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FULL COMMITTEE HEARING ON 

LEGISLATION TO REAUTHORIZE AND 

MODERNIZE SBA’S ENTREPRENEURIAL 

DEVELOPMENT PROGRAMS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 6, 2009 

Small Business Committee Document Number 111-119 

Available via the GPO Website: http://www.access.gpo.gov/congress/house 


Congress.#13
HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

DENNIS MOORE, Kansas 

HEATH SHULER, North Carolina 

KATHY DAHLKEMPER, Pennsylvania 

KURT SCHRADER, Oregon 

ANN KIRKPATRICK, Arizona 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

DAN LIPINSKI, Illinois 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

PARKER GRIFFITH, Alabama 

DEBORAH HALVORSON, Illinois 

SAM GRAVES, Missouri, Ranking Member 

ROSCOE G. BARTLETT, Maryland 

W. TODD AKIN, Missouri 

STEVE KING, Iowa 

LYNN A. WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BLAINE LUETKEMEYER, Missouri 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KAREN HAAS, Minority Staff Director 

(II) 

STANDING SUBCOMMITTEES 

Subcommittee on Contracting and Technology 

GLENN NYE, Virginia, Chairman 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

KURT SCHRADER, Oregon 

DEBORAH HALVORSON, Illinois 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

PARKER GRIFFITH, Alabama 

AARON SCHOCK, Illinois, Ranking 

ROSCOE BARTLETT, Maryland 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma 

GLENN THOMPSON, Pennsylvania 

Subcommittee on Finance and Tax 

KURT SCHRADER, Oregon, Chairman 

DENNIS MOORE, Kansas 

ANN KIRKPATRICK, Arizona 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

DEBORAH HALVORSON, Illinois 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

VERN BUCHANAN, Florida, Ranking 

STEVE KING, Iowa 

TODD AKIN, Missouri 

BLAINE LUETKEMEYER, Missouri 

MIKE COFFMAN, Colorado 

Subcommittee on Investigations and Oversight 

JASON ALTMIRE, Pennsylvania, Chairman 

HEATH SHULER, North Carolina 

BRAD ELLSWORTH, Indiana 

PARKER GRIFFITH, Alabama 

MARY FALLIN, Oklahoma, Ranking 

LOUIE GOHMERT, Texas 

(III) 

Subcommittee on Regulations and Healthcare 

KATHY DAHLKEMPER, Pennsylvania, Chairwoman 

DAN LIPINSKI, Illinois 

PARKER GRIFFITH, Alabama 

MELISSA BEAN, Illinois 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

LYNN WESTMORELAND, Georgia, Ranking 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

Subcommittee on Rural Development, Entrepreneurship and Trade 

HEATH SHULER, Pennsylvania, Chairman 

MICHAEL MICHAUD, Maine 

BOBBY BRIGHT, Alabama 

KATHY DAHLKEMPER, Pennsylvania 

ANN KIRKPATRICK, Arizona 

YVETTE CLARKE, New York 

BLAINE LUETKEMEYER, Missouri, Ranking 

STEVE KING, Iowa 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

(IV) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1 

Graves, Hon. Sam .................................................................................................... 2 

WITNESSES 

Dorfman, Ms. Margot, CEO, U.S. Women’s Chamber Of Commerce .................. 3 

Hauge, Mr. Scott, First Vice Chair, National Small Business Association ........ 5 

Evans, Ms. Connie, President and CEO, The Association For Enterprise Opportunity ............................................................................................................... 7 

Brown, Mr. Justin, Legislative Associate, Veterans of Foreign Wars ................. 9 

Yancy, Mr. Ken, CEO, Score ................................................................................... 10 

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 25 

Graves, Hon. Sam .................................................................................................... 27 

Dorfman, Ms. Margot, CEO, U.S. Women’s Chamber Of Commerce .................. 29 

Hauge, Mr. Scott, First Vice Chair, National Small Business Association ........ 35 

Evans, Ms. Connie, President and CEO, The Association For Enterprise Opportunity ............................................................................................................... 41 

Brown, Mr. Justin, Legislative Associate, Veterans of Foreign Wars ................. 45 

Yancy, Mr. Ken, CEO, Score ................................................................................... 51 

(V) 

(1) 

FULL COMMITTEE HEARING ON 

LEGISLATION TO REAUTHORIZE 

AND MODERNIZE SBA’S ENTREPRENEURIAL 

DEVELOPMENT PROGRAMS 

Wednesday, May 6, 2009 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 1:04 p.m., in Room 

2360, Rayburn House Office Building, Hon. Nydia M. Vela ́zquez 

[Chair of the Committee] presiding. 

Present: Representatives Vela ́zquez, Moore, Dahlkemper, 

Schrader, Bright, Graves, King, and Luetkemeyer. 

Chairwoman VELA ́ ZQUEZ. Good afternoon. I call this hearing of 

the House Small Business Committee to order. Just last month, 

General Motors announced 8,000 new layoffs. Since then, companies like Clear Channel Broadcasting and Johnson & Johnson have 

followed suit. But while the corporate world may be scaling back, 

the entrepreneurial spirit is still alive and well. In fact, 400,000 

small firms crop up every month. With the right resources and a 

little hard work, those startups will be the key to our economic recovery. 

Starting and running a new enterprise is not a small achievement, even during times of prosperity. As any small business 

owner will tell you, the learning curve is steep. That is where today’s legislation comes in. The Job Creation Through Entrepreneurship Act of 2009 will help small businesses access the resources they need to succeed. 

With lending down and credit tightening, small firms are facing 

significant obstacles on all fronts, particularly when it comes to accessing capital. The proposal under consideration today will help 

them identify the best way to secure that funding. It will do this 

by offering training sessions and seminars on everything from repairing damaged credit to seeking out equity investment. 

While the rest of the economy is declining, the Federal marketplace is booming. Last year it grew by 9 percent. The new stimulus 

is only going to add to that increase, and small businesses stand 

to gain a great deal. In terms of infrastructure contracts alone, 

they are expected to win $29.9 billion. Still, many of these firms 

have never competed in the Federal marketplace and need to learn 

its ins and outs. That takes training, and this bill will provide it. 

If entrepreneurs are to emerge stronger from the recession, then 

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sources will help them do that and help them become more efficient. It will also rejuvenate underserved communities. This is critical, especially in the rural regions and inner cities that are suffering most. Through the use of online, satellite, and video resources, small business owners everywhere can access training on 

a variety of subjects, and, in doing so, close the gap with their corporate and international competitors. 

We are constantly hearing about the need to put people back to 

work. An important part of job creation is entrepreneurship. 

Through this legislation, we give people who might not otherwise 

pursue that line of work a chance to do so, especially those from 

nontraditional communities. 

We know that the face of American business is changing. This 

bill recognizes that transformation with provisions for women and 

Native American business owners. It also provides a unique opportunity for veteran entrepreneurship. As our servicemen and women 

return from war, it is critical that they have a chance to start their 

own businesses. But in order for ED to have its desired effect, it 

needs to be running at full capacity. SBA also should be smarter 

about how it manages these programs. The agency has suffered 

from chronic underfunding in the past, and it is critical that it 

make the most of its resources today. 

That is why this legislation includes conditions for program coordination. New requirements promote best practices and ensure 

services are not duplicated. They also contain tough new performance measurements for gauging program success. That way, we 

will know which initiatives are working, which need to be reevaluated, and which should be scrapped altogether. 

The Job Creation Through Entrepreneurship Act of 2009 is a bipartisan product. It is the work of seven different Committee members, including five from the Minority. I would like to thank Chairman Shuler and Ranking Member Luetkemeyer for his leadership 

in these efforts, and everyone else who contributed to this legislation. Strengthening ED programs will not only bolster small businesses, but will help get our economy moving again. 

