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+
+ - STATE OF THE SMALL BUSINESS ECONOMY IN THE ERA OF COVID-19
+
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+
+
+ STATE OF THE SMALL BUSINESS ECONOMY IN
+ THE ERA OF COVID-19
+
+=======================================================================
+
+ HEARING
+
+ BEFORE THE
+
+ COMMITTEE ON SMALL BUSINESS
+ UNITED STATES
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED SEVENTEENTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ HEARING HELD
+ FEBRUARY 4, 2021
+
+ __________
+
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+
+
+ Small Business Committee Document Number 117-002
+ Available via the GPO Website: www.govinfo.gov
+
+ __________
+
+
+
+ U.S. GOVERNMENT PUBLISHING OFFICE
+43-321 WASHINGTON : 2020
+
+-----------------------------------------------------------------------------------
+
+
+
+ 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
+ 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
+ Justin Pelletier, Majority Deputy Staff Director and Chief Counsel
+ David Planning, Staff Director
+
+
+ C O N T E N T S
+
+ OPENING STATEMENTS
+
+ Page
+Hon. Nydia Velazquez............................................. 1
+Hon. Blaine Luetkemeyer.......................................... 3
+
+ WITNESSES
+
+Dr. Robert W. Fairlie, Professor, Department of Economics,
+ University of California, Santa Cruz, Santa Cruz, CA........... 6
+Ms. Sharon Pinder, President & CEO, Capital Region Minority
+ Supplier Development Council, Silver Spring, MD................ 8
+Mr. Stephen Schoaps, Owner, Strother Cinema, Seminole, OK........ 10
+Ms. Karen Kerrigan, President & Chief Executive Officer, SBE
+ Council, Vienna, VA............................................ 11
+
+ APPENDIX
+
+Prepared Statements:
+ Dr. Robert W. Fairlie, Professor, Department of Economics,
+ University of California, Santa Cruz, Santa Cruz, CA....... 48
+ Ms. Sharon Pinder, President & CEO, Capital Region Minority
+ Supplier Development Council, Silver Spring, MD............ 58
+ Mr. Stephen Schoaps, Owner, Strother Cinema, Seminole, OK.... 65
+ Ms. Karen Kerrigan, President & Chief Executive Officer, SBE
+ Council, Vienna, VA........................................ 67
+Questions for the Record:
+ None.
+Answers for the Record:
+ None.
+Additional Material for the Record:
+ NFIB Research Center Study................................... 76
+ PPP Report................................................... 123
+ Associated Builders and Contractors (ABC).................... 146
+ ACA International............................................ 149
+ Brookings Metropolitan Policy Program........................ 151
+ Engine....................................................... 157
+ Hispanic Business Enterprises (HBE).......................... 162
+ National Association of Federally-Insured Credit Unions
+ (NAFCU).................................................... 190
+
+
+ STATE OF THE SMALL BUSINESS ECONOMY IN THE ERA OF COVID-19
+
+ ----------
+
+
+ THURSDAY, FEBRUARY 4, 2021
+
+ House of Representatives,
+ Committee on Small Business,
+ Washington, DC.
+ The Committee met, pursuant to call, at 10:01 a.m., in Room
+2360, Rayburn House Office Building, Hon. Nydia M. Velazquez
+[chairwoman of the Committee] presiding.
+ Present: Representatives Velazquez, Golden, Crow, Davids,
+Mfume, Phillips, Newman, Bourdeaux, Delgado, Houlahan, Kim of
+New Jersey, Craig, Luetkemeyer, Donalds, Fitzgerald, Garbarino,
+Hagedorn, Kim of California, Meuser, Salazar, Stauber, Van
+Duyne, and Williams.
+ Chairwoman VELAZQUEZ. Good morning. I call this hearing to
+order. I want to thank everyone for joining us today for our
+first hearing of the 117th Congress. I welcome all our new
+Small Business Committee Members, and welcome back those of you
+returning to the Committee from the 116th Congress.
+ I want to make sure to note some important requirements.
+Let me begin by saying that standing House and Committee rules
+and practice will continue to apply during hybrid proceedings.
+All Members are reminded they are expected to adhere to these
+standing rules, including decorum.
+ House regulations require Members to be visible through a
+video connection throughout the proceeding, so please keep your
+cameras on. Also, please remember to remain muted until you are
+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 their questioning, I will move to the next
+available Member of the same party, and I will 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 the health and safety guidance
+issued by the attending physician.
+ This past year, COVID-19 sparked a once-in-a-lifetime
+crisis for American small businesses. As we meet today,
+entrepreneurs nationwide are holding onto their businesses for
+dear life. According to the research published by the Federal
+Reserve Bank of New York, the number of active business owners
+fell by 22 percent from February to April 2020, the largest
+drop on record.
+ That same research showed minority owned businesses faced
+the worst outcome. This pandemic has hit minority owned
+businesses the hardest. COVID has caused a 41 percent decline
+in Black-owned businesses, a 32 percent decline in Latino-owned
+businesses, and 26 percent decline in Asian-American-owned
+businesses.
+ As we start the new year, it is not clear that conditions
+have improved. As the virus has continued to spread, small
+businesses are increasingly pessimistic in their outlook for
+2021. The NFIB Small Business Optimism Index declined 5.5
+points in December to 95.9 percent points, a level not seen
+since 1973.
+ Even more troubling is that 20 percent of firms consider
+themselves to be at risk or distressed. The pandemic has hit
+small businesses that rely on large gatherings and foot traffic
+especially hard. According to the New York State Restaurant
+Association, more than half of all restaurants in New York City
+are in danger of closing forever.
+ While small businesses in hospitality, retail, travel,
+leisure, entertainment, and others that rely on foot traffic
+for revenue struggle, big businesses strive. Profits soared for
+large corporations like Amazon, Wal-Mart, Home Depot, Best Buy,
+Costco, and others, who gained market share and saw their stock
+prices rise accordingly.
+ Forty-five of the fifty most valuable publicly traded U.S.
+companies turned a profit between April and September 2020, one
+of the most tumultuous economic periods in modern history. We
+need to be thinking about big and bold policies that provide
+small businesses with the resources they need to make it
+through this crisis and grow in the future.
+ In December, Congress passed a bill reopening the Paycheck
+Protection Program, allocating new funding for EIDL advances,
+and creating the Shuttered Venue Grants Program. These
+initiatives will save jobs and help businesses stay afloat, but
+that relief package was only a down payment on the stimulus the
+small business economy needs. Small businesses are still in a
+crisis, and we must do more.
+ Looking forward, we must enact bold relief measures under
+the Biden administration that reflect the dire reality main
+street firms are facing. Small businesses have made it clear
+they need more direct and flexible cash infusions. Throughout
+this pandemic, small business owners told our Committee they
+couldn't afford to take on additional debt during this
+uncertain time.
+ Programs like the targeted EIDL advances will provide small
+business owners with desperately needed relief without weighing
+down their balance sheets. We will hear testimony today about
+the benefits of advances and other grants and if more funding
+is required.
+ In addition to capital, small businesses also need access
+to customers. The U.S. Federal Government is the largest
+consumer globally, purchasing over $500 billion in goods and
+services each year. The Federal Government can play a unique
+role in supporting small businesses by using the Defense
+Production Act and Buy American policies to increase the
+customer base of the small businesses' economy.
+ Our nation's recovery depends on the well-being of small
+businesses and their employees. These are uncertain times for
+American entrepreneurs, and this Committee must help lead to
+the other side of this crisis. Members of this Committee serve
+as the voice of small businesses in the House, and we must work
+tirelessly to support them.
+ Today's hearing will give us a clear view of the small
+business economy's state and the work we need to do going
+forward.
+ Ladies and gentlemen, the hard work we have been engaged in
+over the past 11 months on behalf of America's entrepreneurs
+continues to date. I am looking forward to carrying on that
+work in a bipartisan manner with our new Ranking Member, Mr.
+Blaine Luetkemeyer of Missouri.
+ Let me be the first to welcome you back to this Committee.
+With that, Mr. Ranking Member, you are recognized for your
+opening statement.
+ Mr. LUETKEMEYER. Thank you, Madam Chair.
+ And, again, I look forward to working with you. I think
+there is a lot of common ground here where we can make a lot of
+progress for our great small business folks back home and
+across this country.
+ Appreciate you holding this kickoff hearing. As the
+Committee begins the 117th Congress, there are few topics more
+important within our jurisdiction than examining the small
+business economy during this unprecedented global crisis. It is
+my hope that we continue to explore all facets of this
+significant issue in a bipartisan manner and work efficiently
+to support and ensure all small businesses, entrepreneurs, and
+innovators rebuild and return to economic independence.
+ While this emergency period is unparalleled, we know that,
+prior to COVID-19, small businesses were operating at historic
+levels. In 2018 and 2019, optimism reached record heights for
+small business owners, and the unemployment rate was decreasing
+sharply and eventually hovered around 3.5 percent. And, if
+small business have confidence, they are more comfortable
+taking prudent risks and innovating new ideas. These are the
+characteristics that drive our economy forward.
+ Our pre-COVID-19 small business environment was constructed
+through progrowth policies that focussed on tax reform and a
+vigorous deregulatory environment that allowed small businesses
+to reinvest their hard-earned dollars into their business'
+employees. Instead of concentrating on mountains of paperwork,
+small businesses were free to focus on their own goods,
+services, customers, and employees.
+ Unfortunately, COVID-19 and accompanying protective
+measures struck at the core of the small business community. A
+once busy Main Street became dormant due to the crisis at hand
+and the burdensome shutdown measures instituted by State and
+local governments.
+ As a response, Congress and the former administration
+developed tools that could deliver assistance to small
+businesses quickly. One program that has been especially
+effective is the Paycheck Protection Program, known as the PPP.
+ According to the Small Business Administration, by the time
+PPP expired on August 8, 2020, it had assisted over 5 million
+small businesses. In total, these loans provided over 2, or--
+excuse me--$525 billion to small businesses from coast to coast
+and assisted in saving over 50 million jobs.
