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SUBCOMMITTEE HEARING ON 

LEGISLATIVE INITIATIVES 

TO 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 

APRIL 2, 2009 

Small Business Committee Document Number 111-015 

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) 

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 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Shuler, Hon. Heath. ................................................................................................. 1 

Luetkemeyer, Hon. Blaine ...................................................................................... 2 

WITNESSES 

Klotz, Mr. Ken, Director, Illinois SBDC, Bradley University, Peoria, IL ........... 3 

Watling-Mills, Ms. Janette, Chairperson, Manasota Score, Sarasota, FL .......... 5 

Kilhoffer, Ms. Donna, Program Manager, Community Education Council ......... 7 

Rackley, Ms. Barbara, WBC Coordinator, Rural Enterprises of Oklahoma, 

Inc.,Durant, OK .................................................................................................... 10 

Gray-Proctor, Ms. Margo, Chairwoman, Board of Directors, The National 

Center for American Indian Enterprise Development, Mesa, AZ .................... 13 

Celli, Jr., Mr. Louis J., CEO, Northeast Veterans Business Resource Center 

Inc., Boston, MA, Vice Chairman, American Legion Small Business Task 

Force ...................................................................................................................... 16 

APPENDIX 

Prepared Statements: 

Shuler, Hon. Heath. ................................................................................................. 32 

Klotz, Mr. Ken, Director, Illinois SBDC, Bradley University, Peoria, IL ........... 33 

Watling-Mills, Ms. Janette, Chairperson, Manasota Score, Sarasota, FL .......... 38 

Kilhoffer, Ms. Donna, Program Manager, Community Education Council ......... 49 

Rackley, Ms. Barbara, WBC Coordinator, Rural Enterprises of Oklahoma, 

Inc.,Durant, OK .................................................................................................... 52 

Gray-Proctor, Ms. Margo, Chairwoman, Board of Directors, The National 

Center for American Indian Enterprise Development, Mesa, AZ .................... 56 

Celli, Jr., Mr. Louis J., Ceo, Northeast Veterans Business Resource Center 

Inc., Boston, MA, Vice Chairman, American Legion Small Business Task 

Force ...................................................................................................................... 68 

(V) 

(1) 

SUBCOMMITTEE ON RURAL DEVELOPMENT, 

ENTREPRENEURSHIP AND TRADE 

HEARING ON LEGISLATIVE INITIATIVES TO 

MODERNIZE SBA’S ENTREPRENEURIAL 

DEVELOPMENT PROGRAMS 

Thursday, April 2, 2009 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. 

The Committee met, pursuant to call, at 10:30 a.m., in Room 

2360 Rayburn House Office Building, Hon. Heath Shuler [chairman 

of the Subcommittee] presiding. 

Present: Representatives Shuler, Dahlkemper, Clarke, Fallin, 

Buchanan, Luetkemeyer and Thompson. 

Chairman SHULER. The Subcommittee will now come to order. 

There is a reason so much of our recovery effort has focused on 

small business. It is simple reality—jobs. Entrepreneurs generate 

between 60 and 80 percent of all new positions, and are the most 

effective driver of economic growth. 

At a time when big businesses are slashing their workforce, we 

need to invest in businesses that are creating jobs, not cutting 

them. Entrepreneurial development programs, or ED, do just that. 

From small business training networks to veterans’ initiatives, ED 

programs have helped countless entrepreneurs get off the ground. 

In fact, startups that receive this kind of assistance are twice as 

likely to succeed. 

It is just common sense. For new entrepreneurs, starting and 

running businesses is a heavy lift. This is particularly true during 

a recession. In 2008 alone, ED programs pumped $7.2 billion into 

the communities across this country. They also laid the groundwork for 73,000 new jobs. With unemployment at its highest point 

in 25 years, we could use that kind of job creation now. 

The seven bills that we are examining today will help those efforts. This morning we will discuss legislation on modernizing the 

ED programs. These initiatives will help small business owners 

survive the recession and spark a recovery. Last year the SBA enacted a handful of new ED provisions, but outside of that the program has changed very little since 1999. Since then, the economic 

landscape has changed considerably. 

We are now facing a crippling recession and historic small business declines. In the coming year, the ED initiatives are going to 

have to adapt. As a part of this process, many programs will have 

to be streamlined and revitalized. 

It is no secret that the last year has been tough on small business owners. Entrepreneurs need all of the tools that they can get 

2 

to pave a path back to prosperity. Investing in ED goes a long way 

to helping entrepreneurs, and the benefits don’t stop at small business communities. Every dollar spent on these initiatives drives another $2.87 back into the economy. 

Those small business dollars are the kind of capital that we need 

to turn things around, especially in rural and underserved communities. But regardless of where they live, entrepreneurs everywhere 

have the ability to restart our economy. With a new emphasis on 

small business resources, they can help bring our country back on 

track. 

I would like to thank all of the Committee staff for their hard 

work on this legislation, as well as all my colleagues have done to 

support this legislation. 

With that, I will yield to the Ranking Member, Mr. Luetkemeyer, 

for his opening statement. 

Mr. LUETKEMEYER. Good morning, and thank you, Mr. Chairman, for holding a hearing on strengthening the Small Business 

Administration’s portfolio of entrepreneurial and technical assistance programs. At a time when small businesses are struggling to 

stay afloat, we must work to be ever vigilant in improving the efficiency of these initiatives. 

Rather than relying so heavily on the government to spend our 

way out of this recession, we need to focus on ensuring our small 

businesses-- truly the engines of job creation --are able to adequately utilize all of the resources readily available. As a small 

businessman myself, I am pleased to introduce a bill that will assist my many fellow small business owners and employees throughout my district in Missouri, and all throughout the country. 

Two out of every three jobs created in the U.S. are created by 

a small business. And like every recession before, small business 

will lead the way to economic growth through determination and 

innovation. Yesterday I introduced a bill—the Expanding Entrepreneurship Act of 2009—that would make several changes to SBA’s 

entrepreneurial development programs. 

The bill aims to expand entrepreneurial job growth by pulling resources for duplicative government programs into a streamlined 

and effective program to help emphasize job creation and retention. 

Specifically, this bill requires the SBA to develop a job creation 

strategy for 2009/2010, including the agency’s intent toward using 

existing programs to create and retain jobs throughout the United 

States. 

The SBA Administrator would collect measures related to the 

program performance and job creation, ensuring that existing programs are being used effectively and duplicative government programs are done away with. And to ensure easy access for entrepreneurs, a database of providers of entrepreneurial development 

services would be established. To be sure, the House Small Business Committee and this Subcommittee recognize how critical 

small business is to the economic health of this country. 

The Office of Entrepreneurial Development at SBA assists entrepreneurs with practical and technical skills needed to start and 

help grow their businesses. The office carries out this mission 

through a network of educational resource partners, including 

Small Business Development Centers, Women’s Business Centers, 

3 

the Service Corps of Retired Executives, and the Small Business 

Training Network. 

Additionally, programs run by the Office of Native American Affairs and the Office of Veterans Business Development work to bolster entrepreneurship in the Native American and veterans communities. 

I am interested in hearing more about the current state of entrepreneurial development programs at the SBA in today’s economic 

climate. I look forward to examining other pieces of legislation my 

colleagues have introduced aimed at improving the entrepreneurial 

development programs at SBA. 

And with that, I yield back, Mr. Chairman. 

Chairman SHULER. Thank you, sir. 

I yield to Mr. Schock for introducing our first witness. And if our 

first witness would read their testimony, and then we will break 

for votes, and then we will come right back. So at this time I will 

yield to Mr. Schock for introduction of our next witness. 

Mr. SCHOCK. Thank you, Mr. Chairman. I am pleased to introduce to you Mr. Ken Klotz from my district in Peoria, Illinois. Mr. 

Klotz is the director of the small business development center at 

Bradley University. Ken was recognized recently as the Illinois 

State Star at the annual conference of the Association of Small 

Business Development Centers. 

This award was presented to Ken for his outstanding service as 

an SBDC director, his commitment to serving Illinois’ small businesses, and his tremendous support of the Illinois entrepreneurship 

network and the Illinois SBDC. He has been with Bradley University’s SBDC for over 10 years. 

Ken has assisted more than 200 individuals and business owners 

in the preparation of their business plans, resulting in the start up 

of 143 new businesses in the Peoria area. 

Thank you. 

STATEMENT OF KEN KLOTZ 

Mr. KLOTZ. Thank you, Mr. Chairman, and all the members of 

the panel. And a special thanks to my Congressman, Aaron Schock, 

for inviting me today. 

SBDC clients come in all flavors, from the individual who wishes 

to start a business to the company that has been in business for 

generations. Our services run from the very basic to the very complex, from guiding people through the startup steps necessary to 

launch a business correctly to helping a company owner diagnose 

cashflow difficulties and bottlenecks. All of our clients need advice 

on business plans, marketing, HR issues, and a whole host of other 

issues. 

With the situation we are faced with today, I know government 

resources are stretched painfully thin. So it becomes incumbent 

upon government to fund those programs that have proven to provide a reliable, measurable, and even a predictable return on investment of taxpayer dollars. The SBDC program historically has 

met that standard above and beyond, every year producing a positive return on investment for the taxpayer dollar. 

And that is just not my opinion; it is backed up by data. Every 

year our nationwide association, the Association of Small Business 

4 

Development Centers, commissions a study of ROI of the SBDC 

program. This past year Dr. James Chrisman, a professor at Mississippi State University, provided that research for us and found 

that for every one dollar of taxpayer investment in the program, 

there is a return of $2.87. And that has been reliably proven year 

after year after year. 

For calendar year 2008, the type of economic impact produced by 

the SBDC program has been dramatic. Just a few examples for 

you—80,000 new jobs created by clients assisted by SBDCs, more 

than 95,000 existing jobs saved in an environment where we are 

losing jobs daily, and more than 13,000 new businesses launched 

nationwide. 