I look forward to hearing from today’s witnesses, and I thank 

them in advance for their testimony. With that, I yield to Ranking 

Member Graves for his opening statement. 

[The statement of Chairwoman Vela ́zquez is included in the appendix at page 25.] 

Mr. GRAVES. Thank you, Madam Chair, and thank you for holding this hearing today examining SBA’s entrepreneurial development programs and the challenges that they face in the current 

economic climate. I would also like to thank all of our witnesses for 

being here and taking time out of your schedule to be with us 

today. 

It is widely accepted that a good business plan is the cornerstone 

of any successful business. Creating and executing a business plan 

requires extensive business knowledge and ingenuity, including the 

ability to predict potential obstacles to success that may unfold at 

any time. 

The entrepreneurial development programs of the Small Business Administration provide both new and seasoned entrepreneurs 

with solid business knowledge to help start and grow their busiVerDate Aug 31 2005 18:02 Jun 12, 2009 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\48883.TXT DARIEN
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nesses. The entrepreneurial development programs provided by the 

SBA have become a critical tool for many small businesses across 

America. Whether it is helping a small business owner export a 

product, develop a marketing scheme, or obtain financing, that entrepreneur is almost always more successful after working with one 

of SBA’s entrepreneurial development programs. 

Unfortunately, the current economic climate provides an even 

more difficult path to success than before. Small businesses are 

finding it increasingly difficult to meet their bottom line, much less 

become a thriving business. Creative methods are being employed 

by entrepreneurs throughout the country as they try to figure out 

for themselves how to survive in this new economic climate. As 

small businesses work to survive, the effectiveness of these programs has become even more important than ever. We must reassess these programs and fine-tune them to ensure that they are as 

efficient as possible. 

Today we are going to discuss six recently introduced bills that 

aim to modernize and recondition the SBA’s entrepreneurial development programs to guarantee they are well suited to serve the 

challenging needs of today’s entrepreneur. As we examine this legislation, we must make certain to eliminate duplication and 

streamline the efforts of the Federal entrepreneurial development 

programs. 

And once again, Madam Chairwoman, thank you for holding this 

hearing today, and I look forward to hearing the testimony. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Graves. 

Chairwoman VELA ́ ZQUEZ. I welcome our first witness Ms. Margot 

Dorfman. She is the CEO and founder of the U.S. Women’s Chamber of Commerce. Ms. Dorfman has championed opportunities to increase women’s business growth, career and leadership advancement. She is here to testify on behalf of the U.S. Women’s Chamber 

of Commerce, which was founded in 2001 to increase economic 

growth opportunities for women. 

SATEMENT OF MARGOT DORFMAN 

Ms. DORFMAN. Chairwoman Vela ́zquez, Ranking Member Graves, 

and members of the Committee, I am here today on behalf of the 

millions of American small businesses who are in need of assistance as they seek to grow strong businesses to provide income for 

themselves, their families, and their communities. 

Thank you for this opportunity to comment on the current legislative proposal to strengthen the SBA’s entrepreneurial development programs. I had the opportunity to speak before this Committee several weeks ago. I am pleased to see the thoughtful steps 

you are taking to extend the reach and effectiveness of these programs. The Committee has appropriately focused on access to capital and contracts, reaching to those in greatest need of assistance, 

including the likely migration of dislocated workers to small business startups, and prudently managing the amount and focus of 

funds committed to each of the SBA entrepreneurial development 

programs. 

Previously I provided a number of recommendations, including 

unifying the entrepreneurial education programs and providing 

greater coordination between these programs, establishing outreach 

4 

specialists, positioning facilities in areas with least mobility and/or 

greatest economic need, providing one clear channel for assistance, 

assuring language and cultural needs are addressed, outsourcing 

the creation of a top-tier e-learning education system, establishing 

a method to review the impact of SBA entrepreneurial programs on 

our communities, looking at the macro view of impact to assure our 

entrepreneurial development programs are the right size and effectiveness to meet our current demands, addressing the revenue disparities for minority, women, handicapped, and veteran-owned 

firms, and finding ways to expose these emerging small businesses 

to the mainstream marketplace. 

In my written testimony I have detailed comments, and today I 

will offer highlights. We continue to recommend that programs like 

the Veterans Business Center program be housed within the Small 

Business Development Centers so that the veterans can have the 

best exposure to businesses with better experience, networks, and 

access to capital. However, we understand that our veterans have 

some very unique challenges as entrepreneurs, and may require 

special counseling to achieve best results. 

Additionally, there are clear regional needs that can best be 

served through placing centers in high-density veteran areas. We 

believe that the Procurement Assistance Grant program duplicates 

the role of the Procurement Center Representatives and the Procurement Technical Assistance Centers. There should be more 

PCRs, and their roles should be better defined to remove the obligation to counsel small firms, so that the PCR may focus more internally to uncover and advocate for opportunities for small businesses. 

We commend this Committee in bringing the SBA into the 21st 

century by establishing a high-quality multilingual distance training and education program. The content should use broadband so 

that the learning may be distributed through all 50 States, small 

businesses, and the SBA program offices. 

We suggest that you consider increasing the budget for this program twofold, as the development and delivery costs may exceed 

the $2 million that you recommend. This program can efficiently 

and effectively reach a broad group of individuals in need of quality 

entrepreneurial training. 

We applaud creation of the Office of Native American Affairs 

within the SBA and the Tribal Business Information Centers, as it 

will provide a great impact on our tribal communities and provide 

a platform to extend the e-learning to these communities. We support the continued efforts of this Committee to assure the Women’s 

Business Centers become self-sustaining and serve socially and economically disadvantaged women. We continue to believe that 

women business owners would be best served through folding 

Women’s Business Centers into SBDCs, and simply establishing 

women’s outreach and support specialists. 

We support your efforts in the Expanding Entrepreneurship Act 

of 2009. The strong focus on jobs is the primary metric for measuring success. It is absolutely appropriate. Job creation must be the 

number one objective of the SBA. All resources and programs must 

lead to this end. Even the new sole proprietor can be measured as 

a new American job created and fulfilled. And if for no other reaVerDate Aug 31 2005 18:02 Jun 12, 2009 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\48883.TXT DARIEN
5 

son, the profound role the SBA can play in job creation in America 

should compel President Obama to place the SBA Administrator on 

his Cabinet. 

In conclusion, America needs entrepreneurial development programs that match our challenging economic times. Coordinating 

and aligning the SBA programs is vitally important. Limiting duplication will prevent waste to the taxpayer money. And the economic challenges we face mandate that our small business programs are working efficiently and effectively. Coordination and cooperation between programs is essential to achieve best outcomes. 

Thank you. 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Dorfman. 

[The statement of Ms. Dorfman is included in the appendix at 

page 29.] 

Chairwoman VELA ́ ZQUEZ. And now I welcome Mr. Scott Hauge. 

He is the First Vice Chair of the National Small Business Association. He has been a leading advocate for small- and medium-sized 

businesses. The National Small Business Association is the oldest 

small business advocacy organization in the United States, representing more than 150,000 small business owners across the 

country. Welcome. 

STATEMENT OF SCOTT HAUGE 

Mr. HAUGE. Chairwoman Vela ́zquez, Ranking Member Graves, 

and members of the Committee, thank you for inviting me here 

today to be able to speak on the importance of the entrepreneurial 

development programs of the U.S. Small Business Administration. 

The Committee certainly is focusing on job creation through entrepreneurship at an unfortunately opportune time. The U.S. is the 

in the midst of the worst financial crisis since the Great Depression. Historically, small businesses have led America’s resurgence 

out of periods of economic distress and uncertainty. The Economist 

recently pointed out Microsoft, Genentech, Gap, and The Limited, 

just to name a few, were all founded during recessions. 

Previous small business-led economic recoveries were based less 

on the sudden expansion of existing small businesses than they 

were on the creation of millions of new small firms. Suddenly outof-work employees, many of them laid off from big businesses, identified a niche they could fill, a product they could provide, or a 

service they could enhance, and decided to start their own firms. 

