional funds, and we did, as you remember, Senator 

Landrieu and Snowe introduced an amendment to the stimulus 

asking for emergency funds for the SCORE program. We also have 

asked for $10 million from the Senate Appropriations Committee 

through this fiscal year. So we will continue to work bipartisanly 

to try and accomplish that goal. 

Mr. YANCEY. And we have appreciated that support and know 

that it will continue and thank you very much for that. 

Mr. CRAVINS. Thank you, Ken. Thank you, Jacob. 

I see that we have been joined by Dr. Morrison. Dr. Morrison, 

welcome to the roundtable. 

Mr. MORRISON. Thank you. 

Mr. CRAVINS. And we are going to get to you. He is with the 

Small Business Exporters Association, so we will get on some of 

those issues shortly. 

Now I would like to move to the Women’s Business Centers, and 

Sharon and those of you who may have some testimony about that 

to help in our discussion. If you could, Sharon, could you just describe the types of small businesses that our Women’s Business 

Centers are seeing? 

Ms. O’DONOGHUE. I would be happy to. And again, thank you 

very much—— 

Mr. CRAVINS. Thank you. 

Ms. O’DONOGHUE [continuing]. To both Senators’ committees for 

the invitation. It was a pleasure to race in front of the thunderstorms this morning to get here from the Midwest. 

[Laughter.] 

Mr. CRAVINS. If you stay here long enough, you will get some this 

afternoon here. 

Ms. O’DONOGHUE. I brought it with me and I take full responsibility. 

[Laughter.] 

My appreciation and gratitude also, obviously, to my colleagues 

with the SBDC and with SCORE and certainly with the full support of our investor SBA office and OED. 

Don and Ken said it well. We are unduplicated. We do know that 

the Women’s Business Centers, though they serve women and men, 

overall, we tend to serve anywhere between 65 to 69 percent 

women, the remainder being men. It seems to focus on a different 

level of entrepreneur and that seems to be what we might want to 

call, regardless of legal business entity across the States, the sole 

proprietor, the onesie, twosies. It is not that these businesses do 

not grow into picking up employees, but as opposed to other small 

businesses that might launch or start with an employee pool, most 

microenterprises start singularly with the owner-founder being the 

everything, the worker bee and the owner. So that is one of the distinctions. 

The type of businesses are more predominately services than 

being in product or traditional storefronts or manufacturing. What 

we are seeing over the last couple of years, especially with the upturn in unemployment, or downturn in employment, is the functional areas of what we would call middle managers coming out 

22 

of—excuse me, functional areas from corporations—accounting 

backgrounds, HR backgrounds, IT backgrounds, marketing backgrounds. So these are individuals. 

You know, in the old days, to hang your shingle, you often were 

licensed as an attorney or an insurance agent or an accountant. 

Now many people can hang their shingle as professions of what we 

would call traditional corporate functions. So somebody can launch 

a business as a marketing expert and they can manage many other 

small business companies that might very well be served by SBDC 

or SCORE and manage their trade shows for them. So that is the 

distinction. 

Obviously, with the women-owned businesses, the distinction 

that we see and that has been captured is that women tend to be 

a little bit more, the terminology is integrated or holistic in need 

as opposed to transactional. I don’t mean to make a profile or a 

stereotype statement here, but just to mention the Babson College 

study in 2005 noted that women business owners tend to ride with 

their Women’s Business Center for up to 1.7 years and they come 

for the whole kit and caboodle. They want to be connected. They 

need the asset building. Social, human, and financial assets need 

to be built and they are looking for, for lack of a better terminology, 

one-stop shopping for that. 

So Women’s Business Centers above and below 100, as SBA 

funds them, are across the country serving over 155,000 clients on 

an annual basis. 

The other interesting part, if I might just make, about the centers is—and I don’t have the exact ratios, but we come from our 

own business entity organizations which seem to be stand-alones, 

not-for-profits, or were a program within a host organization and 

that often throughout the country and through our membership as 

well as the SBA-funded centers seems to be either with academics, 

universities, or with Chambers of Commerce. 

I mention that because that is also a reason why the client may 

often come to the Women’s Business Centers, because of the affiliation of other resources that that Women’s Business Center has to 

offer, depending on the host organization, or if they are a standalone, not-for-profit, they tend to be a very good air traffic controller within their community of connecting women business clients, period, with the other resources within that community. 

Mr. CRAVINS. Does the bill in its present form, does it provide 

enough flexibility to ensure that States that don’t have the Women’s Business Centers can get assistance, as well? I know that is 

a big concern. I mean, the Women’s Business Centers are great resources, but some States don’t have them. 

Ms. O’DONOGHUE. And within States, you have geographic areas 

not covered that do have them. Indiana has two, yet we have more 

than 70 percent of the State not covered, and predominately in the 

area with highest unemployment where Karen Mills and Senator 

Bayh just announced the auto floor financing in Kokomo. 

No, respectfully, obviously. Respectfully, not enough appropriations, authorization to this extent, if I may cover the points that 

were raised by the members. First, there is in the language of the 

reauthorization, and excuse my terminology, a cap of this $150,000 

award. Now, this is how and why most of the Women’s Business 

23 

Centers have gone from an SBA award being 80-some percent of 

the budget, and not that that was ever a perceived goal, to less 

than 30 percent, and in some cases less than ten percent of that 

center’s budget. 

So you have Women’s Business Centers—when you think about 

this as an investor, the government being an investor, you have 

Women’s Business Centers who actually might be beholden to larger investors than the government, especially the SBA. In four short 

years, the Central Indiana Women’s Business Center, the SBA is 

actually my fourth. I have three other powers-to-be that I report 

to that have greater skin in the game than the SBA does, and I 

am only in year four, finished year four, now in year five. I am— 

Central Indiana is what you would call a new center, yet we have 

popped, because of the need, to where not only are we not appropriated at what was authorized, but we have had to go out and 

beat cheeks and raise much more money to meet the need. 

Second with the authorization is—and to speak directly to the 

point of coverage—we have recognized and Senator Landrieu 

opened by noting that women business owners are opening at the 

largest segment of business owners starting businesses and growing, and yet with 370 SCORE chapters and SBDCs geographically 

covering the corners of the States, we have, give or take, only 100 

funded Women’s Business Centers in the country. I don’t know how 

we think we have the resource stacked to respond to those that are 

starting businesses if we are less than 100 Women’s Business Centers as well as some States not even being covered. 

So we have an authorization issue with the number of Women’s 

Business Centers, with the coverage not in existing States, with 

the States that aren’t covered, and then the funding level at which 

we are capped, $150,000 in our little center in Central Indiana in 

just five years to offer over 18,000 hours of training, 2,200 clients, 

543 businesses starting up. I have had to grow that budget to 

$600,000 and I got appropriated $118,000 this year out of my 

$150,000 that I was supposed to get. 

So, quite frankly, I have to look at the SBA grant and the Women’s Business Centers—excuse me, the authorization, this is a cost 

of doing business. So you are also, as much as we are measuring 

the outcome for the appropriations, I would like—and I heard Senator Landrieu say, let us look at the efficiency of the appropriations 

and what it is—how it is measuring across the board. The cost of 

every dollar granted with what we spend to track as well as to do 

it pulls it a little bit off center. 

Ms. SANCHEZ. Great. Thank you, Sharon. 

I know Meredith has a few questions. 

Ms. WEST. Yes. I wanted to touch on some important points you 

made there, particularly on the funding for WBCs, and to point out 

that actually the bipartisan bill that Chair Landrieu and Senator 

Snowe introduced yesterday changes the authorization of the grant 

amounts from a maximum of $150,000 to a minimum of $150,000. 