Since January of 2009, my center, as well as other SBDCs 

around the country, have experienced a huge increase in demand 

for their services. I have attributed that increase, at least at my 

center, to job losses, some early retirement buyouts, and then, most 

distressingly, an increase in the number of small businesses that 

are facing financial difficulties. 

The SBDC program and its subcenters really are already 

stretched very thin in terms of their resources. So handling this influx of additional clients is very difficult to deal with without additional funding resources. So I wholeheartedly support this legislation. 

Job losses, it is no surprise, is at an epidemic proportion today. 

And I know we see a lot of national media about large companies 

losing workers and proposed loss of jobs at the Big 3 automakers, 

but for me and where I live every day, it is small businesses that 

have experienced the job loss. 

The payroll processing giant ADP, recently just completed a 

study for the January to February 2009 time period, and they 

found that 697,000 jobs were lost in the country, but a staggering 

82.6 percent of those were among companies with fewer than 500 

workers. We need to stop that now, and SBDCs are uniquely situated to provide the type of assistance that will allow business owners to squeeze more dollars out of their balance sheet to stem the 

tide of job losses. 

For me, the real impact of our services is in the client success 

stories, and I wanted to take a brief moment to share one with you 

today, my client Valerie Lilley and her company, Sofi’s Stitches. In 

2001, Valerie started this business from her kitchen table with a 

sewing machine borrowed from her grandmother, and what she 

would do is sew authentic replicas of Medieval era clothing. When 

she had enough of it, she would load it in her van, drive to a Renaissance Fair in some state, sit in the parking lot and sell her garments, and then drive back home. 

But she really wanted to grow her business; that was her dream. 

So after dozens of meetings with her, on everything from business 

plans to growth strategies to financial management, by 2007 she 

had reached—she had grown her company to employ 12 people, 

and she crossed the $1 million mark in sales annually. She had a 

vibrant catalog and web sales arm to her business, and she owned 

Renaissance Fair booths in 14 states. No more parking lots for her. 

Now, if the story stopped there, it would be a great story. But 

it doesn’t stop there. Early in 2008, a custom men’s suit manufacVerDate Aug 31 2005 10:01 Jun 15, 2009 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\47800.TXT DARIEN
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turer closed, putting 80 people out of work without any notice 

whatsoever. I recall a conversation Valerie and I had where she 

was looking for a complementary arm or product, and so I suggested that she purchase the assets, which she did. She started 

back—started up the business again, hiring back 20 of the displaced workers, and now is on the cusp of hiring 80 more within 

the next six months when she lands a U.S. Army contract. 

That is the face of small business development centers, and I certainly urge the initiatives put forth by this Committee today. 

Thank you very much. 

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

33.] 

Chairman SHULER. Thank you, sir. Thank you for your testimony. 

At this time, I would like to yield to my good friend Mr. Buchanan for introduction of the next witness. We will go ahead and 

do that and the witness will give her testimony. 

Mr. BUCHANAN. Thank you, Mr. Chairman. It is my pleasure to 

introduce one of my constituents from my area. Janette Mills is 

chairwoman of the Manasota SCORE chapter in our Congressional 

District 13 in Florida. And SCORE has, as many people know or 

might not know, 389 chapters in the country, 10,500 volunteers, 

and her SCORE chapter that she oversees has about 50 volunteer 

consultants that assist up-and-coming entrepreneurs by mentoring 

them on a wide range of business issues. 

I know as chairman of the Florida Chamber four years ago we 

represented 137,000 businesses. Many of them were—95 percent of 

them were small businesses of 50 or 30 employees or less. And one 

of the things that was interesting in talking to Ms. Mills was the 

idea of how they help in business planning, and I know business 

planning is one of the big keys to success. 

She also is an entrepreneur in her own right. She has a commercial window cleaning business that serves Sarasota, Manatee Counties, in my district. I am thrilled to have her today and looking forward to her testimony. 

Thank you. 

STATEMENT OF JANETTE WATLING-MILLS 

Ms. WATLING- MILLS. Chairman Shuler, Ranking Member 

Luetkemeyer, and Committee members, my name is Janette 

Watling-Mills. I am chapter chair of Manasota SCORE in Sarasota, 

Florida. Thank you for this opportunity to testify. 

I am here to represent SCORE and the 11,200 SCORE volunteer 

counselors who donate their time and expertise to serve America’s 

entrepreneurs. As you know, SCORE volunteers are working or retired business owners, corporate executives, teachers, civil servants, and military leaders who share their wisdom and lessons 

learned during their careers. 

I am a born entrepreneur, having started my first business making and selling seashell earrings at age 8. My background and education are in interior design. In addition to my role as chapter 

chair, I own a commercial window cleaning company serving Sarasota and Manatee Counties in Florida. I have also owned several 

other successful small businesses. 

6 

Like most of my SCORE colleagues, I am active in other volunteer organizations and in my community. I joined SCORE in 2007 

and became chapter chair in 2008. SCORE offers free business 

counseling and low-cost workshops. Since its founding in 1964, 

SCORE has helped more than eight million businesses. Our volunteers donated more than 1.3 million hours of service last year. 

By helping small businesses both start up and make it through 

the recession, SCORE helps in creating jobs and saving jobs. Today 

SCORE has 370 offices across the country, plus 800 branches. Last 

year, SCORE volunteers helped more than 357,000 entrepreneurs. 

My SCORE volunteer team in Sarasota includes 53 dedicated 

men and women who provide SCORE services locally. In the last 

five years, more than 2,500 clients received personalized service for 

starting their businesses. More than 1,000 clients who owned existing businesses sought our help, and more than 1,100 individuals 

attended one of our workshops. In all, Manasota’s SCORE volunteers donated more than 22,000 hours of service. 

Nationally, SCORE offers free information resources online. Last 

year more than 2.8 million people visited www.score.org. SCORE 

offers resources specifically for women, minorities, young entrepreneurs, babyboomers, and veterans. More than half of our clients 

and 25 percent of our volunteers are women and minorities. 

SCORE fulfills a vital role for America’s small businesses by providing much- needed technical assistance. 

Many small businesses continue to struggle with layoffs, access 

to capital, cashflow, and management issues. SCORE has a proven 

track record of both creating and saving jobs by improving small 

business survival rates and accelerating small business formation. 

Research shows that small businesses are five times more likely 

to start if they get assistance from a government-supported program like SCORE. SCORE mentors themselves have faced economic opportunities and difficult times. They know how important 

it is to make a payroll, repay a line of credit, anticipate a down 

economy, and, most importantly, what to do next. 

All of us at SCORE want to help small businesses hire more people and keep current employees working and their jobs safe. To 

achieve these goals, SCORE continues to rely on the federal grant 

for operational funds to support our infrastructure needs, public 

outreach, and volunteer recruiting and training. 

In a difficult budget year, we appreciate the Committee’s support 

of SCORE and the budget authorization of $7 million in 2010 and 

2011. Given the economic challenges our country currently faces, 

an additional investment in SCORE would allow us to serve more 

businesses and individuals that are struggling or have lost jobs due 

to layoffs or business failure. 

We request that the Committee consider authorizing SCORE at 

$10 million in 2010 and 2011. Additional funding will allow us to 

implement our modernization plan, including updating our website, 

improving service quality through training and certification of volunteers, and developing a new service model to guide our clients 

through the many resources offered by SCORE. 

Chairman Shuler, Ranking Member Luetkemeyer, and Committee members, every entrepreneur SCORE helps is a company, 

7 

a job, and a contributor to the economy. Every small business matters, and SCORE mentors make a difference. 

We appreciate the support of this Committee and your personal 

support of SCORE. I would be pleased to answer any questions you 

may have, and thank you again for this opportunity to testify. 

[The statement of Ms. Watling-Mills is included in the appendix 

at page 38.] 

Chairman SHULER. Thank you so much. 

At this time, we will be in recess until after votes. 

[Recess.] 

Chairman SHULER. I would like to call this hearing back to 

order. 

I would like to thank both the members and our witnesses for 

their patience during our vote. 

At this point in time, I would like to yield to Mr. Thompson for 

the introduction of our next witness. Our next witness will have 

five minutes. 

Mr. THOMPSON. Well, Mr. Chairman, Ranking Member, thank 

you for holding this hearing today to focus on entrepreneurial development programs that will strengthen the Small Business Administration’s capacity to continue to spur economic growth in 

hard-to-reach and underserved areas. 

For many entrepreneurs in my district, in order to access resources provided by the SBA and the small business development 

centers, they have to drive long distances through often harsh 

Pennsylvania winters. In my rural district, we have learned to use 

our limited resources wisely. A person who knows how to use those 

limited resources is Ms. Donna Kilhoffer, who I am happy to have 

here today. 

Donna is a lifelong resident of Ridgway, Pennsylvania, and since 

1990 Donna has been the program manager for the Community 

Education Council of Elk and Cameron Counties, which provides 

affordable academic and professional development by partnering 

with institutions of higher learning, such as the University of Pittsburgh, Clarion University, Lock Haven University, and, my alma 

mater, Penn State University, along with the countless additional 

partnerships with regional businesses and industry. 

Donna has worked in the past with the North Central Regional 

Planning and Development Commission and is a member of the 

Elk County Women’s Association, and I welcome Donna today to 

speak on behalf of the Committee’s proposals, including my bill, 

H.R. 1807, a bill to provide distance learning to potential and existing entrepreneurs that was introduced on Tuesday of this week. 

And with that, I look forward to Donna’s testimony to address 

the needs and the goals of cooperatives such as the Community 

Education Council and how the SBA can create further access for 

our rural neighbors. 

Donna, welcome. 

STATEMENT OF DONNA KILHOFFER 

Ms. KILHOFFER. Thank you, Congressman Thompson. 

Chairman Shuler, Ranking Member Luetkemeyer, it is my pleasure to be here. As defined by the Pennsylvania Department of Education, the community education councils are nonprofit organizaVerDate Aug 31 2005 10:01 Jun 15, 2009 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\47800.TXT DARIEN
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tions that will bring higher education opportunities to rural and 

educationally underserved communities. 

The community education councils serve as a vehicle for employment opportunities which meet the community’s current and future 

economic development needs. The Community Education Council of 

Elk and Cameron Counties was formed in 1992 to fill the educational void in those two counties. 

