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<title> - THE ROLE OF COMMUNITY NAVIGATORS IN REACHING UNDERSERVED BUSINESSES</title>
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[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
THE ROLE OF COMMUNITY NAVIGATORS IN
REACHING UNDERSERVED BUSINESSES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON UNDERSERVED, AGRICULTURAL,
AND RURAL BUSINESS DEVELOPMENT
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
MARCH 18, 2021
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-006
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
43-802 WASHINGTON : 2021
-----------------------------------------------------------------------------------
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Jared Golden................................................ 1
Hon. Jim Hagedorn................................................ 3
WITNESSES
Ms. Rebecca Shi, Executive Director, American Business
Immigration Coalition, Chicago, IL............................. 6
Ms. Bridget Weston, Chief Executive Officer, Service Corps of
Retired Executives (SCORE), Herndon, VA........................ 7
Ms. Pilar Guzman Zavala, Chief Executive Officer, Half Moon
Empanadas, Miami, FL........................................... 9
Mr. Bruce Strong, State Director, Minnesota Small Business
Development Center (SBDC), St. Paul, MN........................ 11
APPENDIX
Prepared Statements:
Ms. Rebecca Shi, Executive Director, American Business
Immigration Coalition, Chicago, IL......................... 29
Ms. Bridget Weston, Chief Executive Officer, Service Corps of
Retired Executives (SCORE), Herndon, VA.................... 34
Ms. Pilar Guzman Zavala, Chief Executive Officer, Half Moon
Empanadas, Miami, FL....................................... 45
Mr. Bruce Strong, State Director, Minnesota Small Business
Development Center (SBDC), St. Paul, MN.................... 47
Questions and Answers for the Record:
Questions from Hon. Jared Golden to Ms. Bridget Weston and
Answers from Ms. Bridget Weston............................ 50
Questions from Hon. Jared Golden to Ms. Rebecca Shi and
Answers from Ms. Rebecca Shi............................... 52
Questions from Hon. Jared Golden to Mr. Bruce Strong and
Answers from Mr. Bruce Strong.............................. 58
Additional Material for the Record:
America's SBDC Missouri...................................... 59
THE ROLE OF COMMUNITY NAVIGATORS IN REACHING UNDERSERVED BUSINESSES
----------
THURSDAY, MARCH 18, 2021
House of Representatives,
Committee on Small Business,
Subcommittee on Underserved, Agricultural,
and Rural Business Development,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2360, Rayburn House Office Building, Hon. Jared Golden
[chairman of the Subcommittee] presiding.
Present: Representatives Golden, Crow, Delgado, Hagedorn,
Williams, Stauber, Tenney, and Salazar.
Also Present: Representative Luetkemeyer.
Chairman GOLDEN. I call this hearing to order.
I want to make sure to note a couple of important
requirements before we get going. Let me first say that
standing House and committee rules and practice continue to
apply during hybrid proceedings. All Members are reminded that
they are expected to adhere to these standing rules, including
decorum.
House regulations require Members to be visible through a
video connection throughout the proceedings, so please keep
your cameras on. Also please remember to remain muted until
recognized to minimize background noise. If you have to
participate in another proceeding, please exit this one and log
back in later. In the event a Member encounters technical
issues that prevent them from being recognized for questions I
will move to the next available Member of the same party and
recognize that Member at the next appropriate time slot
provided they have returned to the proceeding.
For those Members physically present in the Committee room
today, we will also be following health and safety guidelines
issued by the House attending physician. That includes social
distancing and the use of masks. Members and staff are expected
to wear masks at all times while in the hearing room. And I
thank you in advance for your commitment to a safe environment
for all here today.
I am proud to serve as Chair of this Subcommittee.
Underserved, agricultural, and rural small businesses have
experienced some of the harshest outcomes of the COVID-19
pandemic. The road to recovery they face is long and we should
ensure to advance policies that will prioritize them so that
they are not left behind. I hope to use this Subcommittee's
first hearing during the 117th Congress to examine the newly
created Community Navigator Program.
Throughout the COVID crisis large numbers of minority-owned
and rural small businesses found themselves on the outside
looking in when trying to access emergency relief. During the
early days of the Paycheck Protection Program and Economic
Injury Disaster Loan Advances, large financial institutions
often prioritized larger customers at the expense of
underserved rural small businesses. This lack of access to
relief added insult to injury for small businesses bearing the
brunt of the pandemic's economic impact.
When COVID struck, many small businesses in rural areas
were still financially and structurally rebounding from the
Great Recession. During 2020 slow rural population growth and
declining labor force participation led to a much slower
employment rate in rural areas than elsewhere. Rural businesses
also face a lack of access to capital in general, as well as
broadband connectivity, making pivoting to digital offerings
and adapting to the COVID business environment much more
difficult.
Minority-owned businesses have also been devastated by this
crisis. Last year the number of actively working self-employed
business owners fell dramatically across the black, Hispanic,
and Asian American communities. And minority-owned firms that
had been fortunate enough to avoid closure faced harsher
financial conditions and have less cash on hand than white
firms do.
These are the realities that led to the creation of the
Community Navigator Program. Congress authorized the program as
part of the American Rescue Plan Act of 2021. It will provide
$100 million for grants to organizations to participate in the
program and $75 million to support outreach and education. The
funding for education and outreach will go towards offering
services in the 10 most common languages other than English,
making improvements to the SBA's website, implementing
immediate campaign to educate underserved communities, and
establishing an SBA call center.
The Community Navigator Program will supply grants to
traditional business assistance organizations, like small
business development centers, women's business centers, and its
core chapters. These institutions have deep ties to the
communities they operate in and will engage trusted, culturally
knowledgeable partners to conduct targeted outreach to specific
sectors of the small business community.
This outreach can manifest in various ways, including
hiring dedicated staff to focus on these individual
communities, or partnering with specialized community
organizations and chambers of commerce via a hub and spoke
model. The Community Navigator Program seeks to engage with
underserved communities by providing technical assistance and
enhanced outreach.
For this program to meet its stated goal Congress must
closely monitor its roll out and work with the Administration
to make the program operate as effectively as possible. That is
why this hearing today is important.
I look forward to hearing from our witnesses about the
potential impact of the program on underserved and rural small
businesses and ways the Subcommittee can ensure as many small
businesses benefit as possible.
With that, I will now yield to the Ranking Member, Mr.
Hagedorn, for his opening statement.
Mr. HAGEDORN. Well, thank you, Mr. Chairman, and
congratulations on your appointment as Chair of this
Subcommittee. And on behalf of the Republican Members and
myself we look forward to working with you during this Congress
to especially help our small businesses and those in the rural
communities and the agricultural sector.
Chairman GOLDEN. I very much look forward to working with
you too and I am blessed to be two Congresses in a row working
on a Subcommittee with a Member from Minnesota. And you got the
other one sitting right in front of you.
Mr. HAGEDORN. And I know Congressman Stauber had a good
working relationship with you as well.
So small businesses from all sectors of the economy have
turned to the U.S. Small Business Administration programs for
relief during the COVID-19 pandemic. Following the launch of
the Paycheck Protection Program created by Congress in March of
last year, the SBA processed more than 14 years-worth of loans
in less than 14 days, serving or assisting over 50 million
small business jobs during the program's first run. That is
just unbelievable when you think about it, the amount of work
and loans that were run through in such a short period of time.
The success of recovery programs like PPP is undeniable.
However, there is no doubt that inconsistent guidance,
burdensome paperwork, and administrative holes and delays have
caused confusion for small businesses looking to utilize these
programs. As Democrats continue to exploit the COVID-19
pandemic as an excuse to ram through their massive spending
package and create new government programs, I believe Congress
should focus on targeted and efficient relief that will aid
small businesses as we reopen the economy.
The partisan $1.9 trillion so called American Rescue Plan
Act of 2021 directed the SBA to establish a Community Navigator
Pilot Program. This program will issue grants or contracts with
nonprofits, resource partners, states, and localities,
providing free assistance and resources to small businesses for
programs made available during the COVID-19 pandemic. It is my
hope that any new program created by Congress will aid existing
SBA resource partners in their outreach to all communities and
not duplicate current efforts.
Southern Minnesota is home to a diverse group of small
businesses. In my district it is important that rural
communities have the resources needed to contribute to the food
supply, fuel rural America, and support other local businesses.
As we move past the pandemic it is critical that we ensure
farmers and ranchers have access to the resources needed to
maintain operations. To support rural communities and
agricultural small businesses, I have introduced H.R. 1411, the
Bipartisan PPP Flexibility for Farmers and Ranchers Act, which
would allow farmers and ranchers categorized as partnerships to
utilize gross income when calculating PPP loans. I hope the
Members will support me on that bill. I think it can really
help over 100,000 farm partnerships as we move forward.
