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SUBCOMMITTEE HEARING ON

OVERSIGHT OF THE ENTREPRENEURIAL

DEVELOPMENT PROGRAMS IMPLEMENTED

BY THE SMALL BUSINESS ADMINISTRATION

AND NATIONAL VETERANS BUSINESS

DEVELOPMENT CORPORATION

SUBCOMMITTEE ON RURAL AND URBAN 

ENTREPRENEURSHIP 

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

MARCH 12, 2008

Serial Number 110-78

Printed for the use of the Committee on Small Business

(

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

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

BRIAN HIGGINS, New York 

MAZIE HIRONO, Hawaii 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director

Subcommittee on Rural and Urban Entrepreneurship

HEATH SHULER, North Carolina, Chairman 

RICK LARSEN, Washington 

MICHAEL MICHAUD, Maine 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JEFF FORTENBERRY, Nebraska, Ranking 

ROSCOE BARTLETT, Maryland 

MARILYN MUSGRAVE, Colorado 

DAVID DAVIS, Tennessee

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page

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

Fortenberry, Hon. Jeff ............................................................................................. 2

WITNESSES

PANEL I: 

Prakash, Mr. Anoop, Associate Administrator, Office of Entrepreneurial Development, U.S. Small Business Administration .............................................. 3

Blackwell, Mr. Walter, President/CEO, National Veterans Business Development Corporation ................................................................................................. 6

Wilson, Mr. Donald Wilson, President, Association of Small Business Development Centers ........................................................................................................ 8

Sanderson, Ms. Melinda, Executive Director, Canisius College Women’s Business Center ........................................................................................................... 10

Yancey, Mr. Ken, CEO, SCORE ............................................................................. 12

Carroll, Mr. Dale B., President & CEO, Western N.C. Regional Economic 

Development Commission, AdvantageWest Economic Development Group ... 14

APPENDIX 

Prepared Statements: 

Shuler, Hon. Heath .................................................................................................. 37

Fortenberry, Hon. Jeff ............................................................................................. 39

Altmire, Hon. Jason ................................................................................................. 40

Prakash, Mr. Anoop, Associate Administrator, Office of Entrepreneurial Development, U.S. Small Business Administration .............................................. 42

Blackwell, Mr. Walter, President/CEO, National Veterans Business Development Corporation ................................................................................................. 46

Wilson, Mr. Donald Wilson, President, Association of Small Business Development Centers ........................................................................................................ 56

Sanderson, Ms. Melinda, Executive Director, Canisius College Women’s Business Center ........................................................................................................... 63

Yancey, Mr. Ken, CEO, SCORE ............................................................................. 67

Carroll, Mr. Dale B., President & CEO, Western N.C. Regional Economic 

Development Commission, AdvantageWest Economic Development Group ... 76

Letter from Rep. Dale E. Kildee ............................................................................. 80

National Veterans Business Development Corporation: Strategic Plan FY 

2008 - FY 2012 ..................................................................................................... 83

National Veterans Business Development Corporation: Annual Report FY 

2007 ....................................................................................................................... 112

(III) 

(1)

SUBCOMMITTEE HEARING ON OVERSIGHT 

OF THE ENTREPRENEURIAL DEVELOPMENT 

PROGRAMS IMPLEMENTED BY THE SMALL 

BUSINESS ADMINISTRATION AND NATIONAL 

VETERANS BUSINESS DEVELOPMENT 

CORPORATION 

Wednesday, March 12, 2008

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

The Committee met, pursuant to call, at 10:00 a.m., in Room 

1539 Longworth House Office Building, Hon. Heath Shuler [chairman of the Subcommittee] presiding. 

Present: Representatives Shuler, Clarke, and Fortenberry. 

Also Present: Representative Vela ́zquez. 

OPENING STATEMENT OF CHAIRMAN SHULER 

Chairman SHULER. I call this hearing to order. 

I’d like to, first of all, thank everybody for coming to our new 

place, our new home here. Ranking Member Fortenberry was saying that the folks here that have the column in the way, your tickets will be discounted and you will pick up that discount at the 

door as you leave. 

Today the committee will examine Small Business Administration/Veterans Corporation efforts to provide entrepreneurial development assistance. In times of economic instability, new business 

opportunities are critical sources of growth for our nation’s productivity, employment, and innovation. 

However, with tightened credit conditions and the rising health 

care and energy prices, small businesses face an increasingly tough 

economic environment. For them to remain competitive, they need 

access to up to date information, business training and marketing 

advice. 

This hearing will evaluate SBA’s and Veterans Corporation’s initiatives and determine what needs to be done to make sure that 

they meet the needs of today’s entrepreneurs. This program develops services across a wide range of economic sectors, providing significant returns on investment. 

A particularly remarkable example is the Women’s Business 

Center Program, which has demonstrated a 15-to-one return on 

federal expenditures. This is occurring during a time when diminishing resources, capital, and poor agency management practices 

2

are holding these initiatives back. If we could overcome such problems, think of what that could mean for America’s entrepreneurs. 

For many SBA programs providing the framework for success, 

demand for these services has risen while capacity has not kept 

pace. In fact, consulting hours are declining. It is important to find 

ways to reverse these trends and to provide tomorrow’s business 

owners with the support that they need. 

The Committee will also look more broadly at what the SBA is 

doing to improve these initiatives. One of these proposals is the 

emerging 200 program which focuses on inner city businesses. An 

important point to examine is how the program’s cost compares to 

existing SBA initiatives. We need to make sure that the taxpayers 

are getting the best bang for their buck and that these monies 

couldn’t be better spent elsewhere. 

One of the most important up and coming entrepreneur sectors 

is veterans. For the 600,000 troops returning from Iraq and Afghanistan, business ownership is a viable option. To make this a 

reality, they need the tools to start up and grow. Unfortunately, 

one-third of the veterans have no knowledge of these programs targeting them to promote entrepreneurship. 

We have to find ways to increase outreach efforts to more returning service men and women so that they, too, can become entrepreneurs. The Entrepreneurship Program can provide new opportunities and vital training. With the economy facing substantial challenges, these initiatives should be a top priority for lawmakers, 

practitioners, and small business owners. 

This Committee has spent a great deal of its time to improve 

these programs and recently two bills became law. For 400,000 

Americans who each month take the brave step in starting a new 

business, we must be certain that they can succeed. Our nation and 

our local communities will successfully benefit from the growth and 

business creation. 

I want to thank the witnesses for the testimony today, and I now 

will recognize the Ranking Member, Mr. Fortenberry, for his opening statements. 

OPENING STATEMENT OF MR. FORTENBERRY 

Mr. FORTENBERRY. Thank you, Chairman Shuler, for holding this 

hearing on our entrepreneurial development programs and outreach as well, and welcome to our guests. I hope you are all 

friends, given the tight quarters here, or you will soon be, I guess. 

We are here, as the Chairman mentioned, to offer oversight of 

the SBA’s Entrepreneurial Development Programs, and I am hopeful that this hearing demonstrates to entrepreneurs that Congress 

is very attentive to their needs as the nation’s primary job creators. 

Today’s hearing affords us a unique opportunity to examine some 

success stories, as well as potential areas of improvement of the 

federal government’s efforts to assist entrepreneurs. The vast majority of potential entrepreneurs, as well as the 28 million small 

business owners in the country, do not have the financial resources 

to hire management consultants or business advisors. Nevertheless, these people face numerous operational issues, such as finding 

financing, developing marketing plans, handling production and 

complying with the myriad of local, state, and federal regulations. 

3

Many of the programs we oversee in the Small Business Committee are designed to assist already established businesses. So I 

am pleased and excited to be a part of playing a role to assist small 

business entrepreneurs and start-ups. 

The spirit of entrepreneurship does need nurturing in our country, and to that end, Congress has authorized a wide variety of programs to assist small business owners and budding entrepreneurs. 

The SBA’s Entrepreneur Development Programs operate in tandem 

with a number of other business outreach programs operated by 

other federal agencies, as we all know, such as the Department of 

Commerce and the Department of Agriculture. Some are designed 

to provide advice to small business, such as the Department of 

Commerce’s Trade Assistance Program. Others offer assistance to 

specific groups, such as the Center for Veterans Enterprise at the 

Department of Veteran Affairs, as the Chairman alluded to. 

As with any government program, oversight is very critical for 

these program. Mr. Shuler’s briefing memorandum for this hearing 

did a superb job of highlighting some of the specific issues to be 

addressed in each of these programs under review today. These 

programs must be closely coordinated to insure a maximum level 

of flexibility for our nation’s entrepreneurs so that these small 

business owners do not encounter a patchwork that is confusing 

when they approach the government for assistance. 

The need for better coordination and efficiency led Chairman 

Shuler and I last year to direct the Government Accountability Office to examine how the SBA’s programs can be better coordinated 

with those at the Department of Agriculture. The results of that review should help the SBA do a better job of coordinating its disparate outreach efforts so that entrepreneurs in rural America will 

have access to the best resources and expertise when they interact 

with the government. 

Again, thank you all, to our witnesses, for taking your time out 

today and providing valuable insights. 

Mr. Chairman. 

Chairman SHULER. Thank you, Mr. Fortenberry, for your testimony. 

I ask unanimous consent that the record be open for five days 

for members to submit their statements. 

Hearing no objection, so ordered. 

Our first witness today is Anoop Prakash, Associate Administrator for Entrepreneurial Development for the U.S. Small Business Administration. In his capacity, he manages the SBA’s Technical Assistance Program, providing training and business consulting to small business clients. 

Mr. Prakash, thank you so much. You have five minutes for your 

testimony. 

STATEMENT OF ANOOP PRAKASH, ASSOCIATE ADMINISTRATOR, OFFICE OF ENTREPRENEURIAL DEVELOPMENT, 

SMALL BUSINESS ADMINISTRATION 

Mr. PRAKASH. Chairman Shuler, thank you for having me. Distinguished members of the Committee, we appreciate the invitation 

to share with you the important work for the Office of Entrepreneurial Development. 

4

I am Anoop Prakash, the Associate Administrator for the Office 

of Entrepreneurial Development. 

Our mission is to help entrepreneurs start, grow, and succeed by 

providing a nationwide network of resources both for training and 

counseling through a physical network of resource partners, as well 

as through our online training resources. 

In fiscal year 2007, our portfolio programs counseled and trained 

over 1.4 million entrepreneurs, and we serve our clients primarily 

through our three resource partners, the Small Business Development Centers, the Women’s Business Centers, and the SCORE 

Network, who are all well represented with me here today on the 

panel. 

We also serve them through our Small Business Training Network, which is our online training platform. 

Today I would like to focus on the strategic direction our office 

has been taking over the past year and will continue to pursue 

through fiscal year 2008. We have been focused on three core areas 

to improve our program management and further impact economic 

development across the country. 

Our first area of focus is to accelerate delivery of SBA products 

and services into under-served markets. Agency activities in this 

area fall into three broad categories. First and foremost is improvement of entrepreneurial literacy and technical assistance in the 

inner cities. 

Our first pilot has been a collaboration between the New York 

SBA district office, the New York Small Business Development 

Center, and New York SCORE Chapters to deliver training and 

counseling to Operation Hope’s center in Harlem, New York. At 

last report, we were on pace to double the number of entrepreneurs 

counseled and trained in that community and hope to see more collaborations in 2008. 

Our second area of focus for the undeserved is to improve access 

to capital in undeserved communities through improved lending 

processes and loan products. You have heard from my colleagues 

in the past about rural under advantage, and that is just one example of the programs we are putting into place. 