If today’s aspiring entrepreneurs are to succeed, they are going 

to need support and guidance on an array of issues, and the Job 

Creation Through Entrepreneurship Act of 2009 seeks to improve 

the counseling, technical assistance, education and mentoring, outreach, and networking opportunities offered by the Federal Government through the SBA. 

The NSBA applauds these efforts. Starting a new business has 

never been easy, but the task is even more formidable today. This 

makes entrepreneurial development programs the Job Creation 

Through Entrepreneurship Act would authorize and modernize all 

the more important. With America’s entrepreneurs, existent and 

aspiring, suffering through a crippling credit crunch, programs that 

provide information and technical assistance on the acquisition of 

capital have never been more important. Even in the best of times, 

6 

accessing capital is one of the most persistent obstacles facing 

small business owners. In fact, the small business members of 

NSBA consistently have identified access to capital as one of the 

top 10 issues impacting their firms. 

This perennial problem is worse now, given the economic times. 

According to a nationwide survey of small- and medium-sized business owners commissioned in 2008 by NSBA, 55 percent of smalland mid-sized business owners had difficulty securing credit in the 

previous 6 months. And this finding was consistent across firm 

size. 

In the past, small business owners chiefly would obtain capital 

through three avenues, which at the moment are very difficult: borrowing from themselves, borrowing from friends and family, or borrowing from the bank. Home values are down, stocks are down, 

very difficult to borrow from themselves. Friends and families are 

struggling also. Same problem. Banks are just not making loans. 

In addition to tightening their credit standards, hundreds of banks 

have dropped out of the lending programs offered by the SBA. 

There has been a very dramatic drop over the last year, the last 

couple of years, in the number of loans made through the 7(a) and 

the 504 program. 

NSBA commends inclusion in the bill of many sections focused 

on providing aspiring and existing small business owners with information on how and where to seek capital, improve their financial presentations for lenders, both traditional and nontraditional. 

NSBA particularly supports the provisions in the bill aimed at coordinating and aligning the various entrepreneurial development 

programs within the SBA. It is vital that the SBA programs aimed 

at discrete constituencies complement each other and work in unison. 

Establishing a portal through which small business owners will 

be able to access on the main Web site comprehensive information 

on all the SBA entrepreneurial development programs is extremely 

welcome. 

NSBA welcomes the legislation’s provisions pertaining to contracting. Small businesses need those Federal dollars to work on, 

but we also bring something to the table in that we bring new services, we bring entrepreneurism, and we bring competitiveness to 

the country, and the best use of their dollars. 

Access to capital is always important, but right now is very important. And we think it is clear that the Job Creation Through 

Entrepreneurship Act is going to be of great benefit to small businesses. 

Finally, I would like to touch on a provision in the bill that is 

close to my heart; specifically, the creation of a green entrepreneurs program. Through this critical provision, participating 

Small Business Development Centers will provide education classes 

and one-on-one instruction in starting a business in the fields of 

energy efficiency, green technology, and clean technology. This is 

an overdue but extremely welcome development. 

NSBA thanks the Committee for its introduction of the Jobs Creation Through Entrepreneurship Act of 2009 and its efforts to help 

small business. 

7 

I would like to make just one comment that I think shows the 

way small businesses approach things. Small Business California 

recently did a survey and asked them would they be in business 

in 3 years? Even in this very difficult time, 84 percent saw themselves in business in 3 years. I think that is truly remarkable and 

shows the optimism and doggedness, if you will, of small business. 

Thank you for the opportunity to speak. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Hauge. 

[The statement of Mr. Hauge is included in the appendix at page 

35.] 

Chairwoman VELA ́ ZQUEZ. And now I welcome Ms. Connie Evans. 

She is the President and CEO of the Association for Enterprise Opportunity. She is the founding President of the Women’s Self-Employment Project, and has a long history of leadership within the 

microenterprise development field. Founded in 1991, The Association for Enterprise Opportunity member organizations bridges the 

gap between disadvantaged individuals and the tools they need to 

start and grow successful businesses. Welcome. 

STATEMENT OF CONNIE EVANS 

Ms. EVANS. Thank you. Chairwoman Vela ́zquez, Mr. Graves, 

members of the Committee, thank you for the opportunity to testify 

here today for the SBA entrepreneurial development programs and 

the role of Women’s Business Centers in economic recovery. I am 

grateful for your strong leadership and commitment to small business and entrepreneurial development. 

AEO represents nearly 400 microenterprise development organizations around the country who have served over 2 million microentrepreneurs. Chairwoman Vela ́zquez, I have been involved in enterprise development, as you mentioned, since the mid-1980s, when 

I started one of the first microenterprise and micro loan programs 

in the country, assisting urban women in Chicago to become business owners. I am very proud to say that we hosted the original 

architects of the legislation that was used for a model for designing 

the SBA Microloan program. I have personally seen how these programs unleashed new economic activity and job creation in communities. 

As the members of the Committee are well aware, there is a constant tension within the SBA between the intent of its financial assistance programs and the subsidy of the programs. The argument 

is that microlending programs are too expensive and the return 

limited. 

However, the facts of the SBA microlending programs prove this 

argument to be false. First, the International Labor Organization 

estimates that the return on investment in microenterprise development through programs such as PRIME and the Women’s Business Centers ranges from $2.06 to $2.72 for every dollar invested. 

Second, the SBA microloan program, as compared to other SBA 

lending programs, reaches women, African American, Hispanic, 

and rural business owners in significantly greater percentages. For 

example, 48 percent of women are served by the SBA microloan 

program, as compared to 18 percent by 7(a). Third, these programs, 

WBCs and microenterprise development, serve low-income clients 

at least 67 percent of the time. 

8 

These facts demonstrate that investment in microenterprise is 

both cost-effective and market-effective, serving the communities 

and entrepreneurs most in need. We contend that these dollars are 

an investment, not a subsidy. 

Further, AEO estimates that 2.3 jobs are created annually per business served by our industry, at a cost of less than $5,000 per 

job created or protected. Notwithstanding this record, it remains 

difficult for our clients, these small business owners, to receive the 

capital and technical assistance they need to sustain or grow current employment levels. The public investment in these businesses 

through the entrepreneurial development services of the SBA, including the Women’s Business Centers, SCORE, and the SBDC offices, leads to strong business growth, job creation, and vibrant 

local communities. In our current economic crisis, we need these 

programs to fulfill their intent to provide the assistance when traditional private institutions cannot do so at an affordable price, and 

to provide it to the communities and people that it serves who are 

most in need. 

The country’s Women’s Business Centers are hubs of activity in 

urban and rural communities. The WBCs provide unique services 

to women entrepreneurs with critical business education and access to market and capital resources. These inputs lead to business 

retention, while creating and retaining thousands of jobs per year. 

In these unprecedented times, the WBCs are an important economic development tool for many communities. It is the investment 

in Women’s Business Centers and microenterprise development 

that allow nonprofit organizations to weave together an important 

base for business development and job creation. 

The Women’s Economic Self-Sufficiency Team is one example of 

a microenterprise development organization that is also a Women’s 

Business Center whose mission is to facilitate economic self-sufficiency through sustained self-employment in the State of New Mexico. They provide a comprehensive set of services, including training, technical assistance, and access to capital targeted to both 

startup and existing businesses. 

In 2009, the organization opened the WESST Enterprise Center, 

a 37,000 square foot LEED-certified small business incubator in 

downtown Albuquerque. Once fully occupied, the WEC will house 

18 to 22 growth-oriented businesses, each with the ability to create 

jobs for low- and moderate-income people. It is at this moment that 

we must increase the investment in these businesses by strengthening the vital programs that serve them, ensuring that the agencies who are implementing these services have the funds to keep 

their doors wide open. The microenterprise development industry is 

uniquely qualified to work with emerging business sectors and populations with limited access. 