Today's hearing will explore the role of community
navigators in researching underserved communities. I look
forward to hearing from our witnesses on the outreach completed
by existing SBA resource partners, like small business
development centers, during the pandemic and how they have
reached underserved areas, including remote and rural
communities. I look forward to discussing the Community
Navigator pilot program's objectives and deliverables in
addition to the standards which the navigators will need to
uphold.
Congress has appropriated $175 million for this program and
we must ensure that we be proper stewards of the taxpayers'
dollars and that the Navigator program yields beneficial
results for small businesses.
With the economy in recovery and egregious and arbitrary
lock downs finally coming to an end, new and existing federal
COVID tools, such as the Community Navigator pilot program,
need to be closely examined to determine the most effective,
economical, and efficient next steps.
Thank you for being here today to discuss this important
topic. I yield back.
Chairman GOLDEN. Thank you, Mr. Hagedorn.
Very quickly I will explain how this hearing will proceed.
Each witness will have 5 minutes to provide a statement and
each Committee Member will have 5 minutes for questions. Please
ensure your microphone is on when you begin speaking and that
you return to mute when finished.
With that, let us introduce our witnesses.
Our first witness today is Ms. Rebecca Shi, executive
director of the American Business Immigration Coalition. As
executive director of ABIC Ms. Shi works directly with a
steering committee of over 350 CEOs, university presidents,
chambers of commerce, and immigrant advocates to support the
passage of pro immigrant policy at the state and federal
levels.
Welcome, Ms. Shi.
Our second witness--one moment. Just for one second. Our
second witness is Ms. Bridget Weston. Ms. Weston is the CEO of
SCORE. As CEO Ms. Weston provides executive leadership and
works directly and collaboratively with the board of directors
to establish the vision and direction of SCORE.
In her 10 years with the organization she has developed an
in depth understanding of the needs and challenges facing
SCORE's staff, its 300 chapters, and over 10,000 volunteers.
Welcome back, Ms. Weston.
I would now like to yield to Ms. Salazar to introduce our
third witness.
Ms. SALAZAR. Thank you, Mr. Chairman, for this opportunity.
And I would like to introduce my constituent, Ms. Pilar
Guzman Zavala. Ms. Zavala is a small business owner in the City
of Miami that I represent and the CEO of Half Moon Empanadas,
an Argentinian style restaurant based in my district. She is
also a mentor for women entrepreneurs in the City of Miami with
the WIN Lab Miami from Babson College and the Florida
International University StartUP program.
She is a Ricardo Salinas Scholarship recipient for the
Aspen Institute and a Young American Leaders Program Fellow
from the Harvard School of Business.
Additionally, Ms. Zavala is a Venture Cafe board Member and
a Miami leadership and a Miami fellow graduate.
Small businesses are the foundation of our community. And
during these difficult times our local job creators have been
absolutely devastated. I am committed to restoring our economy
and delivering much needed COVID relief for our struggling
small business owners in South Florida.
Ms. Zavala's story is truly one of the American dream, just
like mine. But her story is also one of the trials and
tribulations. And we look forward to hearing from your
experiences, Ms. Zavala.
Thank you so much for joining us today and to all of you
for doing everything you are doing for our community. Your
determination over the last year is an example to all of us
small business owners. And I specifically and my staff are
looking forward to visiting Half Moon Empanadas on our next
trip to Miami.
Thank you, Ms. Zavala. I yield back.
Chairman GOLDEN. Thank you, Congresswoman Salazar.
With snow still on the ground in Maine and I am guessing in
Minnesota too, the background in Florida there looks pretty
warm and looks nice.
But thank you for the introduction and welcome to Ms.
Zavala.
And I would now like to yield to the Ranking Member, Mr.
Hagedorn, to introduce our final witness.
Mr. HAGEDORN. Thank you, Mr. Chairman.
Our next witness is Bruce Strong, who I believe you have
met in the past and have worked with. And you were highly
complementary of his previous testimony. I am looking forward
to today.
Mr. Strong is the State Director for the Minnesota Small
Business Development Center Network. He has extensive
experience in community and economic development and in the
mortgage lending and banking industries. Mr. Strong is an Air
Force veteran and graduated summa cum laude from National
College with a degree in business administration and marketing.
Yesterday, on March 17, the nation celebrated Small
Business Development Centers Day. Small business development
centers provide valuable resources to our small business
constituents across the country. And I thank Mr. Strong and his
SBDC colleagues for their critical work to promote
entrepreneurship, small business growth, and the U.S. economy.
Mr. Strong, thank you for joining us today and thank you
for your service to our great country.
Chairman GOLDEN. Thank you, Mr. Hagedorn.
Thank you all for joining us today. And why don't we begin
with opening statements from our witnesses. First I will
recognize Ms. Shi for 5 minutes.
STATEMENTS OF REBECCA SHI, EXECUTIVE DIRECTOR, AMERICAN
BUSINESS IMMIGRATION COALITION; BRIDGET WESTON, CHIEF EXECUTIVE
OFFICER, SERVICE CORPS OF RETIRED EXECUTIVES (SCORE); PILAR
GUZMAN ZAVALA, CHIEF EXECUTIVE OFFICER, HALF MOON EMPANADAS;
BRUCE STRONG, STATE DIRECTOR, MINNESOTA SMALL BUSINESS
DEVELOPMENT CENTER (SBDC)
STATEMENT OF REBECCA SHI
Ms. SHI. Good morning, Chairman Golden, Ranking Member
Hagedorn. My name is Rebecca Shi and I am the executive
director of the American Business Immigration Coalition.
ABIC believes that the economy recovery of our nation's
small and underserved businesses is necessary to ensure our
nation's recovery from the COVID-19 pandemic. Small business
owners, especially African American, immigrant, rural, and
other underserved and isolated businesses are the engines of
their local economies.
ABIC is a bipartisan coalition of 1,200 employers, CEOs,
and business associations across 13 states, including Florida,
Texas, Maine, Colorado, New York, Arizona, Nevada, Utah,
Illinois, Massachusetts, Wisconsin, North and South Carolina.
Over the last 11 months ABIC created and implemented a small
business recovery technical assistance program, leveraging a
community navigator model. This program provides one-to-one
technical assistance for small, underserved minority-owned
businesses and growers to access critical resources, including
but not limited to the Paycheck Protection program, federal and
state small business loans and grants.
ABIC thanks Congress and President Biden for including $100
million for community navigators in the American Recovery. We
also thank Chairman Ben Cardin, Senators Marco Rubio and Susan
Collins, and Chairwoman Nydia Velazquez for working tirelessly
over the last 11 months to make improvements to the PPP,
especially for the smallest borrowers, growers, and their
lenders, like CDFIs and MDIs.
The community navigator model utilizes local nonprofits or
501(c)(3)s in a complementary non-competitive fashion with
existing SBA technical assistance programs, like SBDCs, the
NDCs, and SCORE. The unparalleled magnitude of the COVID-19
pandemic forced shutdowns and disproportionate impact of small
minority-owned rural business and growers required a
comprehensive, common sense, grassroots response. This
community navigator model we utilize in Illinois, Florida,
Texas, and South Carolina to assist growers, black and
immigrant entrepreneurs.
This program assisted Pilar Guzman, whom you will hear
later, introduced by Congresswoman Salazar, the owner of Half
Moon Empanadas. We also assisted Chalmers Carr, the owner of
Titan Farms, the largest peach grower in the country, based in
South Carolina. He was denied a PPP loan by his bank because
they did not understand how to calculate his 1,200 H2A workers.
And Stacey Armstrong, an African American woman entrepreneur, a
single mother, who employees less than 10 people at her gourmet
popcorn shop, and she was denied a PPP first because her bank
prioritized larger firms.
Each of these of entrepreneurs was ultimately assisted in
getting a PPP loan by a community navigator and the self-help
federal Credit Union, a CDFI that understands how to work with
small and rural businesses.
Through this model ABIC directly assisted 219 small
businesses and growers to receive over $8.1 million in PPP
loans with an average amount of $37,000. This community
navigator model was later adopted by the State of Illinois'
Department of Commerce and the Cook County Illinois Economic
Recovery Initiative to disperse local business recovery grants
allocated by the CARES Act. The State of Illinois awarded $88
million in business recovery grants to black, rural, and
immigrant entrepreneurs.
I have a chart that I submitted as evidence just to show
that using the community navigator model we were able to ramp
up access to these grants to small, minority-owned, and rural
businesses.