And lastly, we have created an inner city training program called 

the SBA Emerging 200. This program will provide intensive growth 

oriented training to in-business emerging inner city companies. The 

goal is sustained job creation by focusing on companies with the 

highest potential for growth in the most economically distressed 

communities. 

We currently have limited coverage in the inner city with our 

current partners and resources, and it is important that we work 

with the companies that are emerging in those areas. 

It is important to note that the Emerging 200 initiative is not duplicative of current ED programs because of the current coverage. 

Current programs serve entrepreneurs at every stage of business 

development. They also cover very large geographic areas statewide, and they reach out broadly to minority women and veteran 

entrepreneurs. The Emerging 200 initiative is targeted, 200 inner 

city companies with established revenue in business that have high 

potential to grow and create jobs in the communities that have lost 

the most jobs. 

5

Our second major area of improvement in ED is the quality of 

customer service for our grantees. We have completed two major 

projects in this area. First, we have reengineered the Small Business Development Center financial exam process, and we have also 

streamlined the Women’s Business Center operations and the program announcement. In both cases we have received extremely 

positive feedback from the center directors and our clients and are 

committed to continuously improving in these areas. 

The goal across all these continuous improvement activities is to 

make sure our compliance and risk management responsibilities 

are met, that we are taking a practical and proportionate approach 

in terms of so that we allow our grant recipients to spend more 

time doing what they do best, which is to serve entrepreneurs. 

Our third area of focus is to increase investment in our online 

assessment and training tools. As you might imagine, the increase 

in demand for online training and assessment tools has spiked dramatically. We are currently seeing about one-fourth of all clients 

coming through to SBA and through to our training and counseling 

programs coming online, and we would probably expect to see 

about one-third by the end of 2008. By the end of 2008, we will 

probably see fully a third of our training and counseling numbers 

coming through our training network or those of our partners that 

are on line. 

The courses are available to anyone free of charge, and on average we are seeing 1,200 entrepreneurs a day coming to our site and 

the training, and we are continuing to invest there. 

One additional area I would like to touch upon is our focused 

outreach to veterans. As a former marine and veteran, I am passionate about serving both past and present members of our Armed 

Forces and their families. ED Resource Partners do a tremendous 

job of reaching veterans through their counseling and training programs. One contributing factor to our resource partners’ success is 

that several of our Veterans Business Outreach Centers are collocated with some of the larger state veteran populations and with 

our SPDC programs. Those are in Texas, New York, and Florida. 

Last year ED and resource partners served over 64,000 veterans, 

and 7,383 were service disabled. 

Chairman Shuler, it is a sincere privilege for me to be here and 

tell you about my important work and to work alongside such great 

professionals that I have here next to me who are working on behalf of America’s entrepreneurs. 

Thank you, and I will be happy to answer any questions. 

[The prepared statement of Mr. Prakash may be found in the Appendix on page 42.]

Chairman SHULER. Ladies and gentlemen, we will be back. We 

have a procedural vote, I think, on the House floor. So we will just 

recess for now, and we will be back in about 20 minutes. So we 

apologize for that, but we have to do our duties as well. 

[Recess.] 

Chairman SHULER. Thank you for your patience. Hopefully we 

will not have too many more interruptions before this ends. 

Our next witness is Walter Blackwell, the President and CEO of 

National Veterans Business Development Corporation. The VetVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
6

erans Corporation was established in 1999 to provide entrepreneurial development services for our nation’s veterans. 

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

STATEMENT OF WALTER BLACKWELL, PRESIDENT/CEO, NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION 

Mr. BLACKWELL. Mr. Chairman and Ranking Members and members of the Subcommittee, I want to thank you for the opportunity 

to discuss Veterans Corporation, TVC more specifically, our outreach efforts and business development service delivery to veteran 

entrepreneurs across the country. 

The mission of TVC is to create more prosperous communities 

and a stronger national economy by fostering business opportunities for veterans, service disabled veterans. Our special status as 

a federally supported yet independent 501(c)(3) organization creates a public-private partnership that maximizes the effectiveness 

and efficient use of public funds on behalf of veteran entrepreneurs. 

TVC continues to fulfill its mission in spite of increasingly limited funding from Congress, and the strict privacy laws that deny 

us access to contact information about current and former members 

of our Armed Forces, precisely the individuals who are TVC’s target market for membership. TVC helps our veteran entrepreneurs 

maintain their competitive edge by providing direct program services to veterans, including business education and training, one-onone counseling, participation in transition assistance program seminars at Walter Reed Army Medical Center, and around the clock 

worldwide access to a comprehensive suite of online business tools 

and resources. 

TVC acts as an entrepreneurial catalyst and facilitator for veterans, service disabled veterans, and members of the Armed Forces 

by creating a network of resources leveraging partners and building nationwide community based veteran entrepreneurial support, 

particularly in areas with the largest number of veterans. 

In implementing TVC’s mission, our goal is always to reach the 

most veterans possible. To that end we must leverage every dollar 

we receive to a worldwide program that reaches out to veteran entrepreneurs in every state, on then front lines, and in all stages of 

business creation and growth. 

Under the auspices of our mandate to establish and maintain a 

network of centers nationwide, we operate a strong national hub 

headquartered in Washington, D.C. that provides direct business 

counseling and is responsible for implementing programs that can 

provide veterans across the country with the most critical business 

tools, resources and knowledge. 

TVC’s competitive grants process allows TVC to identify, cultivate and support veteran entrepreneurial programs at business 

resource centers nationwide in order to bring one-on-one information and resources to more local veteran communities. TVC has listened to its constituency and established significant, effective programs that are successfully helping veterans start and grow businesses. Responding to veteran entrepreneurs’ pleas for access to 

7

capital, TVC created a program that is without a doubt the most 

successful program in the veteran owned business community. 

In Fiscal Year 2007 alone, almost 46,000 veterans seeking capital 

to starter grow businesses downloaded our Access to Capital Questionnaire. Two hundred and sixteen submitted answers; 209 received individual financial counseling by our national staff who 

worked with them to refine their business plans and prepare for 

loans. We referred 73 of those veterans to our partner, the National 

Economic Opportunity Fund, NEOF, which provided two or more 

financial strategy and advising sessions to each of those 73. 

Through TVC and NEOF’s partnership, veterans are eligible to 

receive financing above and beyond those that are offered by the 

SBA on a fraction of SBA’s budget and staff size. Two tremendous 

success stories clearly illustrate the positive effect TVC’s Capital 

Access Program has on our veterans. 

One example is the Army National Guard Lieutenant Trinity 

Cazzola, who was used to being a man on a mission. In 2007, while 

he was still deployed in Iraq, he expanded his mission to include 

lending his entrepreneurial spirit to the rebirth of New Orleans. 

On November 26, 2007, Lieutenant Cazzola opened Mayas Restaurant on Magazine Street in New Orleans. Just four short 

months earlier he was on active duty in Iraq. It was from Iraq that 

he contacted TVC for help. Lieutenant Cazzola called our office in 

D.C. during his down time, 12:30 a.m. Baghdad time, and talked 

to our staff about the need for capital and the barriers he faced on 

active duty in Iraq. 

TVC provided Trinity with full service support from business 

plan to advice, worked with our local bankers and in fewer than 

60 days, Lieutenant Cazzola found a loan to get his business started. 

In Fredericksburg, Virginia, TVC helped a soldier and his family 

create a triumph moment on November 22nd, 2007. Over the past 

four years the Santiago family had been coping with traumatic 

brain injury Joe Santiago suffered while he was on a mission in 

Kuwait. Unable to hold a traditional nine to five job, Joe and his 

wife decided to go into business and opened a franchise that they 

could own and manage as a family. 

When their loan fell through at the last minute, Joe and his wife 

contacted TVC. TVC’s partner NEOF began negotiating with bank 

officers, and within a month the Santiagos had the loan and were 

preparing for their grand opening, a Nestle Tollhouse Cafe by Chip 

franchise. It is an accomplishment that once seemed impossible, 

but it was achieved through the help of our TVC partner. 

TVC’s national hub has also implemented a nationwide surety 

bonding program. This program is crucial. For veteran contractors 

to secure some of the 550 billion nonresidential construction trade, 

they must be surety bonded. Through TVC and its partner, the 

Surety and Fidelity Association of America, celebrating its hundredth anniversary this year, veteran contractors have access to 

education and training that teaches them how to do business with 

the government and how to become bonded. SBA’s program is 

capped at $2 million with an average SBA-backed bond at about 

$250,000. This is not enough for veterans and service disabled veterans to successfully compete for federal contracts. 

8

By comparison, TVC’s program is in all 50 states. It has no caps, 

and last year, TVC helped qualify 6.7 million in new surety bond 

programs. These Affinity partnerships help TVC make the best use 

of its restricted staff and financial resource. Each partnership is 

carefully considered and the specific applicability and value of the 

veteran entrepreneurial community. Each Affinity agreement is 

vetted through our pro bono law firm to insure that TVC and veteran interests are being well maintained. 

In keeping with the rapid pace of change in our military and our 

economy, TVC’s national staff members created and monitor an online veteran’s business forum, connectvets.com, that facilitates veteran-to-veteran business support. 

One veteran wrote TVC on February 20th to thank him for this 

forum saying, ‘‘The information you provided me will assist our attorneys in a more timely and accurate preparation of our new 

teaming agreement. Keep up the great work.’’

Additionally TVC staff members make presentations at conferences, seminars and events and implement nationwide programs 

that reach specific veteran communities, including service disabled 

veterans and members of the National Guard and reserve. 

Added to these programs, TVC is a component of the Army career and alumni program, ACAP, and is opening an office at Walter 

Reed Army Medical Center through which we are providing direct 

counseling, posting business classes, and serving as a critical transition step for our nation’s men and women. 

TVC also—

Chairman SHULER. Excuse, Mr. Blackwell. Are you getting close? 

Mr. BLACKWELL. I have more. 

Chairman SHULER. Obviously it has been submitted to the 

record. So if we can, let’s move on. We typically only have five minutes, and we never know when the next procedural vote will come 

forward. 

Mr. BLACKWELL. All right. 

Chairman SHULER. So thank you for your testimony. I do apologize. 

Mr. BLACKWELL. Oh, that is fine. I just would like to ask that 

TVC’s annual report, our audit report, our strategic plan, and letters from support be entered into the record as well, sir. 

Chairman SHULER. Yes. 

Mr. BLACKWELL. Thank you. 

[The prepared statement of Mr. Blackwell may be found in the 

Appendix on page 46.]

Chairman SHULER. Our next witness is Don Wilson, President 

and CEO of the Association of Small Business Development Centers. The association has a partnership program uniting private enterprise, government, higher education, and local nonprofit development organizations. 

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

STATEMENT OF DONALD WILSON, PRESIDENT, ASSOCIATION 

OF SMALL BUSINESS DEVELOPMENT CENTERS 

Mr. WILSON. Thank you, Chairman Shuler. 

9

It is an honor to appear before the Subcommittee and discuss the 

Small Business Development Center Program. 

A little over 30 years ago, the SBDC started as a pilot program 

in a handful of universities. Since that time, the program has 

grown to 63 programs in all 50 states, Puerto Rico, Guam, American Samoa, the District of Columbia, the Virgin Islands. We are 

now serving approximately 600,000 small businesses annually. Unfortunately those numbers are declining. 