Let me conclude by clearly stating the gratitude that we all hold 

in our industry toward the Committee and the tremendous leadership of the Honorable Chairwoman Vela ́zquez, who has from your 

very first days as a Member of the House stood strong and clear 

in your advocacy for women’s businesses. 

AEO stands behind the services of the Women’s Business Centers, SCORE and Small Business Development Centers. We applaud your support of H.R. 1838, along with your support of fully 

9 

funding PRIME. We thank you for acknowledging that the SBA 

microloan program and TA services, along with Enterprise Development Service Centers discussed here today are not a subsidy, but 

an investment in the American dream on Main Street and every 

street. Thank you. 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Evans. 

[The statement of Ms. Evans is included in the appendix at page 

41.] 

Chairwoman VELA ́ ZQUEZ. I welcome Mr. Justin Brown. He is the 

legislative associate for Veterans of Foreign Wars. Mr. Brown is a 

veteran of the United States Navy, having participated in Operation Southern Watch and Operation Iraqi Freedom. The VFW is 

the Nation’s oldest major veterans group, with more than 1.7 million veterans who have served our Nation overseas. Welcome. 

STATEMENT OF JUSTIN BROWN 

Mr. BROWN. Thank you, Madam Chairwoman. Madam Chairwoman, Ranking Member Graves, members of this Committee, on 

behalf of the 2.2 million members of the Veterans of Foreign Wars 

of the United States and our auxiliaries, I would like to thank this 

Committee for the opportunity to testify and for its rigor in pursuing small business issues on behalf of veterans. 

The issues under consideration today are of great importance to 

veterans, to our members, and to the entire veteran population. 

During this economic recession, the number of unemployed veterans has increased to more than 1 million as of March 2009. 

There are twice as many unemployed veterans as there were 1 year 

ago, and there are more unemployed Iraq and Afghanistan veterans than service members in Iraq and Afghanistan combined. 

Make no mistake, our service members are leaving Iraq and Afghanistan, coming home and fighting another war against unemployment, homelessness, bankruptcy, and a host of medical conditions. 

In this tough economy, many veterans are considering self-employment. Unfortunately, there are scarce resources for 

transitioning veterans interested in small business. The VFW believes the answer to veterans unemployment is multifold, and that 

increased resources for veterans interested in entrepreneurship is 

one of the answers to this national issue. Veterans, if given the opportunity, will succeed in small business because they understand 

the concept of hard work, can adapt quickly to changing times, and 

are goal-oriented. 

We believe that Title I of the Job Creation Through Entrepreneurship Act of 2009 will have a large impact on veterans, and the 

VFW is highly supportive of it. 

Currently, veterans only have access to eight Veterans Business 

Centers in the entire United States, and only five that are receiving government funding. These centers have proven successful to 

veterans interested in receiving entrepreneurial education, information, and resources to assist them in starting or maintaining a 

business. 

This act would expand these services by providing $10 million for 

Veterans Business Centers in fiscal year 2010 and 12 million for 

fiscal year 2011. These funds will be issued to centers that meet 

10 

the criteria as established by the director of SBA, and are required 

to seek matching funds for grants they receive. The grants will be 

broken into two categories, initial grants and growth funding 

grants. Priority for grant applications will given to areas where the 

population of veterans, or OEF/OIF veterans exceeds the national 

median of such veterans. 

While we are highly supportive of the intent of the legislation, 

we do have some concerns. In the future, we do not want to see 

veterans utilizing these Veterans Business Centers only to find 

they are unable to secure a loan for their business. 

The business centers are half of the equation. Access to capital 

is the other half. And we strongly urge this Committee to further 

address it and consider creating a direct loan program. For many 

veterans, credit was and is negatively affected due to their military 

service. The VFW has found this to be more common among veterans who participated in the invasion force of Iraq, and Afghanistan veterans, due to a general lack of access to communications 

and the Internet. In this, many service members were unable to 

pay bills, receive credit alerts, or learn of any other issues that 

might negatively affect their credit until the damage was already 

done. 

Another issue for veterans in accessing capital is that they lack 

equity, property, and lack the credit history necessary for many 

small business loans. Again, the VFW strongly supports Title I of 

this legislation. This is a hand-up program in the right direction 

to correct a long overlooked population in the realm of small business. 

Veterans need a substantive veterans business program that will 

provide the tools and resources necessary to create and maintain 

business. As America’s largest group representing combat veterans, 

we thank you for allowing the Veterans of Foreign Wars to present 

its opinion on these very important issues. Veteran entrepreneurship, if expanded, is a win-win for everyone, including the government and America’s taxpayers. 

Madam Chairwoman, this concludes my testimony, and I will be 

pleased to respond to any questions you or the members of this 

Committee may have. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Brown. 

[The statement of Mr. Brown is included in the appendix at page 

45.] 

Chairwoman VELA ́ ZQUEZ. Our next witness is Mr. Ken Yancey. 

He is the CEO of SCORE, counselors to America’s small businesses. In this position, Mr. Yancey coordinates all program efforts, 

prepares the Association’s development plan, and manages strategic alliances and fundraising activities for SCORE. 

The SCORE Association was formed in 1964 as a nonprofit association dedicated to entrepreneur education and the formation, 

growth, and success of small businesses nationwide. Welcome. 

STATEMENT OF KEN YANCEY 

Mr. YANCEY. Thank you, Chairwoman Vela ́zquez, Ranking Member Graves, members of this Committee. I appreciate the opportunity to testify. 

11 

As you know, SCORE offers free business mentoring and low-cost 

workshops. Since its creation by Congress 45 years ago, SCORE 

has helped more than 8.3 million people. Last year SCORE volunteers helped more than 350,000 entrepreneurs and donated more 

than 1.3 million hours of service. 

According to an SBA report to Congress, SCORE helped to create more than 19,700 businesses in 2007, at a cost of $29 per business. 

SCORE helps to create more than 25,000 new jobs each year according to an SBA entrepreneurial development impact study. 

Based upon SCORE’s $5 million appropriation, these jobs are created at a cost of $200 per job. Simply put, there is no other program that comes close to delivering the same number of new businesses and jobs at a better rate of return on the taxpayers’ investment. 

SCORE has developed a rigorous measurement program to ensure that we provide excellent client outreach data. Today SCORE 

tracks all counseling cases, counseling hours, volunteer hours, and 

quality in a customer relationship management system. 

While H.R. 1839 and H.R. 1842 call for consistent data collection 

across all SBA partners, it is already in place through the SBA’s 

EDMIS system. The EDMIS system captures all activities for each 

resource partner based upon consistent definitions. SCORE has 

adapted from a traditional face-to-face services model to a blended 

service model, leveraging new Internet-based technologies. This includes the expansion of our online presence, online workshops, and 

social media. Today we are the national leader of online technical 

assistance among SBA partners. 

H.R. 1807, which calls for distance learning, supports the direction SCORE is going with our efforts to use technologies like Skype 

to deliver mentoring and training services. We would like to request that SCORE be added to this bill. 

Additionally, the SCORE Web site at SCORE.org provides a 

wealth of knowledge by business stage and by special interest area. 

We believe that H.R. 1842, which calls for the addition of consumer 

content on the SBA Web site, duplicates that resource that is available today at the SCORE Web site. 

As part of our social media strategy, SCORE will launch its online client community this month in partnership with PartnerUp, 

a Deluxe Company. This new leading-edge community will offer 

SCORE mentoring and peer-to-peer networking opportunities within a growing community of 80,000 entrepreneurs. This supports the 

request in H.R. 1839 related to small business networking. 

SCORE supports the outreach to our country’s veterans as proposed in H.R. 1803. SCORE would be pleased to partner with the 

new Veterans Business Centers, if appropriate, to leverage our existing capabilities and to avoid duplication. 