A couple of things I just wanted to point out, that as the
navigator model ramped up from October to December of 2020,
black participation increased by 25 percent and Latino
participation increased between 30 and 46 percent. Over half of
the applications for black and Hispanic applicants were
received in November and December as a result of the
navigator's program technical assistance. And over two-thirds,
nearly 70 percent of our Spanish applications came in November
and December as the navigators did outreach and document
preparation for these borrowers.
In sum, our community navigators had over 20,000
applications by the end of October and throughout the rest of
December and we were able to award, as I said, up to $88
million.
The last thing that I would just mention is the mechanics
of this navigator model. It is a hub and spoke model. The hub
is the lead nonprofit responsible for capacity building, train
the trainers. The spokes are the grassroots nonprofits, sort of
your boots on the ground conducting direct technical
assistance, document preparation for the businesses. A
successful hub and spoke system creates an assembly line that
feeds directly into a financial institution, a CDFI, and the
goal is that the application is in excellent shape by the time
it is received by that financial institution, so we can ensure
efficiency in processing at scale.
The second piece is there is a high accountability
structure to this model. As you all know, nearly every CDFI, or
financial institution sends a processing number to the PPP
applicant when the application has been received. And so what
we require is not just, you know, general outreach or numbers
of emails sent or just webinars, we ask that each navigator
must demonstrate the receipts for the outreach so that we know
that money is getting deposited in the banks.
So I will just wrap up and just say thank you very much for
the opportunity to testify on behalf of this model.
Chairman GOLDEN. Thank you.
Ms. Weston, you are now recognized for 5 minutes.
STATEMENT OF BRIDGET WESTON
Ms. WESTON. Chairman Golden, Ranking Member Hagedorn, and
Members of the Subcommittee, thank you for the opportunity to
offer testimony today.
SCORE is the nation's largest network of volunteer business
mentors, with more than 10,000 volunteers across 240 chapters,
offering free and confidential advice and educational workshops
to small business owners.
Founded in 1964 as a resource partner of the SBA, SCORE has
helped more than 11 million entrepreneurs to start, grow, or
troubleshoot their small business. Last year SCORE helped its
clients to start over 45,000 new businesses and create nearly
75,000 new jobs. And despite the challenging business climate
of this pandemic, SCORE helped 89 percent of our clients stay
in business throughout the year. SCORE is the most effective,
efficient business formation and job creation engine funded by
the federal government.
In 2020, our costs to create a new job was $156 and $259 to
create a new business. And for every one dollar appropriated to
SCORE, our clients return $67 in new federal tax revenue,
further demonstrating that SCORE is a good steward of the
federal dollar.
SCORE volunteers are the life blood of our organization and
are passionate about helping small businesses succeed. Our
volunteers come from all across the country with diverse
backgrounds and experience in different industries. Our core
services are mentoring, educational workshops, and online
resources. Last year, SCORE volunteers held over 315,000
mentoring sessions, guiding and supporting our clients through
the tremendous challenges brought on by the pandemic.
Many business owners told us they would to have applied for
a PPP or an IDA loan without a SCORE mentor to walk them
through the process. And our high rates of client satisfaction
are captured by our net promoter score of 87, with 70 being
considered excellent.
In addition to mentoring, SCORE provides virtual webinars
on our website and our SCORE chapters offer local workshops
that are in person or virtual. These workshops drew over
464,000 attendees last year.
Knowing that the pandemic has hit some businesses harder
than others, one of SCORE's key areas of focus is fostering
diversity, equity, and inclusion, both for clients and
volunteers. Women and minority volunteers climbed to 38 percent
of total volunteers last year, and this 5 percent increase
represents the single biggest annual growth since we began
tracking these metrics in 2012. SCORE currently serves a
diverse range of small business owners; 60 percent of our
clients are women and 46 percent are minorities. Early this
year we launched SCORE for black entrepreneurs as part of our
SCORE For All initiative, to help serve disadvantaged
businesses. We plan to add more SCORE For All campaigns to help
these businesses survive and thrive, supporting women, rural
entrepreneurs, veterans, the 50 and older community, and
disabled entrepreneurs.
SCORE is working harder than ever to reach underserved
entrepreneurs, leveraging our community relationships
nationally and locally. National partnerships include the BIPOC
Support Foundation, Women Entrepreneurs Grow Global, and the
Latino Coalition who introduce SCORE to new communities of
small business owners. Across the nation our SCORE chapters are
already operating as effective community navigators by working
in local communities to help underserved business owners. For
example, over the past year SCORE Cleveland has rededicated
itself to bring its services to the minority business
community. The chapter has partnered with leading nonprofits
that target these communities and services have more than
doubled over last year.
When the pandemic hit, SCORE pivoted to deliver virtual
mentoring and education without missing a day of service. And
we accommodated a 30 percent increase in services last year
without any increase in funding. Now, we are at capacity and
will not be able to grow without additional resources. Based on
SCORE's continued demonstrated impact, increased demand for
services, and our plans to reach more business owners in
underserved and disadvantaged communities, SCORE is
respectfully respecting an increase, a $9.5 million in funding,
for a total FY2 appropriation of $21.7 million. That additional
funding would be spent to increase mentoring and education by
reducing the administrative burden on volunteers, provide more
direct funding to local chapters for community outreach, and
focus to help more underserved businesses.
With this relatively small investment we can provide even
greater value to the business owners and the economy. The
increased funding would allow us to deliver more than half a
million client services, with a projected outcome of 100,000
additional new businesses started or jobs created.
SCORE's mentoring and education are critical to helping
small businesses overcome their challenges and succeed. SCORE
stands ready to help our nation's most vulnerable small
business owners so they can keep their doors open and keep
people employed.
Thank you very much for your time, and I look forward to
your questions.
Chairman GOLDEN. Thank you.
Ms. Zavala, you are now recognized for 5 minutes.
STATEMENT OF PILAR GUZMAN ZAVALA
Ms. ZAVALA. Hello. Hi, everybody. It is an honor to be
speaking with you all today. Thank you, everyone, for taking
the time to listen to my story. I think it is a story that
reflects, you know, the reality of many small businesses like
mine.
Thank you, Congresswoman Salazar, for that kind
introduction. I am here in Miami, 77 degrees. But so my name is
Pilar Guzman Zavala and I am the CEO of Half Moon Empanadas. I
represent one of the almost, you know, more than 30 billion
small businesses in America. I also represent today the
minority in every sense, you know, I am a woman, I am Hispanic,
I am an immigrant. And now my company is in an industry where
there have been so much suffering and torture that I am also
one of the, you know, minority restaurants that are still open.
You know, I came to America from Mexico when I was 22 years
old, right after college. I went to Georgetown School of
Foreign Service because I wanted to understand how to create
economic development, how to elevate poverty. Little did I know
back then that I would end up creating, you know, an impact as
an entrepreneur in Miami and that my dreams will become clear
in a, you know, in a new food category in America with
empanadas, and that this immigrant that has a hard time
speaking in English in Georgetown would end up picking the
President of the United States.
You know, Half Moon Empanadas, it is a small business in
Miami with a concept of empanadas. Before the pandemic--we have
been in business 12 years, before the pandemic was had 14
stores open. The Miami Airport, the University of Miami,
different non-traditional locations here. And, you know, our
story wasn't easy. We took us--from the beginning, it took us 7
years to get a paycheck from our company. We did everything
wrong and we almost went bankrupt. It took us 10 banks locally
to actually get us our first financing for our store in the
airport. So I do know what it is to go through a financial
system and understand how that works.
You know, when COVID hit, it was literally a year ago,
March 13. That week we saw all of our stores closed. In a week,
everything was like what happened. It was really scary and I
see how great and how blessed we are to live in this country
because we were able to apply to PPP. It took us three banks.
It took us three banks to get noes because the large fund was
not very--it was not responsive. The medium bank was
overwhelmed. And so I--thanks to the community navigator, I was
able to get, you know, the support that we needed. You know,
they connected us with a local bank that approved us quickly. I
think 2 days we were approved. This helped us to stay afloat
and keep our salaries, you know, people in payroll. And because
I am also a mentor here in the community, and I am part of a
network of businesses, I joined the effort, too. And we were
able to help with ABIC, with Becca's team and Impact Fund here
in Miami, other women and Hispanic-owned companies, to get the
support. From processing documentation and gathering paperwork.
We actually got a lot of these businesses approved for PPP.
And so besides the PPP, we though we entrepreneurs don't
stop we don't like to stay still. You know, we didn't stop
there as a company. We did not only rely on help of the
government, we reinvented ourselves, we became a restaurant in
Miami making meals for seniors through our Miami-Dade County
contract and we started our efforts in the digital space, you
know, to send empanadas locally and nationally.