For the last seven years, until the 2008 fiscal year, SBDC funding from 2001 until 2007 was going backwards. As a result, the infrastructure had been decaying, not unlike bridges, roads, et cetera. 

We are very fortunate and appreciate your leadership, the leadership of Ms. Vela ́zquez and others on the committee who have advocated for increased funding for this program. We are not back to 

where we need to be in inflation terms. If you look at 2001, you 

have gone down about 24 percent until we got this new increase. 

If you will look at the testimony, page 2, I cite a number of examples of what is happening in individual state programs: the loss of 

counselors, the loss of centers. 

You know, speaking of veterans, we normally serve 50 to 60,000 

veterans annually. We are now below 50. We simply do not have 

the counselor capacity to serve them like we would like to. We hope 

that the additional dollars that we have received in 2008 will begin 

to reverse that. 

But incredibly and unfortunately, the administration’s budget 

has proposed for 2009 a $10 million cut, which, quite frankly, 

would be catastrophic. 

Our biggest concern right now is to look at the economy in the 

state that it is in, the declining jobs, the severe credit crunch that 

small business is facing, rising energy costs and so forth and realize that for many small businesses, they have only been in business 

during the good years, say, the last five years when the economy 

was growing. They have never faced a declining economy. It is kind 

of like a stock broker never being in a bear market. 

These people, many of them without any management education, 

will be coming to us for assistance to keep their businesses afloat, 

and we are not going to have the counselor capacity to serve them. 

We work with all of our partners. We work with Women’s Business Centers. We work with SCORE. We work with the Veterans 

Corp. We work with the PTACs. We tried to work with the TAP 

Program with the military so that we are reaching all of these individual constituencies. 

I think the numbers are very dramatic. Over 40 percent of SBDC 

clients are women. That is decidedly higher than the percentage of 

business owners who are women. Well over 30 percent of our clients are minorities, once again, considerably higher than the percentage of minorities among small business owners. 

We have identified the at risk, the under-served. We are trying 

to reach out to them, but we cannot continue to do it. We cannot 

do more with less, as has been suggested to us for a number of 

years. 

I do want to acknowledge the tremendous cooperation that we 

have had from the Associate Administrator and his staff and his 

10

predecessor, Cheryl Mills. Many of the issues that we have had 

with the agency over the years have been, I think, alleviated. 

For many years, SBA basically goaled us on how many people we 

saw. Our funding partners goaled us on our economic impact. And 

so as a result of the work of Anoop and his predecessor, that has 

been changed, and I think that is very, very favorable to the outlook for this program. 

One of the things that concerns us, Mr. Chairman, is we are now 

beginning to see a number of new grant programs designed for 

SBDCs. There was some confusion as to whether that intended 

that those monies were to come out of core funding or new funding. 

That is an issue that we brought to the attention of all of the staff 

on both the House and the Senate side, both the authorizing committees and the appropriating committees, and we are very grateful for the response that we are getting to address that issue. 

We do not want to see a situation where we take monies away 

from, say, 42 or 45 states who are serving veterans to provide a 

veterans grant program for half a dozen states. That is a zero sum 

game, and that will not serve our veterans well. 

At this time I will be glad to answer any questions that you may 

have. 

[The prepared statement of Mr. Wilson may be found in the Appendix on page 56.]

Chairman SHULER. Thank you, Mr. Wilson. 

Our next witness is Melinda Sanderson, a member of the Public 

Policy Council for the Association of Women’s Business Centers, 

and she is speaking on behalf of the organization today. 

STATEMENT OF MELINDA SANDERSON, EXECUTIVE DIRECTOR, CANISIUS COLLEGE WOMEN’S BUSINESS CENTER ON 

BEHALF OF THE ASSOCIATION OF WOMEN’S BUSINESS CENTERS 

Ms. SANDERSON. Chairman Shuler, thank you for the opportunity 

to be here today. 

My name is Melinda Rath Sanderson. I am the Executive Director of the Canisius College Women’s Business Center located in 

Buffalo, New York. I am proud to serve as the national chair for 

the Women’s Business Centers Association, as the public policy 

chair. 

The mission of the Association of Women’s Business Centers, 

which was founded in 1998, is to support the entrepreneurial development programs for women across the country. There is currently 

99 federally funded programs, and we see approximately 150,000 

women-owned businesses on a an annual basis. 

I am in a unique position that I bring to you a perspective as 

someone in the field actually running a center. I am proud to tell 

you that at the Women’s Business Center at Canisius College in 

Buffalo, New York, we serve just over 2,000 program participants 

on an annual basis. Since the program was established in 2003, we 

have had just over 8,000 total program participants. 

Our program is somewhat unique, as we are imbedded with an 

entrepreneurial program in the School of Business. We are a completely external business program, but it allows us to truly leverVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
11

age the relationship and the partnership, which is a true publicprivate partnership. 

I also speak to you today having been a woman business owner 

for ten years, and I bring that perspective to my role as Executive 

Director of this particular Women’s Business Center. 

I was asked to address three specific issues. The first one was 

to evaluate the portfolio and the capacity to meet the needs. In my 

testimony, you will see that I have indicated that I think that it 

has been difficult for this particular program, the Women’s Business Center Program, to keep pace with the quantity of growth of 

women business owners in the United States. 

So I think that although we are having significant outcomes, it 

has been difficult to keep pace with the exponential growth of 

women business owners domestically. 

The second area I was asked to address is the SBA’s oversight 

efforts and distribution of resources. Quite frankly, this is the best 

relationship we have ever had with the Women’s Business Centers 

and the SBA, and I applaud the leadership of the Administrator for 

putting in some real solid business practices, setting benchmarks, 

best practices, and implementing some real process improvement 

plans that are going to make a real difference in the running of 

these programs. 

Specifically, I was asked to address the federal resource distribution issue. Recently there was put into place a process improvement which I believe will significantly improve the implementation 

of the payment. It was a model which was selected, a national 

model, a Health and Human Services model, and while it has not 

been implemented yet, it will allow Women’s Business Centers to 

get advanced funding for their grants versus waiting for a request 

for reimbursement, which in the past has taken an incredible 

amount of time. 

So I applaud you for your leadership on that. It is going to make 

a big improvement for cash flow for these Women’s Business Centers, many of whom do not have an institution of higher education 

like a Jesuit institution behind them to support them financially. 

The third area that I was asked to address was recommendations 

to improve the structure and delivery of the program. I think that 

it is critical that Women’s Business Centers have a focus on financial sustainability and leveraging of resources. 

I also think that it is critical for every Women’s Business Center 

to strategically align themselves and partner with the other resource partners, small business development centers, and SCORE. 

In western New York, we have worked very, very hard to develop 

wonderful relationships, and we actually do a significant amount of 

collaborative work together. 

In my opinion, SCORE and SBDC focus primarily on very early 

stage entrepreneurs. In the Women’s Business Center in Buffalo, 

we focus on all stages, but in a very collaborative effort for those 

early stages. Quite honestly, I do not have the resources to be able 

to help people one on one write business plans. So what we do is 

take them after they have gotten their 7(a) or 504 loan and really 

help them to sustain, pay back their money, and grow. 

As far as structure recommendations, I think the district offices 

should have a planned meeting between the resource partners in 

12

their area. I know it is happening in some parts of the country, but 

I do not think there is consistency, and I think that would really 

add to the communication. 

The depth of collaboration and the connection between the entrepreneurial development agencies I believe could be improved, specifically in the area of capital access and procurement. We have 

worked hard in our local market, but I do believe that there is a 

disconnect on the national level with helping those that have already received SBA funding to really help them pay back their 

loans and grow their businesses. 

The Women’s Business Center Program should be recognized as 

an economic development agency versus a social service agency. I 

believe there is a little bit of confusion in the marketplace around 

the country, and I would like to thank you for this opportunity to 

present this testimony. 

[The prepared statement of Ms. Sanderson may be found in the 

Appendix on page 63.]

Chairman SHULER. Thank you. 

As you have heard, we have another vote. So we will be in recess 

for about 15 minutes, and we will be right back. 

[Recess.] 

Chairman SHULER. This hearing is called back to order. 

We probably have 20 minutes. So I have spoken to Mr. Yancey 

and Mr. Carroll, and they are going to speed up the process, and 

thank you for that. 

Our next witness is Ken Yancey, Chief Executive Officer of 

SCORE, the Service Corps of Retired Executives. SCORE has 389 

chapters in locations throughout the United States and its territories, with over 10,000 volunteers nationwide. 

Mr. Yancey, you will be recognized for less than five minutes. 

STATEMENT OF KEN YANCEY, CEO, SCORE 

Mr. YANCEY. Thank you, Mr. Chairman, Mr. Fortenberry. 

My name is Ken Yancey, and I am the CEO of SCORE. We appreciate this opportunity to testify. 

As you know, SCORE is a resource partner with the Small Business Administration. SCORE offers free business counseling and 

low cost workshops to small business owners and those who would 

like to start a business. Since its founding in 1964, SCORE has 

helped nearly eight million small businesses. Today SCORE offers 

its services through 389 local offices and over 800 branches across 

the country. 

Last year SCORE volunteers provided mentoring to nearly 

340,000 entrepreneurs and provided workshops to almost 119 people. Our volunteers donated more than 1.1 million hours in fiscal 

year 2007. SCORE’s total cost to the federal government was reported by the SBA to be $9.8 million. That comes to $8.90 per hour 

for expert business advice. 

By helping new and growing small businesses, SCORE supports 

job creation nationwide. In 2007, the SBA reported that SCORE 

volunteers helped to create more than 19,700 new businesses, and 

SCORE estimates 25,000 new jobs were created. 

13

SCORE was one of the first organizations on the WEB to offer 

E-mail advice. SCORE’s 1,200 online counselors now provide advice 

in more than 600 business areas. Online counseling represents 

more than 38 percent of our total business. 

SCORE also offers free online information and workshops on how 

to start, manage, and grow a business. Last year more than 2.6 

million people visited score.org. SCORE offers online resources specifically for women, minorities, young entrepreneurs, Baby 

Boomers, manufacturers and veterans. More than half of SCORE’s 

clients and 25 percent of our volunteers are women and minorities. 

Men and women serving in the Armed Forces can count on 

SCORE for business mentoring and advice. For veterans who 

owned a business before being called into service, SCORE can help 

with marketing, business recovery and other plans to reestablish 

and grow their business. 

SCORE counselors provide assistance for the new SBA Patriot 

Express pilot loan initiative, which offers loans to help start or 

grow a business. SCORE volunteers, many of whom served in the 

military themselves, are proud to support the success of these entrepreneurs. 

SCORE continues to work to increase outside funding. Last year SCORE raised more than $1 million in total contributions from corporate and foundation and volunteer sources. While major corporations are interested in reaching out to entrepreneurs through 

SCORE, they mainly provide funding for specific projects, not infrastructure, not general support, not organizational growth. These 

targeted donations rarely go into SCORE’s general fund, and they 

cannot replace the dedicated appropriation we receive from Congress each year. 

SCORE will continue to rely on the federal grant for those operating funds. To meet rising costs, expand services, and modernize 

operations, we request that this Subcommittee consider urging the 

House Appropriations Subcommittee on Financial Services and 

General Government to fully fund SCORE at $7 million in fiscal 

year 2009. That additional funding would allow us to serve our clients better. 

Chairman Shuler, we are here to help entrepreneurs achieve 

their dreams of success and strengthen the U.S. economy, especially during a time of economic uncertainty. SCORE volunteers 

help to create one new job for every seven new counseling sessions 

and one new business for every ten new counseling sessions. That 

is a valuable economic impact for our nation at a very reasonable 

cost. 