Today SCORE faces a serious challenge: our funding. SCORE 

has been level-funded at roughly $5 million for almost 10 years. 

Simply put, SCORE needs your immediate support and investment. 

SCORE is the only resource partner not to receive an increase in 

funding in the last few years. We do deserve an increase in our appropriation. 

We appreciate the Committee’s support for $7 million in both 

2010 and 2011, as requested in H.R. 1839. Unfortunately, it is not 

12 

enough. SCORE is beginning a large-scale transformation process 

that will enable us to dramatically increase the number of businesses started during the next 5 years. To meet this goal, SCORE 

is requesting a significant increase in funding to implement new 

initiatives that will improve client service, access and quality. 

We request that the Committee consider authorizing SCORE at $10 million in 2010 and 2011. These funds would be used to develop new online mentoring services through online video and online chat, redevelop and relaunch the new SCORE Web site focused 

on enhancing interactive client services and content, create a national online registration system for counseling and workshops, create a national standardized counseling methodology, create a certification program for all SCORE volunteers, create a national call 

center that can assist entrepreneurs 24 hours a day, 7 days a week, 

and dramatically expand our volunteer recruit efforts to double the 

number of volunteers to 22,000. 

There is nothing more powerful than an army of passionate volunteers dedicated to success of small businesses of America. We 

currently have the passion, the volunteers, and the leadership to 

take this organization to the next level immediately. What SCORE 

has been missing and what continues to be missing today is one 

important ingredient: It is a higher level of funding. 

Chairwoman Vela ́zquez, SCORE has an incredible opportunity to 

dramatically boost small business creation and survivability rates, 

but we need your help now. We appreciate the support of this Committee and your personal support of SCORE. Thank you very much 

for having me today and I look forward to responding to questions. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Yancey. 

[The statement of Mr. Yancey is included in the appendix at page 

51.] 

Chairwoman VELA ́ ZQUEZ. Ms. Dorfman, I would like to address 

my first question to you. As you know, some of these programs of 

SBA have not been modernized for almost a decade. In order to 

make the changes necessary, we need to do it based on well-defined 

performance measures. 

The SBA has typically relied on quantity-based indicators, such 

as the number of clients served or counselor hours provided. A better measure might be outcome-based, such as the number of businesses started or jobs created. Do you believe that such outcomebased indicators are more appropriate than those that are quantity-based? 

Ms. DORFMAN. I would say absolutely, especially as a business 

owner. I would like to see the numbers reflect how many jobs were 

created from the small business, what was their revenue increase? 

That is the true indicator of whether a business is successful, and 

the number of small businesses started and then how they have 

grown. 

So absolutely that makes much more sense than the numbers in 

and numbers out that we have seen in the past. 

Chairwoman VELA ́ ZQUEZ. Aren’t you concerned that these type of 

outcomes will be more difficult to measure? 

Ms. DORFMAN. Well, it will be new and different, but I think that 

this will help the SBA to be very focused in terms of the programs 

that are there and the outcomes. And in the long run I think it will 

13 

be much more efficient and we will see a much better return on 

the investment. 

Chairwoman VELA ́ ZQUEZ. Mr. Brown, as you know, the SBA operates a wide variety of training initiatives targeting specific demographics. What is so unique about the veterans population that 

they require their own program? 

Mr. BROWN. Thank you for the question, Madam Chairwoman. 

I think there are a number of things. First and foremost, especially amongst younger service members coming back, they have 

very specific needs. And they are also going to have their own credit issues in consideration of small business. I think there are a 

number of fixes we can look at for that. One is either directly assessing their credit issues as a result of their service, or creating 

a loan program that makes it more likely that they will be able to 

access capital. 

But in regards to the Veterans Business Centers themselves, you 

know, we obviously do have the set-asides, and I think that veteran 

business owners, from what I have seen, tend to work very well together. And if we can help facilitate this and find a unique place 

to kind of get this started, I think it will build upon itself. And I 

think we have seen that with the Veterans Business Centers that 

already do exist. 

Chairwoman VELA ́ ZQUEZ. Okay. There are two delivery points for 

veterans to secure business counseling. First, there are SBA’s veterans ED programs, which are underfunded. And second, there is 

the Veterans Corporation that is ineffective. 

Mr. BROWN. Right. 

Chairwoman VELA ́ ZQUEZ. What aspects of the new Veterans 

Business Center will make it superior to the existing programs it 

would be replacing? 

Mr. BROWN. I think most importantly would be the quantity and 

the geographic location. I mean I think if you look at the western 

United States—in fact I have a map which I don’t know if you can 

see from there, but if you are anywhere in the United States you 

are going to have a lot of trouble accessing these centers. I think 

foremost that is the most important issue, is that we have a higher 

number of them that are more accessible. 

Chairwoman VELA ́ ZQUEZ. Okay. Thank you. 

Ms. Evans, many of the Nation’s smallest businesses are located 

in areas that lack the entrepreneurial development infrastructure 

of more affluent communities. And this is why the Women’s Business Center is so important. How much of a priority should it be 

to focus new centers in these low-income communities? 

Ms. EVANS. Madam Chair, I think it is incredibly important. As 

you probably already know, when women start businesses and use 

their income to not only create jobs in the communities, they also 

build assets. And when children are raised in asset-positive homes, 

we see outcomes that go beyond just the job creation and the community development, but also we see increased educational, health 

and other positive outcomes. 

Making sure that Women’s Business Centers are in these low-income neighborhoods and communities, where often there are female single heads of households, we think it is very important as 

14 

we look at the many impacts that are happening in the communities from these businesses being there. 

Chairwoman VELA ́ ZQUEZ. And do you think that the agency’s approval of grants should take into account the centers’ ability to 

serve the low-income population? 

Ms. EVANS. Again, definitely. We have some of the most entrenched poverty in these communities, and entrepreneurship development must play a key role in providing the necessary opportunities for asset building and wealth creation for these individuals 

in order to rebuild their communities. And so we must ensure that 

all the communities throughout the country have access to entrepreneurial development services, particularly those aimed at 

women. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. Hauge, the proposed legislation takes several steps to foster 

better coordination among the different SBA’s entrepreneurial development programs. And this includes the development of a comprehensive strategy that draws upon all the agencies’ training and 

counseling initiatives. Why do you think this is important? 

Mr. HAUGE. Well, I think there have been problems in the past 

of coordination amongst agencies. And clearly if there is a common 

goal amongst the agencies and there is a direction, it clearly would 

be more effective. And this has been a problem in the past of agencies going different directions, fighting with each other.Turf battles 

is not the most effective for small businesses. 

Chairwoman VELA ́ ZQUEZ. Ms. Dorfman? 

Ms. DORFMAN. You took the words out of my mouth. There has 

been a competitiveness, and we really need to see focus to move 

forward and to bring together the consistency across the various 

agencies. And having even one person kind of coordinating that, 

bringing people in the door and then identifying what is the best 

avenue for that individual or for that small business, where they 

need to start, would be of great assistance, I think, for a small 

business owner rather than the fragmentation and hearing from 

different people and not sharing the best way to start. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. HAUGE. Could I just ask a question? Are you talking—because I think we have got problems in both areas—are you talking 

specifically within the SBA programs or across agencies in general? 

Chairwoman VELA ́ ZQUEZ. No, SBA. 

Mr. HAUGE. Well, I agree with you. But I think there is another 

problem, agencies in general. And it creates a real problem that 

you cannot have—we have a situation right now where under the 

energy bill that was passed in 2005 and 2007, the SBA was to work 

inter-agencies to assist small business in energy conservation and 

job creation, and that just has not happened. 

Chairwoman VELA ́ ZQUEZ. There are a lot of things that have not 

happened. But this is the purpose of this Committee’s oversight 

role. 

Mr. Graves. 