As the economic situation in our area has changed and we have 

grown, we have taken on many different situations and projects 

that could be described as support services or auxiliary educational 

services. The facilitation of financial and entrepreneurial education 

in our area is one such service. It is our role as a post-secondary 

facilitator to find the most appropriate and cost effective way to 

bring training and education to Elk and Cameron Counties. 

The CEC is available to partner with and facilitate new programs, classes, training opportunities, that are pertinent to the economic growth and a prepared workforce for our region. We are 

flexible, and we look at any means possible for the presentation of 

those programs. Distance technology has been a platform for providing education, training, seminars and workshops on a variety of 

levels and a variety of topics. Not only credit courses, but continuing education units for various fields such as financial and 

legal entities and child care developers are all means of obtaining 

information through our facility. 

Our local high schools use distance technology for dual enrollment and advanced placement courses. Our local hospital uses distance technology in the area of telemedicine and rural health and 

home care. Our county itself and Cameron County are situated in 

north central Pennsylvania; north of Interstate 80, 75 miles south 

of the New York State border. We are in the heart of the Allegheny 

National Forest at the center of the Pennsylvania Wilds Initiative, 

just south of the Route 6 corridor and the hub of the Lumber Heritage Initiative. 

We have just under 50,000 residents. We have approximately 12 

percent unemployment rate in Elk County and 15 percent unemployment rate in Cameron County. We are looking, in our future, 

to use the tourist trade and the natural resources of the Allegheny 

National Forest, the Clarion River, and the assets of the Pennsylvania wilds in our ability to rethink, retool, and rebuild our economic base. 

With the growth of tourism as an economic base, we will have 

many small businesses that will be centered on that trade. We will 

need to grow new entrepreneurs and new entrepreneurial ventures. 

What I would like to do is introduce you, through my testimony, 

to a couple of the residents of our communities. 

Doug is the founder and owner of a small powdered metal business that employs under 20 individuals. He received his MBA from 

Penn State University by attending classes through interactive television at the CEC. Now Doug needs to be aware of the new legislative initiatives and the new OSHA requirements regarding taxes, 

the new insurance regulations, all kinds of things. An association 

with the Small Business Administration and the CEC that provides 

information such as this through distance technology would benefit 

him greatly. 

9 

Nate, an Elk County native, graduate of the local high school, is 

a young man in his early twenties with a dream of running a canoe 

livery along the Clarion River. Nate has been canoeing the river 

since he was a toddler. He has knowledge of the local area. He has 

the desire to put in the long hours and the hard work that running 

a small business would require. 

What Nate does not have is the knowledge needed to get started. 

He needs to know how to write a business plan. He needs marketing data. He needs marketing opportunities. He needs access to 

information and experts relating to the legal, tax, and financial 

issues he will encounter. 

One other young man in our community, Kurt, is a family man 

who, in the mid-’90s when the local brake producing company shut 

down, was forced to find a new means of supporting his wife and 

young child. Kurt turned to his love for fishing, something that fits 

very well into our tourist-type, recreational area. 

Kurt started a fishing guide business. Now Kurt uses the small 

business development center as a resource for anything that is happening that could relate to his business. 

The most telling would be Angela. Angela sent me this e-mail 

last week. ‘‘The purpose of this e-mail is to obtain information regarding upcoming courses that will inform us and other small business owners on a small business tax. Second, a course for small 

business financing and insurance information would help.’’ 

‘‘So what I am saying is that I am looking for any school in the 

surrounding area that is offering courses pertaining to this subject. 

We are willing to travel to Bradford, DuBois, Ridgway, Clearfield, 

Clarion, if needed, but of course we would prefer to keep it local.’’ 

I am still looking for a course for Angela. I am sure the Small 

Business Administration has something that could help. 

The entrepreneurial spirit is alive and well in our area. The resources of the Small Business Administration, married with distance education technology, appears to be one of the most logical, 

timely, and cost- effective ways to bridge the gap that would allow 

the CEC to have answers for Angela and the questions she has 

posed, as well as allow Nate to fulfill his dream and open his canoe 

livery. 

It would appear to me that the legislative initiatives presented, 

in particular H.R. 1807 regarding entrepreneurial development, 

would be a win-win situation for all involved. 

Thank you. 

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

page 49.] 

Chairman SHULER. Thank you. 

At this time, I would like to yield to the gentlewoman from Oklahoma to both give her introduction to our next witness, and also 

to introduce her bill. 

Ms. FALLIN. Thank you, Mr. Chairman. I appreciate that, and I 

want to thank all of our panelists for being here today to enlighten 

us on your areas of expertise. We appreciate your time. 

And I want to thank you, Mr. Chairman, for having this, and our 

Ranking Member for having this hearing today. I would like to 

elaborate for a few moments on H.R. 1838, the SBA Women’s BusiVerDate Aug 31 2005 10:01 Jun 15, 2009 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\47800.TXT DARIEN
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ness Centers Improvement Act, which is going to be discussed by 

Dr. Rackley’s testimony in just a few moments. 

The women’s business centers are an important part of our grant 

programs that are funded by the Small Business Administration, 

and today women’s business centers all across the country are providing women entrepreneurs with much- needed technical assistance in starting and operating their small businesses. 

In the mid-1990s, the federal government began awarding grants 

to women business centers that were operating as nonprofit organizations in conjunction with institutions of higher learning. Originally, these grants were intended to be awarded to small business 

centers in their first five years, with the understanding that after 

the five-year period had ended the center would be financially selfsustaining. 

Although many of the women’s business centers did meet this 

goal, some actually have not, and for a variety of reasons. And, as 

a result, a greater percentage of the funding of this program has 

actually been consumed by operating costs, potentially at viable 

centers rather than the intended purpose of establishing the new 

business centers. 

The result is a drag on the system, and viable business centers 

that are not truly serving an unmet need in their communities. 

And this jeopardizes the effectiveness and the viability of the entire 

program. 

So the SBA Women’s Business Programs Act of 2009 restores the 

original priorities held by the Federal Government when this program was created, and it will offer a three-tiered system of funding 

and lower caps on spending for older business centers. And with 

that, we can ensure a balanced percentage of the funding is used 

to support both the new and the existing business centers. 

And so, Mr. Chairman, we have prepared that bill and have filed 

it, and we are looking forward to having the testimony on it today. 

And I have a great pleasure of introducing Dr. Barbara Rackley, 

who is here from my home State. And we are glad to have you 

here, and Margo is here, too, from Oklahoma. Good to see you, too. 

Glad to have you here. 

Dr. Rackley serves as the coordinator of the REI’s Women’s Business Center in Durant, Oklahoma. After spending 21 years as an 

educator, Dr. Rackley has led Oklahoma’s REI women’s business 

centers and has helped over 10,000 women entrepreneurs through 

training and professional development. 

Dr. Rackley holds a degree in home economics from Oklahoma 

State University, which is my alma mater, and Southeastern Oklahoma State University, and a Ph.D. from Oklahoma State University also. She is currently very active in local organizations and advisory boards for the women’s center at the Medical Center at 

Southeastern Oklahoma and the small business management program at Kiamichi Technology Center. 

She was actually named the SBA Woman of the Year and the 

Business Champion of the Year in 2004. So, Dr. Rackley, we are 

very proud to have you here today representing our state, and we 

welcome your testimony. 

11 

STATEMENT OF BARBARA RACKLEY 

Ms. RACKLEY. Thank you, Congresswoman Fallin. 

Mr. Chairman, distinguished members of the Rural Development, Entrepreneurship and Trade Subcommittee. I am Dr. Barbara Rackley, coordinator of the Women’s Business Center of Rural 

Enterprises of Oklahoma. I appreciate your invitation to appear before you to discuss H.R. 1838, the Small Business Administration’s 

Women’s Business Programs Act of 2009, sponsored by Congresswoman Mary Fallin of Oklahoma. 

On behalf of REI, I am pleased to offer positive insight on important legislation to reauthorize the women’s entrepreneurial development programs of the SBA. 

REI is a statewide nonprofit economic development organization 

that has assisted Oklahoma businesses and communities for more 

than 25 years. We partner with state and local governments and 

local communities to create jobs and promote economic growth 

across Oklahoma. One of our most successful initiatives is the 

women’s business center, which provides training and professional 

development services for women entrepreneurs. 

The services of our women’s business center are available from 

two locations, Durant and Oklahoma City. The mission of our center is to assist Oklahoma’s enterprising women who want to start 

a business or expand an existing one. To date, we have assisted 

over 10,000 women to help them reach business ownership goals. 

It is safe to say that we would not be in a position to provide these 

essential services without the support and partnership of SBA’s Office of Women Business Ownership. 

Our center was first funded in 2001 to serve the southeastern 

quadrant of Oklahoma. At that time, two other centers in Oklahoma City were active but failed to complete their initial five-year 

contract. This illustrates the importance of establishing the centers 

within an organization such as REI. Our Board of Directors views 

the WBC as an integral part of our organization, and state funding 

is secured for our matching funds. 

At the end of the first five years, REI applied for another contract to extend services statewide so that entrepreneurs across 

Oklahoma would have access to all resources offered by our WBC. 

REI was successful in securing such an additional contract, and ultimately opened its second center in Oklahoma City. 

I would like to share some real-life stories with you. We always 

talk numbers, but for a few minutes please indulge me to talk 

about some of our wonderful women we have in Oklahoma, and 

how we have been able to assist them in their businesses. 

We call one of our clients the ‘‘fudge lady’’ because she makes the 

best fudge ever tested. Her fudge must be purchased online, because she is located in Battiest, Oklahoma, in the middle of the 

Ouachita mountain range. It is almost on the Oklahoma-Arkansas 

border, and you must know exactly how to get there to be able to 

find her. 

When she first contacted us, she was already making fudge, but 

she did not have a commercial kitchen. We were able to help direct 

her to the proper resources to help her correctly establish a food 

business. 