I have been listening to you and the association on this very important point, so I wanted to touch on that and ask you if a minimum 

grant amount of $150,000 instead of a max would better enable— 

the centers to serve the important populations you guys are working with. 

24 

Ms. O’DONOGHUE. That would certainly—and coupling on Ken’s 

statement, the authorization would certainly allow us to go in, better match—a lot of women—it is the appropriation, you know. It 

is the appropriation needs to match up to the authorization. 

Just a comment, though, about how and why that helps us. For $150,000 minimum, if you have a third of the funded centers as 

stand-alone 501(c)(3)s with less than four staff members that need 

to operate budgets at $300,000 to $500,000, that helps not having 

to spend manhour time trying to do other fundraising and being 

able to expend the dollars directly to the client services, as well, 

as we already do by the SBA requirements. But when we talk 

about all hands on deck, I think the critical part of a minimum of 

$150,000, if it is appropriated, is that is more money that can be 

turned into physical counseling hours and training workshops and 

loan assistance. 

Ms. WEST. All right. Previously, even with additional appropriations, the agency couldn’t give a grantee more than $150,000, so we 

think this is an important change. 

Holly, I wanted to ask you about the balance between opening 

new centers and supporting the centers that are in existence and 

serving women’s businesses. Does the bill provide flexibility to 

serve the States that currently don’t have centers while maintaining renewal funds—— 

Ms. SCHICK. Yes. 

Ms. WEST [continuing]. For existing centers? 

Ms. SCHICK. Yes, it does. 

Ms. WEST. All right. Thank you. 

Ms. SANCHEZ. Great. I think we have some questions for Shelly, 

too. 

Ms. WEST. Yes. You touched on this a bit earlier, on the challenges in the missing middle and women-owned businesses struggling to grow the revenue base of their businesses. What factors 

have you found in your research and in your work with these populations contribute to this phenomenon, and what are you doing and 

what does the Women’s Business Center program need to do to better support growth in these businesses? 

Ms. PORGES. Thank you very much for the opportunity to address 

that. First of all, the women have told us who have gone through 

our program, the women who have success, we obviously monitor 

them all along, not only their actual financial performance and job 

performance, but also what is working for them, what isn’t. We do 

ongoing modification of the program. 

The key things they have told us work for them to break 

through, the women who have gotten to the million-dollar mark 

and beyond, number one, it is setting the goal. So many women get 

into it either as a sideline, or even if they thought of it as a business, the notion of, oh, I never thought of that. I could grow my 

business to a million dollars. It is almost like you have to give 

them permission. So setting the goal. 

And with that a certain level of confidence that will come with 

the rest of the program, which is the next thing they tell us. The 

coaching is essential. We are partnered with an organization, the 

Coach Connection, that already does what Ken is talking about, 

which is it has got a very formatted approach to coaching these 

25 

small businesses. I don’t know if they call their—they call it certification, but effectively, they certify their coaches. Their coaches 

have to have not only a fairly extensive—I think it is ten yearsplus—of business experience, but also have to have had at least 

two years of coaching experience and then go through a certain 

oversight. So the connection with their coaches. 

And interestingly, they tell us two things about the coaches. One, 

it is, of course, the input they get from the coach, and they get to 

pick their coaches as they do in your program, but it is the accountability to the coach that is very important to them, because otherwise, they are on their own. So if they have decided to tap into five 

new customers but no one is there to tell them, and now months 

from now they haven’t done it, if they have a coach who once a 

month checks in with them and is talking with them and is guiding 

them further or giving them input, they have someone to account 

to who is going to ask them, so, did you call those five new customers? On their own, there isn’t that kind of accountability. 

And the last and most important thing, I think, is the peer mentoring. We found that going on. I mean, you talked about integrated. Women approach these things on an integrated basis. We 

do think that there are differences in the way men and women approach building their small businesses, and what we have found is 

that the women just really benefit from the community. They benefit from the fact of seeing other women in similar situations, understanding it is not a unique challenge that they may be facing, 

getting input from somebody who has already overcome or met the 

challenge and so forth. 

So again, the goal setting, the coaching, the peer mentoring are 

the three things they tell us are the most important things for 

them. 

Ms. WEST. All right. Thank you. 

Ms. SANCHEZ. Great. Wonderful. Actually, now we are going to, 

I think, move on to our Veterans Business Centers, and Lou, I actually want to start with you. Can you briefly describe kind of the 

nature of the center that you run, the services you are providing 

and kind of the gambit of the folks that you are actually serving? 

Mr. CELLI. That you, Ami. That is a great question and it is really a great way to start off the veterans’ portion of this discussion. 

Our center is—I heard Don mention boutique services. I have 

heard some other people mention some specific services. We are a 

full-service resource center that provides a variety of different services, not only counseling and mentoring, but we also provide education. We provide nine-week courses, 11-week courses, three-day 

courses. We provide seminars, not only locally, but we have also 

been asked to provide these seminars nationally. We provide online 

counseling. We provide in-person counseling. 

We provide a variety of services that have really stretched our 

resources to capacity, and I have always understood that we were 

the orphans of the program, you know, that we were the little guys 

on the block. We are the youngest entrepreneurial development 

program in the repertoire of the SBA of entrepreneurial programs, 

only having been around now ten years. 

I hear Sharon’s concern that 100 Women’s Business Centers is 

a very difficult number of outreach efforts in order to service the 

26 

United States of America and I just want the committee to be 

aware that the Veterans Business Resource Centers number in 

total of eight. We have eight across the country. So we are now 

hyper-focused on this piece of legislation to try to grow this program to the degree that it was intended to be grown through Public 

Law 106–50. 

The entrepreneurial effort that was passed in the 110th Congress, Public Law 110–186, sought to try to grow this program at 

least a little bit by funding the Office of Veterans Business Development out of the Small Business Administration from what historically had been a flat-funded program of $750,000 a year to $2 

million a year and that authorization was summarily ignored as 

they remained flat-funded at $750,000 through the term of that authorization, from 2009 and 2010. 

So I sit here and am jealous of all of you, trust me. You know, 

you have resources and outreach and capabilities that we only 

dream about, yet we have still been able to support our veterans 

in this effort. I will leave some of the statistics that I have to Director Sharpe as we talk about returning veterans. 

Ms. SANCHEZ. Joe, do you want to add? 

Mr. SHARPE. Well, first, I want to thank you for having this hearing and the American Legion really appreciates the support that 

we have received from Senator Snowe and Senator Kerry and now 

Senator Landrieu. But I need to make a few things perfectly clear. 

The situation with veteran entrepreneurship is becoming intolerable. Many of the veterans are so angry and so frustrated with the 

lack of support that they are receiving from the Hill and from SBA 

that there is a real movement to move the entire program from 

SBA, move it to the VA. Veterans feel that they really don’t have 

a seat at the table. The centers are underfunded. There is an expectation that the eight centers cover the entire country, that they 

provide special services that no one else can, and it has gotten to 

the point where the American Legion is looking at investing a sizeable amount of money to do the things that we feel the Federal 

Government should be doing. There are also three other Veterans 

Service Organizations, not-for-profit, that are raising money to do 

the same thing. 

It is imperative with the number of veterans returning and wanting to start businesses that they receive the support that they 

need. A hundred-and-fifty-thousand to $200,000 for one center that 

is expected to cover six or seven States is just not feasible. If an 

organization in California—and this has happened—wants to do a 

program, then they expect Louis Celli or someone from Flint to fly 

out there and put that on for them because they feel like they are 

not getting that support from anywhere else. When we do our conferences during our national conventions, we have veterans flying 

in from both coasts for a two-day program, something that we feel 

that they should be able to get in their own States. And this is a 

serious situation. 