+ As the emergency period wore on, Congress worked to install
+the PPP with more flexibility and further enhancements. In the
+latest COVID-19 relief bill, signed into law in December 2020,
+the PPP was reauthorized with $284 billion.
+ This second round of funding was tailored and targeted to
+ensure small businesses and other eligible entities that were
+truly impacted by COVID-19 received the relief they needed.
+Just last month, the PPP program was officially relaunched, and
+I look forward to working in a bipartisan manner to ensure that
+the program continues to reach small businesses across the
+country that were hardest hit by the pandemic.
+ Beyond PPP, the December COVID relief bill extended the
+Economic Injury Disaster Loan Program and reformed the EIDL
+Advance Program. Additionally, it extended debt relief program
+for existing and new 7a, 504, and micro loans. It also created
+the Shuttered Venue Operators, SVO, Grant Program for venues,
+theatres, and museums.
+ In total, the December COVID relief bill delivered $325
+billion--targeted dollars to the Nation's smallest and hardest-
+hit businesses and industries. Ensuring that programs are
+operating effectively and efficiently remain paramount on this
+Committee.
+ The best way, in my judgment, to get these businesses back
+on their feet is to allow them to open up. Let them get back to
+business. It works. In Missouri, my home State, we opened up in
+mid-May. For 2020, we wound up with a 5 percent increase in
+revenues over 2019--2019--that is right--and 2020 had more
+revenue coming into our State coffers than we did in 2019. We
+have a 4.4 percent unemployment rate today and have 200,000
+open jobs in our State as a result of that.
+ As these small businesses worked to try and create--as we
+work to try and create an environment for small business to
+rebuild, create jobs, and expand in the future--i.e., get back
+to work--I am concerned that this administration is taking
+steps to institute a regulatory environment that heavily
+burdens small businesses.
+ By rescinding the commonsense administrative action that
+required repeal of two regulations for every one created, there
+is concern that heavyhanded regulations are returning. This
+regulatory environment combined with conversations surrounding
+increasing the minimum wage are warning signs for America's job
+creators.
+ Our Nation's small businesses are more fragile than ever
+before, and additional rules and regulations are
+counterproductive to the recovery. These hard-working men and
+women are the backbone of this great Nation, and, when they
+succeed, so does our economy.
+ I look forward to working with all of my colleagues to
+ensure our Nation's environment is rich with opportunities for
+growth. I would like to thank all the witnesses for joining us
+today, and thank you, Madam Chair.
+ With that, I yield back.
+ Chairwoman VELAZQUEZ. The gentleman yields back.
+ I would like to take a moment to 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 that your microphone is on when you begin
+speaking and that you return to mute when finished.
+ With that, I would like to introduce our witnesses.
+ Our first witness today is Professor Robert Fairlie,
+Professor of Economics at the University of California, Santa
+Cruz. Professor Fairlie has testified before Congress numerous
+times on policy issues related to small businesses, and we are
+thrilled to have him before us today.
+ Most recently, Professor Fairlie was instrumental in
+research regarding the impact of COVID-19 on business owners of
+color, which has helped guide and will continue to guide
+congressional policymaking. We look forward to hearing more
+about this important research and the implications it has on
+federal relief efforts.
+ Our second witness is Ms. Sharon Pinder. Ms. Pinder is the
+President and CEO of the Capital Region Minority Supplier
+Diversity Council, a nonprofit corporation whose mission is to
+link corporations and government agencies with competitively
+viable minority business enterprises.
+ Prior to joining the council, Ms. Pinder served for 3 years
+as the Director of the Mayor's Office of Minority and Women
+Owned Business Developments for the city of Baltimore, where
+she was responsible for the city's minority and women business
+programs.
+ In 2014, the University of Maryland, Eastern Shore,
+recognized Ms. Pinder's dedication to small businesses by
+naming a scholarship, the Sharon Pinder Award for
+Entrepreneurship, in her honor.
+ Welcome Ms. Pinder.
+ Our third witness is Mr. Stephen Schoaps. Mr. Schoaps is
+the owner of Strother Cinema, a neighborhood theatre with two
+screens, in Seminole, Oklahoma. As with virtually all other
+theatres, music venues, and museums, Strother Cinema was forced
+to close during the pandemic. As a shuttered venue owner, he is
+also looking forward to seeing the newly enacted Shuttered
+Venue Grant Program that will be implemented by the SBA.
+ We look forward to hearing about his experiences with these
+programs, especially the role that the EIDL advance played in
+helping keep his business afloat.
+ Welcome, Mr. Schoaps.
+ I would now like to yield to the Ranking Member, Mr.
+Luetkemeyer, to introduce our final witness.
+ Mr. LUETKEMEYER. Thank you, Madam Chair.
+ Our next witness is Karen Kerrigan. Ms. Kerrigan is the
+President and chief executive officer of the Small Business and
+Entrepreneurship Council, also known as SBE Council.
+ Founded in 1994, the SBE Council advocates for small
+businesses, entrepreneurs, and start-ups. In addition to
+advocacy, SBE Council produces educational resources and
+significant research for our Nation's job creators.
+ For more than two decades, Ms. Kerrigan has been a
+prominent voice in supporting small businesses, whether
+providing information on access to capital, discussing funding
+revenues, or leading on regulation and tax reform, Ms. Kerrigan
+has proven herself to be a distinguished advocate for small
+businesses everywhere. She is a frequent television commentator
+on small business growth and has participated in and led small
+business events at the White House and numerous Federal
+agencies.
+ She is also no stranger to Capitol Hill, where she has
+testified before various committees before, including this one.
+Ms. Kerrigan is a graduate of the State University of New York
+in Cortland and a member of several Federal advisory boards.
+ Ms. Kerrigan, we thank you for your smart approach and
+understanding of the entire small business ecosystem,
+especially during this time of COVID-19. Welcome back to The
+Committee. We look forward to your testimony.
+ Chairwoman VELAZQUEZ. I now recognize Professor Fairlie for
+5 minutes.
+
+ STATEMENTS OF DR. ROBERT W. FAIRLIE, PROFESSOR, DEPARTMENT OF
+ ECONOMICS, UNIVERSITY OF CALIFORNIA, SANTA CRUZ, SANTA CRUZ,
+ CALIFORNIA; SHARON PINDER, PRESIDENT AND CEO, CAPITAL REGION
+MINORITY SUPPLIER DEVELOPMENT COUNCIL, SILVER SPRING, MARYLAND;
+ STEPHEN SCHOAPS, OWNER, STROTHER CINEMA, SEMINOLE, OKLAHOMA;
+ AND KAREN KERRIGAN, PRESIDENT AND CEO, SBE COUNCIL, VIENNA,
+ VIRGINIA
+
+ STATEMENT OF DR. ROBERT W. FAIRLIE
+
+ Mr. FAIRLIE. Thank you, Chairwoman Velazquez, Ranking
+Member Luetkemeyer, and members of the Committee. It is an
+honor to testify before you on the state of small business
+economy. I am a professor of economics at the University of
+California, Santa Cruz, and have studied entrepreneurship,
+racial inequality, and small business policy for over 25 years.
+ I have been asked to discuss the findings of my research on
+the impacts of the pandemic on small business owners. As you
+know, obtaining up to date and accurate information on the
+effects of the pandemic has been extremely difficult. I have
+spent the past 8 months compiling and analyzing data to
+investigate what happened to small business owners, especially
+minority business owners.
+ From the middle of March to early April, most States
+imposed shelter-in-place restrictions that closed nonessential
+businesses. In my research, I found that the number of active
+business owners in the U.S. plummeted by 3.3 million, or 22
+percent, between February and April of 2020. No other 2- or
+even 12-month window of time has ever shown such a large change
+in business activity.
+ For comparison, from the start to the end of the Great
+Recession, the number of active business owners dropped by only
+5 percent. African American businesses were hit the hardest,
+experiencing a 41 percent drop in business activity, Latinx
+business owner activity fell by 32 percent, and Asian business
+owner activity dropped by 26 percent. Unfavorable industry
+concentrations and the smaller scale of minority owned
+businesses were partly responsible.
+ Job losses were also much higher for minority workers.
+Black unemployment hit a peak of 17 percent, and Latinx
+unemployment hit a peak of 18 percent. Although many of the
+closures turned out to be temporary, any month of closure
+reflects lost income to the owner of the business. But the
+owner still has to pay rent and other bills.
+ It has been especially difficult to figure out how much
+small businesses lost in sales and revenues in the pandemic.
+Using taxable sales data from the California Department of Tax
+and Fee Administration, we found average losses of 17 percent
+in the second quarter of 2020. Normally, year-over-year growth
+is in the range of 3 to 4 percent.
+ Sales losses were the largest in businesses affected by
+mandatory lockdowns. For example, we found that hotels lost 91
+percent, restaurants lost 61 percent, and clothing stores lost
+56 percent.
+ At the same time, online sales grew by 180 percent in the
+second quarter of 2020. Without a strong online presence, many
+small businesses will not have the resources to weather a
+prolonged recovery. Recent Census Bureau surveys indicate that
+only 15 to 20 percent of small businesses have enough cash on
+hand to cover 3 months of operations.
+ One of the stated goals in the CARES Act was to prioritize
+serving underserved markets and businesses owned by socially
+and economically disadvantaged individuals. Did the PPP and
+EIDL programs, which were the key components of the CARES Act,
+get distributed to minority communities?
+ Using data on 15 million individual loans, we found that
+funding from these relief programs both flowed to minority
+communities and away from minority communities. If anything, we
+found a positive relationship between PPP loan receipt for
+business in the minority share of the population.
+ There is some evidence, however, that the first round of
+funds flowed disproportionately to nonminority communities.
+When focusing on PPP loan amounts per employee, we also found a
+disproportionate flow to nonminority communities. In contrast,
+EIDL loans and advances in both number and amounts were
+provided to minority communities.
+ In my continual work tracking how small businesses are
+doing in the recovery, I recently found some alarming trends.