12 

Her husband built a commercial kitchen next to their house, and 

she attended our e-commerce class to learn more about doing business online. Now her business is established, she operates by all 

of the standard health codes, and she ships her fudge to anyone 

who shops online. 

Another client started her company at her kitchen table as an 

independent software sales rep. She partnered her company with 

other major publishers to provide research- based software to 

schools in southeastern Oklahoma. At the time the women’s business center was opening, she was moving into one of our business 

incubators. She and her staff always take advantage of programs 

offered by the WBC. With an expanded staff for research and development, her first software program took shape in 2006. Now, 

three years later, over 10,000 students in four states use this program every day. 

When she started, she had one employee. Now she has 17 sales 

reps working in five states. Tonight, at the Durant Area Chamber 

of Commerce banquet, this incredible lady’s company will be recognized as the Small Business of the Year. 

Training workshops and networking opportunities are held in locations convenient to the women entrepreneurs, saving them both 

time and money. Some of our business owners are beginning to feel 

the impact of the economic downturn. Although they need training, 

they will not have the extra money to pay for training workshops 

away from home. 

That puts even more value on the services of our women’s business center. The majority of our training workshops are absolutely 

free, with an occasional minimal charge. These include small business basics, marketing, financing, business plan development, 

doing business with the government, and e-commerce. 

One of the concerns being voiced by business owners and by lenders was the lack of accurate record keeping. We listened, took action and started teaching Quickbooks classes. This training is provided for about one-third the cost of other Quickbook training classes. 

The ladies we talked about, and everyone who attends our training workshops and networking events, are the reasons we need 

continued funding for women’s business centers. Many are starting 

businesses with limited funds or sizeable loans. They don’t have 

the extra resources to pay for consultants to assist in developing 

a business plan, developing a marketing strategy, or getting information for building a website. 

There is not a greater return on investment than seeing an entrepreneur start a business, develop it, expand it, create jobs, and 

ultimately celebrate success. When they succeed, we all succeed. 

For the past eight years, I have been privileged to have a job 

that can be both fun and challenging, but the greatest reward is 

meeting Oklahoma’s enterprising women. 

Thank you for the opportunity to speak on behalf of women’s 

business centers. 

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

page 52.] 

13 

Chairman SHULER. Thank you, Dr. Rackley. It sounds like we 

need to get the lady who makes the fudge to—we probably need to 

sample some of that. 

[Laughter.] 

Ms. Fallin, I know that is from your district. That is— 

Ms. RACKLEY. I can give you her— 

Chairman SHULER. We can get the website address. 

Ms. RACKLEY. I can give you the website. 

[Laughter.] 

Chairman SHULER. Very good. 

Ms. RACKLEY. And she would love to ship it to D.C. 

Chairman SHULER. Absolutely. 

I would like to yield back to Ms. Fallin to introduce our next witness. 

Ms. FALLIN. Thank you, Mr. Chairman, and I know how small 

of a town Battiest is. I can’t remember exactly, but it is a couple 

hundred probably— 

Ms. RACKLEY. Not many. 

Ms. FALLIN. —people. So that is—it is a remote, rural area, so 

we are very proud of that lady. 

Well, I am very pleased today to have two Oklahomans that are 

on our panel, and the next lady—I actually know both of these ladies, but I have worked with Margo on past boards and commissions when I was in the State as Lieutenant Governor. So thanks 

for coming up here today. 

Ms. Gray-Proctor is the chairwoman of the National Center for 

American Indian Enterprise Development. The center is the first 

national organization that is solely dedicated to developing American Indian economic self- sufficiency through business ownership. 

Ms. Gray-Proctor is also the owner of the Horizon Engineering 

Service Company and has received many entrepreneurial awards in 

her own right, including an award for her operation of the State 

Business of the Year from the American Indian Chamber of Commerce in Oklahoma. 

So we are glad to have you here today, and we welcome your expertise. 

STATEMENT OF MARGO GRAY- PROCTOR 

Ms. GRAY-PROCTOR. Thank you. Chairman Shuler and Ranking 

Member Luetkemeyer, I am Margo Gray-Proctor of Tulsa, Oklahoma. I am a tribal member of the Osage Nation, President of the 

Horizon Companies and a third-generation entrepreneur. 

My small business provides engineering and other services to 

federal, state, tribal, and local governments, and private sector customers. I was recently elected Chairman of the Board of Directors 

for the National Center for American Indian Enterprise Development. This year we celebrated our 40th anniversary of servicing Indian country. 

The National Center is pleased to testify on the new Native 

American Business Development Enhancement Act of 2009, H.R. 

1834. Here are our thoughts on this new proposal. First, we are delighted that H.R. 1834 would authorize the SBA’s Office of Native 

American Affairs with $2 million annually, and install an Associate 

14 

Administrator so that this office can continue to do outreach efforts 

and oversee a new grant program proposed. 

We recommend that this office also coordinate Native American 

participation in SBA’s 8(a) program, generally, and specifically the 

SBA’s ongoing 8(a) reform agenda to improve the accountability, 

transparency, efficiencies, and success of the 8(a) program as it applies to Alaska Native and tribal enterprises, in their joint venture 

and other partnering arrangements. 

The new Associate Administrator should also work with other 

SBA divisions to improve the access of tribes, Alaska Native corporations, and other Native entrepreneurs to procurement assistance, small business loans, innovative research support, and other 

SBA programs. 

Second, the National Center and the other national Native organizations support substantial funding increases for existing programs that have a proven track record of effectively targeting business management, financial assistance, and procurement technical 

assistance to tribes, Alaska Native corporations, and enterprises 

owned by them and Native entrepreneurs. 

We support Section 2 of H.R. 1834 and applaud the sponsor’s recent decision to increase the authorization to $15 million for 

FY2010, and $17 million for FY2011, for a new program of grants 

to entities designated for funding. 

We like the flexibility in designating entities for grant support as 

long as existing NABECs, AIPTACs, and Native CDFIs qualify for 

designation. If grant funding is made available before SBA finalizes 

new regulations to designate future grant recipients, we recommend that the Associate Administrator distribute those grant 

funds pro rated to existing Native business and procurement assistance centers. 

Section 3 of H.R. 1834 would authorize $7 million in each of the 

fiscal years, 2010 and 2011, for additional grants for which only existing SBDCs would be eligible if they operate in states with a Native American population of at least one percent. So SBDCs in 15 

states would qualify. 

Ultimately, we would like to see more partnering between the 

SBDCs, the NABECS, and AIPTACs, to cross-fertilize their respective capabilities and training. Therefore, we think it would make 

sense to require or encourage an eligible SBDC to partner with the 

NABEC or AIPTAC, in applying for a grant under Section 3. 

The National Center speaks from experience. We are the longestserving Native business development assistance provider in the 

United States. The National Center has evolved into a national organization with nonprofit business and procurement technical assistance centers nationwide that support our mission—to develop 

the American Indian private sector as a means to help our native 

communities become self-sufficient. 

Our Board of Directors consists of tribal business and political 

leaders who have always played a pivotal role in spurring small 

business growth and breaking down barriers impeding Native companies’ success. The National Center operates three NABECs, and 

several offices function as American Indian Procurement Technical 

Assistance Centers. 

15 

All our offices are staffed primarily by Native American business 

and procurement consultants with experience and training to deal 

with business challenges unique to Indian country, as noted in my 

written statement. 

We have a great track record of having assisted 80 percent of the 

tribes in the lower 48 states and more than 25,000 native enterprises and trained over 10,000 tribal members. Over the last four 

years alone, the National Center has helped its clients capture $2.5 

billion in contract awards and financing, translating to over 50,000 

jobs. 

The National Center was the first Indian business enterprise 

funded by the Minority Business Development Agency after it was 

created in 1971. The MBDA now funds 30 minority business centers nationwide and has supported eight NABECs until last year. 

Now there are only six NABECs, and we operate three of them 

in Arizona, California, and Washington State. There used to be 

NABECs in Minnesota and North Carolina. 

Mr. Chairman, the first North Carolina NABEC was operated by 

the Eastern Band of Cherokees, but the funding was very low and 

they did not seek renewal when MBDA re-advertised it. The National Center bid to operate the NABEC, and we won, but we soon 

realized why the Eastern Band lost interest. 

You see, under the Bush Administration, MBDA instituted a 

strategic growth initiative and directed its centers to help larger 

companies that were capable of winning larger contracts and business financing, presumably so that there would be more bang for 

the federal buck invested in its centers. This approach can work in 

more urban areas, but it is unrealistic for rural areas where mostly 

small businesses operate in Indian country. 

We hope that MBDA goes back to the drawing board and decides 

to open another NABEC in its Southeast Region soon. Native 

American business development was flatlined during the Bush administration, and so we are looking at more additional millions to 

support the minority centers. 

By comparison, the SBA has received substantial increases in recent years for its small business development centers. This funding 

disparity is what prompted the National Center to make the case 

for the need to elevate Native American business development 

issues within the Commerce Department and at the SBA. 

At our RES conference this year, we had over 25,000 individuals, 

320 exhibitors, for two days of business workshops, a day-long procurement pavilion with hundreds of bid-matching meetings. Several national Native organizations recommended that Congress: 

one, authorize and adequately fund SBA’s Office of Native American Affairs, and, two, provide substantially more funding for business assistance centers devoted specifically to the business development needs of Indian country. 

We are delighted that Congress is responding so quickly. In closing, I want to thank the Subcommittee for inviting the views of the 

National Center as the longest-serving small business assistance 

provider with the broadest reach in Indian country. We look forward to working with you and your staff on this important Native 

American entrepreneurial development proposal as it proceeds 

through the legislative process. 

16 

[The statement of Ms. Gray-Proctor is included in the appendix 

at page 56.] 

Chairman SHULER. Thank you for your testimony. As you can 

see, my gavel actually is from— 

[Laughter.] 

Our next witness is Louis Celli, founder and CEO of the Northeast Veterans Business Resource Center in Boston, which trains 

veterans to strengthen and grow small businesses. 

Mr. Celli, you will be recognized for five minutes. 