We appreciate our partnership with the SBA and the others that 

are here. Thank you for this opportunity to testify. 

[The prepared statement of Mr. Yancey may be found in the Appendix on page 67.]

Chairman SHULER. Mr. Yancey, an outstanding job on time. 

Our final testimony will be provided by a resident in my district 

who has served a very important role in promoting the region’s 

growth. Dale Carroll is the President and CEO of AdvantageWest, 

Western North Carolina’s Regional Economic Development Commission. Dale Carroll is the past President of North Carolina’s EcoVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
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nomic Developers Association, where he has helped lead statewide 

efforts in 2003 to promote passage of landmark legislation through 

the Economic Stimulus and Job Creation Act. 

Dale, you have five minutes. 

STATEMENT OF DALE B. CARROLL, PRESIDENT AND CEO, 

WESTERN N.C. REGIONAL ECONOMIC DEVELOPMENT COMMISSION, AdvantageWEST ECONOMIC WEST GROUP 

Mr. CARROLL. Thank you, Congressman Shuler, and it is good to 

see the Ranking Member, Congressman Fortenberry, again today. 

When I was with you in mid-November, I introduced the Certified Entrepreneurial Community Program to you at that time. 

You were having a hearing about collaboration between USDA and 

SBA and how that might be extended to the grassroots level and 

become even more effective in places like western North Carolina. 

I am glad to give you an update today on the Certified Entrepreneurial Program. We now have 14 communities that have completed the required leadership mean training in the Certified Entrepreneurial Community Program. They are moving through the 

checklist of requirements in order to become certified. 

This program is building momentum not just in western North 

Carolina. I am pleased to update you today and let you know that 

the Economic Development Organizations in seven different states 

have now contacted us with interest in our Certified Entrepreneurial Community Program. 

As related to today’s topic where you look at SBA related programs, as I told you back in November, we have a good working 

relationship with USDA Rural Development, with SBA in western 

North Carolina, SBTDC which is the Small Business Development 

Center version of that program in North Carolina. It is called 

SBTDC. 

In the case of the Certified Entrepreneurial Community Program, one of the requirements on the checklist is that these leadership teams, including some of the most rural areas of North Carolina, develop better access to technical assistance and capital formation programs for the entrepreneurs in their given communities. 

As I introduced the subject back in November, I want to reinforce 

the point again today. We believe that the CEC Program with the 

requirement regarding better technical assistance and access to 

capital programs through organizations like SBA and SBTDC in 

North Carolina, CEC can be a platform for delivering those services. 

Let me summarize it this way. Just like it is not practical for 

AdvantageWest as a regional EDC based in Ashville to have a staff 

person in all 23 of the countries that we serve, we have to find 

ways to deliver our programs and services. 

I would submit to you that SBA and SBTDC that is funded in 

part by SBA could do the same thing like we are doing now 

through the CEC Program. The leadership team in each community is going to be required to not only catalogue and promote services like SBA and SBTDC through their brochures, their Web sites, 

the campaign that they do with the local business writers with the 

media, but they will also do something called the Blue Ridge Entrepreneurial Council Forum Series, where they will have ongoing 

15

workshops where SBA experts could come in and make presentations, where SBTDC staff could come in and meet entrepreneurs 

first hand on a regular scheduled basis. A real economy of scale 

could be picking up by doing things this way in western North 

Carolina. 

As I close, let me thank you again for including our program in 

your hearing as you look at these and other important subjects, 

and if I can answer any questions about how the Certified Entrepreneurial Community Program can be a platform for delivering 

SBA and SBTDC services at the local level, I will be glad to talk 

about that. 

Thank you. 

[The prepared statement of Mr. Carroll may be found in the Appendix on page 76.]

Chairman SHULER. Thank you, Mr. Carroll. 

At this time I will open it up for questions. Mr. Prakash, is that 

the proper pronunciation? 

Mr. PRAKASH. Prakash. 

Chairman SHULER. Prakash, Mr. Prakash. I apologize. 

This year Congress gave $97 million to the SBDC Program for 

the modernization and expansion of its services. Six months into 

the fiscal year, state SBDCs have not received any of its resources 

or its funding. 

When will the agency allocate the $97 million? 

Mr. PRAKASH. Chairman, we have actually allocated those funds 

as of this week. Part of the hold-up was our consideration for some 

of the new legislation that had been passed, specifically the energy 

bill and the veterans bill, and making sure we had the right 

amount of money. We did not want to promise something that we 

could not deliver on, and so we did provide those accurate funding 

numbers actually as of Monday this week. 

Chairman SHULER. Was that noted to the folks that it was going 

to take that amount of time? I mean, six months is an awfully long 

time. 

Mr. PRAKASH. Sure. No, I think we all would have loved to have 

provided that early. It hurts our own planning, in fact, to not provide that sooner. We have been working closely with Mr. Wilson 

here and his board chair, Ms. Keenan, to make this happen as soon 

as we could, and a lot of that had to do with some of the questions 

that were left open in terms of the authorizing language and the 

appropriating language and bringing those together so that we 

were synched up. 

Chairman SHULER. Very good, and obviously as we well know, 

everything up here does move extremely slowly. 

Mr. PRAKASH. Absolutely. 

Chairman SHULER. What has the SBA done to insure that the 

programs are keeping pace with the changing demographics of our 

veteran population? 

Mr. PRAKASH. Well, I think I would love to also allow my peers 

to respond because they are the ones on the ground delivering 

those services every day. I can tell you that from our point of view, 

you know, we have a large emphasis on veterans service through 

all of our partners. Our online training speaks directly to veterans, 

16

particularly when it comes to our Patriot Express loan program. 

That has been a great success, and it is a core mission of our agency. It has been a core mission, and it is something that we think 

about very seriously every day. 

As far as the changing demographics of veterans, obviously there 

is a lot of return. Veterans are tapping into some of the transition 

assistance programs, particularly those resource partners who are 

located near places where there is transition happening, the larger 

military installations, and again, you know, I think the response 

has been tremendous. Particularly through the SBDCs and the 

Women’s Business Centers and the SCORE program equally have 

served a disproportionately larger share of the veteran population. 

Chairman SHULER. Mr. Blackwell, in my opening statement we 

recognized that only one-third of our veterans are obviously aware 

of the program. Do you agree with that part? And it is okay to disagree. 

Mr. BLACKWELL. Absolutely. I mean, we are one of the best kept 

secrets in Washington, let alone in the other cities and rural communities. 

Chairman SHULER. We will help fix that. 

Mr. BLACKWELL. Yes. It is a serious issue. As I mentioned, one 

of the core problems really revolves around the fact that we do not 

know who those people are until they self-identify. I have often 

used the term there are three times that a person drowning uses. 

‘‘Hey, I am out here.’’ The second time, ‘‘I am in trouble.’’ The third 

time it is, ‘‘Goodbye.’’

We are getting our veterans somewhere between two and three. 

They have gone through the traditional sources, the VA, the SBA. 

They may be confused by the Web site. They may not be close to 

an SBDC. They are not close to a DOL one-stop, and they are really confused about how to get through the process. 

Sometimes we get them at the point where they have just abandoned all hope. So we absolutely agree there has to be a better way 

to get the message that there is an organization that works with 

all of my friends here at the table today, that is consolidating the 

salient points for them to start or be successful in a business that 

is already there. 

Chairman SHULER. And I will note that I met recently with our 

veterans, our VFW and our American Legion, and they are having 

the exact same problem reaching out to our veterans, and part of 

it just a mental state after coming back home. The mental stress 

that they are under at that particular time that when they are 

leaving, that is the last thing on their mind. 

Mr. BLACKWELL. I think it is two really flavors of ice cream here. 

The first is our guys are coming back much faster. So they are coming back from a theater of activity back into a civilian life without 

those transition times that are so crucial for them to readapt to a 

peacetime environment. At home it is very hard for them to do that 

quickly. 

The second piece is they are coming back as you say in a mode 

of ‘‘I do not want to talk about it right now. I am going to go do 

something else for a while.’’ So they put that time of transition into 

a longer period to where they are really ready to go look for and 

get advice. 

17

Chairman SHULER. Thank you. 

And I think we do have to continue to work with our veterans. 

They need the support whether it be health care and obviously in 

small business to give them an opportunity and have that outreach. That is something that I know Mr. Fortenberry and I will 

continue to talk about and stress, the importance of having the 

contacts and relationships that you can reach out to them. 

Mr. BLACKWELL. I would just close on that piece by saying that 

we need whole people to be whole businesses. 

Chairman SHULER. Absolutely. 

Mr. BLACKWELL. And we really have to address all of the issues 

that veterans face, whether that is health care or well care, whether that is family services. You cannot be in a business that demands so much of your time that small businesses do without having a whole person to start that process, go through the process 

and be successful. 

Chairman SHULER. Okay. It was not quite 20 minutes. I would 

like to ask one last question and then I would like to turn to my 

colleague. 

This will be for Mr. Wilson and Ms. Sanderson. You know, with 

the tremendous amount of our budgets continuing to be cut, tell us 

about your outreach with the private sector and different foundations, how you are actually being able to gain capital and capitalize 

even though the funding is not there from the federal government. 

I mean, you can look at the signs all over the halls. Democrats 

and Republicans talk about our debt. So if you do not mind, talk 

about your outreach to the community and how you have been able 

to gain so much economic structure for your organization. 

Ms. SANDERSON. This is Melinda Sanderson. 

We have been able to leverage our resources and our relationships because we are an institution of higher education. We have 

significant representation on our public directors who are lenders. 

They are SBA lenders, and because we are not doing direct lending, 

some Women’s Business Centers are micro lenders, but we are not. 

They see a direct benefit to the sponsoring of programs, and we 

have been very successful. 

The SBA percent of the budget currently is 37 percent, and we 

have been very successful in raising corporate and foundation dollars, as well as individual donors. 

So I think it is finding the right partner. I think if you have got 

the right partner that has got the respect, I think that makes a big 

difference. And then showing that there is really something in 

there for that, there is a benefit for these banks to run a sponsored 

program that has access to our clients. 

Chairman SHULER. Mr. Wilson. 

Mr. WILSON. Mr. Chairman, we have, of course, had a requirement from the outset to access the federal dollars, we have to raise 

non-federal dollars, and we have done that through state governments, local governments, foundations, corporations and so forth. 

One of the issues is the whole design of the program was that 

the federal dollar would leverage the non-federal dollar. And so 

when you get states that match and the federal dollar never goes 

up, the states are not likely to go up. 

18

And now with this current economic downturn, all you have to 

do is look at foundations and you see where their stock portfolios 

are going. You see banks which have often been very helpful for us 

because we bring them high quality loan candidates. Their dollars 

are declining. States that are facing severe budget deficits which 

by law by their state constitution they cannot have. They are cutting back. 

And so the issue now is not the same rosy outlook in terms of 

getting matched that it was, say, three or four years ago, and quite 

frankly, we encounter all the time if the federal government does 

not believe in this program, you know, we are not going to start 

pouring a lot of money into it. 

Fortunately, with 208, with the help of Ms. Vela ́zquez and others, we have been able to change that, and I have had several people tell me that that has resulted in a new match for them. But 

we have had some states that are in such dire stress for their 

budget that they have had to cut back on some of our match. 

Chairman SHULER. At this time I would like to recognize Ranking Member Mr. Fortenberry for his questions. 