+From April to October, there was constant month-to-month
+improvements in business activity. But, in November and
+December, that pattern reversed. Over those 2 months, small
+business activity dropped by 6 percent.
+ The losses I have described here are especially alarming
+for two vulnerable groups: African Americans and Latinx. Prior
+to the pandemic, business ownership and revenues were already
+low for both groups. But, perhaps more importantly, there is a
+huge wealth gap. Half of Black families in the U.S. have less
+than $10,000 in total wealth, and half of Latinx families have
+less than $25,000 in total wealth. White levels of wealth are 7
+to 18 times higher. Many minority business owners will simply
+not have the financial resources to weather prolonged closures.
+ I would like to turn to discussing what could help move us
+forward.
+ First, consumers need to feel safe again. The number one
+priority for helping small businesses is to get the vaccine out
+faster, enabling customers to go back to small businesses.
+ Second, more financial assistance is needed for small
+business owners, especially during the next few months. In
+particular, rent relief and protection could be crucial for
+survival.
+ Third, we need to slow down the extensive shift to online
+shopping that occurred in the pandemic and is likely to
+continue. Small businesses need to have more of an online
+presence. Aid in the form of web page assistance could be
+useful. Search engines could prioritize local businesses
+instead of online retailers and big-box stores.
+ Fourth, the Federal Government needs to collect more data
+on race and their relief efforts. Demographic information was
+only partially and unevenly collected in the first two rounds
+of the PPP program, and there was much criticism for this
+omission.
+ Chairwoman VELAZQUEZ. Doctor----
+ Mr. FAIRLIE. Additionally, collection of information----
+ Chairwoman VELAZQUEZ. Professor Fairlie, your time has
+expired, and maybe during the question-and-answer period, you
+will be able to expand on any point that you were not able to.
+ Mr. FAIRLIE. Yeah, I am finished. Thank you for the
+opportunity to present.
+ Chairwoman VELAZQUEZ. I now will recognize Ms. Pinder for 5
+minutes.
+
+ STATEMENT OF SHARON PINDER
+
+ Ms. PINDER. Good morning, Madam Chairwoman Velazquez and
+Ranking Member Congressman Luetkemeyer and the distinguished
+members of the Committee of Small Business, and I certainly
+have to recognize my favorite Congressman, Congressman Kweisi
+Mfume. Thank you for your service to our country, and thank you
+for this opportunity to speak with you today.
+ I am Sharon Pinder, president and CEO of the Capital Region
+Minority Supply Development Council and operator of two centers
+funded by the U.S. Department of Commerce, Minority Business
+Development Agency. We operate the MBDA Business Center,
+Washington, D.C., and the Federal Procurement Center, the only
+one of its kind in this country.
+ There is an old economic adage that says, ``When America
+catches a cold, minority businesses catch pneumonia.'' Well,
+now it is worse. America has COVID-19, and both minorities and
+their businesses are dying at dramatic rates. Just like many
+minority individuals have preexisting health conditions, well,
+most minority businesses faced preexisting discriminatory
+conditions that show up in ways like access to capital, lack of
+access to opportunities, mentorship, et cetera.
+ PreCOVID, there were 1.1 million minority owned businesses
+employing 6.3 million people, generating more than 1.8 trillion
+in revenue annually. Then, in 2020, the world came to a halt,
+and the data that we, I think, were all talking from, the
+National Bureau of Economic Research, looking at between
+February and April, African Americans experienced the largest
+loss.
+ Madam Chairwoman talked about the 41 percent with African
+American-owned businesses, Latinx businesses, 32 percent Asian
+businesses, et cetera. But my organization and our sister
+organizations across this country live this every day, and what
+we know to be true is that our businesses need a lifeline.
+ And, as we examine and reflect upon the state of minority
+businesses due to COVID-19, we have to factor in, layer in the
+social injustice piece. Black-owned businesses were especially
+impacted by this.
+ Ladies and gentlemen, the failure of our minority small
+businesses places our country at risk why? Because minority
+businesses are poised to become the majority population. We
+need to plug up the cracks in our economic foundation and
+preserve our place in the future global marketplace.
+ I can spend hours talking about issues with PPP and all
+those things, but I would like to spend my remaining time
+talking about some solutions.
+ We ask that Congress look at some existing assets through a
+different lens. The Defense Production Act statute is one of
+the country's most powerful laws for Federal intervention in
+national commercial activity. Title III of the act establishes
+the President's authority to invest in specific industries.
+ The idea of investment in business development would be
+crucial, for example, in jump-starting minority businesses in
+manufacturing. There could be a no-interest loan like those
+provided to businesses to ramp up for defense work.
+ A quick example. In the State of Maryland, through the
+CARES Act, we recently implemented funds to--for COVID-19 small
+business relief grant and loan program. Governor Hogan
+allocated $5 million that was allocated or dispensed by
+Meridian Management Group. But the loans were from 25,000 to
+150,000, 0 percent interest the first year, and 2 percent of
+the remaining 5 years. The remaining fund I told you was 5
+million. There was $20 million on request. There is a need.
+There is an identifiable need.
+ Title IV of the Defense Production Act includes a section
+that establishes preference for small business contractors.
+Showing a preference for minority businesses as a subset of
+small business by expanding the use of sole source programming
+provisions of the 8a program will put more money into those
+minority businesses that compete in both the Federal and
+private sector.
+ Let's look at--further at existing assets. How about Buy
+American. We are excited about President Biden's Buy American
+executive order. The concept of Buy American has been around
+since 1933, but the executive order includes all Federal
+procurement now. That is huge. We hope that it will be
+implemented with--in a manner that is advantageous to minority
+businesses.
+ With the Buy American executive order, we propose a
+strategy that involves OEM teaming up with foreign
+manufacturing companies to produce and manufacture goods and
+services in partnership with U.S.-based minority businesses.
+ Such a joint venture could introduce a pathway for foreign
+businesses who want to move their organizations to the U.S., an
+avenue to do so, and at the same time provide resources and
+increase support to the development of minority businesses.
+ Madam Chairwoman, minority and small businesses are in need
+of an economic vaccine. The Capital Region Minority Supply
+Development Council is a national minority supply development
+council and networks stand ready to support your House Small
+Business Committee in its work to help build small and minority
+businesses.
+ My written testimony goes into or provides more detail.
+ Again, I appreciate the opportunity to have this
+discussion.
+ Chairwoman VELAZQUEZ. Thank you, Ms. Pinder.
+ I now recognize Mr. Schoaps for 5 minutes.
+
+ STATEMENT OF STEPHEN SCHOAPS
+
+ Mr. SCHOAPS. Thank you, Chairwoman Velazquez, Ranking
+Member Luetkemeyer, and distinguished members of The Committee.
+My name is Steve Schoaps. My wife and I own Strother Cinema, a
+small, two-screen movie theatre in Seminole, Oklahoma. Seminole
+is a small town in rural Oklahoma that has been hard-hit by
+COVID-19, like many other small towns across America.
+ We are an integral part of our community, and it has amazed
+me that, with everything going on in our town and across our
+country, people call me or talk to me everywhere I go asking if
+we are okay, and when are we going to open the theatre again? I
+guess I didn't understand how many people cared about us and
+the service we were providing our community. Now I do.
+ We are hurting, like most other theatres across America,
+from small-town, single-screen theatres to megaplexes in the
+big cities. The pandemic has basically wiped out our business.
+According to estimates from the National Association of Theatre
+Owners, 75 percent of movie theatre companies will be insolvent
+before this spring unless they receive financial aid. Ninety-
+five percent have experienced revenue losses greater than 70
+percent. Nationwide, 63 percent of jobs in theatres have been
+lost to furlough or permanent layoff. And, in Oklahoma, we have
+lost 45 percent of the jobs in movie theatres.
+ It started out that people were just scared to go to the
+movies, but we put in place comprehensive cleaning procedures
+and social distancing policies that made our auditoriums and
+lobbies safe. But then the movies stopped coming. The film
+slate coming from Hollywood dried up through studio closures
+and the studios' reluctance to take chances with movie assets
+that are worth billions of dollars.
+ Comparing our theatre's 2019 revenues to the same time
+period in 2020, we have seen a 92 percent reduction in revenue.
+We have been forced to reduce our staffing to almost nothing
+and have resorted to selling popcorn and concessions to go. We
+have even started renting out our theatre to video gamers who
+play on the big screens.
+ We have been able to survive, but not without the help of
+the programs that Congress and the SBA have developed to help
+us. The most important thing that we needed to figure out was
+how to stay afloat without taking on too much new debt. Given
+the scale of our losses and the reduced film slate for 2020 and
+2021, taking on more debt will impact our ability to recover.
+That is why businesses like ours are especially in need of and
+grateful for grant programs provided by Congress and the SBA,
+including our forgivable Paycheck Protection Program loan and
+the upcoming Shuttered Venue Operators Grant Program.
+ In particular, I would like to highlight the help provided
+to us through the EIDL grant program, which we received as part
+of our EIDL loan applications. While the loan application was
+being evaluated, we received a $10,000 grant. We were able to
+use the money to pay a myriad of ongoing expenses, including
+rent, utility bills, workers compensation insurance, property
+and liability insurance, technology vendors, our security
+system, and property maintenance, along with many other things.
+ These expenses have continued unabated during the pandemic
+and could not be deferred or suspended. Being able to stay
+current with our vendors also helped prevent a secondary crisis
+among the businesses that support our theatre, which helps
+ensure that they will survive the pandemic too.
+ We were very challenged when we learned that the EIDL grant
+would count against our PPP forgiveness. The COVID relief bill
+that was passed in late December helped us again by fixing the
+EIDL grant issue, and that will mean a lot when we receive that
+money back from our bank.
+ Small businesses are running on razor-thin margins and, for
+small-town theatres, surviving is what it is all about. In many
+towns like ours, we are one of the few entertainment options
+left available locally, and one of the more important communal
+gathering places, and that means a lot to our community.