There is going to be a veteran business seminar that will take 

place in July in Las Vegas. We expect over 2,000 veterans to fly 

to that event, and the Secretary of VA is speaking, not SBA. SBA 

has played a very minimal role in anything the veterans have done. 

As Louis had stated before, that veteran office in the SBA has been 

27 

flat-lined with a budget of $750,000 for years and they have somehow been able to use that money to keep five centers going, and 

now they have eight. We don’t feel like we are getting support that 

is required. 

Mr. WALKER. Could I respond to that? I would just like to respond. I think that you are preaching to the choir here in terms 

of veteran support, particularly from our bosses. That is why we 

fought so hard to get the bill passed last year. That is why we 

fought to secure in the Senate the funding to keep the three Veterans Business Resource Centers open, including Louis’. We included provisions to do so in the Senate appropriations bill, and we 

were fortunately successful in doing so. 

I also do not want to in any way downplay the role that we are 

playing in terms of veterans in this bill. This bill proposes a significant increase to veterans services. By order of magnitude, what we 

are proposing in this bill is an over 1,225 percent increase in funding, from the historical level, for this upcoming year. And that is 

in response to fiscal year 2009. So a 1,225 percent increase should 

certainly show a level of support from people that understand that 

this program deserves increased funding. I think that that is one 

of the largest proportional increases in fundings that I have ever 

heard proposed on Capitol Hill. 

Similarly, for the Office of Veterans Business Development, we are proposing raising its funding to $2 million. That is a massive 

increase, as well. 

And in regard to one center serving, for instance, six or seven States, if you do the math with $8 million, which is the lowest 

amount that we would have in every year, that would be approximately 40 centers at $200,000 apiece. So if you did 40 centers 

across the nation, it would not be one center for every couple of 

States. 

Additionally, we are trying to bolster what the SBA offices are 

doing for veterans. That is why this bill has the requirement that 

the SBA designate a Veteran Business Center representative for 

every State, and that way, there would be an additional 50 people 

out there that would be focused on veterans’ needs, as well as a 

new computer network and other measures that we are working 

on. 

So again, I do understand the frustration. I do understand the 

concerns. But I definitely, in defense of this bill, want to express 

the fact that a 1,225 percent increase is substantial, and that is the 

lowest level, it increases in the following years. 

Mr. CELLI. Thank you, Matt. I just want to respond to that by 

saying that while we certainly appreciate the increased emphasis 

this year, that 1,200 percent really represents a ten-year increase 

which never happened. So we are just now trying to get caught up 

with where we should have been starting ten years ago, and while 

it may seem like a lot of money dumped into one pot overnight, it 

is really money that we never got over the past ten years. I mean, 

eight centers—and really, it has been five centers over the past ten 

years that were generated out of Public Law 106–50, which started 

in 1999. So I don’t think that it paints an accurate picture to say 

that it is a 1,000 percent increase overnight. It is really—it is an 

outgrowth where we should have been anyway. 

28 

Mr. WALKER. I agree that it is regrettable that there are not 

more centers, and that is not to say that more isn’t needed in the 

future, but also, in terms of incremental growth, it is a substantial 

amount to do in the very beginning with the knowledge that more 

may need to be done, but we should do so incrementally in a way 

that can be done responsibly. I think it is a very large increase in 

support of the Veterans Centers, is what I am trying to say—— 

Mr. CELLI. I agree. 

Mr. WALKER. And I think that in order to grow something incrementally, that is a pretty big step to take in years one through 

three. 

Mr. CELLI. Right. 

Mr. SHARPE. But Matt, I need to also state that that is a good 

start, but you and I both know that a lot of statutes, a lot of laws 

that have been enacted for the past ten years have not been carried 

out from the various agencies that were supposed to do them. 

Mr. WALKER. I agree. 

Mr. SHARPE. SBA, again, you fought hard for an increase in the 

budget. The Administrator of SBA never gave that department the 

money that they were allocated for. A lot of the laws that were 

passed last year have not been carried out. Most of the Federal 

agencies have not reached their three percent goals. VA is the only 

agency that has that. And when you start talking about having a 

seat at the table, that has not happened for veterans. We are still 

ignored. SBA has not participated in many of our programs and the 

perception is, even though you may pass a bill, that doesn’t necessarily mean it is going to be enacted, the agencies are going to 

follow suit, and any type of recourse will be done to them if they 

don’t fulfill their obligations. 

Mr. WALKER. And I couldn’t agree more, and going back to that 

bill, I have got to thank you for all of the hard work the American 

Legion and you personally did, and Louis, as well, in passing that 

bill. A perfect example of that is the Veterans Task Force. The Veterans Interagency Task Force was required to be stood up specifically for this reason, so that we could coordinate and leverage what 

it was that the Federal agencies were doing. It has been over a 

year and that hasn’t taken place. So we have called on the SBA to 

do that, to get it up and running, and we are going to continue to 

push for that, particularly trying to get that up, because we really 

believe that it is an opportunity, and anything that anyone in this 

room can do to help to push that, we strongly encourage it, because 

it is something that our bosses believe in. 

Mr. CRAVINS. And Joe, I want to thank you and Lou for being 

here, and I am new to the Hill but I am not new to government 

and the politics. One thing that I would advise you on, though, is 

realize that we have a new administration, as well, and I think before you write off the Small Business Administration—and I don’t 

need to speak for Holly or for the Administrator—I think it is 

worth reaching out to the new Administrator and reconsidering inviting her and her staff to different events that the VA may be having because I think you need to reconsider that. I think it is good 

to—I understand past and you base people’s—you base results on 

past experiences, but I think you will be—I can’t speak for her, but 

I think if you reach out to the Administrator, you invite her to 

29 

some of those events, I think you will be very pleasantly surprised 

or happy with the results you get. I think she is on the same page 

with our bosses on the VA issue. 

Mr. SHARPE. I don’t think it is a question of whether the American Legion personally reaches out. What I am conveying to this 

committee today are perceptions from veterans across the country. 

We have a Small Business Task Force. We are inundated every day 

with inquiries, that there is a lot of frustration around the country. 

Mr. CRAVINS. Absolutely. 

Mr. SHARPE. There is still a feeling that SBA is more concerned 

with the Women’s Centers and 8(a) and HUB Zones than they are 

for veterans, and this comes out on a daily basis. And I am telling 

you that the hostility toward these various interest groups is getting to the point where there is a call to move the program to an 

agency that understands veterans and their issues. 

Mr. CRAVINS. And we want to help with alleviating some of those 

concerns and some of that hostility, and I know that the Administrator and the administration would love to be part of that, too. So 

anything that we can do to do that, we definitely want to be a part. 

But thank you very much. 

Let us move on to our Native American entrepreneurial development opportunities. Katharine, you are going to be talking to us 

about those issues today. Are there any specific issues to our Native Americans that would make targeted assistance necessary? 

Ms. BOYCE. Yes, Don. Thank you very much for the opportunity 

to be here today. I represent the National Center, but I will try to 

do my best to describe or at least speak on behalf of other providers 

of business assistance in Indian Country. 

First of all, I want to echo what you just said about the new 

SBA. I have been really pleased in my brief conversations with the 

new Administrator, Karen Mills, with Holly Schick, with the new 

National Director of the Office of Native American Affairs, Clara 

Pratte. They have all been tremendously outreaching and understanding of the real challenges of delivering business and entrepreneurial development assistance in Indian Country. 