Mr. FORTENBERRY. Thank you, Mr. Chairman. 

First of all, let me thank you all for your patience through the 

disruptions today, and let me give a little speech, a little editorial 

comment, and then I will go to my questions as well. 

This is an oversight hearing. Obviously, as members of Congress 

who are charged with responsibility for this area of federal spending, it is our responsibility to make sure taxpayer monies are used 

prudently and wisely. But I think you will find in us some that 

some oversight hearings can be a bit raucous and contentious, and 

of course, if there is something wrong we need to find it and point 

it out, but I think the spirit in which we approach this through the 

leadership of the Chairman has been a working partnership. 

If you see things that are not right, if you see things that could 

be done better, if you can enliven your work with the spirit of entrepreneurship so that we could use our limited funds most efficiently, expand where appropriate, maybe pull back on things that 

are dated and no longer apply, that is very helpful to us in helping 

you do your jobs as well. 

And in that regard, let me ask you, Mr. Prakash. I appreciate 

your comments. The Emerging 200 targeted program for inner cities, do you have something under consideration for rural communities that would be concentrated like the Emerging 200? 

Mr. PRAKASH. Thank you for your question, sir. 

Right now the Emerging 200 is standing alone as an inner city 

program. Certainly for rural entrepreneurship, we have had a 

number of interesting programs go through. 

First of all, Rural Lender Advantage, which I know, again, my 

colleague Mr. Zarnikow has briefed this Committee on or the 

broader Committee, and what we have found in the rural areas, 

the most important thing there is reaching rural communities because of the dispersion and the geographic dispersion; we have 

found that the best tools to reach rural communities are not only 

through our resource partners, but also our online training and online tools and working with local economic development organizaVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
19

tions who can deliver those in their places of business much like 

the program Mr. Carroll described. 

You know, as far as doing a concentrated technical assistance 

program there, there is just not enough density to be able to deliver that to rural America, and that is why we have been working 

through the banking community with Rural Lender Advantage, because the banking community has that scale, has that leverage, 

and you know, they have a co-investment and alignment of interest 

to grow that community. 

Mr. FORTENBERRY. Yes, it is a very interesting concept and the 

reason I raise it. And if you look at the work Mr. Carroll has done 

in terms of coordination of all resources and elevating it to a new 

concept which gives, I think, real excitement that rallies even small 

communities around an idea of it being a certified entrepreneurial 

community, again, I put it on the table as perhaps an entrepreneurial governmental policy idea that lifting the best practices from 

what you are doing there and success stories and applying it in 

perhaps a more micro way, even though it might not be as concentrated of an area in terms of economic opportunity, need, or 

population; nonetheless, the severity in some areas of rural communities that are experiencing significant resource decline and dislocations which cause tremendous problems and stresses and duress for communities, again, may fit what I was talking about earlier in terms of entrepreneurial policy thinking. 

So I leave that to you all to ruminate on. 

Mr. Chairman, do we have a few more minutes? It is just about 

ten minutes of. 

Okay. Mr. Blackwell, you had pointed to an interesting story 

about a disabled veteran who has a wonderful success story. What 

types of entrepreneurial opportunities do you see emerging for disabled veterans, best fits for people who are suffering from significant consequences of their public service to this country and have, 

therefore, certain limitations on their ability to move and pursue 

the range of opportunities most of us take for granted? 

So what do you see as real potential there? Because, again, as 

I mentioned earlier, I think we do need to elevate your good work 

so that it is widespread and known, but there may be a subset of 

the niche you are talking about in terms of disabled veterans’ opportunities. 

Mr. BLACKWELL. There are veterans who have very strong family 

ties, wives, children, who are able to enter into franchise businesses, not just the Santiagos were able to do. Joe’s traumatic 

brain injury allows him to be at the building, but it is really his 

wife Stacy and their three daughters that are making this work 

and give financial stability to that family. 

So the franchise opportunity continues to grow. That is why we 

work with the International Franchise Association to make that 

happen. 

In terms of severely disabled vets who are able to participate either in homebound business activities or able to go into outbound, 

we are very actively involved in establishing call centers. Call centers in Chattanooga, Tennessee will come on line some time midnext month. We are very excited because that is a 150 seats. They 

can do that from their home with special assisted equipment. 

20

We have made all of our Web site activities 8(a) compatible so 

that all of our activities are available regardless of your disability. 

We are working, as I mentioned earlier, with Walter Reed to see 

if an internship program will work with local kind of mini mentors 

in the area. The first of those folks will be coming into our offices 

directly to work on the phones and to get direct advice on businesses. 

So I do not think that there is a specific range of jobs that are 

available. What we are trying to do is see where the knowledge and 

assets that maybe the physical liabilities do not allow would allow 

them to go into either a coordinated activity for counseling other 

vets in jobs or sharing their information about their professions. 

Mr. FORTENBERRY. Great. Thank you. Thank you very much for 

that. 

I will continuing questions, Mr. Chairman, if that works. Are we 

ten minutes in? No, we are five minutes. 

Chairman SHULER. The next bell. 

Mr. FORTENBERRY. Thank you for your leadership, Mr. Chairman. 

[Laughter.] 

Chairman SHULER. We will be in recess and we will come back 

in ten or 15 minutes. 

[Recess.] 

Chairman SHULER. At this time I would like to recognize the 

gentlewomen from New York, Ms. Yvette Clarke, for her questions. 

Ms. Clarke. 

Ms. CLARKE. Thank you very much, Mr. Chair and Ranking 

Member Fortenberry, for holding this very important hearing. 

Let me just start by stating that it is evident that there is a direct relationship between the technical assistance and positive success rate for small businesses. In fact, there is evidence that firms 

that receive technical assistance double their chances to succeed. 

Small businesses in many inner city communities, including my 

district, benefit from accessible, affordable technical assistance, and 

as more socially economically disadvantaged and women-owned 

businesses continue to grow rapidly, we must continue to find ways 

to provide resources they need to succeed since these businesses 

have historically faced so many obstacles in order to start and to 

improve their companies. 

I would like to start my questioning to Mr. Prakash. As you 

know, my colleague, Chairman Shuler, introduced H.R. 2389, 

which is the Small Energy Efficient Business Act, which was later 

incorporated into the House energy bill that passed last August. 

These provisions require the SBA to develop an Energy Star Program for small businesses and to provide grants through SBDCs to 

help small businesses become energy efficient. 

My question to you is: has your agency started developing the 

Energy Star Program? And do you intend to insure that small businesses who need financial assistance the most to become energy efficient will be able to get that funding? 

Mr. PRAKASH. Thank you for the question. 

We have, indeed. Obviously we are in receipt of the passing of 

the Energy Efficiency Act. We are looking forward to implementing 

the bill. Part of the delay, frankly, for us was making sure we unVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
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derstood what the funding was going to be in 2008 for the agency, 

and at this point now that that is clear and we know that we are 

going to be providing to the SBDCs, we are looking forward to implementing a pilot set of grants for the energy efficiency audits that 

were required by the law. 

Ms. CLARKE. And can you give us a sense of how the Energy Star 

Program will work for small businesses, what structure and infrastructure has been put in place to facilitate that? 

Mr. PRAKASH. I think I may be confused around the Energy Star 

Program. I am speaking to the Energy Efficiency Grant Program 

to the SBDCs. I am less familiar with the Energy Star requirement, but I am assuming you are speaking of the same thing. 

Ms. CLARKE. Yes, basically. 

Mr. PRAKASH. Okay. What we are planning to do is as per the 

legislation, the legislation spoke to grant amounts between 100,000 

and 300,000 to get started. I think from our point of view there are 

certainly a couple of SBDCs that have already demonstrated some 

best practices in the energy audit area. We would like to take those 

best practices, learn what they have done that has been so successful, put those into our program announcement for the pilot program, and try to see five pilots within this fiscal year, which obviously we know time is running short. 

We want to get those five pilots up and running, get some 

metrics, get some response back, and then hopefully, depending on 

the funding levels next year, work on a much broader program. 

Ms. CLARKE. So the program has yet to be implemented. Have 

you targeted specific regions to run these pilots in? 

Mr. PRAKASH. We have not targeted any regions. We are still 

working on collecting all of the pieces for the program announcement. I do not expect personally that we would move to a regionby-region requirement. Part of doing a competitive grant program 

is to allow it to be open for any SBDC to pursue it. 

Ms. CLARKE. So you are going to do sort of an RFP for competitive bidding? 

Mr. PRAKASH. That is right. It will take the same grant RFP format as our Women’s Business Center Program, which is also a 

competitive program. 

Ms. VELA ́ ZQUEZ. Will the gentle lady yield? 

Ms. CLARKE. Certainly, Madam Chair. 

Ms. VELA ́ ZQUEZ. Sir, can you explain to us where you are getting 

the money for the program? 

Mr. PRAKASH. Absolutely, yes. For both the energy and the veterans program, we will be pulling that from the $97,120,000 that 

were provided in the appropriations language for grant programs. 

Ms. VELA ́ ZQUEZ. I will come back to you when I am recognized. 

I yield back. 

Ms. CLARKE. Mr. Prakash, the full Committee recently sent a letter to the Budget Committee recommending that new funding initiatives, but expressed the core SBDC Program to be fully funded 

before resources are directed to new services. 

Do you intend to not divert funds from the core SBDC program? 

And if so, then how do you plan to fund other initiatives? 

Mr. PRAKASH. Are you speaking to the veterans and energy specifically? 

22

Ms. CLARKE. Yes, specifically. 

Mr. PRAKASH. Well, our plan today is to pull about a million dollars, exactly one million dollars from the 97,120,000 that was provided in the appropriations language for grants. It was a general 

grants line, and given that this was law and we intend to implement that law and look forward to implementing those laws, that 

was basically the only pool that was appropriated for those programs. 

Ms. CLARKE. Thank you very much. 

Mr. Chair, I yield back. 

Chairman SHULER. I would like to recognize again the Ranking 

Member, Mr. Fortenberry, for his follow-up questions. 

Mr. FORTENBERRY. Ms. Sanderson, I would like to continue with 

you as well. In your experience, what are you seeing as emerging 

trends among women entrepreneurs? 

Similar to the question I asked previously, where do you see the 

trajectory of certain types of opportunities and success stories 

emerging? Can they be quantified to a particular set of opportunities? Is it a continuum of things? 

And what are the resources that are giving rise to certain sets 

of entrepreneurial opportunities for women that you work with? 

What other barriers are out there that are prohibiting or limiting 

entrepreneurial opportunities for the sector which you work with? 

In other words, what are your success stories, if there is a general pattern of them, and do you see those being duplicated and 

continuing to grow versus other opportunities that might be on the 

continuum of things that are available? 

Ms. SANDERSON. You know, the program is set up as a center. 

We are a center. So, you know, we are kind of like the switchboard 

operator where we can really direct people to other resources that 

might suit their needs better like the veterans program. We have 

a veterans representative, a permanent position on our board of directors, specifically for the purpose of being that switchboard operator to direct them to the other resource partners that might better 

serve their needs. 

So that is an important distinction, I believe, of the program, 

that we are a center and a resource for all women. I do think that 

women have some very specific and unique characteristics. They 

are risk adverse. So they are afraid to get a loan and afraid to sign 

the collateral because they know that they would have to sign the 

collateral for their house, and that is very scary for women. So that 

is a unique feature for women business owners. 