+ Congress' help and the help of the SBA have been an
+integral part of our survival this past year and will be again
+this year. We would love to just go back to the businesses we
+ran in 2019, but that is not going to happen.
+ With social distancing, our capacity has been reduced by
+half. And, in other States, it is reduced even more. Movie
+studios will be slow to release big films this year, and their
+streaming services will gobble up what used to be our bread and
+butter.
+ Cleaning and maintaining theatres will cost more well into
+the future until we get through the pandemic, and people's
+attitudes about large gatherings will have a damaging effect on
+our business. We are just trying to make the changes necessary
+to survive in the future. The challenges we faced in 2020 and
+the challenges yet to come will be daunting, but we can
+overcome them. We just need your help for a little while, and
+so far you have been there when we have needed you.
+ Thank you for everything you have done and are doing for
+small businesses and, in particular, the movie theatre
+industry, and thank you for your time today.
+ Chairwoman VELAZQUEZ. Thank you, Mr. Schoaps. Thank you for
+your willingness to share your story with us. Quite insightful
+and compelling.
+ Now Ms. Kerrigan is recognized for 5 minutes.
+
+ STATEMENT OF KAREN KERRIGAN
+
+ Ms. KERRIGAN. Yes. Thank you. Thank you, Chairwoman
+Velazquez. Thank you for your invitation to participate in this
+important hearing today on the state of small business in an
+era of COVID-19.
+ The work of the House Small Business Committee has been so
+vital to entrepreneurs, small business owners, and their
+employees over the course of the pandemic last year, and we
+deeply appreciate the engagement and hard work of each and
+every Committee member. And I welcome all the new members as
+well. We look forward to working with you.
+ Chairwoman Velazquez and Ranking Member Luetkemeyer, we are
+very grateful for your leadership. We look forward to another
+round of working with you on developing and advancing solutions
+that will help our small businesses and entrepreneurs lead the
+way in digging the economy out of the significant jobs and
+small business hole we are facing.
+ As you well know, America's entrepreneurial sector is more
+important than ever, and SBE Council is hopeful and optimistic
+that our Nation can rebound if policies and programs continue
+to provide relief and support for small businesses and to help
+our entrepreneurs transform and grow their businesses.
+ Obviously the sudden onset of the pandemic, severity and
+long-term nature of shutdowns and restrictions, followed by
+continuous uncertainty about the course of the disease and when
+and if economic normalcy will return has shocked and deeply
+wounded our small business ecosystem. Countless small
+businesses have been lost. More will be lost, and this
+devastation will take some time to dig out of, particularly in
+certain areas of the country and in business sectors that have
+been hit the hardest.
+ Yet, despite the vast hardship on Main Street, there have
+been innumerable stories of survival and resiliency. Many small
+business owners and their employees have discovered new tools,
+new markets, and new methods for operating in the COVID-19
+economy. Moreover, there has been a surge in the number of
+individuals who are pursuing entrepreneurial activity according
+to the U.S. Census Bureau business formation data on high-
+propensity business applications--these are likely employers--
+over 1.5 million employer applications were filed last year,
+which is an increase of 16 percent compared to 2019. So this is
+really great news. The entrepreneurial spirit is alive and
+well.
+ So we really do need to be thinking about and addressing
+policies that will not only support existing small businesses
+get through the challenging months ahead and to the other side
+of the pandemic, but also those that encourage individuals to
+move forward with their intention of starting a business and
+being successful in that endeavor in order to breathe life into
+America's small business ecosystem.
+ When I hear from small business owners directly or review
+their current challenges and concerns in a number of regular
+surveys produced by organizations and media platforms--and I
+have highlighted some of those in my written testimony--one
+message comes through very clearly.
+ First, small business owners can't afford to withstand any
+new shocks or costs. And, second, more revenue capital is
+desperately needed.
+ Of course many small businesses continue to struggle to pay
+their bills. An Alignable January 2021 Rent Poll revealed 33
+percent of small business owners reported that they could not
+pay their rent in January. The number is higher for minority
+owned businesses at 48 percent.
+ The year-end Q4 2020 MetLife U.S. Chamber survey found that
+half of small businesses see their operations continuing for a
+year or less before having to permanently shut down.
+ Now, hopefully with the added PPP boost and other programs
+running smoothly, an acceleration in vaccine output and
+distribution, and States and localities restarting economic
+activity, these will all help to shift small business optimism
+and outlook in a positive direction--more of a positive
+direction than what was conveyed in the surveys in my written
+testimony.
+ Small business owners may be the optimists among us, but
+they are exhausted. They need a period of stability and
+continued support, and our organization looks forward to
+working with all of you on common-ground areas that will help
+restore this sector, help it recover, and bring our economy
+back to robust and sustainable growth.
+ So I look forward to our discussions and your questions and
+talking about what these solutions are for moving forward.
+ Thank you so much.
+ Chairwoman VELAZQUEZ. Thank you, Ms. Kerrigan.
+ Now I will begin by recognizing myself for 5 minutes.
+ Professor Fairlie, I would like to address my first
+question to you.
+ Thank you so much for the type of research that you have
+done demonstrating the negative impact of COVID-19 on
+underserved businesses, particularly Black, Latino, and Asian
+Americans. It was that data and that type of research that
+validated the anecdotal stories that we were hearing from
+businesses that were not able to get any access to the PPP
+program or EIDL program given the fact that they didn't have
+preexisting relationships with financial institutions, and that
+gave the argument to us to insist----
+ And, by the way, former Secretary Mnuchin and the
+Administrator both recognized that, yes, there was a disparity
+when it came to underserved communities.
+ That gave the basis for us to insist in the December relief
+package to set aside not only PPP for underserved community and
+minority businesses, but also for mission-based lenders.
+ Has your research given you any opportunity to look at the
+impact that these programs and targeted relief programs have
+had on the businesses that we intended to help?
+ Mr. FAIRLIE. Yes. So that is one of the things that I
+definitely want to start looking into. I looked the other day
+when I was preparing for this testimony and the data have not
+been released yet. So we have no information on that.
+ Chairwoman VELAZQUEZ. Okay. Mr. Schoaps, I understand that
+you--but, Mr. Fairlie, is it your estimated guess that more
+businesses that were left behind during the first tranche of
+money will have a better opportunity now to access the PPP
+program and the EIDL program?
+ Mr. FAIRLIE. Yes, I do think so. One of the things that I
+found in my research is that the EIDL program did reach
+minority communities, and that was promising. The first round
+of the PPP program did not, right? That was the one that had
+the problems with the established banks, as you mentioned.
+ So I think there is just much more awareness, there is much
+more emphasis on fintech and also on, you know, kind of small
+local community banks. And I think that it will make a
+difference, it will help.
+ Chairwoman VELAZQUEZ. The latest data that was provided to
+us by the Small Business Administration demonstrated the large
+number of smaller loans that were made after the second--the
+December relief package.
+ Mr. Schoaps, I understand you received a few SBA relief
+products, including PPP, EIDL loan, and EIDL advance. Can you
+elaborate on the value to you and your business of receiving
+the EIDL advance?
+ Mr. SCHOAPS. The EIDL advance was integral in us surviving.
+It came at a time that the PPP money was running out. It came
+at a time when we were looking, waiting to hear about our EIDL
+loan. And the EIDL grant program was tremendous for us.
+ Now, we were thrown for a loop when we found out that it
+was going to go against our PPP forgiveness. However, that has
+since been corrected in the December COVID relief bill.
+ But no, it has been integral. It helped us pay our rent,
+our--all the expenses that we had kind of piling up at a time
+when there was no revenue coming in whatsoever.
+ Chairwoman VELAZQUEZ. How was your experience with SBA when
+seeking the EIDL loan and advance?
+ Mr. SCHOAPS. Our experience with the SBA was phenomenal, to
+be real honest. When I filed for my PPP loan, my banker said,
+hey, you need to maybe consider this EIDL program. Go and fill
+out an application and see if you qualify, and even if you
+don't qualify there is a possibility you can get this grant
+they have.
+ And so I went online, filled out an application, and it
+was--I didn't think much about it. I didn't think I had much
+hope of getting it. And just one day I happened to be looking
+at my bank account and there was $10,000 in there from the EIDL
+grant program. And we used that immediately to pay bills that
+were there. I thought it was a simple operation. We went
+online, filled out the application, and it was just an easy,
+easy situation. The SBA has been nothing but great on that
+program.
+ Chairwoman VELAZQUEZ. Thank you, Mr. Schoaps.
+ My time has expired, and I recognize the Ranking Member,
+Mr. Luetkemeyer, for 5 minutes.
+ Mr. LUETKEMEYER. Thank you, Madam Chair.
+ I would like to begin with Ms. Kerrigan. One of the things
+that is in the new budget bill that is being promoted by the
+administration is the increasing of the minimum wage.
+ This morning, I would like to enter into the record, Madam
+Chair, the NFIB Research Center study, Economic effects of
+enacting the Raise the Wage Act on small businesses and U.S.
+economy.
+ Chairwoman VELAZQUEZ. Without objection.
+ Mr. LUETKEMEYER. The summary on the front here says it is
+going to cost 1.6 million jobs and have a real output loss of
+more than $2 trillion to our economy. And this is by the
+National Federation of Independent Businesses, which is that is
+the effect on small businesses.
+ So, Ms. Kerrigan, my question to you is, what is your
+thought process on the doubling, basically the doubling of a
+minimum wage with regards to how small businesses are going to
+be affected, what kind of response they will have, especially
+since you mentioned in your testimony that the small businesses
+cannot withstand any more new shocks for costs?
+ Ms. KERRIGAN. Thank you, Congressman. Gosh, this is going
+to be very, very harmful for many small businesses,
+particularly those who have been hardest hit by the pandemic,
+you know, and in those certain sectors, you know, the
+restaurant industry, et cetera.