You know, in the last umpteen years, there has not been a lot 

of focus on Native American entrepreneurial development by SBA, 

particularly in the last eight years, or on small business development assistance from any other centers than the Native-focused 

centers. For example, during the Clinton administration, SBA provided about $5 million for a Native American outreach and had 

funded some Tribal Business Information Centers, and in the beginning of the next administration, that whole program was 

defunded. The funding for MBDAs, Minority Centers, and they run 

eight Native centers, has also been flat-lined about at $1.5 million. 

So there hasn’t been a lot of money in this area at all. 

There is a real—it is a unique set of problems in Indian Country. 

You have got, in most cases, first generation entrepreneurs. You 

have tremendous hurdles with financial literacy. I have to take my 

hat off to the Native CDFI, the Community Development and Financial Institutions system, that has developed in Indian Country 

because that is providing microlending and so increasing the 

amount of entrepreneurial development assistance. That is really 

important. 

30 

There is very limited access to capital in Indian Country or even 

traditional financing mechanisms. For example, an entrepreneur 

cannot use his home or her home or land as collateral to start a 

business because the land is not—the Tribal lands are not alienable, which is a major problem. For a tribe to start a business, particularly, for example, in government contracting, you have to 

waive sovereign immunity in order to qualify and that is a real 

challenge for Tribal councils to agree to waive sovereign immunity. 

So all of these business challenges require more time by business 

counselors in these centers and that is one of the reasons why a 

lot of the other centers that are not Native-focused have not really 

spent the time that it takes to work with Native entrepreneurs. 

So SBA funding, though, is really essential because SBA focuses 

on the start-ups. The Minority Business Development Agency funding more and more are focused on strategic growth companies. So 

they want more bang for the Federal dollar. They are looking for 

big contract awards and big financings in order to prove that their 

program is providing that return on investment, and it makes it 

more difficult for the Native Centers, because they need to meet 

their goals that MBDA imposes on them for those big numbers, but 

they still have their mission to service any Native American company that comes in the door, or entrepreneur. 

So one of the things that I wanted to say, to echo the comment 

that Mr. Yancey made, this is a big problem, that you always have 

unfunded authorizations up here. I notice that the SBA budget request for fiscal year 2010, and I was delighted to see it, has $29 

million for entrepreneurial development. There is no mention within that figure for Native American entrepreneurial development. So 

I am very anxious to help the committee move this bill along as 

quickly as possible so there is an authorization figure, at least a 

target. We have talked to the Appropriations Committees on both 

sides and it is hard to make a case if there is only $1 million right 

now in the budget for Native American outreach at SBA. To get 

higher, it is difficult without an authorization that is actually enacted. So—— 

Ms. SANCHEZ. Sorry. I know—just really quickly about the programs that are created by the grant work in conjunction with the 

preexisting technical assistance programs, and you spoke a little 

bit about the kind of unique nature of Indian Country and how 

these programs work. Who do you anticipate—or do you anticipate 

those programs being interested in applying for the assistance 

under the Act and kind of who would represent these service providers? 

Ms. BOYCE. Okay. I think that there is a lot of interest in this 

legislation in Indian Country to the extent that it is known out 

there because every center that tries to provide development assistance to Indian people is short-funded. They don’t have the capacity 

to develop big grant proposals to foundations. The ones who are 

more schooled in that kind of activity do better, obviously. 

I think you will find that the existing centers run by the National Center, we have been working for quite a while with the 

Senate committee to make sure that this entrepreneurial development assistance legislation is available to centers like the ones the 

National Center runs. I think the Native American DCFI will apply 

31 

for this kind of funding. There are American Indian Procurement 

Technical Assistance Centers. They might apply. Tribes will apply 

for this funding. Alaska Native Corporations, likely. 

I think the bill should include Native Hawaiian organizations 

and service Native Hawaiians, and every bill that has been introduced on this subject in the House and Senate prior to this bill has 

covered them, so I think you need to talk to more organizations 

that have a broad Native American representation in order to decide whether you want to pursue that narrow focus of this Native 

American bill. 

I know that you all wanted me to focus on the match requirement. The National Centers, with the programs they run now, 

their cooperative agreements with other Federal agencies have to 

meet a match requirement, so I think we would be able to meet 

some sort of match requirement. But not everybody who would like 

to either start a center or augment what they are doing now would 

have the capability to meet this match. 

So what we would recommend is that you lower that—either remove the match or lower it to 25 percent for the first two years and 

33 percent for the last three years of the project, and for renewals, 

make that more flexible than requiring a flat 50 percent. 

Mr. TRIOLO. Just a quick question. Can you briefly address or go 

through your relationship with the SBA and what else they could 

do or you would like to work with them in doing, to ensure that 

Native Americans are receiving proper technical assistance? 

Ms. BOYCE. Yes. Actually, we have had a lot of meetings recently 

on this. The grant funding would be helpful. Access to more of the 

online capabilities and probably some of the tracking mechanisms 

for tracking return on investment and metrics for business success 

and so forth would be helpful. We have some of that. The National 

Center has some of that operationally already, but oftentimes we 

have to apply for other grants in order to fund that kind of activity. 

We would like to explore the possibility of some sort of veterans 

capability. There are a lot of Native American veterans in the country. Native Americans have a higher percentage of serving in the 

military than just about any other ethnicity in the United States. 

They are very loyal and they have needs. So that is one area where 

I think that—I am glad that SBA is moving into this and we would 

like to work with them on that. 

Microlending is really important in Indian Country, as I mentioned, and to date, SBA loan programs and their loan guarantee 

programs have not been as accessible to Native entrepreneurs and 

Indian-owned businesses, particularly Tribal-owned businesses, as 

they could be. So I think this is an area—I have already talked 

with the SBA—that there should be more focus and set up working 

groups and so forth. 

Mr. TRIOLO. Can you also describe a bit as to your relationship 

with—your understanding of some of the current Technical Assistance Centers that are out there that do specific Native American 

issues and how they are able to work with other SBA resource 

partners, because my thought would be that even with a full-funded grant the SBA may not necessarily be able to put a center in 

every area that has a large population of Native Americans. So I 

think it is important that they also work to leverage other reVerDate Nov 24 2008 10:45 Oct 27, 2011 Jkt 066427 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\66427.TXT SHAUN PsN: DPROCT
32 

sources. I am just wondering what you have seen, your experience 

in the past with that. 

Ms. BOYCE. Well, I think there is some collaboration. There could 

be more, and we have talked about this before. My concern, even 

with the Senate bill’s provisions, which we tend to prefer over what 

the House has passed in this particular area, is that what little 

funding is made available for Native American outreach, entrepreneurial development outreach, really ought to be focused on the native centers that are already providing this work, because they 

have a proven track record. They have already developed their culturally-appropriate business assistance. That is not to say that 

they couldn’t do better, no question about it. 

And so collaboration is helpful. But I would really not like to 

see—or I think it would be better if the primary focus of this funding be to assist the Native Centers and encourage collaboration, 

but not make the requirement so stringent that the only people 

who can require and meet the match and fulfill all the reporting 

requirements are SBDC-funded organizations. 

And if that is the case, if there has to be that kind of mandatory 

collaboration because of financial constraints, then the Native Centers should have more access to the SBDC funding, because SBDCs 

are funded at a pretty substantial rate, far more than what Native 

Development Assistance has been provided. Granted, it is a smaller 

community, but still, there is a huge need in Indian Country for 

this assistance. 

Ms. SANCHEZ. Great. Thank you. 