STATEMENT OF LOUIS CELLI 

Mr. CELLI. Thank you, Chairman Shuler, Ranking Member 

Luetkemeyer, and members of this Committee. Thank you for the 

opportunity to present my views on the SBA and their entrepreneurship development programs as it applies to the veteran community. 

As CEO of the Northeast Veterans Business Resource Center, I 

have been able to gather data, case histories, and research important to veterans’ entrepreneurship. Our network of veteran business owners, state, federal, and community-based leaders totals 

more than 12,000 stakeholders that we maintain contact with on 

an annual basis. My testimony today is a reflection of this work as 

I represent this community. 

The United States has brought freedom to more people than any 

other country in history. That freedom was bought and paid for 

with the sacrifices of our veterans. In his book The American Patriots Almanac, William J. Bennett describes patriotism in this way. 

‘‘Patriotism brings an obligation. It involves actions, not just feelings. Occasionally, being a patriot means putting national interests 

before self. Here is when patriotism can be a hard virtue to live up 

to: when it involves sacrifice.’’ 

The signers of the Declaration of Independence, for example, put 

their fortunes, their safety, and their sacred honor on the line for 

something greater than themselves. 

September 11 reminds us that there will always be tyrants, madmen, and bullies who hate American ideal. And President Harry 

Truman once said, ‘‘Freedom calls for courage and endurance, not 

only in soldiers but in every man and woman who is free and determined to remain free.’’ 

We ask the patriots of this Committee, our Congress, and our 

government to make the hard choices necessary to support, defend, 

and enable our nation of veterans and their families who, according 

to the U.S. Census Bureau, represent more than 10 percent of the 

total U.S. population. 

In 1945 and ’46, millions of Americans took off their uniforms 

after World War II and came home to a job market that was 

shrinking because the war no longer provided economic stimuli. In 

1953, the Small Business Act created the Small Business Administration. The Act was created to encourage and promote small business growth and free competition, but, still, large firms which grew 

powerful as a result of war production had a tremendous advantage over smaller startup companies, and the SBA was supposed 

to help level that playing field. 

17 

While small businesses collectively represent 97 percent of all 

employers, and are responsible for the majority of all corporate tax 

deposits, we are still just a community of individuals. Big businesses have an unequal ability to immediately influence opinion, 

whether legislatively, through public advertising, or private investment in the political process. 

To give you an idea of just how unbalanced this divide really is, 

when we talk about small businesses we think about micro enterprises—the local landscaper, barber, hardware store. But what 

many Americans don’t realize is that by federal standards a business is small if they have less than 500 employees, and in some 

industries it can be as high as 1,500. 

Where does the voice of the micro enterprise or startup venture 

fit in? More often than not, it doesn’t. Despite all of the programs 

and money dedicated for entrepreneurial outreach and development, veterans have consistently remained the most historically 

under-maximized and overlooked socioeconomic group by SBA. Veteran entrepreneurship programs only started receiving funding in 

1999, and have lost federal appropriations every year since. In 

2009, the appropriations gave us a total of $1.2 million to fund a 

national network of veterans business center programs, which is 

down from $2.1 million the year prior. 

The SBA Office of Veterans Business Development, which is responsible for supporting five business outreach centers, received 

less than $750,000 for the fifth year in a row to support these centers. 

Veterans face a unique set of challenges when starting or growing small businesses or micro enterprises. Due to the multiple 

transfers and relocations that occur during a military enlistment, 

veterans commonly leave the military as renters, never really having the opportunity to purchase a home. Since most new ventures 

are financed based on personal credit backed by assets, veterans 

face a major disadvantage trying to start a new business. 

Military members commonly live in military communities. Their 

interaction with the civilian economy is usually reduced to consumer spending. They don’t have the opportunity to network or acquire industry-specific skills, knowledge, or experience that might 

be leveraged when starting a new business. Guard and Reserve 

members, as you well know, are always subject to extended and 

multiple deployments, which can render any business of nearly any 

size bankrupt and destitute. 

Military members are trained with a can’t fail/ won’t fail attitude, and often have a false sense of security regarding the level 

of assistance available as they depart the active military support 

system. While considering post-military operations, veterans are 

told that there are entrepreneurial programs and business financial assistance programs out there to assist them once they leave 

the military. We mistakenly believe this to be true. 

I also would like to share a story. Two friends graduate the same 

class of 2001. Both have similar grades, both are from minority descent, one goes to a trade school for heating and air conditioning, 

and the other one joins the military, trained in heating and air conditioning, and deploys to Iraq. 

18 

The first guy who went to trade school works as an apprentice 

for four years, starts a small business. That business then is accepted into the 8(a) program, business development program, and 

by 2008 he is servicing multiple federal and state contracts. 

His counterpart, in 2008, leaves the military, tries to start a 

business using SBA programs available for veterans, and after two 

years he is frustrated with marginal support, and the soldier ends 

up working for the other classmate as a technician, because his 

bills become so far behind that his credit has started to suffer. 

We are not asking for anything out of the ordinary or special, 

just a fair and equitable allocation of resources and protections 

with which to grow, survive, and thrive in the nation that we took 

times out of our lives to defend. Every veteran in this room, every 

veteran in the United States, past, present, and future, signed over 

a blank check payable on demand to the United States of America 

for an amount up to and including my life. 

The veterans who were never called upon to cash that check 

come before this Committee today and ask: will you support us now 

and invest in us as we continue to serve and strengthen this nation 

as corporate taxpayers? 

I thank you for allowing me to be here with my comments today, 

and I welcome any questions that you may have. 

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

68.] 

Chairman SHULER. Mr. Celli, that was great testimony. 

Mr. Klotz, how can the SBDC utilize new legislation to help 

small firms secure financing? That is typically the most difficult 

thing for small firms, small businesses, startups securing that initial financing. 

Mr. KLOTZ. I think through harnessing the existing network of 

small business development center counselors that have already 

been in place doing very similar things with their clients, additional funding for those types of initiatives can only improve upon 

and expand what they offer. 

I could see new micro lending programs perhaps starting. I know 

one of the gaps that I see in my own community are those who 

might have less-than- perfect credit, have great business skills, and 

an outstanding idea for a business, but just can’t get through that 

banker’s door. So maybe some sort of program like a second-chance 

financing program, something like that, would be very beneficial. 

Chairman SHULER. Okay. Dr. Rackley, how do you think the 

rules for increasing transparency in the Women’s Business Center 

Act will affect the WBC’s ability to provide their services? 

Ms. RACKLEY. We welcome the transparency. We think that will 

improve the ability for us to—and all women’s business centers to 

be more transparent, to know more about what we should be doing, 

and for the local communities to know what we do. 

Chairman SHULER. Mr. Celli, the Veterans Business Center Act 

shifts the veterans business outreach facility’s administration by 

the Veterans Corporation to the SBA. Is this a better model for 

long-term stability for the centers or not? 

Mr. CELLI. As one of the centers that was previously funded 

through the Veterans Corporation, we feel it is a much better 

model for a couple of different reasons. For one thing, it really 

19 

brings legitimacy to our program. It allows us to report our successes. We love to brag about what we do. We love to brag about 

our clients. 

And in our experience with the Veterans Corporation, while it 

has been troubled getting funding out of them, in addition it has 

been even more of a struggle getting our successes processed 

through them and up to the people who have given them money, 

which is this Congress. 

Chairman SHULER. Ms. Kilhoffer, how do you think the small 

businesses will respond to the online education and distance learning programs contained in the education of entrepreneurs through 

today’s Technology Act? 

Ms. KILHOFFER. The initial response would depend on their age. 

I would like to first state that. What we typically find, though, is 

that as opposed to traveling the distances involved to attend a 

small business development center or a seminar at a college or a 

university, they will choose distance training over the travel any 

time. 

And so putting them together in a situation where they can take 

advantage of the training with a group, and have the advantage of 

multi-generational—you know, older/ younger together—the technology becomes less intimidating, and the benefit is there for gaining the knowledge. 

Chairman SHULER. I am sure you get the assistance from some 

of the younger students in the class— 

Ms. KILHOFFER. Right. 

Chairman SHULER. —to assist the more senior members of the 

class. 

Ms. KILHOFFER. That is very typical of what happens in our 

adult classes. Yes, sir. 

Chairman SHULER. It is kind of amazing how for the young students, their whole lives depend upon the technology today. And I 

think the BlackBerrys run this Congress, so— 

[Laughter.] 

Ms. KILHOFFER. I have noticed that. 

Chairman SHULER. We find ourselves constantly on the BlackBerry. 

Ms. Watling-Mills, what is your opinion on the applications of 

benchmarks to the SCOREs program? 

Ms. WATLING-MILLS. I really don’t have an adequate answer to 

that. 

Chairman SHULER. Okay. 

Ms. WATLING-MILLS. I would have to research it and respond to 

you at a later date. 

Chairman SHULER. Sure. No, that is perfectly fine—will the 

SCOREs legislation strengthen the network capabilities for local 

entrepreneurs? 

Ms. WATLING-MILLS. Yes, very much so. I mean, that is where 

we shine in working one on one with local individuals and helping 

them, often with multiple SCORE counselors, with multiple expertise in whatever they need to get their businesses up and going, or, 

if they are existing businesses, to help them through these difficult 

economic times. 

Chairman SHULER. Very good. 

20 

Ms. Gray-Proctor, you talked about the Eastern Band. Why do 

you think one of the most important—what do you think is the biggest factor for the Eastern Band basically not wanting to re-up in 

the program? 

Ms. GRAY-PROCTOR. Well, you know, if you even take that one 

tribe and you add the other 540, you know, to get into the entrepreneurial, to where they can go and help, it takes adequate funding, no matter what we do. Like we said, we have nationwide over 

540 different tribes. Alaska Native Corporations—I mean, Alaska 

Natives, Native Hawaiians. 

So that is why we are asking for that increase in net funding, 

because if we don’t have enough to do our job we are not able to 

provide the procurement. We, as Native Americans, wanted to help 

our Indian community. So we have the training, we are the experts 

in Indian business, so we—that is what we have there with the 

Eastern Band. 