+ And you are right, I mean, right now, you know, with many
+small businesses being in a position where they are struggling
+to pay their bills, they can't pay their rent. I also noted in
+my written testimony that revenues starting in 2021 are down,
+you know, over 40 percent. Forty percent of small business
+owners report their revenue, you know, is down this year, even
+compared to last year.
+ Mr. LUETKEMEYER. Okay. I would like to interrupt just a
+second here, if I could.
+ Ms. KERRIGAN. Sure.
+ Mr. LUETKEMEYER. What would be the response for the small
+business folks in order to survive? Are they going to lay off
+people, go to automation, just close up altogether? What, in
+your judgment, would you see happening along that line?
+ Ms. KERRIGAN. All of the above. I mean, I do think there
+are going to be small business owners who are just--who grinded
+it out up to this point who are exhausted who really can't take
+the cost, and they will throw in the towel for sure. I mean, we
+are seeing that already, given a lot of the uncertainty.
+ So, I mean, definitely, the workers' hours will be lost,
+jobs will be lost. I don't know how much they could pass on,
+you know, to--you know, to consumers and stay competitive, you
+know, particularly when they are competing with bigger
+enterprises.
+ Mr. LUETKEMEYER. Okay. I apologize. I have got some more
+questions and I have got to move on here very quickly. My time
+is limited.
+ Dr. Fairlie, you talk about in your testimony sales losses
+are largest in businesses affected by mandatory lockdowns. I
+will just give you some statistics very quickly here. Due to
+COVID lockdowns, Florida and New York, roughly the same
+population, 19 to 21 million each, Florida has roughly 20,000
+people that died due to COVID, New York 39,000 people, and yet
+Florida is open and New York is not.
+ I indicated in my opening testimony how Missouri, my own
+home State, opened up mid May and wound up with a positive
+revenue growth for the year, and we now have 4.4 percent
+unemployment. New York's own survey during the September-
+November period show that less than 1.4 percent of COVID deaths
+came from restaurants and bars and hair and personal care was
+one-tenth of 1 percent.
+ Lockdowns are killing us, and I think your testimony here
+indicates that. I would like for you to elaborate on that just
+a little bit more, if you would, please.
+ Mr. FAIRLIE. Well, it is one of the arguments that I have
+made is that if we can get the vaccine out faster, distribute
+it more, you know, evenly across the population and get people,
+customers to feel comfortable to go back, then we can open up
+businesses and get going again.
+ I mean, if you are comparing New York to Florida, it is
+very difficult to compare the two, right? New York has very
+densely populated areas. It is a very expensive place to live.
+You have got multi-families living in the same households. So
+it is just much more of a vector for spreading the disease than
+in Florida, which is much more spread out.
+ Mr. LUETKEMEYER. Well, we can talk about that later.
+ But, Mr. Schoaps, very quickly with you. Good to hear that
+the program has worked for you. One of the things that I am
+concerned about is the regulators coming in and pressuring the
+creditors, your creditor to foreclose on people who are falling
+behind on their loans, on their debts, and then by doing that
+just decimating entire industries within the communities,
+costing jobs.
+ What kind of relationship do you have with your banker and
+creditor? Is this something that would be concerning to you if
+the regulators came in and forced them to do something
+different?
+ Mr. SCHOAPS. I don't really think it would. I have spent
+many years even before owning a small business developing my
+relationship with my banker. And if there was one thing I
+would--and I heard you talking about minorities and their
+relation with banks.
+ I really think somebody needs to help mentor small business
+owners in developing that relationship with their bank. I have
+literally had my banker call me and say, look, if you have any
+problems or issues, you need to let us know so we can help you
+out. We have some other things we can do.
+ And so I think that relationship with your bank is one of
+the key things, and I would really like to see more businesses
+build those relationships with their bankers. Of course, I am
+lucky. I live in a small town. A small town banker might be my
+neighbor. And so----
+ Chairwoman VELAZQUEZ. Mr. Schoaps.
+ Mr. SCHOAPS. Yes.
+ Chairwoman VELAZQUEZ. Thank you so much. Time has expired.
+ Now we recognize the Chairman on the Subcommittee on
+Underserved, Agricultural, and Rural Business Development, Mr.
+Golden from Maine.
+ Mr. GOLDEN. Thank you, Madam Chair.
+ I wanted to direct my first question to Ms. Pinder, and
+then if I have some time left over we will take it from there.
+ Ms. Pinder, I am from Maine. I live in a community,
+Lewiston, Maine, which is about 36,000 people. Immediately
+across a river dividing two communities is Auburn of about
+18,000 people. So we are talking about, you know, a population
+of roughly 55 to 60 thousand people, perhaps not as large as
+many an urban area out there, but in the State of Maine this is
+about as urban as it gets. We are one of the more rural States
+that you could look at.
+ In Lewiston, we actually have a large amount per capita of
+recent immigrants from Western Africa as well as over the past
+decade of Somali Americans, many of whom have turned to
+entrepreneurship and starting their own businesses, and many of
+their children now graduating from our schools and coming of an
+age where they might look to start their own businesses or take
+on these existing businesses.
+ I wanted to ask, in an area like this--I know it is not as
+urban as Washington, D.C. or New York City or many other, you
+know, big urban areas, but in one like this that I have
+described, how might you think the Federal Government could
+support economic development? I know you have talked about the
+Defense Production Act and the Buy American executive order.
+Feel free to talk further about those, but if you have other
+ideas beyond those, we are all ears.
+ Ms. PINDER. So, Congressman, you are asking what resources
+are available to provide support to some of those businesses?
+Is that----
+ Mr. GOLDEN. Absolutely. As we are thinking about the COVID
+response as well and the things that the Biden administration
+are looking at doing to support small businesses, what do you
+think we should be looking at on this committee?
+ Ms. PINDER. Well, in reference to what you were talking
+about your constituents going into entrepreneurship, part of
+what they can take advantage of are some existing programs that
+are in place. We have a national network of--we exist all over
+the country, and so there is access from our MBE Centers as
+well as our Minority Supplier Development Council that your
+constituents can access as well. There are existing resources,
+such as PTAP and things of that nature that can do that.
+ But at the end of the day--and the businesses I am assuming
+you are talking about are mostly doing startups at this
+particular point in time. And so as a result of that, looking
+at how to support that, you know, maybe there is information
+they can receive from SBA loans as we are talking about it, you
+know. Information of Pell grants to students to attend colleges
+and things of that nature might help.
+ But what I was proposing, in terms of us looking at some
+existing assets through the Defense Production Act and things
+of that nature, looks at how do we then take some policies that
+are in place that kind of help and look at innovative kind of
+ways to kind of help our businesses, in terms of their growth.
+ You know, where are the opportunities? It is all about
+opportunities, right? Where are some of the opportunities,
+whether it is in the Federal sector--we support primarily the
+private sector, but identifying where those opportunities are
+and then helping with removing the barrier to the access of
+capital. That is kind of what is key.
+ Mr. GOLDEN. On that, Ms. Pinder, you might have some
+advice. Many of our community members who came from, many of
+them from Kenyan refugee camps, these are Somalia Americans,
+you know, many of them have issues with access to capital due
+to issues with lending on interest.
+ Are you aware of other resources that are out there to help
+a small business family like this in accessing capital?
+ Ms. PINDER. Yes. And what I can do, Congressman, is provide
+you with that, with some information after this session. I
+certainly can forward that information to you, because those
+kind of startups are really prevalent across the country, and I
+certainly can provide that.
+ Mr. GOLDEN. That would be very helpful.
+ Madam Chair, I am sure I am getting pretty close here, and
+I don't want to put someone in the situation of having just
+seconds to respond, so I will yield my time.
+ Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
+ Now we recognize the gentleman from Texas, Vice Ranking
+Member of the committee, Mr. Williams.
+ Mr. WILLIAMS. Thank you, Chairwoman.
+ Mr. Schoaps, you touched on the Shuttered Venue Operators
+Grant program in your testimony. I was proud to be the
+Republican lead on the Save Our Stages Act in the House, which
+I am sure you know is what this program is based off of.
+ The Shuttered Venue program recognizes that businesses like
+yours were some of the first to close and will be the last to
+reopen, as COVID-19 caused some problems. Other aid programs,
+such as Paycheck Protection Program, do not meet the unique
+needs of these highly affected industries. The SBA must swiftly
+implement this program to deliver much-needed relief to small
+businesses like yours that you own.
+ So I would say, Mr. Schoaps, I would like to give you the
+opportunity to speak directly to the Small Business
+Administration on how your business is impacted every single
+day this critical program is not accepting applications.
+ Mr. SCHOAPS. Well, thank you first of all, Congressman, for
+supporting and sponsoring the Shuttered Venue Operators Grant.
+Every day that that grant application process isn't open causes
+consternation for everybody in the theater business especially.
+We are--a lot of us are closed. If we are not closed, we are
+running at losses, at best.
+ And I think every day we don't have that application
+process open, the more worry comes into our lives about the
+future, whether we are going to survive or not. You know, I sit
+down with my wife almost every night and we say, well, how many
+more days do you think we can last? How many more? Are there
+weeks? Is it weeks or days?
+ And I think the Shuttered Venue Operators Grant is the hope
+we have for the future, and I think that that is one thing that
+we need to get that application process open as quickly as
+possible. I know it is an involved thing, but----
+ Mr. WILLIAMS. Well, we hear you, and we are going to make
+some noise to get that money to you.
+ Many Americans are under the false notion that they must go
+to a 4-year college to be successful and make it in America. I
+personally do not think this is true and believe our country
+would be better off if more people utilized trade schools so we
+could have more plumbers, contractors, welders, et cetera, in
+the workforce. Once a person learns a skill, they can translate
+that knowledge into creating their own small business.
+ Ms. Kerrigan, what role do you see career and technical
+education opportunities playing to help hardworking Americans
+overcome the economic devastation of COVID-19?
+ Ms. KERRIGAN. I think they are critical, I mean, absolutely
+critical, you know, particularly given, you know, where we see
+some of the growth. Actually, the bright spots are in the
+economy now, you know, in terms of home improvement and in
+terms of those other type of services that are really, you
+know, on the uptick, you know, versus some of the other
+sectors. So, obviously, there is a skills gap, and this type of
+training is going to be critical for these workers, moving
+forward.