Now, I would like to move into PRIME. If you could speak to 

PRIME, give us kind of what is the clientele again, what is the clientele that the PRIME program is meant to serve, and how does 

PRIME differ from SBA’s Microloan Technical Assistance Program. 

Ms. JONES. Sure. First of all, I want to say thank you for the opportunity to speak today and thank the committee for all of their 

leadership and commitment to small businesses and entrepreneurial development. PRIME is a program for investment for 

microentrepreneurs and it provides assistance to the low and very 

low-income microentrepreneurs and it is a program that, again, 

provides training and technical assistance. It doesn’t provide any 

lending. 

Ms. SANCHEZ. Why is PRIME so important to entrepreneurs, 

women-owned businesses? What factors account for this phenomenon? Can you just kind of give a little bit more into the services? I mean, one of the changes that we are making is moving it 

into the Office of Entrepreneurial Development, and kind of give 

that kind of background on what effect that would have. 

Ms. JONES. Sure. PRIME is the only program—well, first of all, 

entrepreneurs lack the access to capital, only one of the barriers to 

starting, growing a successful small business in today’s complex 

economy for microentrepreneurs. They frequently require business 

training in order to achieve business success. By investing in business training for disadvantaged entrepreneurs, PRIME has been 

successful in creating jobs and generating income in communities 

that need it most. 

PRIME is the only Federal microenterprise program that provides intensive business training to low-income and very low-inVerDate Nov 24 2008 10:45 Oct 27, 2011 Jkt 066427 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 C:\DOCS\66427.TXT SHAUN PsN: DPROCT
33 

come entrepreneurs. It is different from SBA because it is—again, 

it provides one-on-one training to the very low-income entrepreneurs and they are not—they are not looking for capital. They 

need training for, for example, developing business plans, 

mentorship, coaching, walking through what entrepreneurship may 

be, and how to develop their business. 

Ms. SANCHEZ. Great. Thank you. Do you have any kind of comments as to what can be done to help women business owners accelerate their revenue growth given kind of the current state of the 

economy and what kind of assistance that could mean for women 

business owners and kind of the socially and economically disadvantaged group, folks that are being served by this? 

Ms. JONES. Sure. The current economic climate has really affected, you know, the economy throughout, but microenterprise has 

actually grown and Women’s Business Centers have done better in 

the economy and microenterprise has done better, but funding is 

definitely needed. Funding for the private sector foundations of personal giving have been severely curtailed due to the current economic climate, especially unfortunate because these funding 

sources dwindle. The demand for self-employment training has 

gone up considerably. Job losses have contributed greatly to the 

number of individuals who seek to start the businesses using the 

vocational and technical skills they may have honed in their careers. 

We have requested $15 million for PRIME and we haven’t received that funding since 2001. So that is something that we really 

need, because with the current state of the economy, PRIME has 

not—the current state of the economy, there are more people who 

have moved into self-employment and microenterprise is a much 

greater need at this point and the funding is not there. We see a 

lot of our members want—need to provide more technical assistance and training and they just don’t have the funds to do that. 

Ms. SANCHEZ. Just to get in, I mean, one of the changes in this 

piece of legislation that really affects PRIME is the move into entrepreneurial development, and it is our understanding that 90 

percent of these microentrepreneurs are not seeking financing. So 

would it be correct to say that, well, SBA microloan programs, technical assistance pieces for borrowers, PRIME serves actually those 

not necessarily seeking capital, do I have that right? 

Ms. JONES. No. They are not seeking capital. They are not seeking capital. They are seeking training and technical assistance. A 

lot of it is one-on-one training. For example, for Women’s Business 

Centers, for Small Business Development Center programs, they 

define a client as someone who has received two hours of training. 

Under PRIME, a client is defined as receiving ten or more hours 

of service. So it is specifically focused on providing training and 

technical assistance. It is not microloans. It is not microlending. 

And it is the only Federal program that focuses on training and 

technical assistance for this population. 

Ms. SANCHEZ. Thank you. Do you all have anything? 

Ms. WEST. Yes. Thank you, Ami. 

As you know, the PRIME program has typically been considered 

when we have reauthorized the SBA’s loan programs. I would just 

like for you to speak to why it is so important for us to reauthorize 

34 

PRIME now in this entrepreneurial development reauthorization 

legislation. 

Ms. JONES. Well, again, in this economy, there is a growing need 

for microenterprise. There are a lot more people who have moved 

to self-employment. It has grown substantially, according to our 

members. AEO serves over 400 microenterprise organizations and 

we have served over two million entrepreneurs and we have heard 

from them that, you know, they are just screaming that they need 

assistance with training and technical assistance and they have 

seen an increase since the recession. 

Ms. WEST. Right. So it is a matter of timing? 

Ms. JONES. It is a matter of timing and the funding has not been 

there. The previous administration has, you know, since the inception of PRIME, which was 1999, has continually tried to eliminate 

funding for PRIME and Congress has seen the importance of 

PRIME. So it has been funded, but substantially less than what 

was authorized, which was the $15 million. 

Ms. WEST. In this committee, Chair Landrieu and Ranking Member Snowe worked to include additional funds for PRIME in the 

stimulus bill earlier this year, and in our appropriations letter requested the $15 million in funding. So this committee has been 

supportive of that. 

Ms. JONES. And we very much appreciate that. 

Ms. WEST. Before we move off this topic, I wanted to ask SBA, 

back to the conversation we were having earlier about metrics outcomes of these programs, do you think that the EDMIS system can 

be used to evaluate the PRIME program and utilized in evaluating 

outcomes, or would you have to develop a separate tracking mechanism for that program? 

Ms. JONES. First of all, I would comment that entrepreneurial 

development is the agency’s hub for management and technical assistance and the expertise resides there in terms of how to do it, 

how to do it efficiently, and how to measure it. EDMIS has the capability to track the basics of what management and technical assistance means to entrepreneurs, which is what services they get, 

who provides it, how long do we spend with the customer, and 

what is the outcome. And so I believe that EDMIS would absolutely 

support the PRIME clients in that regard with very few, if any, 

modifications. 

Ms. SANCHEZ. Great. Thank you, Holly. 

Now I am going to actually turn it over to my colleague, John 

High, who handles trade for the committee. John. 

Mr. HIGH. All right. Thank you, Ami. 

Good afternoon, everyone. I just want to start off by thanking Dr. 

Morrison, Ms. Reilly, and Ms. Conrad for being here today to speak 

with the committee staff about small business trade issues. I know 

we are a little bit short on time, so we will try and just jump right 

into it and move quickly through it. 

I just want to start off by saying that, as many of you know, the 

government offers a wide variety of assistance and counseling programs to small exporters. Chief among them is the SBA and the 

services offered through the Office of International Trade over 

there. I think we all know that they have some good programs that 

reach a significant number of small exporters. 

35 

Unfortunately, under the previous administration, this office was 

neglected a little bit, and I think when you look at the loan volume 

of the programs offered through their office, you will see a significant drop over the last five years, and I think that indicates to us 

that we need to make some changes. 

Both Senator Landrieu and I believe Senator Snowe have recently introduced trade legislation, and one of the things that they 

have in common in their bills is moving the SBA Office of International Trade out of the Office of Capital Access at the SBA, in 

which it is currently housed, and creating a new office that is directly accountable to the Administrator. 

So I would like to start with Dr. Morrison. Do you support this 

idea of moving the Office of International Trade from within Capital Access and creating a new office within the agency? 