So when I think about this whole year, I actually was
thinking about [inaudible]. It must have been so hard for all
you guys, government officials, you know, trying to figure out
what to do and coming up with an entire package to save our
economy and our community. So I wanted to at least to take 2
seconds to thank you for the work you have done and for the
effort, because it truly has made a difference in many
businesses like mine.
I had the honor to speak to President Biden twice in the
last month. On our first call, you know, I raised my hand. My
husband could not believe that I actually interrupted the
President and I said could I please give you a suggestion. And
my suggestion to him was please remember that the small
businesses are not the large 300 businesses, it is--there are a
lot of tiny businesses that are what I consider truly a small,
of one, five, ten, twenty people, and that we need to focus on
that because we are--we sustain the economy.
So as we speak today, I am opening one store in
Congresswoman Salazar's district. I cannot express to you how
challenging it has been to open that store, because of COVID,
because how hard it has been to hire. It is just really
difficult compared to before. But I am a believer and I believe
change is possible and I truly believe that challenges bring
opportunities. And so I think this whole crisis has shown us,
you know, all of us how to work together and how to actually
focus on the things that really matter.
I am thankful for President Biden's leadership and for you
guys' leadership, for Congress to approve, you know, the help.
I do believe that this Community Navigator Program was helpful
to me and to many here locally and that we should, you know,
continue to do this kind of work.
Thank you so much for your time and your support.
Chairman GOLDEN. Thank you.
And finally we will recognize Mr. Strong for 5 minutes.
STATEMENT OF BRUCE STRONG
Mr. STRONG. Thank you, Chairman Golden. Thanks also to
Ranking Member Jim Hagedorn and Member Pete Stauber, who are
both from the great State of Minnesota, where I live and work.
I would also like to recognize Nydia Velazquez, Chairwoman of
the House Small Business Committee, Ranking Member Blaine
Luetkemeyer, and Representatives Angie Craig and Dean Phillips,
who are also from Minnesota, for their many years of service
and tireless support of small businesses throughout the
country.
My name is Bruce Strong and I am the state director of the
Minnesota Small Business Development Network, or SBDC.
SBDCs have been operating throughout the country for more
than 40 years and in Minnesota alone during that time we've
provided more than 960,000 professional consulting hours to
help 95,000 clients start 5,200 businesses, helped more than
80,000 existing businesses, and helped them all to secure $3.2
billion in new business capital. Since March of last year our
staff has worked tirelessly and literally day and night to
double the number of clients that we served in a typical year
in response to the COVID pandemic. Demand for SBDC assistance
skyrocketed as business owners needed help with applications
for the PPP and EIDL loan programs, or to reimagine their
businesses due to government-ordered shutdowns.
Recently the U.S. Small Business Administration introduced
the Community Navigators Program. They state the intent of the
program is to broaden and intensify outreach and technical
assistance to targeted sectors of the small business community,
including persons with disabilities, women, veterans, and/or
those in minority, immigrant, rural, or other underserved
communities using a hub and spoke delivery model. We don't yet
have the details as to exactly how the program will operate,
but several SBDCs, including Minnesota, are working with SBA on
a pilot of the program to build models for the future of this
effort. A total of $175 million has been allocated to the
program under the American Rescue Plan. This is a significant
sum and we are pleased to be working with SBA to develop the
program. Assuming, that is, there is no requirement to provide
matching funds for the program.
SBDCs have long worked with other community organizations
to reach rural and underserved markets, but like other
businesses, the pandemic forced us to reimagine our own
business model. To continue meeting the surge in demand, we are
creating even more partnerships between the SBDC and local
community organizations. In Minnesota, for instance, we just
signed a contract with First Children's Finance to provide
specialized assistance to new and existing childcare
businesses. We are working to complete a similar contract with
the African Development Center to increase their services
throughout the state, and I am seeking to create even more
partnerships.
The Northern California SBDC has just launched a new
inclusivity project that provides a simple but effective
approach to reach out to the black and African community there.
It goes beyond simply providing outreach by creating an actual
challenge for the SBDC and local partners to provide real
social change to obtain capital and start new black-owned
businesses. The project has seen tremendous early success and
was met with great enthusiasm when presented to SBDC state
directors across the country just last week. So much so, that
we will be soon adopting this project for implementation in
America's SBDCs everywhere.
America's SBDC wishes to express strong support for the
Community Navigators Program and we envision it will fit
perfectly into these plans. We are particularly supportive of
the outreach portion of the funding. SBDCs have too long been a
``best-kept secret''. We have been prohibited from marketing
our services and that has truly hampered our outreach. That
prohibition has only recently been lifted by the SBA. The
Community Navigator Program will ensure that entrepreneurship
education reaches all parts of the small business community,
and it will go a long way to help our efforts to reopen the
economy.
Thank you and I look forward to your questions.
Chairman GOLDEN. Thank you to all of our witnesses and we
appreciate all the testimony that you shared with us.
I will now move to questions and I will begin by
recognizing myself for 5 minutes.
I think I will begin with Mr. Strong. I did want to point
out that I agree with Mr. Hagedorn that the PPP program worked
well. For that matter, I agree with pretty much everyone that
has joined us and testified today about that as well. I also
look forward to hearing a little bit about H.R. 1411, your bill
on PPP in support of farm partnerships. Last Congress you
joined me, Congressman Hagedorn, in cosponsoring the SBDC
Reauthorization legislation, which we passed through the House.
Did not get taken up by the Small Business Committee in the
Senate, so hopefully we can continue that work in this
congress, but.
Mr. Strong, obviously there are some who might naturally
conclude that some of the groups out there, like SBDCs or
SCORE, could view the creation of a new program such as this
one as potentially duplicative or in competition with the
services you provide. You just ended up by putting forward
really an endorsement of the program. So I wanted to give you
the opportunity to say a little bit more about the potential
effects of the program, how you think it will interact with
SBDCs. And also if you have any concerns that should be avoided
in order to make sure that the programs are really
complementary.
Mr. STRONG. Thank you, Chairman Golden.
I don't view the program as being duplicative or
competitive with what we are already doing. Rather, I view it
as being complementary to what we are already doing. As I
mentioned, we have long had partnerships with other local
organizations to help broaden the reach of the SBDC and
particularly to provide deep reach into those markets that have
typically been underserved. We have worked with the
Metropolitan Economic Development Association, or MEDA, with
the Neighborhood Development Center, with other local nonprofit
groups and specifically those that serve communities and
communities of color.
So, again, I believe that the Navigator Program will help
us reach even more community organizations and partner with
more organizations as we have recently done with the African
Development Center and First Children's Finance here in
Minnesota.
Chairman GOLDEN. Thank you very much. And you made a great
point, by the way about previous prohibitions on marketing and
outreach. What good are these services to businesses if they
don't know that they exist in the first place. So look forward
to continue to work with the SBDCs and SCORE and others on
fixing that problem in this Congress as well.
Next I guess I would direct a question to Ms. Weston from
SCORE.
Through your work with underserved and rural small business
owners and entrepreneurs, what resources and technical support
are most often requested? And how do you think this new
partnership with the Community Navigator Program can help
address these?
Ms. WESTON. Thank you for the question, Chairman.
And with SCORE mentors seeing tens of thousands of small
business owners each year we really do have a pulse on what the
challenges that small business owners are facing. In our
mentoring sessions the common themes that our mentors hear do
relate to funding. Do these small business have position
funding or cash flow, and, along those lines too, attracting
and retaining customers. Those are the two biggest challenges
that we see.
With SCORE partnering across the country with local
community partners, as well as nationally with some of the
partnerships I had mentioned previously, it helps connect those
business owners struggling with funding opportunities, access
to capital, cash flow questions, or customer questions with
those people that have been there, done that expertise. We have
seen that the PPP and EIDL programs were more successful when
they were partnered with a mentor like SCORE, SBDC. And we want
these new federally funded opportunities, which are extremely
valuable to these business owners, be able to take advantage of
it. And SCORE mentors are ready to help those most vulnerable
business owners navigate. The key is to make sure that they are
connected to those disadvantaged and underserved communities.
We are doing that already across SCORE chapters. Maine, for
example, partners with a number or organizations like the USDA,
the Maine Farmland Trust, to make sure that that one-on-one
business mentoring service is provided to make sure they have
the best opportunity for success.
Chairman GOLDEN. Thank you very much for that. And I hear
repeatedly from business owners in Maine about how valuable the
programs and services offered by SCORE are in starting
businesses and making tough decision to keep them going as
well. So thank you for that partnership in Maine.
My time has expired and the Ranking Member, Mr. Hagedorn,
is now recognized for 5 minutes.
Mr. HAGEDORN. Thank you, Mr. Chairman.
You know, I was listening to testimony, especially from Ms.