+ And you are right. I mean, you know, in terms of spurring
+entrepreneurship, you know, I think it also is very vital. I
+mean, it is these individuals, these new individuals that enter
+into these professions that actually see things in the
+marketplace, talk to consumers maybe that their current
+employer does not. So there is more competition, more vibrancy,
+more innovation in those industries.
+ But yes, moving forward, vital. And I agree with you in
+terms of the 4-year very expensive college education not being
+necessary.
+ Mr. WILLIAMS. Thank you. In other words, we have enough
+lawyers. Thank you.
+ COVID-19 has caused a massive shift in consumer preference
+from brick-and-mortar retail stores to online shopping. This
+does not seem like a temporary trend. It is likely to persist
+long after the pandemic. Unfortunately, there are so many rural
+areas across the country, including my district, that do not
+have access to high-speed internet.
+ This is setting these small businesses up for failure,
+simply because they do not have access to the necessary
+infrastructure to succeed. I plan on pushing for rural
+broadband to be in any infrastructure program that may come to
+the floor.
+ So, Dr. Fairlie, in the brief time that we have, can you
+talk about how increasing rural broadband funding would help
+small businesses.
+ Mr. FAIRLIE. Yes, I fully agree. I think anything and
+everything we can do to help small businesses have more of an
+online presence is crucial, right? I mean, you just see big box
+stores, you know, the online retailers have done incredibly
+well, right? That was talked about in the very beginning, that
+their revenues are up. Their stock prices are up.
+ Small businesses, of course, are not seeing that. And that
+I think is, you know, everything we can do. Broadband access I
+think is a crucial issue, especially for rural small
+businesses.
+ Mr. WILLIAMS. Thank you. I yield my time back.
+ Chairwoman VELAZQUEZ. The gentleman yields back.
+ The gentleman from Colorado, Mr. Jason Crow, Chairman of
+the Subcommittee on Innovation, Entrepreneurship, and Workforce
+Development, is recognized.
+ Mr. CROW. Thank you, Chairwoman. And thank you to all the
+witnesses today. You are very insightful, and I appreciate you
+taking time. I know how busy you are doing your normal work, so
+we appreciate your insights.
+ I just wanted to start by clarifying something. There was
+discussion earlier about the impact of minimum wage on the
+pandemic. And I certainly understand some of those concerns,
+but also, just to be clear, the Raise the Wage Act doesn't
+actually immediately take effect after enactment. There is a
+delay after enactment, and then is a gradual increase over a 5-
+year period. So I think we have to be very careful about how we
+frame this, in terms of its impact on businesses during the
+pandemic. So I wanted to start with that.
+ And I represent a community where one of the biggest
+challenges that our small businesses face right now is that
+people can't actually afford to live in the community and can't
+actually afford to patronize the businesses and help them grow
+as well. So we have to I think address this with a level of
+sophistication and look at the multiple dynamics going on here.
+ So, with that said, I would like to start with Ms. Pinder.
+Ms. Pinder, I represent one of the most diverse districts in
+the country. Nearly 20 percent of the residents in my district
+were born outside of the country, and I have over 150 languages
+spoken. So I am very concerned and very attuned to the issues
+of underserved communities and their lack of access to capital.
+ So, as you might know, we changed the PPP program and some
+of these relief programs to dedicate money to CDFIs, to help
+drive that money to those areas of need. So I would appreciate
+your comments on what are still the barriers for underserved
+communities in accessing CDFI money and money that is allocated
+to try to get to those businesses in great need.
+ Ms. PINDER. I think that the second round, there were all
+those problems that were identified with the first round of PPP
+and EIDL loans and all those kinds of things, because of the
+rush to get out and that kind of thing.
+ But I think that the intentional nature of looking at how
+to place or push the money down to intermediary types of
+organizations or CDFIs was a good one, because we have to be
+intentional about it. There has to be organizations or
+resources that are, if nothing else to describe this, boots-on-
+the-ground kind of approaches.
+ And understanding where those communities are--I mean,
+where those businesses are and being able to market and
+communicate the existence of the resources, because that has
+been one of the biggest barriers of entry for achieving this
+money throughout the cycle. It is where are the resources,
+where can I identify those resources, and then the government
+or private sector organizations that have taken this on being
+intentional about making the information known.
+ Mr. CROW. Just to follow up on that last point, Ms. Pinder,
+what would be an effective way--and I know I am kind of putting
+you on the spot here a little bit, but what would be a really
+effective way to get that information, that last piece you just
+mentioned, get that information known and communicate what is
+available to some of these communities?
+ Ms. PINDER. I think you have to meet people where they are,
+right? And so if you are looking to increase awareness in
+particular communities, what are those--the knowledge of where
+the CDFIs are? How do you use means to advertise that
+information? And whether it is through our churches or through
+organizations that exist in those communities, I think that is
+how you meet people where they are.
+ Mr. CROW. Thank you. I appreciate that very much.
+ Professor Fairlie, you had also touched on this in your
+written testimony about the changes between the first round of
+funds, relief funds, and the second round of funds.
+ So the same question for you, if I may: What are some of
+the barriers that you have determined and seen from your
+research on getting CDFIs connected to those underserved
+communities?
+ Mr. FAIRLIE. Well, I think that, you know, the big problem
+in the first round is that it was mainly established banks that
+were providing the funds, and those were going out to mostly
+nonminority businesses.
+ And it was the second round of PPP funds that--where they
+really targeted, you know, trying to get this fintech into
+local banks, CDFIs, you know, those types of organizations that
+really made the big difference, right? In the research that I
+show, you can just see this incredible difference between this
+positive relationship with nonminority communities overall in
+the U.S., and then it switches around, totally, you know,
+reverses in that second round.
+ So I think it is really important. I think that we need to
+be aggressive. We need to go out and talk to small business
+owners, you know, get that information out to them so that they
+know about these programs, so that they know to apply.
+ Mr. CROW. Thank you. Madam Chair, I yield back.
+ Chairwoman VELAZQUEZ. The gentleman yields back.
+ The gentleman from Minnesota, Mr. Hagedorn, is recognized
+for 5 minutes.
+ Mr. HAGEDORN. Thank you, Madam Chair.
+ I would like to expound a little bit about these lockdowns
+that our Ranking Member, Mr. Luetkemeyer, brought up. In our
+State of Minnesota, our Governor, Tim Walz, has held onto
+emergency powers and made all sorts of arbitrary decrees, and
+in so doing his central government planning has really affected
+our small businesses. It has crushed a lot of them, put some of
+them out of work, out of business permanently. And you look
+at--some of them just didn't make sense. You had big box
+stores, corporate stores open, small businesses closed.
+ And then you get into the rural areas that I represent down
+in southern Minnesota and you have border communities, and the
+Minnesotans were just across the border going to Iowa, South
+Dakota, or Wisconsin to purchase their goods there, go dine,
+and go to a bar or restaurant. And then we were hurt.
+ Now we are trying to open back up, but the effects of these
+lockdowns are really hurting small businesses. You have a
+situation where we don't have enough labor. Part of that is
+because the schools are still closed throughout most of
+Minnesota with regulations that don't make sense. Even the CDC
+says it is okay to get the teachers and everybody back in
+school for in-person learning. That would free up the parents
+to be able to go out and do work again in the community, work
+for our small businesses.
+ And then at some of the border communities, the employees
+have literally gone to neighboring States and taken full-time
+jobs there, knowing that those States will remain open when
+Minnesota's opening and closing.
+ So I guess to Ms. Kerrigan, what are your thoughts about
+that? I would like to hear any other experiences that you have
+learned along the way and just how devastating some of these
+lockdown orders have been to small businesses across the
+country.
+ Ms. KERRIGAN. Well, they have been very, very, very
+devastating, obviously. You know, from the beginning of the
+pandemic or very shortly thereafter, you know, we said that,
+yeah, this is a very difficult challenge for the country,
+unprecedented, but still small businesses could operate safe
+and smart. They had every incentive to do so.
+ And you are right. I mean, sort of the inequities in
+allowing sort of the larger stores to remain open and closing
+the smaller stores that could have sold some of these goods
+that were provided by the larger stores and, in effect, herding
+a larger amount of customers into bigger stores, you know,
+didn't make sense from our members' perspective.
+ So--and what we are seeing now, Congressman, is you do see
+businesses just in these locked down States, I mean, really
+picking up--you know, picking up and moving, moving to other
+States. I mean, it was the trigger for them, actually, to move
+to more business-friendly States, you know, to lower cost
+States, and to States that--you know, where there was a little
+bit more flexibility, you know, in terms of these policies.
+ So I don't know if I have one simple answer for you. I
+mean, hopefully with the vaccines and now we are seeing the big
+drop in the disease. I mean, we are on a course here where
+economic activity can, you know, open up and get back to
+normal, whatever that might be, you know, the next 6 months or
+so.
+ Mr. HAGEDORN. Sorry to cut you off. I want to get over to--
+thank you for that. And that has been our experience with
+businesses and others going to neighboring States like South
+Dakota that have been more open.
+ Mr. Schoaps, I have a real quick question for you. Being in
+the business that you are, in the movie theater business in a
+small community, we have communities in my district in Madelia
+and Kasson that have small theaters that haven't been able to
+reopen.
+ In some of our rural communities, obviously, we need
+infrastructure for folks to be there, jobs and everything else,
+good, obviously, healthcare and education. But quality of life,
+things to do, entertainment, that is really important in a
+community the size of yours. I think it is what, you have about
+7,000 people. And I see that. What is your thought about that?
+ Mr. SCHOAPS. Well, I have to agree with you. I can't tell
+you the number of people that have come up to me and asked when
+we are going to open. They come knocking on our door when they
+see us in the theater. They want us to open.