And, you know, so it is a difficult thing to do when you don’t 

have enough funds. 

Chairman SHULER. Sure. 

Ms. GRAY-PROCTOR. And so in order to do it right and help your 

entrepreneurs, and help them with the procurement centers, and 

to go after government contracts, if we don’t have enough money— 

and I think it is the same if—you know, with the women’s, the veterans, the rural—we all share the same goal, is that we want to 

help the people in our communities that we represent. 

Chairman SHULER. Absolutely. 

Ms. GRAY-PROCTOR. And that is why we are here. 

Chairman SHULER. At this time, I would like to yield to the 

Ranking Member for his series of questions. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Ms. Watling-Mills, I have one of the larger SCORE chapters in 

the country, just outside my district. And, in fact, I have part of 

the county in my district, so I know the folks very well. And they 

are from the Camdenton, Missouri, area, and they have a very, 

very large SCORE chapter, and they are very active. I know all of 

those folks very well, but I—just now and for myself, everybody 

else on the Committee here, what are the qualifications, or how do 

you become certified to be a volunteer, to be able to do the work 

of a SCORE volunteer? 

Ms. WATLING-MILLS. To become a SCORE volunteer, we have a 

training process currently that is called a five-step program that— 

the people who come to be SCORE volunteers are people who have 

great business backgrounds, great business knowledge, and we 

help them learn to be able to counsel and use that knowledge better. 

One of the things, of course, we are hoping for is more funding, 

the same as everyone else is looking for, which would enable us to 

expand our training processes to make our—our very dedicated volunteers, to make them even better counselors, to—because, as I 

say, they have the business knowledge, it is helping them to understand the counseling process. 

Mr. LUETKEMEYER. Just a follow up to that. What qualifies them 

as a business person that has the kind of knowledge you are looking for? I mean, is it somebody who has just been in business a 

21 

long time? Or is it somebody who has an educational background 

in business as well? Or somebody who has just been successful? Or, 

I mean, Joe the Plumber, is he somebody that could be in your program? 

Ms. WATLING-MILLS. Yes. Because we have small businesses 

coming to us, as—if a plumber needs to start up a business, he can 

certainly use the expertise of someone who ran a successful plumbing business. So while in the past SCORE was made up very largely of executives, it is more and more people like myself who run 

small businesses, who have that hands-on day-to-day experience 

and can hopefully prevent or help startups by keeping them from 

making some of the mistakes that I made or that other small entrepreneurs made in their startup process. 

Mr. LUETKEMEYER. That is quite an interesting statistic. You 

said five times more likely to succeed if they have been mentored 

by a SCORE volunteer? 

Ms. WATLING- MILLS. Yes. 

Mr. LUETKEMEYER. Wow. 

Ms. WATLING-MILLS. Yes. 

Mr. LUETKEMEYER. That is very impressive. Thank you. 

Ms. WATLING-MILLS. Yes. 

Mr. LUETKEMEYER. Thank you for your testimony today. 

Ms. Kilhoffer? 

Ms. KILHOFFER. Yes. 

Mr. LUETKEMEYER. You discussed the need for and the—I guess 

your experience with long distance technology and how it can be 

helpful. What is the demand in your area for that? And what do 

you see on a statewide and nationwide basis? Or can you elaborate 

a little bit more on what your comments were a while ago? 

Ms. KILHOFFER. Well, distance technology has become a platform 

for the presentation of a lot of the credit courses that the state system of higher education presents, and they have a reciprocal agreement between colleges and universities, within the system and 

community colleges. 

The distance education is cost effective, whether it be online or 

through interactive television. In our area, in the beginning, people 

were very, very skeptical, but we have had acceptance of distance 

technology to the point where we now have a nurse practitioner in 

our area who through distance technology is presenting. She is the 

instructor to a course in the master’s of family nurse practitioner 

program at Penn State, main campus. 

So our clientele, our folks, have become much more accepting. 

The demand, the use of it [distance learning], we see approximately 

2,000 go through our facility in a year’s time, whether it be for 

credit courses, training on any subject, CEUs. We have had our distance technology used to conduct interviews, present deposition in 

legal cases, and so the use of the equipment itself has broadened, 

the topics that are covered through that method have broadened. 

And as we have the economic downturn and a whole gamut of 

new problems and a new population that is going to need to find— 

like Kurt in the story, new employment, there will be a need to 

provide the services of the Small Business Administration to our 

folks. 

22 

Mr. LUETKEMEYER. Do you find that it works better for certain 

business types versus others? 

Ms. KILHOFFER. Most definitely. You are not going to get a technical education strictly online. You are not going to learn to adjust 

air conditioners or be a plumber. That will not work. But if you 

combine the classroom side of that type of education with work 

with existing plumbers, air conditioning folks, who are in our region, getting up there in years and will need to be replaced, then 

you have a chance to produce that kind of training. 

Mr. LUETKEMEYER. So even for some—practically everybody, 

there probably is some kind of educational process that can be utilized like that, not necessarily all of it, but certain types of training 

can still be like that, even though the heating and air conditioning 

folks can’t do the hands-on stuff. 

Ms. KILHOFFER. That is correct. 

Mr. LUETKEMEYER. Very good. Thank you. Great testimony. 

Ms. KILHOFFER. Thank you. 

Mr. LUETKEMEYER. Dr. Rackley, that was great testimony with 

regards to the work that you do with the ladies’ councils there. And 

I am just curious, do you have a lot of other statistics about other 

chapters around the country that—or groups like yours that work, 

how successful they are, and how many there are? 

Ms. RACKLEY. There are over 114 women’s business centers in— 

I think it is 114, there are over 100—114 women’s business centers 

in the United States. We all have similar programs. Our programs 

can be flexible, according to the clientele, the region in which we 

live, in which we work. But we all have similar programs. We come 

from different kinds of organizations. 

I am fortunate to be in an organization, REI, that has other resources to help us. So we are able to—we cover a lot of territory. 

We are rural. I travel out, because technology is great, but many 

of our women are not where they have the technology available to 

them, or they want face to face. And so we are able to do that. 

But there are statistics on—I don’t have them with me right 

now. The only statistic I can quote is women-owned businesses are 

growing at twice the rate of all businesses nationwide, so women 

are out there starting businesses. 

Mr. LUETKEMEYER. Fantastic. Fantastic. 

You mentioned something there that you got outside funding. Do 

you partner with local public entities or private entities, or both? 

Ms. RACKLEY. Rural Enterprises works with state and private 

entities, and we are part of that organization, for our state—for our 

matching funds. But we do rely on federal funds for our women’s 

business centers. It is very important for us to be able to have that 

funding for our women’s business centers. 

Mr. LUETKEMEYER. Very good. Thank you. 

Mr. Celli, thank you for your service, and thank all of those men 

and women who you represent for their service as well. That is 

why we are here today to—as a result of their efforts, and we 

thank you for that. 

Mr. CELLI. Thank you very much. 

Mr. LUETKEMEYER. Where do you think we can help, or where 

are we failing with regards to the veterans groups here? How can 

23 

we best—I know that the Chairman asked a great question a 

minute ago with regards to— 

Mr. CELLI. The Veterans Corporation. 

Mr. LUETKEMEYER. —Veterans Corporation and the SBA. Is 

there something else you want to elaborate on that perhaps, and 

enlighten us a little bit more how we can do a better job? 

Mr. CELLI. Well, I want to thank the Chairman and Ranking 

Member. These are excellent questions, and they really do get to 

the heart of the matter, not only with the questions specifically 

with regard that you have asked me, but the other panelists as 

well, because, let us face it, an entrepreneur really is an entrepreneur at heart. And we all face the same issues. 

The distance learning I think is a critical piece. Last year, or two 

years ago, I did a Boston to Baghdad class, where I had soldiers 

down range that obviously couldn’t come to class, and we broadcast 

over the internet through a teleconferencing system. 

I am a SCORE counselor, and the way I was recruited to become 

a SCORE counselor is because when I started my counseling program in Boston I went to SCORE and I said, ‘‘Hey, can you send 

me, you know, four or five counselors over the course of a couple 

of weeks, so that I can, you know, start my programs?’’ And they 

said, ‘‘We are really not built that way.’’ 

And I said, ‘‘Gee, I am sorry. I didn’t understand, you know, the 

dynamics of your organization. How can I help you?’’ They gave me 

an application. 

So, you know, I think that the most important thing to take 

away from testimony or from hearings such as this and the laws 

and the proposed regulations that are being introduced here is that 

we all operate in a very cooperative society. And we want to work 

together, we want to leverage each other’s resources, we want to 

be able to work not independently but as a team through these federal appropriations, so that we are not spending the same dollars 

on the same services on the same client in many cases, so that we 

can work together. 

So, again, I— 

Mr. LUETKEMEYER. You just framed my bill. Thank you very 

much. 

[Laughter.] 

Mr. CELLI. Thank you. 

Mr. LUETKEMEYER. I didn’t mean to interrupt, but I couldn’t resist. 

Mr. CELLI. That is okay. 

Mr. LUETKEMEYER. Go ahead. 

Mr. CELLI. Well, I just think that it is our responsibility as responsible grantees to make sure that we make the best use of our 

money and of your intentions. And I think that this Committee, the 

overall Committee, this Subcommittee, has exactly the right focus, 

and that is to start to interweave these programs together and 

really force everybody to play in the same sandbox. 

Mr. LUETKEMEYER. Two thumbs up, sir. Again, thank you. You 

just made my case. I am going to have you do my briefings from 

now on, how is that? 

[Laughter.] 

24 

Mr. Klotz, very briefly, return on investment, three to one, wow, 

that is impressive. That is a great number, and it is a great story 

to tell for small business development centers, for what they can 

do and the value that they have. 

What do you think the—Mr. Celli probably put it more succinctly 

than even I can do that with regards to the entrepreneurial development programs, how do you think we can better fit them together? Where do you see some cracks here that things are falling 

through? 

Mr. KLOTZ. I think Mr. Celli put that very well—have cooperative agreements between service providers, and maybe within a geographic area, not to have five or six or eight programs, all of 

which seem to have a similar function, but maybe carve out specialties and work together. 