Mr. MORRISON. Yes, we do support that. We think that is a very 

good idea. It has been a problem for several years that the Office 

of International Trade has sort of descended within the SBA organization. Back in the 1980s when it was created, it did answer directly to the Administrator, and over time, as the agency has assumed other priorities and maintained more of a domestic focus, 

this has, I think, been to some degree neglected. Its track record, 

however, is terrific with the resources it has been given and there 

is every indication that with more emphasis, it could do more. 

Mr. HIGH. Thank you, Dr. Morrison. 

Ms. Conrad or Ms. Reilly, if you would like to make any comments on that. No? Okay. 

Dr. Morrison, if I could just follow up real quick, do you have any 

other suggested changes that we can make to the office without unduly burdening the agency and impacting field operations in the 

agency? Do you have any other suggestions that come to mind as 

a way to improve the office? 

Mr. MORRISON. Well, over time, I think that the—all IT people 

need to be in more of the U.S. Export Assistance Centers. We have 

18 of them now, and in the last fiscal year, those 18 people 

underwrote over $2 billion worth of small business exports. It is 

quite an amazing record. If you do the math, for every dollar that 

we put into this program, we get over $500 in export sales, and 

those dollars create really good jobs in this country. 

So I think that the program is well proven, but it is only in— 

we have 104 U.S. Export Assistance Centers in the United States 

and SBA is only in 18 of them. In fact, it is in fewer than that, 

because in a couple of cases, they have got one or two people in the 

same office. You look at a State like California with 50,000 small 

business exporters and probably two or three times that many that 

could become exporters and you have got SBA, they have got two 

people, 25,000 exporters per person. 

I think that the committee and the agency really should look at 

it as an expansion of the program and to more of the U.S. Export 

Assistance Centers as a top priority. 

Mr. HIGH. Sure. Ms. Reilly. 

Ms. REILLY. Yes, thank you. Just on behalf of the Chamber, I 

want to thank Senator Landrieu and Senator Snowe for these important bills. I think all of us understand that small business is the 

backbone of our economy and that is why we fully support increasVerDate Nov 24 2008 10:45 Oct 27, 2011 Jkt 066427 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 C:\DOCS\66427.TXT SHAUN PsN: DPROCT
36 

ing the SCORE funding by $10 million, as well as the SBTC funding. But trade and export promotion is really an important piece 

of this, and just what I just do a little bit within the U.S. Chamber 

is I am the Director of our Trade Roots Program. So what I do specifically is trade and education on exporting for small- and medium-sized companies. So I am in the real world most of my time. 

I am actually only in town four days this month and was in Wisconsin this morning. 

I partner a lot with local Chambers of Commerce as well as universities and world trade centers to talk about what are the resources that are available for business. So part of our programs always include SBA, but they also always include the Export Assistance Centers as well as EX-IM Bank and whoever might be relevant locally. And another key of that is that we highlight the 

small and medium-sized companies that are exporting as our faces 

of trade. 

What I can say is that there is really a lack of awareness of these 

agencies here in the real world. I think that, sadly, I spend a lot 

of time explaining just what SBA is and what they do and why 

they are there to help. So I think kind of on a more basic level, 

there is some work that needs to be done on the marketing side 

of SBA as well as the promotion side of it. 

As far as international goes, really, it is pretty basic science. It 

is opportunity for small business. Ninety-six percent of the world’s 

consumers are outside of the U.S. Jobs that relate to international 

trade pay 13 to 18 percent more. Small businesses that are exporting are less than one percent right now. So there is amazing opportunity for business and that is why it is crucially important to help 

these companies figure out how to get their exports and how to get 

their products abroad. 

The World Bank came out with a recent study that said for every 

dollar spent on export promotion is a 40-to-one return on investment, and some States have taken this into account. Pennsylvania, 

for example, has developed what is called the Market Access Grant, 

which is a $5,000 grant for small- and medium-sized companies if 

they basically want to become international in any way. So they 

can go to trade shows, they can do trade missions, they can translate their website, and it has been a really—not a lot of red tape 

and a really good program for a lot of these companies in Pennsylvania. So we would recommend that turning into a Federal program. 

Regarding the funding of the SBA, I just have to echo Mr. Morrison, as well, as far as the offices and the shortages of personnel out 

there. Often, there is one person in charge of five States and so 

they can’t be everywhere and it is very difficult for them even to 

put a face on the SBA in the rest of the States, as well as collaborating and coordinating efforts with the Department of Commerce 

and with the Export Assistance Centers. They are a wonderful resource. They do a great job. But they are underfunded, as well, so 

I think that that is going to be something to look at, as well, is the 

Department of Commerce funding. We are recommending to double 

the Federal expenditure on that. 

Mr. HIGH. Thank you for your comments. 

37 

I just want to go back real quick to the staffing levels of the U.S. 

Export Assistance Centers. I know that that is an issue that is 

very, very important to Chair Landrieu. The center down in New 

Orleans has been vacant since 2003, I believe. Since then, I believe 

the number of financial specialists funded by the agency has gone 

from 22 down to, I believe, as low as 14 or 15. And as Dr. Morrison 

pointed out, now it is back up around 17 or 18. Unfortunately, the 

New Orleans position is still vacant, but I know the SBA is working on that and will hopefully have somebody soon. 

But in Senator Landrieu’s bill, this is something she addresses 

and I think that once we get this program back fully staffed to 

where it needs to be, I think we would be interested in looking at 

maybe expanding the program a little bit, and I know we have 

heard from various stakeholder groups that some of the areas of 

greatest need might be some of the fastest-growing export regions, 

such as New York, California, Texas, and Florida. And it sounds 

like, Dr. Morrison and Ms. Reilly, that you would be supportive of 

this idea and I just want to confirm that. 

Mr. MORRISON. Absolutely. You have got one person in the entire 

State of Florida, and it is arguably the best State in the United 

States for small business exporting. 

Mr. HIGH. Sure. 

Ms. REILLY. We would support that, as well. 

Mr. HIGH. Thank you. 

Ms. WEST. Yes. I want to just jump in here and say that Senator 

Snowe has been working with Senator Landrieu in supporting an 

increase in the SBA staff that are sent to the USIACs, that it is 

a really critical position in connecting these small exporters to financing and the technical assistance they need to deal with some 

unique challenges. 

We very much agree on the need to fill those positions and really 

increase the positions that have been vacant and really to increase 

the presence of SBA staff in the USIACs nationwide and would 

suggest that a study is necessary to understand where there are 

opportunities for growth in small business exports, and Senator 

Snowe’s bill really focuses on that and we are working with Senator Landrieu. Any comments you have related to really the level 

of coverage in these USIACs would be appropriate, I think. 

Mr. MORRISON. Do you want one now or later? 

Ms. WEST. I would love it now. How many do we need and—— 

Mr. MORRISON. I think that if you are doing this good by scratching the surface with 18 people, you really should have in place a 

plan to grow this program to at some point 40 or 50 people. In 

some States, you are going to need several people. I mentioned 

California, Florida. It is a matter of scaling up existing operations. 

But in other cases, like in the Midwest where you have, as Liz 

pointed out, people covering four or five States, you have just got 

to do better than that. And I might note that SBA is forever cutting the travel budgets for these people so they get stuck in the 

USIACs and they can’t go out and visit businesses or visit other 

bankers in other parts of their region. 

Mr. HIGH. Thank you. And Dr. Morrison, just to follow up real 

quickly, I think one thing that is really important—would you 

agree that it is important to, before we start to look at expanding 

38 

the program, at least get it back up to where it was in 2002 and 

2003? 

Mr. MORRISON. Yes. I mean, it has been as high as 20 or 22 people at the beginning of this decade, so yes, absolutely, get it back 

to the starting point. 