Mr. GRAVES. Thank you, Madam Chair. If each of you could just 

pick one thing when it comes to the entrepreneurial development 

program, you know, and you can simplify it or expand on it, but 

just give me the one quick thing that comes to mind that would 

15 

help. And this is coming from each of your individual areas, obviously, of expertise or your focus. But what would be the one thing 

that would make all the difference in the world? Ms. Dorfman? 

Ms. DORFMAN. I think, again, the coordination between the various programs, streamlining, preventing the duplication that could 

occur, will make the programs more effective and efficient. 

Mr. HAUGE. I don’t mean to be repetitive, but I think that is— 

Mr. GRAVES. I figured both of you kind of answered it. Ms. 

Evans? 

Ms. EVANS. I would expand the PRIME, SBA PRIME program, 

doubling that program and expanding its reach to all 50 States. 

Mr. BROWN. Thank you for the question. In addition to the legislation that is laid out, we would urge increased access to capital 

through a direct loan program or something to that means, additional financial tools for access to capital. 

Mr. YANCEY. From a SCORE standpoint, support totally the need 

for additional information on outcomes as opposed to outputs. All 

of our stakeholders, the SBA, the Congress, everybody that we 

work with, is interested in that number. So the more we do there 

the better off we are going to be as an organization. And, of course, 

from a SCORE standpoint, funding would be also very helpful. 

Mr. GRAVES. But outcomes are the biggest—emphasis on outcomes? 

Mr. YANCEY. Yes, sir. Jobs created, business starts. And I would 

like to add to that survivability. You know, what we know based 

on survey is that the toughest time for small businesses are startup through the first six quarters. And we would like to begin and 

will attempt to begin to track that as best we can. 

Mr. GRAVES. Okay. Thank you, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Mr. Schrader. 

Mr. SCHRADER. Okay. Thank you, Madam Chair. 

Ms. Dorfman, given your testimony about unifying and coordinating a lot of the disparate programs within the Small Business 

Administration, what do you think about the fact that we are actually creating more programs within SBA? 

Ms. DORFMAN. Well, I have always said I think that the SBDCs 

can handle it with specialized people within those agencies to address each of the socioeconomic areas. Given the way we are—if 

you are developing these programs, I think that is why I say that 

coordination is key so that there is not the duplicity in that. And 

then the focus again on the economics of survivability, and the 

small businesses growth, and just sort of the economic outcome for 

them would be very important. 

Mr. SCHRADER. It would seem that we would want to make sure 

that we are not adding to the burden, we are actually making 

sure—or cross-training. I mean the fact that we don’t have a lot of 

extra money to throw around, at least at this point, perhaps crosstraining of individuals so they could address the women’s issues, 

veterans issues, appropriately. 

Let’s see, Mr. Yancey, excuse me, I was heartened by your response to the Chair’s and Ranking Member Graves’ questions about 

outcomes, because it has been my experience in my home State of 

Oregon that it was very difficult to get any outcome data at all. 

There were a lot of input stuff. As a matter of fact, it would be good 

16 

in the legislation, I think, just to line out exactly the outcomes that 

we are talking about. Because I don’t see that bureaucracies, with 

all due respect, are able to formulate thoughtful ones on their own 

or actually able to track them. 

And we are the legislators, we are the policymakers, not the bureaucracies. It would be nice if we could come up with things that 

we think the taxpayers are interested in funding. And I think you 

have hit upon several here, certainly the actual outcomes as they 

go forward. 

Mr. YANCEY. Thank you. 

Mr. SCHRADER. I guess a question for Mr. Hauge: How effective 

do you think SBDCs are? 

Mr. HAUGE. Well, at one time— 

Mr. SCHRADER. I can tell you how effective I think they are. 

Mr. HAUGE. At one time I was the Chair of the National Advisory Committee for the SBDC so I do have some history there. I 

think the SBDCs can play a tremendous role in assisting small 

businesses. And in a number of areas around the country, they 

have done that. 

I guess my only comment would be is I would like to see all of 

the—not all, but more of the SBDCs to be more entrepreneurial. 

I sense in some of them that because they are housed in universities, there is an academic, bureaucratic position. And I think that 

where they function best is where you have entrepreneurs that are 

running those centers and assisting small businesses. 

Mr. SCHRADER. Very good. Well, I would tend to agree. I don’t 

think many businesses know they exist, so part of the education— 

like in the bill, we talk about the Web site, making portals available, advertising the fact that they are there. And again, frankly, 

I spent a year trying to get outcomes out of the SBDC in the State 

of Oregon. And also, Madam Chair, I think these things should be 

audited. I have a lot of people that tend to say we created X number of jobs. You go back and you audit you find out those jobs never 

existed, or the SBDC had little or no effect on that, it was actually 

somebody else that came in and made the major effect. 

So I really applaud where this legislation is going in trying to 

make sure that we are actually doing the best we can with the little bit of money that we have. I might also recommend that we continue to look at getting rid of a lot of the output requirements or 

the input documentation that make it difficult for small businesses 

or SCORE or the SBDCs to actually do the job they need to do. 

They are so busy writing the reports that they, frankly, can’t do 

what they are trained to do or want to do, I think, in their hearts 

of heart. And with that I yield back my time. 

Mr. HAUGE. Could I just add to that if you don’t mind? I think 

the SBDCs have for years been pushing to increase their budgets, 

and I think that is very good. However, I think there should be a 

contingency or what else are they going to bring to the table? What 

are they going to do? 

There are tremendous opportunities with the SBDCs in the energy arena. They can serve a tremendous role in helping small 

businesses lower their energy costs, developing small businesses 

that are green businesses. And I think those kind of things should 

17 

be encouraged and additional funding should be provided where 

they are doing that. 

Mr. SCHRADER. Thank you. 

Chairwoman VELA ́ ZQUEZ. Now I would recognize the Ranking 

Member of the Subcommittee on Rural Development, Entrepreneurship and Trade, Mr. Luetkemeyer. He has worked very hard 

on this bill and he is a sponsor of the bill. 

Mr. LUETKEMEYER. Thank you, Madam Chairwoman. I appreciate those remarks and I want to thank you and Ranking Member 

Graves for your hard work on this issue of trying to make the SBA 

more responsive and improve its operations. I think it is extremely 

important, and your leadership is very much appreciated on this 

issue. And I think you have done a great job of putting this together and I want to thank you for that. 

I will keep my remarks very brief here. Just for Mr. Brown, you 

made a comment about direct loan. Can you expand on that, what 

you are looking for with your direct loan stuff? 

Mr. BROWN. Sure. Thank you for the question, Congressman. 

One of the things that we are seeing right now is that with the 

capital options that are available many, especially younger veterans in consideration of transferability, are not getting approved 

for these types of business loans, whether it be because they lack 

credit history, whether it be because they have poor credit scores— 

sometimes, as I stated in my opening statement, due to their service. 

What we are hoping to see is potentially a direct loan program 

through something like SBA in which, if they did not get approved 

for, say, the Patriot Loan Express or a loan through a third party, 

that they would be able to look into accessing capital through SBA 

and maybe have some additional measures. Maybe they have to do 

additional small business training and they have to actually sit 

down and really have someone go over their business plan. And 

there would be additional mechanisms to someone that was going 

through it, that was going to get a loan directly through SBA. 

We have had this before, I think it was 20, 25 years ago, but that 

is kind of the idea we were getting at is that it would give veterans 

that are not getting—that are unable to get access to capital an option. 

Mr. LUETKEMEYER. I appreciate your comments. 

I am willing to work with you on that issue. Having been in the 

business for over 30 years, I know a little bit about the direct lending. When the government gets involved, it doesn’t do a very good 

job, quite frankly. I think we are better off from the standpoint of 

being able to monitor and being able to do a better job of addressing the needs of an individual. 