You know, at our particular small business development center, 

we have a close relationship with our SCORE chapter. What 

SCORE will do for their very first-time clients is to tell them they 

need to go through our SBDC ′′How To Start a Business′′ seminar 

first. And also, we then have access to their list of volunteers and 

expertise, so that when we find that entrepreneur with a particular 

business type or industry, we can match them up with a counselor 

there as well. 

So I think we should utilize the resources that, in large part, are 

already there, but just coordinating them. 

Mr. LUETKEMEYER. Fantastic. Thank you very much. 

Ms. Gray- Proctor, thank you for your testimony today. How 

many other—or how much underfunded do you believe you are 

with regards to the different tribal groups that have needs? I know 

you mentioned the ones in North Carolina. Of course, that is pretty 

near and dear to the Chairman’s heart here. 

Ms. GRAY-PROCTOR. Yes. 

Mr. LUETKEMEYER. But are there other groups out there that 

have dropped their services as a result of funding? 

Ms. GRAY-PROCTOR. Exactly. And that is why, you know, the disparity of the funding, some of the programs we lost, weren’t refunded, because what we serve is nationwide. I mean, it is in the 

lower 48, and, of course, up in Alaska as well. And, you know, we 

can’t be all things to all people. 

But you know what? I really got a lot of good ideas about long 

distance learning, and we have Native American veterans. Of 

course, I am a woman entrepreneur myself, and have had my company for 11 years. So, you know, the funding issue is that, you 

know, our voice hasn’t always been heard, because our differences, 

as different from what—my panelists here, is that the social needs 

have to come with the economic needs in our Indian communities. 

We have of course, you know—I am just going to throw out some 

statistics. We have the highest rate of teenage suicide dropout. So 

if we look at helping our economic needs in Indian country, which 

is all over the United States in our Indian communities, we will be 

able to help those needs if we help give them the hope of the entrepreneurial spirit, which is—historically, that is where Native 

Americans—we reformed. 

We were tribe to tribe. If they had corn over here, and we had 

beans, we traded. It was a trade that we have done historically for 

25 

years—2-, 3-, 400 years prior to us being a country. We did it—we 

had commerce way before. So we do need to have that money infused, because we have, you know, our reservations, our needing 

that help for entrepreneurs—Pine Ridge. 

And also, you can get me started on doing tax credits on Indian 

land and everything else that we can think of. But it is having 

these centers funded and having them spread out across the United 

States that we are able to help—to do a far-reaching. 

And I am just glad that I have gotten to be able to be up here 

with them, because I am going to call on them, you know, for the 

veterans and for—I want to know more about SCORE, you know, 

and the long distance learning, it is just great. So anyway— 

Mr. LUETKEMEYER. Thank you. Thank you for your testimony. 

Ms. GRAY-PROCTOR. Thank you for the opportunity. 

Mr. LUETKEMEYER. Thank you. 

And for those of you who can’t pronounce my name, don’t worry 

about it. Nobody else can either. Our press secretary still hasn’t 

gotten it right, so— 

[Laughter.] 

Thank you. 

Chairman SHULER. Thank you, Ranking Member. 

[Laughter.] 

At this time, I would like to yield to Ms. Dahlkemper for her 

questions. 

Ms. DAHLKEMPER. Thank you very much, Mr. Chairman. Thank 

you, panel, for being here. I appreciate your holding this hearing 

today. 

Small business is a critical component of our economy. And as we 

focus on ways to restore the economic growth and end this downturn, we must keep small business in the forefront of our efforts. 

As small business owners experience tightened credit and lower 

sales in this difficult economic environment, it is crucial for us to 

ensure that there are assistance programs available to help them 

meet their challenges. Entrepreneurial development assistance programs have a proven record of helping our businesses grow, yet the 

last time these programs were reauthorized was a decade ago. 

Since then, these programs have not modernized to meet today’s 

small business needs. We must provide programs with adequate 

funding in order for them to revamp their programs towards guiding small businesses through these new financial obstacles. 

I just have a few questions. First, I want to say hello to Ms. 

Kilhoffer. I am from Erie, Pennsylvania, so we are neighbors. And 

I have been to St. Mary’s many times. It is a beautiful area of the 

country. I did have a question for you regarding the long distance 

learning and wondering what obstacles you see for economically 

disadvantaged individuals to have access to this technology and 

benefit. 

Ms. KILHOFFER. Well, working for a community education council 

that is to be the hub of those [long distance learning options], the 

only obstacle would be that they—any individual— who do not 

have access within their home to a computer or whatever is tied 

to our hours. But our hours are anywhere from 7:00 in the morning 

until 10:30 in the evening. So they have to come to us, yes, to access online through computers the distance education technology. 

26 

In regard to interactive television, that is, again, tied to our hours 

and whether or not the equipment is in use. 

But for the individual to do it from their home, if they have access to a computer that is great. Not everyone in our county does. 

Ms. DAHLKEMPER. Right. And broadband. 

Ms. KILHOFFER. It has gotten much better, I am pleased to say. 

So that is not necessarily a problem any longer. 

Ms. DAHLKEMPER. Okay. And the distances, how far do people 

have to travel to get to the center? I mean, how far out-reaching 

are you? 

Ms. KILHOFFER. Our service area is defined as Elk and Cameron 

Counties, but we are finding that we have a large increase in the 

last two years of people from surrounding counties who are willing 

to come to our facility, because it is easier, shorter. I don’t know 

if it is better roads, whatever, than going elsewhere. State College 

is an hour and a half, Clarion is an hour and a half, Erie is two 

hours away, and those are hubs of education that—and learning. 

Even the Small Business Administration—the small business development centers that are in our area are those distances away. 

What happens is they come to us. The representatives come to our 

facility and meet with the clients there. We find that we are centrally located for the people that we serve. 

Ms. DAHLKEMPER. So you think it is adequate in terms of— 

Ms. KILHOFFER. Adequate. 

Ms. DAHLKEMPER. Okay. Appreciate that. 

Mr. Celli, I have question for you. H.R. 1803 will create a special 

service disabled veterans grant program. As compared to soldiers 

who fought in previous wars, what do you see as any new needs, 

if any, that these brave men and women might need to have dealt 

with before starting a business, or while starting a business? 

Mr. CELLI. Thank you very much. That is an excellent question. 

And one of the biggest problems and disparities with regard to 

these conflicts as opposed to earlier conflicts is really the enormous 

call-up of our Guard and Reserve forces. Our Guard and Reserve 

forces have—and it is very difficult to get the exact numbers out 

of the Department of Defense, but anywhere from 15 to 25 percent 

small business ownership. 

And what is going to happen is small business owners who wanted to dedicate part of their patriotic time to serving their country 

are going to stop doing it when they realize that they are not being 

supported with their small business efforts when they come back, 

or before they leave. 

If I get hold of a Guard or Reserve member who is a business 

owner before they leave, 12, 14, 18 months before they leave, I can 

help them put in place certain safeguards and plans that can help 

keep their business viable, maybe not as profitable as it would 

have been, but at least viable while they are gone. the money for 

these types of programs absolutely just doesn’t exist. 

And earlier we were—we heard some testimony with regard to 

how these grants are sustained over many years, and some of the 

centers may be becoming a little stale over years. The truth is that 

I have been doing this for almost six years now, and getting matching funds is hard enough, but getting funds to completely support 

an entrepreneurial outreach center is very, very difficult in today’s 

27 

nonprofit community, because philanthropic organizations really 

want to put their money toward disease or children or literacy. 

So we are really far down on the pecking order. These grants are 

absolutely critical to keep a viable economy moving, because, as we 

spend money on these TARP programs and bailing out the big businesses, the big businesses are failing because the little businesses 

are failing. Big business absolutely can’t survive if little business 

isn’t there to support them. 

They are some of the major purchasers, some of the major suppliers, so if we start to support the small businesses it will just by 

nature support the larger businesses who will then have more food 

to eat. So these programs are critical. 

Ms. DAHLKEMPER. Do you have any statistics on veterans who 

have had, you know, small businesses? Or I want to say maybe 

they aren’t veterans yet, they are in the Guard— 

Mr. CELLI. Sure. 

Ms. DAHLKEMPER. —possibly Reserves, and then go serve and 

come back and their businesses have failed? 

Mr. CELLI. I can tell you that based on my client base, one of two 

things happens. When they leave, they either put their business on 

ice or they sell it. When they come back, if their business has been 

on ice, it is almost like starting over again. 

And the veterans and the Guard and Reserve members who face 

the biggest challenges are those who have purchased franchises. 

And while franchises are trying to be as compassionate as possible, 

they are in business in well, and they need their franchise money. 

And the other thing is, with loans, outstanding loans with regard 

to large equipment, the USERRA Act and the Soldiers and Sailors 

Relief Act, that protects veterans who deploy and come back with 

personal loans, but not for business loans, so— 

Ms. DAHLKEMPER. Thank you very much. 

And one last question for Mr. Klotz. I just wanted to ask you for 

some specifics, because one of the key programs in H.R. 1845 calls 

for establishing a green entrepreneurs training program. However, 

this is kind of short on details, and I was wondering, what would 

qualify as a green program? 

Mr. KLOTZ. That is a question we have been struggling with for 

about six months in our center trying to define that very thing, because almost anything a company does or intends to do can be done 

greener. I think we are looking at startup companies that are looking to retrofit businesses or homes to use less energy. I think that 

is going to be a growth area. We will have a significant bump in 

number of solar and wind-powered startup companies. We will see 

some of that. 

It is a difficult question, but an important question you ask. And 

I think all of us at SBDC are still trying to define what that is. 

Ms. DAHLKEMPER. I appreciate it. Thank you. 

I yield back. 

Chairman SHULER. Thank you. 

At this time, we will yield to Mr. Thompson. 

Mr. THOMPSON. Well, thank you, Chairman. 

I want to thank the panel for your testimony, and also, way more 

importantly, your service to small business entrepreneurs. We all 

28 

know how important that is, and just really appreciate how you 

each in your own respect are providing that service. 