Also, the issue of isolation. Many women start home-based businesses and that is unique to women, and also support, the support 

piece. Our program focuses on critical skills, knowledge, tools and 

support, and what I find is that for the women that that support 

element to our program is really what they need. They need ongoing continual help in kind of a continuum of care so that wherever 

they come to us, whether it is early stage entrepreneur or middle 

stage, we are really looking, you know, to sustain and grow and get 

another loan and expand and take advantage of some of the capital 

504 programs. It is really that continuum of ongoing care step by 

step that is really important to them. 

23

Mr. FORTENBERRY. It is interesting that you mention home-based 

businesses, and I just want to bring this up in a larger context because the last hearing we held if I recall correctly, what we were 

trying to do is identify clear burdens or barriers to entry for entrepreneurs, and there are many of those outside the traditional 

bounds of what we think of. We tend to quantify them as capital. 

Mr. Carroll, you do a real good job of identifying the four key 

ones, I think. It is capital, technology, regulatory, and education, 

if I recall correctly. 

But there are other issues out there that could smooth the pathway, and let’s just pick up with home-based businesses, for instance. Are there tax code changes that could be made to allow this 

to be a little bit easier for people to take advantage of the potential 

tax deductions that are available? That is one. 

Do we encourage or are we encouraging or are our deductibility 

on real estate laws such that we give a disincentive in a certain 

sense to wiring up through technology so that we can have extended workplace either hours or distant locations of work? 

I think these are the types of questions that we need to look at 

as drivers underneath or impediments underneath what could be 

much more flourishing opportunities and entrepreneurship given 

the constraints that exist in certain communities. 

We talk about disabled veterans. There might be certain constraints for women entrepreneurs, and you have identified some of 

them that other initiatives might help take care of. So I was trying 

to get at that point as well earlier, and that is why I wanted you 

to expand upon do you see a certain trajectory of opportunity that 

is fitting the niche that you are working with. 

Ms. SANDERSON. I do, and for us and having been a woman business owner, we start with a business plan. Having been in business 

for ten years myself without a business plan, I think the fallacy of 

the plan is you only write it to get money, but the reality is I may 

still be in business had I had a plan with accurate financial projections. 

So you know, we work real hard on trying to set a distinction between a hobby and a business, and we serve a lot of hobbies. You 

know, Dolly’s Doughnuts out of her kitchen is very different than 

someone who has capital and is renting space and has employees 

and is really trying to pay back their loan and trying to grow and 

get the core business skills necessary. 

Our program focuses on core business skills and what is really 

necessary, and then we focus on their area of deficiency. If they are 

weak in marketing, we get the marketing help, and if they are 

weak on finance, we match them up in a one-on-one program, a 

coaching program we have, with experts that focus on that deficiency, and to get them the knowledge that they need for tax purposes, we partner with our state and our local experts in that to 

bring that kind of educational entrepreneurial training to them. 

Mr. FORTENBERRY. Thank you. 

One other impediment that we have not discussed that is probably worthy of a hearing in and of itself is the issue, and we have 

had them in the larger Committee, but the issue of how health insurance, lack of availability or portability impedes entrepreneurial 

opportunity is a real productive drain on society because it basiVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
24

cally chains the person to whatever institution they may be with 

that is providing them health insurance and does not allow a shift 

into what they would desire, what they would socially prefer in 

terms of risk taking. 

That is a topic for another day, but, Mr. Yancey, I want to say 

thank you for your work with SCORE. I think it is probably our 

nation’s oldest effort in this regard and well established. 

I was in Norfolk, Nebraska recently to celebrate three entrepreneurs. One was a new barbecue business. One was a person 

who was doing marketing through her home on the Internet, and 

there was another business, but it was a celebration of the SCORE 

chapter’s work in one of my primary rural communities. 

In that regard, I think it is important also to point out that 

sometimes the answer is no, and this is very important as well to 

properly allocate scarce resources in a society. Whether or not the 

capital is not adequately there, whether or not the technological 

barriers have been overcome, whether or not there is sufficient understanding of how to market an account or lay out a business plan 

leads sometimes to the answer being, no, this is not a good fit for 

you because being in business, particularly entrepreneurial business, is risky, is a heavy lift. It takes not only a deep passion and 

a long view, but a lot of things to line up accordingly. 

In that regard, Mr. Yancey, I want to go back to that same question. What do you see evolving as new trends for entrepreneurs 

that mitigate those risk elements that increase the probability of 

success and, again, can provide a broader template as we are discussing this for SCORE to work with so that we could precisely 

identify real opportunities that are emerging that have strong 

probability of success? 

Mr. YANCEY. As we address the needs of our clients that come 

in, you are right. The need to say no is something that we do often 

and try to do that without in any way damaging anybody’s dreams 

or making them feel like they do not have the possibility of being 

successful at a point in time. 

We do see opportunities, franchise type opportunities where 

there is a model and there are systems and processes in place that 

can be replicated successfully. We talk more about the franchise 

opportunity these days than we have in the past. 

We also find that clients that come to us today are better prepared than they have been in the past, and I think the reason for 

that is the proliferation of information on the Internet and one’s 

ability to go and search Small Business Start and see 39 million 

different opportunities to get information. 

That is certainly valuable, but information only goes so far, and 

we believe that what we provide is an opportunity for a small business owner to take that information, bring it into one of our counselors and allow us to help them understand how that or if that 

applies in their particular business environment. 

So I think, again, the franchise opportunity seems to be one that 

we see more, and certainly that we recommend when someone does 

not have really strong business background. 

Mr. FORTENBERRY. Well, again, let me leave you with a parting 

challenge to say that we are here to help creatively think through 

new policy opportunities that will strengthen America’s entrepreVerDate 0ct 09 2002 10:32 Apr 29, 2008 Jkt 033615 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40412.TXT LEANN
25

neurial vision. This is a great growing trend, particularly among 

younger workers who do not project and see themselves out as 

being someone for 30 years in retirement and all of those other 

niceties which we use to structure our labor force. 

I think it is a great trend. It is very meaningful to people to be 

able to take the gift of their own two hands and their intellect and 

create a product and take full responsibility for that and, in turn, 

create a product that is good for society and have the fullness of 

returns to them and in the process maybe help some other families 

along the way with employment opportunities. 

So even though I think the Small Business Committee and the 

small business policies, the SBA and U.S. affiliated organizations 

really should be deeply gratified by the opportunity you have been 

given to help people at the most fundamental level, to provide well 

for themselves in an area that is deeply gratifying. 

To that end though, what I like to avoid is a conversation about, 

hey, here is the pie. We need a bigger slice. We need a bigger slice. 

Let’s expand the size of the pie. Things that are not working, 

that are dated, that are from a previous era let’s let go of. Things 

that need to be modernized, expanded because they have real benefit-to-cost ratios and high levels of return is what I want to hear 

about, and I think the Chairman and I are greatly disposed or 

being open to receiving that type of input from you all. 

Thank you. 

Ms. SANDERSON. I would like to follow up with a couple of my 

questions that I had from earlier. 

Mr. Carroll, obviously, you have been an outstanding champion 

in our community, and I would kind of like to brag on what 

AdvantageWest has done in our communities, and so I would like 

you to share some of the ideas that you have had in the form of 

a question, but tell us more specifically how you have been able to 

organize a community. 

Your organization has helped implement economic growth strategies for the rural areas. The western part of North Carolina is a 

very rural area. We have three counties that have less than 10,000 

people in population. It seems that one of the principles for Advantage West is using resources and partnerships to the greatest extent possible. 

Can you outline to the Committee why it is particularly important in rural areas to have these outlining groups to come in and 

help you to organize and to bring entrepreneurship throughout the 

region? 

Mr. CARROLL. Thank you. 

I will briefly summarize what I mentioned earlier. In a 23-county 

area like the AdvantageWest region, it is roughly the size of the 

State of Maryland, but due to the presence, thankfully, of both national and state parks in that landscape, our geography is a beautiful geography, but our population is just not that dense. Very 

much when you get outside of Ashville and Hendersonville, we reflect a landscape that would be representative of rural America. 

And so the leadership teams that are required to go through prerequisite training through the Center for Rural Entrepreneurship, 

RUPRE as it is called, are crucial to these very rural and small 

communities as you describe, Chairman Shuler. 

26

And we are excited about the momentum of the program. The 14 

leadership teams include 12 county-wide programs, the Eastern 

Band of the Cherokee Indian has developed a leadership team, and 

the most recent team to complete training was the Town of Black 

Mountain, a very small, quaint, little municipality. 

Each of these leadership teams have in common that they represent a cross-section of people in their given community. There are 

elected officials. There are people from the financial community, 

local business owners. We have made it a requirement that entrepreneurs be seated as members of each leadership team as they go 

through the certified entrepreneurial community checklist and 

meet all of their requirements. 

And I tend to believe that when you make progress, whether it 

is rural or urban America, generally people follow leadership, and 

they follow a sound plan and strategy. And I know that sounds like 

I am oversimplifying something that can be very challenging, but 

in essence, that is what this Certified Entrepreneurial Community 

Program is all about. It is putting some structure in place at the 

grassroots level. It is getting the right leaders in behind that structure, and then requesting that resources like the group that I am 

here with on the panel today be a part of that Certified Entrepreneurial Community effort so that we can deliver those programs 

and services more efficiently in, again, very rural communities. 

Chairman SHULER. How has the program worked in working 

with our panel here today? Describe some of the relationships and 

how it has worked and some of the benefits that the entrepreneurs 

receive from that. 

Mr. CARROLL. Well, we are off to a very good start in that in our 

23-county area we have a regional presence of SBA in Ashville, our 

urban center, and then for the rest of the region, again, that is so 

rural, we have SBTDC offices, one based at West Carolina University, the Western Carolina University campus in southwestern 

North Carolina. We have an office of SBTDC at Appalachian State 

University in Boone. All of that football publicity, people know 

where Boone is now, Appalachian State University. 

And in Ashville, a relationship with one of our financial institutions. Bank of America has provided some of their space for an 

SBTDC office in Ashville. 

And then in the Hickory MSA between Ashville and Charlotte, 

that part of the foothill counties we have the fourth SBTDC office 

in the region. 

Those SBTDC offices are beginning to work with us. You have 

to keep in mind that the Certified Entrepreneurial Community 

Program was just designed and launched in 2007, and as the communities begin to go through the checklist, the SBTDC field personnel are working with those local leadership teams, again, because there is a requirement that the leadership teams reach out 

to them. 

We think that over time we will pick up some economies of scale 

this way, and it will get that technical assistance and access to capital to entrepreneurs, not to say that they could not have gotten it 

otherwise. I believe in many cases they could. This will be a more 

structured and a more efficient way to deliver it through the 14 different communities that are participating. 

27

Chairman SHULER. Thank you. 

It gives me great pleasure to introduce our Chair of the Small 

Business Committee, the Chairwoman of Small Business, Ms. 

Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman, and thank you for 

holding this very important hearing, and Ranking Member 

Fortenberry. 

Mr. Prakash, I would like to address my first question to you, 

and that is regarding your emergent cities proposal that will draw 

resources from the agency’s already strapped budget for very limited results, helping 200 inner city businesses. This is in comparison to a program like the Women’s Business Center where, for example, the Canisius College Women’s Business Center in Buffalo, 

New York, whose Director is testifying here today, assists on average 2,000 women per year, including many inner city women. 

Yet, as you know, this is with a grant that is approximately half 

of what you are spending on your entire new initiative. 

Given the cost of this new program and the limited deliverables, 

how can this be a good use of this agency’s funds? 