If you leave it in private hands and have SBA guarantee it, I 

think probably if we could work on some sort of language that 

would allow it to put some parameters in place—and, boy, I would 

love to work with you on that and see if there is a way we could— 

you have indicated a few things here like more training or put 

some criteria together that if they fall through the cracks of another program that there would be a way you could qualify for a 

95 or 100 percent guarantee or something like that in an extreme 

instance where we have got some credit difficulties. If it is a vetVerDate Aug 31 2005 18:02 Jun 12, 2009 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\48883.TXT DARIEN
18 

eran, we would be able to at least take a shot with those guys, to 

give them some help. 

I appreciate your comment about the direct loan, but having been 

in the business for 30 years, the government doesn’t do a good job 

in direct loans. The experience has very poor. If you look at what 

FHA did back in the 1970s, it took it all away from them, because 

they did such a poor job, and it went back to the lending institutions. 

I think that we have seen that that has been very helpful to the 

farming community over the years to get them back out and get 

back into the guarantee portion versus direct lending. 

I think you have a great idea from the standpoint of, if we have 

some problems with the VA portion of this SBA program here, we 

need to find out a way to come up with some new criteria that will 

enable those folks to get the loans they need to be able to participate in the programs. If they are falling through the cracks, we can 

find a way. 

Chairwoman VELA ́ ZQUEZ. Would the gentleman yield? 

Mr. LUETKEMEYER. Yes, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Last year, we passed out such a bill, 

not with direct lending, but it is loans specifically for veterans returning from the war, 90 percent guaranteed, no fees. All we need 

to do is to get SBA to implement the program. 

Mr. LUETKEMEYER. Appreciate those comments, Madam Chairwoman. If you would like to include something like that in this 

bill— 

Chairwoman VELA ́ ZQUEZ. We don’t have to. It is oversight. We 

will bring SBA to inform us and to report where they are in implementing the program. 

Mr. LUETKEMEYER. So we are already there. Fantastic. 

With that, I yield back. I appreciate your time. 

Chairwoman VELA ́ ZQUEZ. Mr. Moore. 

Mr. MOORE. Thank you, and I want to thank the witnesses for 

being here to share your expertise and your perspective on these 

things. 

My first question is for anyone to answer. As you know, the draft 

legislation that has been developed to reauthorize the SBA’s ED 

programs is designed to ensure that the programs can effectively 

meet the demand for counseling, training, and support services, to 

increase the accessibility of the programs in underserved communities, to improve service delivery, and close gaps in ED services. 

In your opinion—whoever would like to answer this or several of 

you—do you believe the draft legislation would be effective in 

achieving these objectives? And are there additional suggestions or 

specific reforms that you would recommend be included in this legislation? Anybody care to answer? 

Not all at once. Any suggestions for improving the bill here that 

would provide better services to people who are trying to serve 

here? 

Ms. DORFMAN. I guess I would just kind of reiterate some of the 

things that we talked about, the accountability and transparency 

to make sure the outcomes are very focused on the money that is 

coming in through revenues, the jobs created, those sorts of things. 

19 

I think those are the important aspects. But I think you all have 

done a great job with what you have done, and I appreciate that. 

Mr. MOORE. Anybody else? 

Ms. EVANS. I would just add, Congressman, that I think the bill 

as written is a very good bill. 

As it relates to accountability issues, I would urge you to encourage the SBA to look at accountability mechanisms that are already 

in the field. Our industry, the microenterprise industry, working 

with the Aspen Institute and Ford Foundation and several others 

have spent years identifying key indicators and developing, monitoring and evaluation. So rather than kind of come out of the blue 

with something that no one has had to put systems together, we 

have actually had longitudinal data, tremendous indicators, and 

data sets that I think would be very useful in developing accountability and outcome measures. I really encourage you to do what 

you can to use the existing infrastructure for indicators, for business development organizations, for accountability. 

Mr. MOORE. Thank you, Ms. Evans. 

Mr. Brown. 

Mr. BROWN. Thank you for the question, Congressman. 

One thing that isn’t clearly written in the bill that we have taken 

note is we think it should be expanded to include not only veterans 

but members of the Guard and members of the Reserve and surviving spouses. 

Mr. MOORE. Thank you. 

Mr. Hauge. 

Mr. HAUGE. A specific area that I think needs to be beefed up 

a little bit is the whole green aspect. Small business is about 50 

percent of the economy of this country; and when you look at the 

resources that are available to small businesses, not just in business startups and job creation but also in the area of energy conservation, there are tremendous opportunities. It has been shown 

that we waste about 30 percent of the energy that we use; and with 

some very simple things, which may just include maintenance— 

We have got a program that we put together called On Bill Financing, which is a program that takes a business, has an audit, 

and the utility company then provides the money to do the retrofit. 

And we have done very successful work with United Illuminating 

back in Connecticut. Small Business California has implemented a 

program in California. 

That money is paid back at zero percent financing over a 2- to 

3-year period. It is a positive cash flow. And right now in United 

Illuminating, they are doing it as a positive cash flow to the business. 

There are almost no defaults. Not only is that helping the global 

warming situation, but it also is putting capital back into the small 

business that they can use to hire people and buy equipment. 

Mr. MOORE. Thank you. 

My final question I would like to direct to Mr. Brown of the 

VFW. 

Mr. Brown, as a veteran myself, I am particularly interested in 

the opportunities available to those who serve our Nation in uniform. As you know, the structure of entrepreneurial development 

assistance to veteran entrepreneurs needs to be improved; and I 

20 

think this legislation would expand the veteran business center 

program. 

I noticed in your testimony that you feel the legislation does not 

go far enough in ensuring that the veteran small business owners 

have access to capital, does not address a lack of entrepreneurial 

education assistance, and doesn’t address a lack of compliance with 

Federal contracting requirements. Can you go into a little more detail in how those can be addressed, if you think they could? 

Mr. BROWN. Thank you for the question. 

Much of what I would say is what I would reiterate of what I 

have said earlier in regards to access to capital, that really there 

are two ways, in my opinion, that we can look at changing that. 

That is, either creating new financial tools, whatever they may be, 

if it is a direct loan program, if it is not a direct loan program. We 

are actually looking at service members whose credit was affected 

by their service and looking for some form of relief for those service 

members. 

In regards to the set-asides themselves, I testified recently before 

Congressman Nye’s committee; and, really, we just need the agencies on that side to step it up. Some are doing excellent, DOD particularly is not, and others are egregiously failing that mandate. 

It has been 10 years since we passed Public Law 106-50, and we 

are not even halfway there. We are not even at 1.5 percent. We 

could really use any help from your side of the aisle and really try 

to get these agencies to follow the laws that you have created. 

Mr. MOORE. Thank you, Mr. Brown and the other witnesses. I 

yield back. 

Chairwoman VELA ́ ZQUEZ. Mr. King. 

Mr. KING. Thank you, Madam Chair. 

I appreciate the testimony of the witnesses, and I hope you appreciate the intensity of our schedule around this Hill. 

I have a particular interest in distance learning; and it is something that I have worked on for quite a number of years, more than 

a decade. I just frame my belief in this, that certainly education 

needs a mentor, someone with their hands on the shoulder of the 

student; and that is an important component of this. But, also, I 

have not watched technology develop in a fashion in education and 

I think it has a potential. 

When I look at distance learning in the area of military or the 

private sector, I see that, at least by my judgment, they are far 

ahead of especially our public education. We have some universities 

and some schools of higher learning that have taken some leads in 

distance learning. I have, of course, communicated with them. 

When I look at a whole combination of things with distance 

learning—for example, there is a Virtual Reality Center at Iowa 

State University. It has been there for some years. It is a 12 by 

12 by 12 cubicle, and you can go inside that and put on a set of 

3-D glasses and take a controller that gives you an XYZ coordinate 

and you can go virtually visit the Taj Mahal or the cathedral of 

Notre Dame and levitate up into the air, look at it from a bird’s 

eye view, go in the window up above the gussets and the trusses, 

et cetera. It is a fascinating tool, but it is only one of many different kinds of tools out there, all the things that are available on 

the Internet. 