Mr. HIGH. Thank you. And before I just move on to one final 

question, Ms. Reilly, I just wanted to follow up with you. You had 

spoken a little bit about this idea of a State grant program to small 

businesses looking to export to provide them financial assistance to 

allow them to go to trade shows and et cetera, et cetera. I just 

wanted to kind of flesh this idea out a little bit more. We really 

like the idea behind it. I mean, I think everybody in this room 

agrees that it is very important to get more capital in the hands 

of all small businesses and especially small exporters with the opportunity that is available right now. 

I would just like to ask you if you could give some more detail 

on this program, and Ms. Conrad and Dr. Morrison, if you would 

like to comment, as well. I think a good programmatic model that 

comes to mind that the SBA has already done in the past is the 

Fast Program, that used to be part of the SBIR/STTR program. I 

would just like to kind of get your thoughts, if you think that 

would be a good model for accomplishing this goal. 

Ms. REILLY. Yes. Just a little bit more on the Market Access 

Grants and as they stand. Like I mentioned, they are a pretty simple system, which is good, I think, for a small, medium-sized business. They have so many other things to worry about, let alone how 

to find a new international market and what that takes. But it has 

to be a company that has been in good standing for over a year, 

that shows good financials. 

Currently, the way the Pennsylvania system works is that the 

company puts the money up front and then they are reimbursed 

after they get back and they just have to prove that they, again, 

have been at a trade show or on a trade mission. I would be happy 

to send you more information from companies that have actually 

utilized those that have told me about them and how successful 

they have been. 

Mr. HIGH. Sure. Thank you. And can I just ask real quickly, it 

sounds like it is a fairly new program, but have there been any significant issues with companies not adequately providing proof that 

they have attended these missions and stuff, because I think one 

issue that we would be concerned with is kind of oversight of this 

sort of program. 

Ms. REILLY. Right. Absolutely. I haven’t been aware of any issues 

because often, the companies that I have dealt with have actually 

worked through their USIACs to help them even find these markets and to begin to even go down that road with trade shows, so 

they have been all legitimized from the start. 

Mr. HIGH. Thank you. 

Dr. Morrison. 

Mr. MORRISON. On that, I might mention that Los Angeles County runs its own trade missions, particularly to the Asia Pacific 

countries, and they have a contest for who can get the award to 

come on the trip and they scale and rank the businesses and the 

ones that seem to be the most export-ready for the markets that 

39 

they are going to visit receive, in effect, a scholarship, a significant 

amount of assistance. It is not hard to notice whether somebody is 

actually on the trip or not. I mean, they are all together at one 

place at one time. So I think there are plenty of ways to evolve 

checks against abuse. 

Mr. HIGH. Okay. Thank you very much. 

And just real quickly, before I turn it over to my colleague, Meredith West, one of the other big issues that I know this committee 

has been working on, and Senator Landrieu has put this in her 

trade bill and I know that Senator Snowe has been a big advocate 

for this, is creating a role for somebody in the government at a very 

high level to advocate for small exporters. 

Back in March, Senator Landrieu, Senator Snowe, and Senator 

Schumer sent a letter to U.S. Trade Representative Ron Kirk asking him to create a Trade Representative for Small Business. The 

idea behind this is that we need somebody at a very high level advocating for small businesses, not only in trade negotiations to ensure that they get a fair deal and that they are not an afterthought, but also to just kind of help raise the profile of small businesses and maybe even contribute a little bit to better coordinating 

some of the trade and export promotion efforts across the government as a whole. 

So I would like to see, Dr. Morrison and Ms. Reilly and Ms. Conrad, if you would like to comment on this at all and are you supportive of this idea. 

Mr. MORRISON. I think it is a terrific idea. We have worked closely with USTR for a number of years and USTR does care about 

small business, but they care about small business intermittently 

and after the fact, in my experience. You need somebody at the 

agency that is strategic and proactive about this issue and can 

bring it to the attention of the people who are doing the trade negotiations and also can listen, can go around the country and listen 

to what small businesses feel they need from trade agreements and 

then tell them what they really are getting from the trade agreements. 

Unfortunately, we sometimes get into a situation where the trade 

agreement is completed and then the first that the small business 

community hears about it is a plea to support the trade agreement 

without having had much input. I think an Assistant USTR for 

Small Business could solve a lot of those problems. 

Mr. HIGH. Thanks. 

Ms. Reilly. 

Ms. REILLY. I think from our position that that would be something worth exploring a little bit more. I think that we see on the 

Commerce side the Trade Promotion Coordination Committee that 

has been put in place with, I think there are 22 agencies at that 

and everybody has a voice. I am not quite sure how often they meet 

or how effective they are, but I think that it would be something 

worth looking into, because if you are talking about raising the profile of small business at these negotiations, I think that there could 

possibly be other assets to do that already. There is a compliance 

issue to it. There is an intellectual property protection issue. And 

those people really should be representing small business as part 

of the bigger issues. 

40 

Another possible way might be to look at the District Export 

Councils and putting one of those members on the President’s Export Council or something to that capacity. But I think it would be 

something we would want to look at a little bit more. 

Mr. HIGH. Thank you. 

Ms. Conrad, do you have any comments? 

Ms. CONRAD. No. 

Mr. HIGH. Okay. Meredith. 

Ms. WEST. Okay. Thank you, John. 

On the Market Access Grant Program, which Senator Snowe has 

included in her export opportunities bill, S. 1208, it allows for that 

grant to pay for a subscription to the Department of Commerce 

Gold Key Services, which now small businesses have to pay in 

many cases thousands of dollars to access Department of Commerce services in embassies around the world when they are trying 

to connect with foreign buyers, when they are trying to connect 

with export trading companies and actually the logistics of getting 

these deals done. 

Have you seen the cost of some of those Department of Commerce services as a barrier to small businesses in pursuing some 

of these deals, and as you said, the 96 percent of the world’s customers who live outside of the U.S.? 

Ms. REILLY. Yes. I first have to say that the Gold Key Service 

is an amazing service. It is really well done. If it maintains its 

funding as it says with all of our foreign offices everywhere, I think 

that it can continue to be a great thing. But I do think that it has 

been cost prohibitive for a lot of, in particular, very small companies that are new to export. So I think often it is much easier if 

there is a company that has already found a couple of countries to 

export to and it is a little bit easier and then the costs are different 

that way. But I have talked to a handful of companies, very small 

ones, that have said that they would be interested in this service, 

but they just don’t have the money up front to go down that road. 

Ms. WEST. Okay. Thank you. The core part of SBA’s current export assistance is their export finance programs, because small 

businesses, small exporters face particular challenges in financing 

the working capital that is needed to fill these export orders and 

providing sufficient liquidity and if they want to offer open account 

terms to their foreign buyers. So the SBA has a number of export 

finance programs—the Export Working Capital Program, the International Trade Loan, a pilot Export Express Loan. 

Dr. Morrison or Ms. Conrad, could you comment on those programs and what needs to be done to expand access to them? As 

John mentioned, the numbers of loans in these programs have been 

very low—very low—and we want to make sure that small businesses are getting access to the working capital they need to participate in the global marketplace. So we want to consider the improvements to those loans that need to be made and this committee 

is going to be focusing on this in the months to come. 

Ms. CONRAD. Thank you. Now I know why we invited the banker. 

[Laughter.] 

Basically, you have two programs that lenders tend to use, and 

that is the—for exports—I shouldn’t say two, three. You have got 

Ex-Im Bank, and for SBA you have got the Export Working Capital 

41 

Guarantee and the Export Express Program. We appreciate being 

able to use the EWCP as it offers us the opportunity to do lines 

of credit for small business exporters that cannot avail themselves 

of the Ex-Im Bank’s rules under the programs. 