Shi and Ms. Zavala, and they were saying how important it is to
make sure that our small businesses, all of them, have access
to especially Paycheck Protection Program and everything else
needed in order to get, especially at this time, from one side
of the Coronavirus to the other. And so I think the work of the
Committee, led by our Committee Chairwoman Velazquez and
ranking Republican Luetkemeyer, was--and you, Mr. Chairman as
well, and many Members of this Subcommittee, all of them, I
think to extend the Paycheck Protection Program by 60 days,
that bill that was just passed this week, pretty important. So
hopefully we can work with our Senate colleagues and get that
done and make sure that all of our businesses are cared for and
have proper access to the program.
So, you know, Mr. Strong, I listened to your testimony. It
is very good. And I certainly am supportive of small business
development centers and women's business centers, veteran's
business center, SCORE, you know, all of it. But you said you
think this is more of a cooperative deal, these navigators, it
is not going to be competition with you. What do you foresee
them going out and basically bringing the business back to you?
Is that kind of the concept? Or could you, you know, let me
know what your thoughts are on that?
Mr. STRONG. Sure. Thank you, Representative Hagedorn and
Chairman Golden for that question.
Again, the vision for the delivery is a hub and spoke
model. In my estimation that is the SBDC acting as the hub and
these local community partners acting as the spokes. That is
similar to how our model has worked in the past. Oftentimes,
particularly with communities of color, underserved markets and
rural markets, folks really want to talk to somebody from their
own community. They want someone that looks like them that can
identify with them, and that is the strength in my estimation
of the community partners in this hub and spoke and approach.
So I do believe it is going to be effective. I think the
outreach can actually be a combination of that provided by the
hub, by the SBDC, to make sure that folks are aware that the
Community Navigator Program exists and what it does, but then
also those local partners who can reach out specifically to the
groups within their local markets and bring clients into the
program that way as well.
Mr. HAGEDORN. Thank you. I do really appreciate the work
that you do on behalf of Minnesotans and have spoken to many of
your clients over the last several years who have been, you
know, very much aided by the work that you perform.
And during the Obama Administration we had Obamacare and we
had these community navigators then and there were some
problems with, you know, fraud and just other types of things.
Are there standards in place do you think with the Small
Business Administration that we can make sure that these folks
are going to be trained up properly and we won't have any legal
or ethical problems?
Mr. Strong, that is for you again.
Mr. STRONG. Representative Hagedorn, yes, I do--I believe
SBA does a great job of oversight of the program that we
currently run, our regular core program that has been in
operation for 40 years. They have strong measures in terms of
metrics and goals that we must achieve under that program. I
believe the same will be true under the Navigator Program. And
as long as we have a clear objective as to what this program is
to do and what it is to accomplish, I am fully confident that
the SBDCs will absolutely come to bat and make sure this
program is successful, that it meets the actual challenges.
That is already being demonstrated most recently in this
Northern California SBDC program.
So, absolutely, I believe we will--once we set clear
objectives and metrics for the program, we will be able to
accomplish them.
Mr. HAGEDORN. I hope Members on both sides would make sure
we do the proper oversight and follow up on that and make sure
what you are saying is going to work out.
Lastly, real quickly, on broadband access--and I will stay
with you, Mr. Strong, since we only have about 30 seconds--how
important it is that we make sure that folks, not just in rural
communities, but all across the country, wherever they might
be, have access to broadband and high speed access in order to
do their work and to market their businesses and so forth?
Mr. STRONG. Thanks again for that question, Representative
Hagedorn.
Clearly the COVID pandemic underlined the importance of a
strong broadband network. When we are all confined to our homes
and required to work from our homes, without a strong broadband
network, we are sunk. And that is why I believe that support
for broadband funding is critical. Here in Minnesota the
legislature is contemplating large scale programs to improve
and increase the broadband network. I hope that the same--I
trust the same is happening in other states across the country
and I hope nationally we can come to a broadband program that
helps provide a stronger network across the entire country.
Mr. HAGEDORN. Thank you. I am out of time. Appreciate it.
Chairman GOLDEN. Thank you. The gentleman's time has
expired. The gentleman yields back.
I will now recognize Representative Jason Crow, Chairman of
the Subcommittee on Innovation, Entrepreneurship, and Workforce
Development.
Mr. CROW. Thank you, Chairman. Thank you to all the
witnesses for coming in today. Really great testimony and
really good information for us to look at these programs and
how to better improve them.
You know, when I think about the Community Navigator
Program I am reminded of this program in my district where the
City of Aurora actually partners with the local nonprofit, the
Village Exchange Center; has a program called the Natural
Helpers Program where immigrants and refugees who have been
here longer actually help fellow immigrants and refugees who
have recently arrived actually navigate nonprofit resources and
find their way around the community and better integrate it.
And I think it is within that spirit that the Community
Navigator pilot program is trying to help our underserved
businesses the most.
So in that vein, starting with Ms. Shi, Ms. Shi, can you
just tell me your thoughts on what types of private, nonprofit
that are best suited to serve as community navigators?
Ms. SHI. Thank you so much for the question, Congressman.
We had the same experience at the start of the pandemic.
After the Paycheck Protection Program was rolled out, immigrant
owned businesses, refugee owned businesses, black owned
businesses, you know, came to us and they had not heard about
these other SBA programs or SBDCs. And so we trained local
nonprofits, so nonprofits that they know in their community,
that perhaps that they have gone there for English classes or
citizenship classes. And so they started doing the one-to-one
document preparation, outreach, and education about the PPP and
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malfunction.] and, as you know, unique SBA processes where
there will be a host of hand holding and to get them access
[Audio malfunction.] three lenders that denied her until we had
a navigator that assisted her. And Pilar is much more
sophisticated compared to some of our small businesses and sole
proprietors [Audio malfunction.] to do this kind of work for
the ones that have the grassroots [Audio malfunction.] to our
businesses, our sole proprietors, to all [Audio malfunction.]
say do you know about these programs [Audio malfunction.]. And
thanks to all of you [Audio malfunction.] PPP, but also be
retroactive [Audio malfunction.]. This is the kind of outreach
that is important and one they are made aware of the program,
then our navigators like hold their hand and go through the
entire document preparation for them. You know, because of the
pandemic, for a lot of these smallest businesses, this is their
first interaction with a government loan or a grant program,
right. And so, you know, they are afraid, they are concerned
and it is--you know, we all know if you check the wrong box,
right, that affects your credit score. And then, you know,
getting them access to a lender.
So I would say the best types of nonprofits are not so
much--you know, in our experience, the ones that have done this
work before, but really are willing to get in the gutter and be
on the ground and hold the hands of our small businesses and
get them through from the beginning to the end. And we have a
very, very rigorous accountability measure. Because like with
Pilar, we need to show that the money--so.
Mr. CROW. Ms. Shi, I will--yeah, I will stop you there. I
want to give Ms. Zavala an opportunity to weigh in as well. But
I appreciate that perspective and your thoughts on that very
much.
Ms. Zavala, any thoughts on what you think would be the
best nonprofits that could perform these types of services?
Ms. ZAVALA. Yes. Thank you for the question.
I saw that the CDFIs, the small--really small one branch,
you know, banks, the Axiom--which now I think it is a different
name--those are organizations that are close to the small--what
I mean when I say close is they understand the issues they have
with not having the perfect P&L, right. I have a perfect P&L. I
didn't have it 10 years ago. So understanding--I think what is
good about working with the local organizations is that they
understand how to work on the context of that small business,
which banks don't understand.
So and I think the issue of--you know, it is an issue of
capacity. There is a lot of--there is the SBA, but is there the
capacity to serve all of these? I think the numbers show that
there is not the capacity. We need more.
Mr. CROW. Yeah. Thank you. Thank you. I am out of time, but
really, really great thoughts.
Ms. ZAVALA. Thank you.
Mr. CROW. Thank you very much.
Mr. Chairman, I yield back.
Chairman GOLDEN. The gentleman yields.
I will now recognize Representative Roger Williams, Vice
Ranking Member of the full Committee.
Mr. WILLIAMS. Thank you, Mr. Chairman. Thank you for your
leadership. Ranking Member, thank you. And our witnesses, thank
all of you for being here today.
I am a small business owner myself. I have been in business
50 years and still have my business and employ hundreds of
people back in Texas. And I appreciate your stories. They are
just so--they show the power of this great country.
Attending a trade school and learning a skill can be just
as valuable as going to a traditional four year college. I am a
strong advocate of career and technical education programs and
push back against the belief that a college degree is necessary
to get ahead in America. If someone learns a skill they are on
their way to eventually translating their abilities into
starting their own small business. However, learning how to run
a small business is not easy task, as we all know.