21 

The virtual reality component of this, text base, the text that is 

a rolling quiz test system that would allow students to grow their 

education at the pace of their ability. It seems to me that distance 

learning has the potential not only to be a useful tool for the entrepreneurs out there so they can continue to get themselves up to 

speed at any hour of the day or night, but it also is a tool that can 

take us to the point to transform education and be able to have 

every student learn at the pace of their ability rather than the pace 

of their class. 

So I would ask if there is anything in this bill we are talking 

about or any ideas out here in the panel that would care to expand 

upon that thought that I have offered to you. A general question 

to whoever grabs the microphone. 

Mr. YANCEY. If I may, thank you for the question. 

I will tell you from a SCORE standpoint we believe technology 

is an enabler that will allow us to develop relationships between 

counselors and clients in a variety of different methods and manners, and we are beginning to do more of that with communities 

and social media and so on. 

It is not a desire that is limiting. It is the investment ability. 

These things are not easily developed. You can do them in partnership. 

A good example is the new community that we will launch in a 

couple of weeks in partnership with a company that provides private label communities. They have donated that, so we are very appreciative. But you can’t always get these technology donated. So 

what limits our ability to enhance our offer and create more relationships using technology, distance learning, whatever it might be 

is the investment. 

I have got a plan. It is a $14 million plan, and we are Implementing it little bit by little bit, because the funding just doesn’t 

exist. 

Thank you for the question. 

Mr. KING. I thank Mr. Yancey. 

And I would add to this question and offer back out, what do you 

think of the idea of providing education as well as technical assistance under a distance learning proposal? And perhaps, Ms. 

Dorfman, you were leaning ahead more than anyone else. 

Ms. DORFMAN. I am a great proponent of it. We have been using 

at the Chamber various technologies to connect with members or 

participants at our various educational seminars. And I think that, 

yes, it can be accomplished; and for what we have seen it is also 

for a business owner who is very busy and doesn’t have time to go 

to a meeting somewhere because of the time it takes to drive them, 

to get there, attend the class, drive back. Whereas if they can put 

it on mute and listen, and if there is an emergency that comes in 

through the business, they can take it and then get back to class. 

It really does well for small businesses. 

Well, there are some very expensive technologies out there. 

There are also very affordable technologies out there as well. We 

know where they are, and I would be glad to help with that information. 

Mr. KING. I thank you. I thank all the witness, and I yield back 

the balance of my time. 

22 

Ms. EVANS. May I also answer, please? I think it is a very good 

question. I would like to respond on a couple of issues. 

One, because our members serve many communities, rural and 

urban, that are low income. We still have the issue of broadband 

coverage. So even though this technology would be great in terms 

of reaching scale, we also must be aware that not all of our communities have access to broadband coverage to make that possible. 

Secondly, I want to also reiterate the issue of investment. AEO, 

my association, is moving to create a fund, raising social capital 

that we can invest in these kinds of platforms that our member organizations around the country can link into. I have not seen anything in the present bills that actually will help support our efforts 

in raising that capital. And so, looking at the issue of broadband, 

looking at how do we get the investment dollars to create platforms 

so— 

For example, one of our members in Albuquerque, New Mexico, 

has actually designed technology that is distance learning, delivering technical assistance throughout the State. I mentioned earlier Aspen Institute, one of our partners, has already evaluated the 

use of the pilot. So they have done the due diligence. We know it 

is an effective strategy for delivering TA to the entrepreneurs. So 

we are now trying to again put together a fund that can build a 

platform to expand that to more members throughout the country 

in our association to be able to use that. But broadband and investments opportunities are clearly needed to make your ideas a reality. 

Mr. KING. I thank you very much for getting that in the testimony. 

Thank you, Madam Chair. I yield back. 

Chairwoman VELA ́ ZQUEZ. Mrs. Dahlkemper. 

Mrs. DAHLKEMPER. Thank you, Madam Chair. 

Given my experience as a small business owner, I certainly understand the daunting task of starting a new business and making 

that business grow; and these entrepreneurial development programs are critical in providing these businesses assistance. 

I do have a couple questions for a few of you. 

Mr. Hague, what effect would the proposed legislation to 

strengthen entrepreneurial development programs have on our 

local economies? Do you have any sense of that in terms of do these 

small businesses use other—use of other locales for their workforce, 

for technologies, other needs? 

Mr. HAUGE. Clearly, if you strengthen the assistance to the small 

businesses and provide them the tools to be able to effectively develop their business and hire employees, that is going to have a 

positive effect on the local economy. 

The other thing that I would like to point out on that is locally 

owned businesses have a disproportionate effect on the economy, 

the local economy, as opposed to businesses that are headquartered 

outside of the locality and taking capital away from the economy 

in that specific area. There have been numerous studies that shows 

that the return to the local—as a result of the locally owned business versus the business that is headquartered outside of that particular locality is much, much greater and has a greater effect on 

that particular local economy. 

23 

Mrs. DAHLKEMPER. Ms. Dorfman, do you want to comment on 

that at all? 

No, okay. 

Mr. Brown, you showed your map; and I think there were five 

locations for your veterans business outreach centers. One of them 

is in my State of Pennsylvania, but it is still an hour drive from 

my district. And, obviously, the whole western part of the country, 

I think, from your viewing of your map, looked pretty empty. So 

what do we need to do to make sure— 

First of all, will this legislation make these centers more accessible? And, if not, how do we need to change that? And, also, what 

do you see are the needs going into the future here? 

Mr. BROWN. Thank you for the question, Congresswoman. 

I think this legislation is an excellent start with a step in the 

right direction, being that it would clearly create more of the veteran business centers and it would concentrate them where the 

veterans are by basing a priority of application for the centers that 

have a higher than the median for the respective veterans, veterans at large and then OEF and OIF veterans especially. 

Geographically, I think that is really one of the big things hurting us. I have veterans calling me that are interested in going into 

small business. They are looking for resources, and I am over here 

praying that they are near one of these eight veteran business centers. Because they have really done a good job. I think what we are 

looking to do is duplicate something that is working, which is, I 

think, a good way to start. And does that answer your question? 

Mrs. DAHLKEMPER. Yes, thank you. 

Ms. Dorfman, in a 2004 survey, members of the National Association of Women Business Owners cited as their top concerns business marketing and business growth. How can the legislation assist 

women-owned firms in expanding their market, despite the current 

economic downturn? 

Ms. DORFMAN. I think the program focused—when you get into 

the small business development centers and the other programs 

out there, that the focus of making sure that their needs in terms 

of business growth, whether it be marketing or, in our case, when 

we did our survey door to door, it was really access to Federal contracts and access to capital and access to affordable health care 

that are key. And all these components I think start that process. 

I think what we want to make sure that has happened is make 

sure there is quality to the programs, that it is consistent so when 

you walk into one SBDC or women’s business development center 

or any centers that it will be the same across the United States. 

There is not a disparate where one you might get better quality 

service in one locale than another. So I think those are some of the 

key things. 

Mrs. DAHLKEMPER. Thank you. I yield back. 

Chairwoman VELA ́ ZQUEZ. Mr. Graves? 

Are there other questions by any other members? 

Well, let me take this opportunity to thank all the witnesses for 

your contribution and your insights on the pending legislation before the committee. Hopefully, soon we will be marking it up in the 

full committee and we will have legislation ready to be sent to the 

floor. 

24 

Chairwoman VELA ́ ZQUEZ. I ask unanimous consent that members 

will have 5 days to submit a statement and supporting materials 

for the record. 

Without objection, so ordered. 

This hearing is now adjourned. 

[Whereupon, at 2:21 p.m., the committee was adjourned.] 

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