The problems that we run into is that as contracts have grown, the SBA’s limit is $1.6 million and with a 90 percent guarantee. 

Recently, I had a client who had a $3 million deal. It could not fit 

under Ex-Im Bank and we had to stand on our head to try to figure 

out how we could do it. So we certainly would like to see the 

amount of the loan increased, or the amount of the guarantee increased so that it would fit more in with what is going on on the 

ground. 

The Export Express Program itself is a good program. It has 

been a pilot program, which means you never know when it is 

going to get funded again. It falls into place because a lot of times 

in banking, lines—you don’t look at lines that are smaller than a 

certain amount because they are too cost prohibitive to the exporter, because there is—I am sorry. You have to monitor them. 

There are certain fees that are handled on that. So you would like 

to send them to the Export Express Program. 

The problem with the Export Express Program is it, once again, stops at $250,000. So you have got a gap between where you have 

got most regional lenders that are going to do a line of credit and 

where SBA stops. So we would certainly suggest that that also not 

only be increased, but also—I was at an SBA lenders’ roundtable 

around the Ex-Im Bank conference, and the amount $500,000, 

$600,000 was thrown around because you can do that locally, monitor it, and it costs less for the small business. So we would look 

to see that. 

And then also, we would like to know that at least the program 

is going to be in place for a while. I was able to introduce the Export Express Program into BB&T as well as the Export Working 

Capital, but they love the Express Program. They love the Export 

Express Program. So that would be great. 

The third thing I probably would bring up is the use of delegated 

authority. Ex-Im Bank calls it delegated authority. SBA—every 

agency has to have its own nomenclature—they call it PLP. So we 

will speak of it as delegated authority to make it easier for everybody to understand. 

When Ex-Im Bank approached its lenders years ago with their 

own delegated authority program, they were doing about $500 million worth of loans. In three years, they did over $1 billion worth 

of loans. The reason it took three years is because you just don’t 

have banks come in and start lending. What you are doing is you 

are allowing a bank to commit your guarantee, the Federal Government guarantee, so they have to be trained. 

I know that SBA has been aggressive, has started to be very aggressive about getting out their delegated authority program. 

BB&T is one of them that is under their delegated authority program. But it would be great to be able to avail themselves—if they 

could find a way to move into and be able to avail themselves of 

the delegated authority. 

And for those of you that don’t know much about that, that just, 

as I said, simply means that normally when you are doing a loan 

42 

and you have it approved internally, then you have to send it to 

SBA in order for it to be approved. And while they turn it as quickly as they can, sometimes it takes two weeks to get all the documents back. If you are doing the delegated authority under the 

Working Capital Program, you then are able to commit the line, 

sign the loan, get the documents, and close the loan, and that is 

going to be able to help the small business exporters. 

Mr. HIGH. Thanks. All set? 

Ms. WEST. I just have one last question here for Dr. Morrison. 

Right now, less than one percent of U.S. small businesses export, 

participate in the global marketplace. We have spent a lot of time 

in hearings here on the Hill talking about how small businesses 

are going to lead us to economic recovery. That is going to involve 

making sure small businesses are participating in the global economy. With less than one percent exporting right now, what needs 

to be done from your perspective as the representative of small 

business exporters to really move the needle there and make small 

businesses bigger players in the global marketplace? And what is 

a reasonable goal we can consider and expect for small business 

participation in this? 

Mr. MORRISON. Well, to answer the latter part of the question 

first, you have countries around the world that are getting six or 

eight or ten percent of their SMEs to export and we are below one 

percent. I don’t think it is unrealistic to shoot for five percent. I 

think we could do that. But that would be more than five times as 

many as we have got right now. 

Conceptually, the problems in this country, or the problems for 

small business exporting anywhere are opportunity costs, transaction costs, fear factors, learning curves. All those things can be 

addressed through training, through helping smaller companies 

find customers, through teaching them the ropes of exporting. 

SBDCs over there have some international centers that do that. 

Through financing, both through Ex-Im and SBA, as we have 

talked about. It also helps if at the upper reaches of trade policy, 

some of these concerns are addressed on a continuing and strategic 

basis, which is one of the reasons I am happy about your initiative 

with USTR. 

I just think that you have got to decide you want to do it and 

then you have got to press out in four or five different directions 

at once. It is obviously not impossible. You have got 240,000 SME 

exporters now in this country and you have got other countries that 

are doing better. 

Another thing you can do, and you mentioned the States, is just 

look around at some of the States. I mean, most States consider it 

an important priority to encourage their companies to export and 

they have gotten very creative. There are a lot of very interesting 

things going on in the different States. Just find the stuff that is 

working and bring it here. 

Mr. HIGH. Thank you, Meredith, and thank you, Dr. Morrison. 

Just real quickly, I think we are just about out of time, but I just 

want to let everybody know that I am sure we are going to be doing 

a lot more on this issue. Senator Landrieu recently announced that 

on June 30, we are going to be holding a field hearing on trade 

issues down in New Orleans and we are very, very excited about 

43 

this field hearing. We are going to get a lot of feedback both from 

the Federal level and some local businesses who are involved in exporting, so thank you all for your feedback on that. 

Mr. CRAVINS. I want to thank all of you on behalf of Senator 

Landrieu for being here this morning, and we have tried to get you 

out before the hail begins, Sharon’s weather she brought. 

On behalf of my staff, thank you so much. I want to thank the 

staffs for working hard—very hard. As you saw today, this is what 

bipartisanship looks like, when you can’t really determine which 

staff works for whom because we have worked so hard on these 

issues together. 

Again, thank you all. Holly, I want to thank you for being here, 

and I am hoping that this roundtable was more than just discussion of a bill. It was also an opportunity for you, and I know you 

guys work hard on meeting with these respective groups, and I am 

hoping that it will lead to meetings and talks and sit-downs, particularly with my friend Joe and his group, because that is what 

this was supposed to be about, too, was just talking and getting to 

deal with folks’ concerns. 

Matt, I know you had some closing remarks. 

Mr. WALKER. Yes. I just wanted to echo what Don said about the 

bipartisan nature of the Chair and the Ranking Member as well as 

the staff and how much of a privilege it is to be able to have that 

relationship. 

And in the spirit of bipartisanship and cooperation, I similarly 

want to impress on people before they leave one extra thought, and 

that is that all too often, we hear concerns about the government 

being fragmented and duplicative and too big. We heard a lot today 

about different people, different constituencies and different specialties and the varying concerns of different businesses and it evidences why there is a special purpose for the different entrepreneurship development programs. 

But I want everyone to leave today with an additional thought, 

to continue to focus on ways that you can coordinate what you are 

doing for one another and to help one another. I was very encouraged to hear today Jody Keenan mention about the veterans computer program that you are working on and how you want to expand that beyond Virginia and into other SBDC networks. It would 

be great to share that with other entrepreneurship program networks, as well. 

And similarly—I know that this is being done, so I don’t want 

to try to infer that it is not, but there is a tremendous amount of 

power in this room and knowledge in this room and the ability for 

people to cross-refer people to one another and to work with one 

another and to share counseling advice and services and information and computer programs. It is absolutely essential that you do 

so because it is going to help everyone in the long run and it is 

going to show that there isn’t duplication and that what you are 

doing is truly leveraging one another in what you do. 

Thank you. 

Mr. CRAVINS. Thank you all. 

[Whereupon, at 12:33 p.m., the committee was adjourned.] 

44 

Æ