So my question, to start out with, Ms. Weston, you touched
a little bit about this earlier, but maybe you can go deeper,
can you discuss some of the largest challenges you see from
young entrepreneurs who come to your organization wanting to
take a chance and start their own businesses and how any way
the SBA can better utilize resources to spur new business
creation? Because at the end of the day, risk and reward is the
American dream.
Ms. WESTON. Thank you for the question, Congressman.
And we know at SCORE that being an entrepreneur or a small
business owner--and you know this too--is challenging under the
best of circumstances. And this year has been hard on everyone.
SCORE has data that there are some groups of businesses
that have struggled more than others, but being a business
owner and an entrepreneur you feel that you have to be that
person who does everything, that you--you know, you are the
Jack or Jill of all trades and you have to wear all of the
hats. What SCORE and SBDC and other organizations that provide
technical support do, is we are that step by step guide to
these businesses that help them fill those gaps when they don't
have that information on the P&L, like small business centers
do. You might be an expert as, you know, a plumber or a hair
stylist, but you don't necessarily have that knowledge about
how to do your accounting. That is where SCORE and the SBA
resources come into play. SCORE stands ready for small business
support for everyone. Some business owners do have unique
challenges. We have been talking about historically under-
represented groups and rural business owners and there are some
needs that those groups have a greater need for, and we can
address those too.
The important thing is, with 30 million small business
owners out there that we as the resource partners and the
technical assistance, get out there, get the word out, connect
with these community organizations that have the reach into
those communities so that these business owners know SCORE and
other resource partners are here to help and provide that
support. And when the business owner steps away and uses a
mentor to answer those questions, they are much more likely to
successful.
Mr. WILLIAMS. That is great. I think your support find
there is a big difference between the sale of dollar and the
gross of dollar. So thank you for helping on that.
Secondly, I think the Navigator Program has the potential
to help a large number of small businesses realize the
resources that they have at their disposal. However, in the
past, there have been some serious issues of fraud, and we have
talked about that this morning, and of leaking sensitive
consumer information that led to some security threats against
individuals.
Since we just allocated $100 million to this program, we
must make sure that we are making good--or being good stewards
of taxpayer dollars and not repeating the mistakes of the past.
So, Ms. Shi, for you can you discuss what safeguards the
SBA should put in place to ensure that this program is not
opening itself up to waste, fraud, and abuse?
Ms. SHI. Yeah, absolutely. And thank you so much,
Congressman, for that question. And that is extremely
important.
So when we ran the navigator model in several states,
including Texas, Florida, and South Carolina, we asked all of
our navigators to show receipts for the PPP received by their
small businesses. So that is part of our accountability
structure. You know, I think it is very easy just to send a
whole bunch of emails and do a webinar and say that, you know,
we assisted businesses, right, but we actually--especially
during this global pandemic as our businesses are struggling--
we need to see that these funds are getting into the bank
accounts of our small businesses as well as staying with them
to go through the forgiveness process to turn the loan into a
grant. So that is number one.
And number two is working with a trusted CDFI--and the I--
or financial institution, to make sure that, you know, all the
Ts are crossed, Is are dotted. And, you know, as we know with
our financial institutions, there are also multiple layers of
assurance and accountability.
But, so that is extremely important to us and this is
taxpayer dollars and these are the local engines of our
economy. And so we need to make sure that these funds are
getting to the folks that need it the most.
Mr. WILLIAMS. Okay. Thank you to the witness. And I yield
my time back.
Chairman GOLDEN. The gentleman yields.
I will now recognize Representative Pete Stauber from
Minnesota's 8th District.
Mr. STAUBER. Thank you, Mr. Chair. And thanks to all the
witnesses for providing the testimony today.
And, Mr. Strong, thanks once again for coming to our Small
Business Committee hearing and testifying. I am sure all the
Minnesota Members really appreciate you coming here again and
giving us quality time.
I would just like to give you a moment to share what worked
for the Minnesota SBDCs, what has it looked like during the
pandemic, and how has it changed from what you had done prior
to the pandemic?
Mr. STRONG. Thank you, Representative Stauber. Thank you
for those kind words.
What has changed for us is the sheer volume of the
questions and the demand that we are receiving from the public.
Obviously the Paycheck Protection Program and the EIDL loan
programs were critical to those small businesses that were most
affected as a result of the pandemic. And helping those
businesses wade through the myriad regulations for both
programs, both the PPP and EIDL loan programs, and the changing
requirements that occurred during the launch of those programs,
just caused so much confusion in the marketplace. We spent a
great deal of time just trying to decipher those changes
ourselves and then interpret those changes to the small
business community so that we could most effectively help them
apply for their loan, or help them apply for forgiveness under
the Paycheck Protection Program. We are still to some extent
struggling with issues regarding that. And this latest deadline
of the Paycheck Protection Program expiring and hopefully being
extended just kind of creates ripples throughout that program.
As Chairman Golden stated, SBA processed 14 years-worth of
loan applications in a 14-day period of time.
Mr. STAUBER. Mr. Strong----
Mr. STRONG. That, you know, by itself is going to cause
problems.
Mr. STAUBER. Mr. Strong, I want to just thank you and your
organization for helping out the small businesses and helping
with the lending institutions, because when we passed that
legislation there were some blind spots. And when we knew
better, we did better with the flexibility portion afterwards.
Mr. Strong, prior to the pandemic northern Minnesota was
plagued with a childcare desert. The situation got worse during
the pandemic. In your testimony you mentioned that Minnesota
SBDC signed a contract with First Children's Finance to provide
specialized assistance to new and existing childcare
businesses.
Can you elaborate on this? On the work you are doing?
Mr. STRONG. Certainly. Thank you again for the question.
First Children's Finance has been around for a long time.
They are a nonprofit group, they are a CDFI as well. They
specialize in helping childcare businesses with all of the
nuances, the legislation, and the requirements that are
expected of a childcare business. And so partnering with them
the SBDC will help broaden--the outreach will help broaden
their outreach. It helps bring funding to them so they can pay
additional counselors to come alongside. But it also helps the
SBDC because we can help with the business aspect of running a
childcare business, even though we may not necessarily
understand all of the nuances of those requirements.
And you are exactly right, the childcare industry was
struggling even pre-COVID. In Minnesota we found that small
businesses were unable to grow because their employees weren't
able to find adequate childcare, particularly in rural markets.
We are hoping and trusting--we believe that partnering with
First Children's Finance will be of great benefit to the SBDC
and all Minnesota businesses.
Mr. STAUBER. And, Mr. Strong, I think that is really great
news because we know when there is adequate, secure childcare
that benefits the economy, especially coming out of this COVID
crisis. We want to make sure that the workforce is there to be
had and having safe, secure childcare is certainly a priority.
So, Mr. Strong, once again, thank you for your testimony,
and we will see you shortly.
And, Mr. Chair, I yield back.
Mr. STRONG. Thank you.
Chairman GOLDEN. The gentleman yields.
I will now recognize Representative Claudia Tenney from New
York's 22nd.
Ms. TENNEY. Thank you, Mr. Chairman, and thank you to
Ranking Member Hagedorn, and the witnesses as well. Great to
hear from all of you. And thank you for holding this important
hearing.
Obviously the COVID-19 situation has been challenging for
all of us, all Americans, and especially our small business
community, which are truly the backbone of our economy. And I
can't emphasize that enough. As a small business owner in New
York's 22nd District, over 94 percent of the workforce in my
district come from small businesses. So our community's
success, our economic success, depends on the success of our
small businesses.
Last week I launched a small business outreach tour to meet
with business leaders and employers across the 22nd District.
So far I have met with over 30 businesses, have spoken with
hundreds in the past, and have had the opportunity to discuss
their priorities and their needs for relief and recovery.
The two common questions that I get are what programs and
resources are available and, second, how do we navigate some of
these cumbersome applications processes and rules. And I know
as a business owner, also as an attorney, federal programs, you
know, have helped thousands of businesses in my state,
particularly in our underserved and rural communities, which my
district is. We must continue to reach out to these underserved
communities and educate our employers on how to use these
resources and their employees. It is also imperative to
understand that these programs need to be made simpler and
easier to use because so many small business owners are so busy
running their businesses they really don't have time to hire
compliance teams and teams of lawyers. And I know that as my
business was started over 75 years ago and I have been one of
the owners for over 35 years, so I understand how complex this
can be. And I really appreciate our witnesses.
And my first question--and some of these have been
answered--I would like to address to Ms. Weston. And first I
want to say thank you so much for SCORE. I have--as a business
owner also, many of my colleagues have used SCORE and it has
been a wonderful asset to people in the business community. So
I just wanted to ask you, so many of these business owners have
said this is--getting the money and the Navigator Program has
been so daunting. What do you consider the biggest barrier and
what recommendations do you have to fix those issues? Briefly,
if you could.