Just a couple of questions. Ms. Kilhoffer, you know, the remote 

area, you know, I am very familiar with how remote—how rural 

the area is. The area that you are in there is—you know, that is 

home to the area—the congressional district is the only elk herd in 

Pennsylvania. 

Ms. KILHOFFER. Yes, sir. 

Mr. THOMPSON. And that is how rural we are. If a student in 

that area, the student that you served, did not receive education 

from your institution, or through your institution, where else— 

what other options do they have? Where else could they go locally 

for education? 

Ms. KILHOFFER. Locally? They would have to drive an hour and 

a half, two hours, over 60 miles—well, excuse me, 40 miles to the 

one institution. Would they be likely to go? No. We are talking 

about adults who have families and roots, and they would just as 

soon stay where they are at as make a twice-a-week, three-timesa-week drive to a facility that is that far away. 

So where would they go? They could go to Clarion University, 

they could go to Penn State University, they could go to— 

Mr. THOMPSON. Quite a distance, though. 

Ms. KILHOFFER. They wouldn’t. Would they do it? Not likely. 

Mr. THOMPSON. Not likely. The folks that are there, what is kind 

of the breakdown between currently entrepreneurs, you know, people that are looking at a new start, second career, third career, 

being laid off, versus someone—a young person just coming out of 

high school, and the differences in their needs? 

Ms. KILHOFFER. We have—traditionally, our clientele, our population that we serve, are returning adults. We have seen an increase in the number of students fresh out of high school who are 

choosing to remain at home and get their education through the opportunities at our facility. 

As for the entrepreneurs, we have just this past month—our facility is used by what they call the rapid response teams who address immediately the needs and the information sessions that are 

available for current—recently laid off employees. We have seen in 

the past month over eight sessions, each session numbering between 50 and 60 people, people attending rapid response teams. 

These people could have—will be potential candidates for new 

ventures. Some will choose to pursue education. Some will choose 

to take the talents that they have and start their own businesses. 

Typically, one half—50 percent of our companies only have one 

to four employees, and what will happen is that folks will choose 

to start something new on their own as opposed to going back and 

starting a new education, because they know work best. They don’t 

know education best. So we are going to see a lot more entrepreneurs that are going to need services coming out of this new 

round of eight sessions of 50 or 60 people a session who no longer 

have employment because of forced layoffs, permanent forced layoffs in our area. 

Mr. THOMPSON. Great. Thank you. 

My last question, Mr. Klotz, what would you say is—the number 

one problem is for small businesses right now? And what strategies 

29 

are you seeing being used to assist small businesses with that 

problem? 

Mr. KLOTZ. The largest problem that I have seen among my clients is in the access to capital area. There are some exciting new 

programs with the SBA as far as increasing the guarantee to 90 

percent, waiving fees for loans, and one of the newer programs of 

stabilizing businesses. That is exciting. 

However, as great as those programs are, the lending is done at 

the local bank. And unless they sign on, it all stops there. And I 

have seen an extremely conservative local lending environment, to 

the point where I saw deals that were no-brainers before, I mean 

hands down easily fundable, where my clients are either getting 

nos or you have to try to piece together multiple financing sources 

to make the deal happen. So every single deal is like pulling teeth. 

So I see that as the largest area of concern, especially in a time 

when companies are seeing their sales drop, they might need that 

extra boost on their line of credit to make payroll next month. And 

the local lenders are very conservative and scared. 

Mr. THOMPSON. Thank you. 

Mr. Chairman, I yield back. 

Chairman SHULER. Thank you, sir. 

I now yield to the gentlewoman from New York, Ms. Clarke. 

Ms. CLARKE. Thank you very much, Chairman Shuler, and Ranking Member Luetkemeyer. Was that good? All right. We are getting 

there. We are getting there. 

I want to also thank today’s witnesses for their valuable contribution to the American entrepreneur and small business. 

Today’s hearing gives us an opportunity to enhance the SBA programs that are vital in helping small business during our economic 

downturn. One program that I am a strong advocate for is the 

women’s business center. As you are aware, this program was designed to address problems that women face being competitive entrepreneurs through counseling, training, and mentoring. By increasing access to resources for these entrepreneurs, it also increases the viability of that business. 

This is especially true for women-owned businesses in socio-economically disadvantaged communities. And it should be a collective 

goal to find ways to strengthen the women business centers. One 

area of improvement is in the area of grant disbursements to 

women business centers. Women business centers experienced 

delays that were so extreme that they were forced to seek funding 

elsewhere while attempting to resolve matters with the SBA. 

Also, these same delays caused some women’s business centers 

to lay off staff, abandon vendors, and curtail operations to stay in 

business. 

I hope that we can modernize the women’s business centers 

which are essential for our economic recovery. So I would like to 

ask Dr. Rackley, as you stated in your written testimony, small 

business owners are beginning to feel the impact of the economic 

downturn, in particular women-owned businesses. What is great 

about the women business centers are that they provide free training workshops to entrepreneurs who need it most, but I know that 

it can be costly for women business centers. 

30 

Can you tell me if you are aware of any women business centers 

that experienced problems receiving grant disbursements, which 

may be helpful in funding these great workshops? 

Ms. RACKLEY. I know that there was a problem. There was a 

backlog in getting reimbursements. But the Office of Women Business Ownership is implementing a new program with—so there is 

not that delay in getting their reimbursements. But it is a problem. 

I mean, we are trying to provide the training, and we try to provide 

it at free or low cost, because there is just not a lot of money out 

there. That is what I think is great about our women’s business 

center program. 

And I have to say that we—our women’s business center at REI, 

we partner with a lot of other organizations, because we partner 

with the SBDCs, SCORE chapters where they are available—they 

are not always available in my rural area—and with the Native 

American community, so that we can all use our resources. We 

have limited resources. But if we can pool our resources and work 

together, we can provide training. 

I want to just give an example of a training program we had last 

week with the Citizen Potawatomi Nation. We were doing a minority business summit, because with all the stimulus package and all 

the contracting, there is a great need to find out how to do business 

with the contractors, with the government, with the tribes. 

And so we had 65 at our program last week in Shawnee. So we 

are great partners with other organizations, and we are always 

looking—because we can’t do it on our own, but we can work together. We don’t always have SBDCs. And we are two business 

centers, and we cover the entire state. So we must make the most 

of our resources. 

Ms. CLARKE. Very well. Let me ask you about the communication 

between the SBA offices and the women business centers and the 

processing of payment requests. The inability of these offices to 

work in an integrated fashion, combined with flaws in the payment 

process, largely cause paperwork to be rejected or lost. 

Do you believe that a simple checklist can ensure that payment 

requests are adequately reviewed? 

Ms. RACKLEY. I think that would help. As I said, they are implementing new procedures that are speeding up the process and not 

causing that delay. But there is always other methods that could 

be tried, could be improved on. It is important. 

I know that there are some stand-alone women’s business centers. When they didn’t get the funding, they were not able to operate. Like I said, we are fortunate to be in an organization that 

helps us, but not all women’s business centers are in organizations—a strong organization like REI. And so they really did suffer 

from not being able to get the funding. 

Ms. CLARKE. And what would you say creates that level of 

strength within your organization versus the stand-alones? Is it the 

collaborative process? Is it the type of relationship or partnership 

that is established at the outset with the SBA? What would you 

say has been your pathway to creating, you know, this visibility to 

get response? 

Ms. RACKLEY. We have great leadership. We have a great board 

of directors. And we are an economic development organization. We 

31 

have other resources. We have SBA loans, we have the micro loans 

within our own organization. We work with our Finance Division 

to help our clients know how to go about securing loans, get the 

information before they go to a bank. 

So we have those other resources. We have business incubators. 

The woman I talked about —that is getting the award tonight— is 

in one of our business incubators. We have housing programs to 

help small employers, small businesses, to retain employees. So 

there is just a multitude of services, and we have great leadership. 

Ms. CLARKE. Dr. Rackley, would you say on average most of the 

women business centers are at your level? Or, you know, how 

would you describe it? You know, what I am trying to get at is how 

we build capacity. 

Ms. RACKLEY. I don’t think they are at the level that we are, because many of them are stand-alone, there are several that are organizations the size of ours that have that other support, but many 

are not there yet, they are in stand- alones. I think that is what 

happened to the two in Oklahoma that failed. They were in a 

stand-alone and getting those matching funds is—can sometimes 

be difficult. 

Ms. CLARKE. Very well. 

Ms. RACKLEY. But if we don’t have the federal funding, we cannot operate. And it is important—I notice that the funding level 

that is written into the legislation, that would be great for all women’s business centers. 

Ms. CLARKE. Wonderful. Well, thank you very much for your candid responses. 

And, again, to each of the witnesses, thank you for the work that 

you do. It is so critical and vital to all of our communities, particularly those that are in the rural parts of our nation or that may 

be struggling economically in disadvantaged communities. Your 

work is really greatly appreciated by this Committee and by the 

communities that we serve. 

And I yield back, Mr. Chairman. 

Chairman SHULER. Thank you, Ms. Clark. 

I also want to thank you for your testimony today. I think we 

have already seen several instances of ways that we feel that we 

can help, and that is the part of the process that we enjoy. This 

is due process which starts in the Subcommittee and goes to the 

Committee. Now we have found some holes and some gaps, and we 

hope that we can fill those gaps. 

So thank you for your participation. Thanks to all of my colleagues. I look forward to continuing to work with them on this legislation. 

I ask unanimous consent that the record be open for five days, 

additional days, for members to submit their testimony. Hearing no 

objection, so ordered. 

This hearing is adjourned. 

[Whereupon, at 1:36 p.m., the Subcommittee was adjourned.] 

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60 


47800.034
61 


47800.035
62 


47800.036
63 


47800.037
64 


47800.038
65 


47800.039
66 


47800.040
67 


47800.041
68 


47800.011
69 


47800.012
70 


47800.013
71 


47800.014
72 


47800.015
73 


47800.016
74 


47800.017
75 


47800.018
76 

Æ