+ But it goes back to what you were talking about just a
+minute ago. As long as L.A. and New York are locked down, they
+represent 25 percent of the revenue that goes into movies,
+movie theaters in the country. And movie studios will not put
+out their movies, their big movies, if they know that L.A. and
+New York are locked down.
+ So yes, it is quality of life. Movie theaters are a big
+thing in small towns, simply because it is a gathering place.
+It is a place where--it is a reach out to the rest of the world
+from a small rural community.
+ Mr. HAGEDORN. Thank you very much. I appreciate the time.
+ Chairwoman VELAZQUEZ. Now we recognize the gentlelady from
+Kansas, Ms. Davids, Chairwoman of the Subcommittee on Economic
+Growth, Tax, and Capital Access.
+ Ms. DAVIDS. Thank you, Chairwoman.
+ I am definitely cognizant of the fact that it was about a
+year ago that the Small Business Committee held our first
+hearing on how the emerging, at that time emerging pandemic
+might impact small business. And, obviously, so much has
+changed in that time.
+ I have been honored--hold on a minute. The buzzing is
+happening in my office.
+ I have been really pleased to be able to speak with a lot
+of small business owners in the Third District in Kansas. And,
+first of all, I appreciate folks taking time out of their
+business schedules just like you all have here today to share
+experiences and perspectives.
+ And, you know, I think that what we are hearing now and
+what I have heard at home is that, obviously, small businesses
+are in a fight for their lives. And they are getting innovative
+and using every tool at their disposal to keep their doors open
+and employees paid. And there is obviously a lot of work to do,
+continue to do to provide the capital and resources and relief
+that our small businesses are going to need.
+ You know, I know we talked about the EIDL or heard about
+the EIDL loan earlier. A small business owner in my district
+was able to apply for and receive the funds almost immediately
+within a day of applying. And it really saved her business, and
+she was able to continue to operate. So know that when these
+programs are working effectively, they can save jobs. They can
+save businesses.
+ And I also know that some of the issues that we are facing
+are because we don't have the necessary funds or programs
+available for people to get a second drawdown on the PPP, and
+so we are going to continue to work on that.
+ And then finally, I want to mention that when it comes to
+the supply chain and our small manufacturers and medium size
+manufacturers, I have introduced the SUPPLIES Act because I
+know that there are so many businesses, particularly in Kansas,
+who are eager to shift their production over to things like
+personal protective equipment, testing supplies, and even to
+help with the vaccine rollout. I know a lot of healthcare
+workers are still struggling to get all of those things.
+ So I am glad to see that the American Rescue Plan includes
+$10 billion of funding for domestic manufacturing, for
+emergency medical supplies and this sort of thing.
+ So, Ms. Pinder, I would love to hear you speak a little bit
+to the opportunity to utilize small businesses and particularly
+minority-owned businesses when it comes to the implementation
+of the Defense Production Act. I know you mentioned that in
+your testimony, and would just love to hear you talk a little
+bit more about that.
+ Ms. PINDER. Thank you, Congresswoman. One of the things
+that I talked about is how do we then take existing assets and
+see how we leverage them in order to help support what you are
+talking about, because you are right, there is this plethora of
+need that is out there, and how do we identify, specifically
+for those businesses that are hurting the most.
+ So traditionally, assets like the Defense Production Act
+and like Buy American has not really looked at or leveraged how
+we then translate some of that that perhaps we could leverage
+with, say, minority and women and small businesses.
+ We take, for example--I talked about the title, Title 3,
+that the President has authority to invest in specific
+industries. What you talked about, people pivoting during that
+time, well, what if we could take something of that nature. And
+the goal of Title 3, for example, is expand domestic capacity
+for supplies, but if, indeed, that can be done and implemented
+in mind with supporting minority and smaller businesses.
+ I think those are the kind of things that we need--that
+Congress can take a look at. It is all about implementation,
+right? So how do we implement it to make sure that that is
+indicated in those efforts.
+ Ms. DAVIDS. Thank you, Ms. Pinder. We will probably follow
+up more after this.
+ I will yield back to the Chairwoman.
+ Chairwoman VELAZQUEZ. The gentlelady yields back.
+ The gentleman from Minnesota, Mr. Stauber, is recognized
+for 5 minutes.
+ Mr. STAUBER. Thank you, Madam Chair.
+ And at our first meeting of this year, I do not mean to
+kick things off in such a negative way, but I believe this
+situation calls for it.
+ Small businesses were crushed at the hands of their State
+and Federal Governments. Speaker Pelosi put politics ahead of
+our country. For months, she made her partisan wish list items
+a priority over the millions of Americans who were suffering.
+It was unacceptable.
+ So now here we are a new Congress, and yet we have not
+heard any fresh ideas on how to help America's small
+businesses. Instead, we have the tired old ideas. One of them
+is known to close small businesses across this Nation.
+ Ranking Member Luetkemeyer brought this up in his comments,
+the $15 minimum wage. When asked, one of the witnesses stated:
+Jobs will be lost, small businesses will close.
+ President Biden's relief plan shows just how out of touch
+he is with the hardworking small business owners of America,
+and it is frustrating. It is unconscionable that a relief
+package took so long. Americans and small business owners
+everywhere deserve better.
+ Now to our witnesses. I want to thank you all for being
+here today. Your testimony will provide much-needed clarity on
+policy proposals that can actually deliver effective targeted
+relief to our small business owners, who are the engine of our
+economy.
+ As the government has rolled out relief programs, mistakes
+were clearly made. Lenders wrongly doled out PPP loans to
+individuals who should not have qualified. The SBA created
+ongoing guidance, some making loans out of compliance at a
+moment's notice.
+ Ms. Kerrigan, in your opinion, where have our relief
+programs failed our small businesses?
+ Ms. KERRIGAN. Well, I will start with the good news, that,
+you know, over the course of time there have been lessons
+learned. And, you know, based on this current PPP round, you
+know, there are many things that have been done right.
+ But I will agree with you in terms of there was the need
+for speed back, you know, in the summer, where the economy had
+some momentum, where small businesses saw some light, you know,
+at the end of the tunnel, and yet Congress left town in August
+without acting and without extending the PPP program, where
+there was actually money that was left in that program.
+ So, you know, getting small businesses that money that they
+needed to weather what we went through in the fall and what we
+are going through currently I think would have been very, very
+important to save a lot of small businesses, save jobs. And
+that is one area, you know, that I will recognize.
+ And then just again, you know, I think there just needs to
+be the continuous sort of reevaluation of the program and for
+the SBA and for the Congress, you know, to act on
+recommendations I think a little bit more quickly, in terms of
+getting--making it more flexible, reducing complexity, and
+providing more certainty both for, you know, small business
+owners and the lenders, particularly as we move through and
+into the forgiveness period.
+ So, I mean, again, I know it was a big lift, getting this
+money out the door. A lot of small businesses benefited. But
+there could have been things done along the way that could have
+helped a lot more small businesses, and particularly reaching
+those in the minority and disadvantaged communities as well.
+ Mr. STAUBER. I appreciate those comments, and I agree with
+you, that need for speed. Once the investments ran out at the
+end of August, it was unacceptable that our small businesses
+across this Nation had to wait almost 4 months before the
+additional relief.
+ Ms. Kerrigan, a second question: Can you identify any
+issues in our relief program that have made small business
+owners reluctant to spend money they have received or reluctant
+to turn to the government for aid at all in the future?
+ Ms. KERRIGAN. You know, I think some of those issues have
+been resolved, in terms of, you know, some tax issues. You
+know, I still think there can be additional flexibility in the
+PPP program.
+ You know, many business owners just don't think that
+program is for them, particularly as it relates to, you know,
+the 60/40 split, 60 percent for payroll, 40 percent for other
+expenses, particularly if they are in high-cost areas and have
+high overhead.
+ Mr. STAUBER. Thank you. Ms. Kerrigan, my time has run out,
+and I appreciate all the witnesses. And I yield back.
+ Chairwoman VELAZQUEZ. The gentleman yields back.
+ Now we recognize the Chairman of the Subcommittee on
+Contracting and Infrastructure and Vice Chair of the committee,
+Mr. Kweisi Mfume from Maryland.
+ Mr. MFUME. Madam Chair, thank you very much. And I
+appreciate the opportunity. I assume we will have an
+opportunity also in a second round to expand on everything that
+we don't get a chance to cover here, so I look forward to that.
+ A couple of quick things. I want to thank the witnesses,
+all of whom I am sure have busy schedules and lifestyles, for
+making time available. This sort of discussion helps those of
+us, as lawmakers, get a sense of the divergence of thought and
+where some of the urgent matters are that we can apply
+ourselves to right away.
+ I must admit, having served on this committee in the
+eighties and the nineties, that this issue that continues to
+come up about the minimum wage is a little perplexing to me. I
+appreciate the Ranking Member introducing it and the response
+that was given, but for me it is a little like deja vu. The
+answers are the same as they were many, many years ago, that it
+would cause job loss and, of course, businesses would be forced
+to close, and that would be the end of small businesses as we
+know them.
+ In fact, in 1988, the Federal minimum wage was at $3.35.
+Today, 33 years later, it is at $7.25. So it has taken us 33
+years to give Federal workers a minimum wage increase of $3.90.
+Thirty-three years is a long time, and in the interim,
+businesses did not go out of business. Cost in some instances
+were passed along to consumers.
+ But the issue here is one of a lesson, and I think the
+lesson is that we will continue to see an increase in the
+efforts to try to make sure that people have a livable wage or
+a minimum wage that reflects where we are in society.
+ I want to associate myself to the remarks of Mr. Crow and
+reiterate the fact that this is not something that takes place
+next week or next year. So I know we are in the middle of
+COVID, but it might be a little bit of a mischaracterization to
+use that backdrop to place this issue as if it is going to
+happen right away. It doesn't really completely happen until
+2025. So, for the record, I just thought I would rhetorically
+ask myself the question, if not now, when? So when has been a
+long time coming.
+ I do want to go back to Mr. Fairlie's remarks and Ms.