Ms. WESTON. Well, thank you so much for the question,
Congresswoman. And maybe one day you will consider becoming a
SCORE volunteer since you are a small business owner yourself.
So one of the things that we heard from our clients,
especially as it relates to PPP and EIDL, was just that
Congress acted so quickly, there was such a drive to help these
small business owners, and when things were really done quickly
there was confusion--how to apply, who can apply for these
loans, what that process is. And so what SCORE was able to do
is set up our small business resilience program, which paired
mentoring, check list, and step-by-step guides that were
industry specific to help these businesses navigate the
challenges they are facing.
So we saw nearly 600,000 people through that portal to help
answer questions in a timely, specific, guided fashion so that
we could get them to the right lender, the right program, the
right resource. What we have seen is that these guides, mentors
from SCORE or other resource programs, are what can really help
make these federally funded programs successful. And the
communication would be helpful across lines collaborating with
other resource partners and other agencies.
Ms. TENNEY. And as you say that, I know you recommend more
communication. We also have state programs that are now going
to be enhancing some of the federal programs. And so that is
where I consider SCORE would be a great resource for us to be
able to access them.
Thank you, though. I appreciate that.
And for Mr. Strong, I wanted to ask a question about
childcare, which is really important to me as a single mom, how
important it is to have reliable safe childcare. But Mr.
Stauber hit that question, but I was just going to ask you in
looking at this model, a lot of businesses--this pandemic is
forcing everyone to reimagine their business model. And in
response to the demand, what would you say for the SBDC, what
could we implement in a rural setting to help people in a
pandemic for the future and how do we best reach out to some of
these people in rural settings? I am running out of time, but
if you could answer real quick, I would appreciate it.
Thank you.
I guess I will yield my time back. I am sorry.
Mr. STRONG. I lost your audio. I couldn't get the question.
Ms. TENNEY. Mr. Chairman, we will address it in another
meeting.
Thank you so much. We will catch up with you in a private
setting.
Thank you.
Chairman GOLDEN. The gentlewoman yields. Sorry about the
technical difficulties. And we can submit it for the record if
you like.
Ms. TENNEY. Absolutely. You need more broadband. Thank you.
Chairman GOLDEN. That is the truth.
I will now recognize the Ranking Member of the full
Committee, Blaine Luetkemeyer from Missouri's 3rd Congressional
District.
Welcome, Ranking Member Luetkemeyer.
Mr. LUETKEMEYER. Thank you, Mr. Chairman. And thank you all
of the witnesses.
I have been listening in my office and trying to keep a lot
of balls in the air this morning here. I apologize for getting
here a little late. But, you know, one of the things that
concerns me are--that I have been watching here is that, you
know, I had a meeting this week with an SBIC group, a small
business investor, and they were telling me that they were
doing basically what the navigator proposal in this CARES Act,
or the funding bill, actually was doing. So I mean I am
curious--you know, they were trying to bring together all the
different groups, whether the chamber or the libraries--in fact
is one of the groups they were talking about, as well as
historic and black colleges that they were working with and
some other partners. So if they are already doing this, is this
really necessary? What is your--can you explain to me? Mr.
Strong, for instance, can you give me the reason why this is a
good deal? Or should we continue it or change it around? Or
what is your suggestion here?
Mr. STRONG. I am sorry, Congressman. I lost the last part
of your question.
Mr. LUETKEMEYER. Okay. I was curious as to whether you
believed--or what your opinion would be with regards to the
necessity of the Community Navigators pilot program here in the
COVID relief bill because I was talking with some folks in SBIC
this week and they do the same thing--some SBDC folks that are
doing the same thing.
So are we duplicating services I guess is my question?
Mr. STRONG. Well, thank you, Congressman. I appreciate the
question.
And, again, it is going to be a challenge. It is always a
challenge, especially when Congress is trying to act in as
robust a fashion as they are. It seems like a lot of these
programs are duplicative, but I think it is simply going to
help increase the outreach and the effectiveness of the
partnerships between SCORE, the SBDCs, the Women's Business
Centers, and all of their local community organizations to
provide even greater outreach into markets that haven't
historically been very well served.
We continue to hear about underserved markets, particularly
in communities of color and in rural markets. The more folks we
can have out there helping the existing small businesses and
potential small businesses, I think the better.
Mr. LUETKEMEYER. Can you explain to me who all is going to
qualify for this money and how they get it?
Mr. STRONG. No, I am afraid I can't. We haven't gotten the
details of the program yet. I have only seen it in concept
form. We are anxiously awaiting what the actual details of the
program will be, eligibility criteria, and more importantly, or
just as importantly, the metrics and goals that we hope to
achieve through the program. I think that speaks to your
question about effective use of this funding. We need to have
clear cut goals, we need to have clear cut eligibility, and we
need to have clear cut metrics for the outcomes of the program
to evaluate its success.
Mr. LUETKEMEYER. If we are delaying--and SBA has got a lot
of balls in the air right now. They have got a lot on their
plate and I am very concerned about that. I am working with
them on a lot of other issues right now. And if it is going to
be a delay in getting this information out, putting this
program together, how worthwhile is it if you wait until
September to get it done, for instance? If we wait, you know, 4
or 5 months here, is it still going to be effective? Or is it--
at that point we will be over the hump, so to speak, such that
it is not going to be necessary?
Mr. STRONG. Thanks again, Congressman for the question.
I believe that the problem with underserved markets has
been around a lot longer than the COVID pandemic. I think
anything that we can do to help increase outreach to those
markets is going to be beneficial. You know, if a delay--and
hopefully it won't be 4 or 5 months before we get clearer
marching orders on the pilot program isn't necessarily going to
have an overall impact on its effectiveness.
Mr. LUETKEMEYER. Just a quick question for you with regards
to the other programs that are out there. I am not sure you are
involved with them, but just to kind of get your opinion on
them real quickly. With regards to the restaurant program, for
instance, are you working with any of the groups? Do you think
that is going to be pretty impactful, those restaurant grants?
Mr. STRONG. I don't think there is a more important program
out there than the restaurant grants. But, again, we have seen
absolutely no details on what it will do or how it will work.
But I can tell you--and Minnesota is not unique here--the
hospitality industry has been decimated as a result of COVID
and the required business closures that took effect as a result
of that.
So absolutely we must provide some support to the
restaurants and hospitality industry.
Mr. LUETKEMEYER. Well, I think the key--I thank the
Chairman for his diligence here--but I think the key is going
to be how these grants are doled out, how they are applied for,
and how they--what kind of oversight is provided over them
because I think it is a situation that is ripe for fraud if we
are not careful. And I think hopefully you will work with us to
provide some expertise in this so we can find a way to minimize
that.
With that, I yield back the balance of my time.
Thank you.
Chairman GOLDEN. Thank you. The gentleman yields.
And we would now recognize Representative Maria Salazar
from Florida's 27th for 5 minutes.
Ms. SALAZAR. Yes, and thank you very much, Chairman.
I want to congratulate Ms. Pilar Guzman because I think you
are the epitome of the American dream and we need more people
like you in this country. People that came with really not
knowing any English, as you said, but willing to work and to
take advantage of this fantastic American dream, or the
American system that the Founding Fathers put together for
people like you and me. So I think that we not only have love,
but gratitude for this country. And I am sure that you feel the
same way.
And, look, not only were you able to come, you were able to
stay, you learned the language, you went to school, and then
you put together a business, came COVID, and the government
gave you money so you could keep that business. Where does that
happen? Nowhere else. Is that true? Nowhere else. And that is
why I congratulate you and I think that we Hispanic Americans,
first generation, we should celebrate what a fantastic country
we have. And that is why I am in Congress, because--and you are
in business--because we want to keep this system for the future
of our children.
Am I right?
Ms. ZAVALA. Yes, I support that 100 percent.
Ms. SALAZAR. and I just wanted to ask you, in which way we
could spread the word and help other businesses like yours,
specifically in our district, Miami and south Florida in order
to--what else do you think we could do in order to send a
message and give the info to people like you in order to
continue living the American dream?
Ms. ZAVALA. Yeah, thank you for that question,
Congresswoman.
I think that it is crucial that we support groups like
ABIC, like Impact Fund here in Miami. I saw how hard it was for
me, and I am a little bit sophisticated in the sense of, you
know, I have systems in place, I have, you know, financials in
place. It is so hard as a small business to understand what the
PPP was, how to apply to it. You know, the bank wasn't
replying. So, you know, ABIC in that sense helped me connect to
the opportunity because I couldn't get in. With all my network
in Miami, I could not get the PPP. So imagine the majority of
the businesses that don't have that network, that are not
mentors to other businesses, that don't have the community
connections, they need ABIC, they need Impact Fund.