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

The Emerging 200 Program is sufficiently focused on an area of 

coverage that we currently just do not have coverage in. Currently, 

our best estimate is about less than ten percent of any of our resource—

Ms. VELA ́ ZQUEZ. I am sorry. What did you just say, that they do 

not have coverage? What? 

Mr. PRAKASH. I am saying that less than ten percent of our nationwide coverage with our resource partners is in the inner cities 

in the United States. 

Ms. VELA ́ ZQUEZ. I would like for Mr. Wilson and Ms. Sanderson 

to comment on that. 

Mr. PRAKASH. Sure. 

Mr. WILSON. Madam Chair, I do not have a breakdown, but I will 

try to get that for you. Obviously whether it is St. Louis or Philadelphia or New York or Atlanta or wherever, we have SBDCs right 

downtown, and they are serving the inner city community. 

Obviously, as you know, with 25 million small business people 

across the country, if you took all of these, we are only reaching 

a part of them. 

Ms. VELA ́ ZQUEZ. But does that ten percent come right to you? 

Mr. WILSON. Ten percent might very well be a reasonable number. I am thinking of places like Georgia and Pennsylvania and 

New York. I would think in New York probably we are better than 

that. 

Ms. VELA ́ ZQUEZ. Mr. Prakash, let me go to Ms. Sanderson. I am 

sorry. 

Ms. SANDERSON. Thank you for the question. 

The program, the Women’s Business Center Program specifically, 

has about 100 federally funded programs right now in the whole 

country. So you know, there are limited, you know, ways that we 

can focus specifically on inner cities. 

We had a conversation at the break that many of these areas 

that are being targeted are urban that do not have a focus or do 

28

not even have a focus of Women’s Business Center or maybe an 

SBDC Program. 

Ms. VELA ́ ZQUEZ. But do you really think that only ten percent of 

your centers are serving ten percent of the women in urban areas? 

Ms. SANDERSON. Our numbers are not tracked that way. The 

way we track it is socioeconomically disadvantaged. That is how we 

are required to track it, and the Women’s Business Center sees between 46 and 52 percent on an annual basis. So whether those 

women come from the inner city or not is not a focus. It is tracked 

in different ways. So I cannot answer the question. 

Mr. BLACKWELL. When we look at our minority numbers of over 

30 percent, Madam Chair, I would correct myself. 

Ms. VELA ́ ZQUEZ. I am sorry? 

Mr. BLACKWELL. When we look at SBDC overall counseling clients and training, which are over 30 percent minority, I would 

probably raise my estimate of coverage. 

Ms. VELA ́ ZQUEZ. At a time when the budget is being cut and at 

a time when the entire budget for SBA has been cut and the money 

for Women’s Business Center and Small Business Development 

Centers, you have to ask yourself if the type of money that you are 

taking from this program is worth taking to finance 200 businesses. The return that you are going to get compared to the work 

and the goals that are achieved through the network of Small Business Development Centers across the nation and Women’s Business 

Centers. 

Mr. PRAKASH. May I comment? 

Ms. VELA ́ ZQUEZ. I know the answer, but I want to tell you that 

$250,000 out of the money of the corps to fund—

Mr. PRAKASH. That money is not coming from the Core, Madam 

Chairwoman. 

Ms. VELA ́ ZQUEZ. It is coming from the agency’s budget. 

Mr. PRAKASH. It is a request. 

Ms. VELA ́ ZQUEZ. It is coming from—the cuts that have been—

from the agency whose budget has been cut almost 50 percent in 

the last six years. So when you talk about consolidating programs, 

when you talk about making government smaller, here you come 

and take money and create a new program. 

Let’s talk about the language on the energy bill that you made 

reference to and the language on the H.R. 4253 for the vets program. I am going to read the language to you. 

‘‘Subject to amounts approved in advance in appropriations acts,’’ 

that is the language for H.R. 4253. On the energy bill the language 

reads, ‘‘Specifically in advance,’’ and the energy bill goes further 

and says it takes the extraordinary step to include separate. 

So my question to you today is: what does advance mean? 

Mr. PRAKASH. Madam Chairwoman, the authorizing bill may 

very well say advance. It is the appropriations language that has 

said the $97,120,000 for grants. It did not specify Section 21(a) 

grants, and we are being told also by your colleague, Ms. Clarke, 

we want to implement this bill. We want to support energy and 

support veterans, which is core to our mission, and we intend to 

do it, and we have reached a very nice accommodation to be able 

to support that as a pilot and none of the money is going away 

29

from the SBDC Program. It is simply supporting energy and veterans within the SBDC Program. 

Ms. VELA ́ ZQUEZ. My question is why don’t you then use the 

$250,000 to do that. 

Mr. PRAKASH. This is a fiscal year 2008 implementation. We do 

not have those $250,000 to do that. 

Ms. VELA ́ ZQUEZ. My question is the statute reads ‘‘subject to 

amounts approved in advance in appropriations acts.’’ Are you 

going to request appropriations separate for the vets program? 

Mr. PRAKASH. We are going to be using one million dollars from 

the 97 million that was appropriated for grants. 

Ms. VELA ́ ZQUEZ. Why are you doing that? 

Mr. PRAKASH. That is the only grant pool that has been appropriated. 

Ms. VELA ́ ZQUEZ. It does not say that you are going to take money 

from that. It says separate from that amount of money, from that 

program. 

Mr. PRAKASH. There is no other grant pool to take from. 

Ms. VELA ́ ZQUEZ. Yes, but you know, we here passed the law, and 

you implement it. So it does not say that you are going to fund the 

vets grant program through the Corps money. 

Mr. PRAKASH. I think I am confused. We are here to implement 

laws. We look forward to implementing these laws. We support 

them. 

Ms. VELA ́ ZQUEZ. What I am trying to say—

Mr. PRAKASH. But I am not sure how you expect us to fund them 

if we do not fund them from a grant pool. 

Ms. VELA ́ ZQUEZ. —that you have to use—well, the statute is very 

clear. It says it is separate. It says in advance in appropriations 

act, and what I am saying to you today is that you have to use a 

separate appropriation, and do not come to us with something different because then we are going to hold a hearing, and I am going 

to bring the Administrator to explain to us why you are doing what 

you are not supposed to do. That is not what the statute said. 

Mr. Wilson, you testified that the SBA has defined congressional 

intent in its interpretation of how the grant programs are to be 

funded. So based on the fact that the statute is clear, what do you 

intend to do? Are you going to file a lawsuit because they are in 

violation of the statute? 

Mr. WILSON. Madam Chair, the association probably does not 

have standing to file that suit, you know, and when you are trying 

to work with a partner, litigation is not an avenue that you would 

readily jump into. 

We have talked with a number of people, as you know. Michael 

and Tim and others have been so helpful to us, and Mr. Serrano’s 

staff and Chairman Kerry’s staff and others. We are not experts in 

writing appropriations statutes or authorizing statutes. We had 

thought it was clear. Working with your staff and Senator Kerry’s 

staff and Ms. Snowe’s staff, we had thought it was clear, but we 

have had others, some of Senator Durbin’s staff and legal counsel 

of SBA—

Ms. VELA ́ ZQUEZ. But the Parliamentarian of the House made it 

clear to us that the language that was submitted was in violation 

30

of House rule. If it is in violation of House rule, we cannot include 

such language. 

Mr. WILSON. Right, and so we had hoped, I think, as you did, as 

your staff and everyone on the Committee that that language was 

clear enough. Apparently SBA legal counsel views it differently, 

and I do not know that we are in a position to address that through 

litigation. 

I would hope that if there are disagreements among the agency 

lawyers and congressional staff and the authorizers and appropriators that perhaps language can be found that everyone can agree 

on its meaning, but we had, like you, we had thought that what 

you had done was adequate. 

Ms. VELA ́ ZQUEZ. What you need to do, what the administration 

needs to do is to read the statute, and I am going to read it again 

to you. ‘‘Subject to amounts approved in advance in appropriations 

act, the administration may make grants or enter,’’ and it continues. 

So it is quite clear, but do you know what? We created the Women’s Procurement Program. We signed that into law. The administration refused to implement it, and the Women’s Chamber of Commerce, first they want to work with the administration, but when 

they are in violation of the law, you have a remedy, and that is to 

bring a lawsuit and they did, and the court ruled in their favor. 

So it seems like women in this country, when they feel violated 

and that their rights are being violated, they will use the legal recourse that they have in front of them. 

Mr. Blackwell, you claim that the process for awarding grants to 

average centers was altered to increase the program’s 

comprisment. Yet some of this year’s grant recipients have no history of serving veterans. 

At the same time you terminated funding for average centers like 

the Boston one that focuses only on training veterans. This center 

has served over 4,000 clients over the past four years. 

Given the Veterans Corporation’s limited budget, why would you 

fund organizations without experience over those who have demonstrated success assisting veterans? 

Mr. BLACKWELL. Thank you, Madam Chairwoman. 

The board faced a very difficult decision two years ago in that 

funds are limited and in order to maintain the national mandate 

of 106-50 serving nationwide programs, we decided to follow the 

lead of Women’s Business Centers in competitive grants. Those 

competitive grants would be based on opportunities that exist, for 

example, in 1999. When 106-50 was passed there were very few, 

quote, veteran assistance centers around the country. 

Today there are literally hundreds, and those hundreds have 

demonstrated the ability—

Ms. VELA ́ ZQUEZ. But can you explain to me why you do not fund 

the Boston Center while you fund the Technological and Research 

Development Authority and the Jewish Vocational Service in Boston, the Seattle Business Assistance Center? They have no experience, none. In their mission statement, if you go to, they have no 

experience. 

Mr. BLACKWELL. I understand that. 

31

Ms. VELA ́ ZQUEZ. They provide no services. So why are you going 

to terminate centers that have the experience, the capability, and 

the history of providing services to veterans and instead give to 

these who have no experience? 

Mr. BLACKWELL. I go back to the fact that the board decided on 

a competitive grant system in Fiscal Year 2006, and that competitive grant system, again, modeled after the Women’s Business Centers, gave three centers that we funded in Fiscal Year 2007, Boston, St. Louis, and Flint, Michigan, the opportunity for a non-competitive grant program for that entire year. 

At that time they were told that they would be part of a competitive grant system for Fiscal Year 2008. That Fiscal Year 2008 system had over 32 grants from 22 states compete for those grants, 

and—

Ms. VELA ́ ZQUEZ. What is the success of the three centers that 

have been operating? 

Mr. BLACKWELL. Those charts are in my written performance, 

and we evaluate those every quarter. Their success rates are good. 

The organizations—

Ms. VELA ́ ZQUEZ. So why are you not providing the money for 

them if they are good? 

Mr. BLACKWELL. It is very simple. We could only fund the top 

eight according to our grants committee review. There are 32 other 

grants that are there. 

Ms. VELA ́ ZQUEZ. Are you telling me that those who have no experience, no track record, no history, no capability, that they score 

better than those who have been on the ground providing the service? 

Mr. BLACKWELL. No, I am not telling you that. I am telling you 

that these centers are—

Ms. VELA ́ ZQUEZ. Let’s go to the next question. 

Mr. BLACKWELL. —qualified through the grants—

Ms. VELA ́ ZQUEZ. Mr. Blackwell, the act creating the Veterans 

Corporation required that your organization develop and coordinate 

relationships with a number of federal agencies, such as DOL, 

DoD, and the Department of Commerce. Additionally, you were to 

work with SCORE and SBDCs. 

It seems that over the past to years or few years the corporation 

has ignored this mandate. In the last 12 months, what has been 

your interaction or partnership with any of these agencies or resource partners? 