And what I say is, you know, it is great with the SBA, you
know, has done, you know, during the crisis and before, but we
must recognize that the numbers don't lie. This is not about
parties or emotions, it is about numbers. And so we need to
look at the numbers, who is getting the finance help. And why
is it that the underserved, you know, communities don't have
that access to financing. And in this case the PPP--the PPP
just highlighted the systemic problem we have.
And so I think that one of the challenges is that we need
more technical assistance, we need more, you know, guidance in
how to getting a small loan, because we are lost. Access to
information and having these local partners working one-on-one
with businesses that already know them, it is important.
Ms. SALAZAR. And I thank you, because that is why I created
a prosperity center within my congressional office. And I am
glad that you are telling me that information is power. Because
the more info that we put out there into the community for
people like you--because like you said, that you had certain
knowledge. There are many other businesses that are not as
sophisticated or have as much information as you have.
So thank you for that.
I am not sure if I have to yield my time back or if I have
a few more minutes. I don't have the----
Chairman GOLDEN. You still have a minute to go if you would
like to ask another question.
Ms. SALAZAR. I could have--yeah.
And now let me ask you this, what about the--like you were
saying, I have to definitely recognize the local people in the
Impact Fund, our local partners who are with the American
Business Immigration Council, ABIC, to help you connect and to
give you those tools and that information, that technology or
know that information, basic knowledge in order to be able to
navigate the system and get to the money.
Now, the info in Spanish, even though you were
knowledgeable in English, what else can we do for those people
that also want to live the American dream but still do not
understand the literature in English? What have you found out
there? Do we need to promote more material in Spanish?
Ms. ZAVALA. Yes. I mean I think that first we need to just
have the information available. You know, people were just lost
in the process. Like nobody knew what to do with the PPP. And
so, yes, it will be very helpful to have it in Spanish as, you
know, the majority of our businesses here locally are Spanish
speaker businesses. So certainly that is important and that is
I think one of the barriers for many of our businesses.
Ms. SALAZAR. Thank you very much for that info. Thank you
Ms. Guzman. Looking forward to meet you when I go down to
Miami.
Ms. ZAVALA. Thank you, Congresswoman.
Ms. SALAZAR. I wish you a lot more success in opening up
many more Half Moon Empanadas shops.
Ms. ZAVALA. Thank you.
Ms. SALAZAR. I yield back. Thank you, Chairman.
Chairman GOLDEN. Thank you very much.
I am going to ask a few more questions, so second round if
Members can bear with me. I certainly recognize if you are not
able to stick it out, however, Mr. Hagedorn, but if you do have
more questions, I am happy to recognize you after.
Thank you to the witnesses. Just a few more questions.
One of them--I guess I will just follow up with you, Ms.
Zavala, because that was a really good exchange right there.
You know, early on in the pandemic my office was hearing from
many, many businesses who were very eager for help from EIDL,
from PPP, had a lot of questions. SBA staff were very busy
working with the Treasury trying to build the program, and as a
result people were really struggling to get information.
One of the things that the American Rescue Plan authorizes
at SBA is a call center, where business owners such as yourself
could call to get information, how do I apply, you know, what
are the guidelines, you know. Many people were very concerned
about taking the loan not knowing how they might qualify for
forgiveness. These types of questions were everywhere. And as
you said earlier, people were very concerned.
Do you think that having a call center that you could have
called at the beginning when you were contemplating the
Paycheck Protection Program and things like EIDL, would have
been helpful? And would you have called it if it had existed?
Ms. ZAVALA. Thank you for the question, Chairman.
Yes. I mean I think that as the information is what was
missing, the access is what--sometimes people were lost. Even
before the pandemic, think about it, like where do you get
financing. I get those questions all the time when I do
mentorship. I get texts from companies, from people, I need
support for this financing wise. Like there is a lack of
information. And so, yes, a call center--there was an effort
here in Miami led by the city Foundation where they put
together a website with like specific questions about where to
get the help during COVID, the loans or the individual help.
And so, of course, those are important efforts.
Chairman GOLDEN. Thank you very much.
You know, I also wanted to say just thinking about the
early weeks and months of the pandemic and the emergency it
caused for a lot of small businesses, I actually had almost my
entire team establish what we called a task force completely
focused on aiding small businesses and accessing the EIDL and
PPP. Even my D.C. staff were on the phone lines trying to
develop expertise to connect business owners with assistance.
And, you know, I think it was one of the beautiful things
that this Committee really took part in early on. Having had
the PPP established--it wasn't perfect, we had to roll it out.
And there was a lot of great oversight done by the entire
Committee that resulted in follow on actions that improved the
program over time and more, you know, accurately targeted it
where it needed to be to have the biggest impact as time went
on. A really important effort.
And one thing I--you may be aware, maybe you are not--I
actually voted against the American Rescue Plan, but as
Chairman of the Subcommittee I certainly intend to take part in
that kind of collaborative oversight to make sure that these
programs are very successful for all the businesses that are
out there. Certainly there is a lot of need that remains.
So another question I wanted to ask for Ms. Shi, you ran
the pilot program on the Community Navigator Program in various
different states, could you talk a little bit about some of the
issues you came across that SBA and this Committee should be
aware of in order to avoid those same mistakes occurring as the
program rolls out nationally?
You are muted. I am sorry, ma'am. Go ahead, try again.
Looks like we may have some technical difficulties. We will
submit that one for the record.
Ms. SHI. Is this better?
Chairman GOLDEN. Yes.
Ms. SHI. Oh, I am so sorry about that.
Yes, so some of the issues that we identified were the
access to lenders, were for the sole proprietors, the Schedule
C issues of not being able to have a fuller relief through the
calculating with the gross income. And I would just say that
because these were the boots on ground, it sounds similar,
Chairman, with your office. Almost seems like you had your
whole team as navigators. But really holding these small
businesses' hands to get these loans and then helping to turn
the loans into the grants were some of the issues and that we
reflected back to the Committee, to the Chairwoman Velazquez--
and thank you for her leadership on this--and to try to get the
program major improvements over time as we have seen.
And just the other issue I think a couple of times that has
come up about the accountability and the anti fraud measures.
The other thing that we did in our program is to make sure the
navigators and organizations that weren't producing, that were
not helping businesses get the money in the bank, were defunded
from the program, right. So that this is--we are in a pandemic,
we are in an emergency, we require high performance and that
these businesses like Pilar's, and even smaller employers, do
get the funds that they deserve and do it quickly, so.
Chairman GOLDEN. Thank you. My time has expired on the
second round. So I did want to make sure to offer an
opportunity for further questions to the Ranking Member.
Mr. HAGEDORN. I have no more questions at this time. I
would be happy to yield to our Ranking Member for any further
question.
But thank you.
Chairman GOLDEN. Very good.
Well, I want to thank all of our witnesses for joining us
today and all of the feedback that you provided. And certainly
appreciate you bearing with us through all the technical
difficulties that exist out there. Some people have commented
on the side here more evidence of the need for this Committee
to stay focused on access to high speed internet, particularly
for small business owners all over America. And I think I heard
the Ranking Member comment he looks forward to having everyone
back in the Committee. I couldn't agree more.
But, with that, just some closing remarks.
You know, to the witnesses, your testimony today will be
valuable as the Administration and this Committee moves forward
to stand up and fine tune the Community Navigator Program. For
a nearly a year COVID has hit underserved, agricultural, and
rural small businesses particularly hard. Congress has taken
many steps to make relief programs such as the Paycheck
Protection Program, EIDL, and others there for small businesses
more accessible, equitable, and to ensure that our small
businesses get the greatest, you know, help out of this
Congress and these programs as possible. But certainly there is
always room to continue to make improvements.
Today we have heard about the impact that this program
could have in underserved small businesses. That is why
Committee Members need to do everything we can to ensure that
the program is sped up and run effectively and efficiently
without waste on getting the help into the hands of those who
need it the most.
So, with that, I look forward to continuing to work with my
fellow Committee Members and the Committee staff as we take a
look at the roll out of this program and continue to support
things like the Paycheck Protection Program, as we just
extended the ability of small businesses to access that program
through the remainder of the month of March.
With that, I think I will go ahead and close it out and ask
unanimous consent that Members have 5 legislative days to
submit statements and supporting materials for the record. And,
without objection, so ordered.
[Whereupon, at 11:34 a.m., the subcommittee was adjourned.]
[Ms. Pilar Guzman Zavala did not submit her QFR's in a
timely manner.]
A P P E N D I X
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[all]
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