Mr. BLACKWELL. I would be happy to answer that. In December 

of 2007, we co-sponsored the Department of Defense’s Doing Business with DoD Show—

Ms. VELA ́ ZQUEZ. But previous to that, since you have been operating. So talk to me about all of the coordination that you have 

been doing—

Mr. BLACKWELL. Oh, I would be happy—

Ms. VELA ́ ZQUEZ. —in accordance to the mandate. 

Mr. BLACKWELL. We work with almost every agency, except Agriculture, and they just have not had an opportunity to do that. 

Ken Yancey at SCORE and I have been working together for my 

entire three-year tenure. We send through our portal at TVC site 

three to 500 people a day to Ken’s counseling center. 

32

Mr. Wilson and I have a memorandum of understanding since 

my tenure three years ago, and we worked literally last Friday. Mr. 

Wilson’s organization and mine did a ribbon cutting in Scranton, 

Pennsylvania for a young vet who has started his own mining company. 

Ms. VELA ́ ZQUEZ. That was last Friday. 

Mr. BLACKWELL. That was last Friday. 

Ms. VELA ́ ZQUEZ. Previous to that, besides doing a workshop in 

December. 

Mr. BLACKWELL. I speak at Mr. Wilson’s conferences. We work 

on programs together. We have an active memorandum of understanding. 

In terms of DOE, we work very closely with the Department of 

Energy. 

Ms. VELA ́ ZQUEZ. Okay. Specific initiative with the Department of 

Energy. 

Mr. BLACKWELL. We co-sponsor their annual event. We co-sponsor the Eighth Annual Event for Small Business Conference in 

June of last year. 

Ms. VELA ́ ZQUEZ. You sponsor their annual event. Is that solely 

for veterans? 

Mr. BLACKWELL. No. Veterans comprise a large number of those 

things. 

Ms. VELA ́ ZQUEZ. Mr. Blackwell, TVC was basically a charter with 

three missions: to establish a professional certification advisory 

committee; to engage the major federal agencies and partner with 

them to assist vets; and finally, to establish and maintain a network of information and assistance centers. 

Given that the first two mandates have not been met, it seems 

the corporation will have more resources to insure a solid framework of centers to assist veterans. However, we understand that 

the three centers TVC was responsible for funding are all about to 

close. 

What efforts has the organization pursued to insure that the 

three centers in Boston, Missouri and Michigan will not close? 

Mr. BLACKWELL. Well, we are very concerned about their fate as 

well as we are our own. 

Ms. VELA ́ ZQUEZ. I know that you are very concerned. What are 

you going to do so that they do not close? 

Mr. BLACKWELL. We are very actively involved in trying to find 

private funding. A lot of my time is being put on finding that outside private sector funding. 

Ms. VELA ́ ZQUEZ. Okay. Let me make this clear to you. Then 

Chairman Talent and I worked very hard to create this legislation, 

to pass this legislation, and we spent a lot of time in putting this 

together, and I promise you that I intend to spend a lot of time to 

make sure that the Vets Corps gets back on track. And so you and 

I, we are going to be seeing each other a lot. 

Mr. BLACKWELL. Well, we will welcome this opportunity. 

Ms. VELA ́ ZQUEZ. And we will intend to hold oversight hearings to 

make sure that the Vets Corps accomplishes what it sets out to do, 

and that is not to close centers and open three million centers and 

dilute the resources that you do not have. 

33

So let’s make sure that the mission of this corporation is 

achieved, and we are going to be seeing each other quite a bit. 

Mr. BLACKWELL. Thank you, Madam Chairman. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Chairman SHULER. Thank you, Madam Chair. 

I guess I forgot to mention fasten your seatbelts. 

[Laughter.] 

Chairman SHULER. I would like to have follow-up questions. Ms. 

Clarke has a couple more questions. So Ms. Clarke from New York. 

Ms. CLARKE. Thank you, Mr. Chairman. 

Just a follow-up to Mr. Blackwell, just one. I have a concern that 

I would like you to address on the record here today, and that is 

recently reading in the New York Times March 5th that the Senate 

Small Business Committee launched an investigation into a shortfall at the National Veterans Business Development Corporation. 

Can you please tell us why your organization is being investigated, 

one? 

Two, why did your organization receive only 1.5 million in funding last year? 

And, three, how do you expect to run your program efficiently and effectively on only $1.5 million? 

Mr. BLACKWELL. Well, let me start with the latter. The simple 

facts are there are 4.2 million veteran companies in the United 

States. I cannot even send them a stamped envelope, let alone provide a service if I were just be chartered to support them. Secondarily, we are very concerned obviously because $1.5 million does not go very far when you start talking about serving a 

nation. 

To your first question, the real issue is we are not terribly sure 

why they are doing that. We have provided and been in compliance 

with Senator Kerry and Senator Snowe and given them information on our 2007 activities in the annual report, our audit, and all 

the other materials they have asked for, including our strategic 

plan from 2008 to 2012. 

We are more than happy to work with them and to resolve this 

issue because our staff of three, which is literally 50 percent of 

where we were six months ago, has a very deep commitment along 

with our board to supplying veterans services across the country. 

It is very, very, very difficult to do that when you are talking about 

over 600,000 young men and women who have served our country 

nobly who have come back recently from Iraq and Afghanistan. 

Ms. CLARKE. Just as a follow-up, so why did your organization 

receive only 1.5 million in funding last year? 

Mr. BLACKWELL. Well, the Public Law 106-50 is out of authorization in 2004, and thanks to Congress, we have been able to apply 

for and receive appropriations in 2005, 2006, 2007 and in 2008, and 

those numbers decrease. We are very grateful to Congress for keeping our veteran entrepreneurship hopes alive through this organization. 

We had approved in the house 2.5 million, as you may know. It 

went to the Senate, and out of conference it came back at 1.41. So 

we were very disappointed. 

To the Chairwoman’s comment, we would have been able to give 

a lot more grants this year had we been given the 2.5 out of the 

34

Senate. So it is very disconcerting to the board and to the professional leadership that dollars are decreasing at a time when demand is increasing. 

Ms. CLARKE. My final question is to Ms. Sanderson. Ms. 

Sanderson, Women’s Business Centers have faced reductions across 

the board due to inadequate budget resources. Can you tell this 

Committee in detail how this has impacted your center? 

You know, this is a major concern. I think the fastest growth in 

small business has taken place in women-owned businesses across 

the board, and the type of supports that we believe are required 

have not been stated explicitly here today. 

We also want to acknowledge the overlap that is taking place. In 

other words, women veterans, you know, what type of attention are 

they being given in the entrepreneurial sphere as well? 

So if you could just address that for us. 

Ms. SANDERSON. Yes, thank you for the question. 

Specifically regarding women veterans, we had a focus group 

with all of our local veteran leaders. We have got a leader on our 

board of directors who is currently employed with the county in 

western New York, and so we do a lot of really thinking, strategic 

thinking, about how we reach out to these special groups. 

And last year the Women’s Business Center received more funding than it had in the past. We were up to 13 from 12.8, and for 

my particular program and the program that I run, we have a sustainability plan, a sustainability plan and a strategic plan that 

really forces us to look strategically at our resources and to creatively come up with diversified streams of revenue. It is the only 

way that we are going to sustain the organization. 

And I think that that is really important for Women’s Business 

Centers. I think it should be part of the RFP, that in year three 

of their five-year grant, they should put a sustainability plan together because that is what we did and it actually preceded our 

strategic plan, which called for us partnering with corporations and 

foundations and individuals, as well as defining the needs and designing programs that met the needs, did not duplicate, but collaborated with other resource partners and, you know, charged a 

fair price for the products and services that we are delivering. 

And specifically for the socioeconomically disadvantaged and the 

inner city clients that we serve, we scholarship them into our programs because we believe that that is core to our mission and is 

one of our core values. 

Thank you for the question. 

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

I noticed Mr. Prakash taking some notes there. I think that that 

is an important component, the sustainability of these technical assistance and development centers within our communities. You 

know, economic times change, and certainly I think, Mr. Blackwell, 

you may be seeing some of that in terms of your expectations. 

It is really important that we, you know, think outside the box 

and look at how we can leverage what we are receiving. We expect 

that the dollars that we are able to appropriate to you, that they 

are maximized and they are not diluted, which is one of the issues 

and concerns that our Chairwoman has. 

35

At the same time we have got to think smart, and we have got 

to be able to leverage this for the future of our economy. 

Thank you very much, Mr. Chairman. 

Chairman SHULER. I would again like to recognize the Chairwoman, Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you very much. 

I just a copy of a letter that I sent to Administrator Preston, that 

Mr. Edward Rose answered on his behalf to me, and I am going 

to read what he sent, what I asked him for him to respond and 

what was his response to the subject that I raised in my letter. 

‘‘Administrator Preston asked me to respond to your letter of 

May 16th, 2007, regarding the Small Business Development center 

Program. You inquired as to whether proposed legislative language 

will provide guidance that SBDC based on program funding is separate from the funding of other proposed SBDC related grant initiatives. The language in question reads,’’ and this is right after 

Mr. Shuler’s energy bill passed, ‘‘’Subject to amounts approved in 

advance in appropriations acts and separate from amounts approved to carry out Section 21,’’’ and it goes on. 

This is his response. ‘‘SBA assumes its placement will be in a 

separate paragraph of the Small Business Act in the absence of any 

other writing or conflicting statutory provisions in the authorizing 

or appropriations statute. This proposed language, maintain the 

main SBDC program baseline funding separate from that of any 

other enacted SBDC related grant initiative programs.’’

So, sir, why is it that administrative officials tell me and this 

Committee something and you come here and tell me something 

else? 

Mr. PRAKASH. Well, Madam Chairwoman, there was a key sentence in there, and that was in absence of any conflicting authorizing and appropriating language, and what we have heard, and I 

am not the General Counsel. This is my General Counsel advising 

me, and I think it is correct, is that the authorizing language and 

the appropriations language—

Ms. VELA ́ ZQUEZ. Okay. Yes, I hear what you are saying. 

Mr. PRAKASH. —was conflicting. The appropriations language 

overrides that language. 

Ms. VELA ́ ZQUEZ. Sir. 

Mr. PRAKASH. And it was not referred to as 21(a) funding. 

Ms. VELA ́ ZQUEZ. Your legal counsel, you made reference to your 

legal counsel. Can you tell me right here right now when did your 

legal counsel approach the Committee staff regarding this language 

so that they concluded what they concluded? 

Mr. PRAKASH. There have been many conversations with Committee staff, both with counsel, with our Legislative Affairs group. 

Ms. VELA ́ ZQUEZ. No. 

Mr. PRAKASH. Both on the Senate and the House side. 

Ms. VELA ́ ZQUEZ. None. 

Mr. PRAKASH. I would be happy to provide that in writing when 

those meetings took place. I know there were several visits, and I 

am not sure who attended, but there were several conversations. 

Ms. VELA ́ ZQUEZ. I will maintain my previous statement, and that 

is you will request funding that is separate from the ABDC for the 

36

grant program, and if not, we will hold a hearing and the Administrator will come and will answer. 

Thank you, Mr. Chair. 

Chairman SHULER. Thank you. 

I would like to thank all of the witnesses for their testimony 

today. I look forward to working with my colleagues to address 

some of the issues that were raised today. 

This hearing is adjourned. 

[Whereupon, at 12:49 p.m., the Subcommittee meeting was adjourned.]

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