+Kerrigan's, as you have sort of given us a 30,000-foot view of
+what is going on as a result of the impact the pandemic has had
+on small businesses in general and minority businesses in
+particular.
+ In just a couple of minutes, could either or both of you--
+and I don't have much time--just indicate, from your
+perspective, when do things get better? Do they get better when
+we open up, or do they get better when we are able to get rid
+of the disease?
+ Ms. KERRIGAN. Where I start, I think it is both. I think we
+can, you know, move in kind of a parallel track. And when we
+open up, I think that will definitely help small businesses.
+But certainly, the whole vaccination issue and getting rid of
+the disease, you know, will give consumers the confidence, you
+know, to go to stores and to, you know, get back to sort of,
+quote/unquote, normal economic activity.
+ But, again, Congressman, I just have a lot of optimism for
+all these new entrepreneurs. That is the opportunity in the
+marketplace, based on where consumer trends are going right
+now. And to the extent that we can encourage those
+entrepreneurs to move forward to innovate and keep our economy
+competitive, no matter what the normal may look like, the new
+normal moving forward, I think is vital.
+ Mr. MFUME. Thank you. And Professor Fairlie?
+ Mr. FAIRLIE. I think that we need three things: One, we
+need to get that vaccine out. We need to get it out faster. We
+need to get it out evenly across the country. So there are some
+equity issues about that, of course. That is really important.
+ Customers need to feel comfortable. They need to feel like
+they can go into a small business and not worry about getting
+the coronavirus. That is essential. And, of course, once that
+happens, we can start opening up everything, which is really
+important.
+ But the third thing, though, that I would not underestimate
+is this kind of trend toward shopping online. People are just
+becoming much more accustomed to doing it. I don't think it is
+going to go away forever. And small businesses somehow need to
+have more of an online presence.
+ And so I gave some ideas there about how search engines
+could prioritize small businesses in their local area instead
+of just the big box stores or bigger online retailers. That
+would be one way that we could do that.
+ Mr. MFUME. Thank you. Thank you very much. Mr. Schoaps, I
+really empathize with your situation out there in the Midwest.
+To see a 92 percent reduction in your revenue in 1 year is sort
+of unfathomable, and I can only imagine what you and your wife
+are up against, in terms of swimming upstream.
+ I am glad to know that the December stimulus bill, in which
+we did correct this whole issue of the EIDL loans, helped you
+to some extent, and that I look forward to President Biden's
+current stimulus bill----
+ Chairwoman VELAZQUEZ. Excuse me.
+ Mr. MFUME.--in terms of pushing you a little further down
+the road in terms of your own survival.
+ I want to underscore two things, one of which dovetails on
+what the professor just said. Innovation is one of the biggest
+enemies that many small businesses face. We saw it with the
+newspaper industry a couple of decades ago. We are seeing it
+now with movies, as it relates to Netflix and On-Demand and
+Pay-Per-View, which affects both television and other losses.
+ Madam Chair, were you trying to----
+ Chairwoman VELAZQUEZ. Yes. Your time has expired. We are
+discussing with the Ranking Member in a minute if we are going
+to go to a second round, and then you will have an opportunity
+to have Mr. Schoaps answer your question.
+ Mr. MFUME. Thank you very much. Actually, it is he and Ms.
+Pinder. So I will await the decision of the Chair and the
+Ranking Member.
+ Chairwoman VELAZQUEZ. Thank you.
+ The gentleman from Pennsylvania, Mr. Meuser, is recognized
+for 5 minutes.
+ Mr. MEUSER. Thank you very much, Madam Chair.
+ Thank you to the witnesses. I appreciate your being here
+with us. The PPP, the Paycheck Protection plan, was very much
+of a success. Nationwide, there were 5.5 million,
+approximately, small businesses received loans. $557 billion in
+forgivable loans were issued, with an average of approximately
+$100,000. So that was really the sweet spot. That was the
+intent. In Pennsylvania, my home State, it was very much the
+same sort of metrics, 200,000 loans for $22 billion, so about
+$110,000 per business.
+ The EIDL loans were also very successful, the Economic
+Injury Disaster Loan, particularly in Pennsylvania. The SBA
+worked extremely hand in hand with me and with us. 3.6 million
+loans for $200 billion, which works out to be about $6,000
+each, which, again, was right on the mark.
+ Nevertheless, that is about a trillion dollars. And with
+another $3 trillion that was put into the economy, that is $4
+trillion thus far over the past year. And yet, one in four
+small businesses still predicts they are going to go out of
+business within the next 6 months, and most of them are
+restaurants. So it is almost that there is almost no amount of
+money that is going to buoy and allow small businesses to
+survive except the free marketplace itself.
+ So, Ms. Kerrigan, I will start with you, please. You know,
+there is some talk here about business planning and how somehow
+government is supposed to provide innovative ideas. Anybody who
+has been in the private sector for more than we will say a year
+knows that that is ridiculous. Entrepreneurs figure those
+things out on their own.
+ What government does is create a competitive business
+environment for small business and large business to do their
+thing and be competitive and deliver the best products and
+services at the lowest prices.
+ Nevertheless, Ms. Kerrigan, I would like to ask you about
+access of capital outside of all of the forgivable loans and
+all and the additional that we are going to provide. I am not
+sure there is--in fact, I am sure there is no alternative to a
+safe and smart opening that is driven by the entrepreneurs and
+the small businesses themselves, where their ideas are applied,
+to assure that their customers and their staff are safe, yet
+they stay open.
+ And I would like to get your comment on that, Ms. Kerrigan
+and Mr. Schoaps. Am I saying it right? Mr. Schoaps.
+ But first just a quick answer on access to capital. Do you
+have any suggestions for us as to what we should be looking for
+outside of the EIDL and the PPP and standard lines of credit
+that banks have or that businesses have?
+ Ms. KERRIGAN. Well, you know, one of the areas that we have
+been very involved with since the Obama administration is the
+whole area of investment crowdfunding. And we are beginning to
+see a big surge in that. Obviously, investment crowdfunding was
+made legal. It took 4 long years, you know, for the rules to be
+written on that.
+ But now I see this huge surge in investment crowdfunding I
+think which is really great. It is truly democratizing access
+to capital. Minority-/women-owned businesses are tapping into
+this capital. And what I think the beauty of it is is it
+leverages local capital and local investors.
+ And there are new rules now at the SEC that are going to
+lift the limit from $1 million to $5 million and some other
+things that will strengthen equity crowdfunding.
+ I think we could work with some tax credits there. I mean,
+the U.K. has, with investment crowdfunding, put together
+actually a fund where if an individual raises, you know, up to
+$250,000 or more--I forget what the actual cap is--that through
+a fund the government will match that, that it will have to be
+paid back.
+ So I think what we need to start looking at is ways that we
+can, on the capital formation front, tie the capital and, you
+know, leveraging what I think is a lot of capital out there.
+And investment crowdfunding is the way to do that, one of the
+ways to do that.
+ Mr. MEUSER. Thank you. I would love to follow up with you,
+if I can, afterwards and discuss that further.
+ Quickly, Mr. Schoaps, I have very little time, what would a
+$15 minimum wage do to your business right now?
+ Mr. SCHOAPS. It would, as most small businesses, it is
+going to hurt somewhat. It is not going to force us to close.
+It will force us maybe to raise prices, to look at ways and
+cutting back in other areas. It is not going to close us, but
+it will put some more hardships on us.
+ But at the same time, I would--we hire mostly entry-level
+students, the young people. I would like to see some kind of
+maybe a minimum--some tier of minimum wage that addressed that
+kind of entry-level position.
+ Mr. MEUSER. Thank you very much. I am out of time. Madam
+Chair, I yield back. Thank you very much.
+ Chairwoman VELAZQUEZ. The gentleman's time has expired.
+ Now we recognize the gentleman from Minnesota, Mr.
+Phillips, Chairman of the Subcommittee on Oversight,
+Investigations, and Regulations.
+ Mr. PHILLIPS. Thank you, Madam Chair. Greetings to my
+colleagues and to our witnesses.
+ I want to address a couple things quickly that a couple
+colleagues have brought up, starting with the fact that
+Governors around our country, both Democrats and Republicans
+who imposed lockdowns did so to save American lives, in the
+absence of a strong Federal response or even support or
+guidelines.
+ I know how economically painful it was. I can attest to it
+firsthand. But I simply ask my colleagues and remind all of us
+it is incumbent on us in this committee to now help small
+businesses recover. So I invite everybody to invest our time
+and energy in repair and revert rather than regression.
+ Relative to the $15 minimum wage which has come up a number
+of times today, I own a chain of small coffee shops. And we pay
+a $15 minimum wage, not because we have to, but because I want
+to. I know the implications, how it helps employees and how
+challenging it is for owners.
+ But I think it is fair to say that we all, Democrats and
+Republicans, share the same objective. We want more prosperity
+for everybody, especially those who work hard and are trying to
+make ends meet.
+ I think we should balance these minimum wage increases with
+the EITC, earned income tax credit, so we don't reduce
+employment, we don't further hurt businesses, especially in
+rural areas. And I invite my colleagues, anybody who is
+interested, to speak with me about that, because I want to work
+together.
+ Now, the numbers and stories we have heard today from our
+witnesses are staggering and painful, to say the least. We know
+that businesses that survive the crisis are going to have to
+adapt in a post-COVID world and with higher relative costs and
+with less working capital than ever.
+ We know how many small businesses entered the crisis with
+low financial resilience. About a third were either operating
+at a loss before COVID or breaking even. So we know it is going
+to only get worse over the coming weeks and months before it
+gets better.
+ So, as briefly as possible, I want to ask each of our
+witnesses to simply share with me and our committee how we on
+the Small Business Committee can most impact small business
+recovery moving forward, particularly for businesses in rural
+areas, minority-owned firms and women-owned firms.
+ Perhaps we can start with you, Mr. Fairlie. What is the
+best way? Where do you want to see us focused?
+ Mr. FAIRLIE. I think the best way is to really promote
+trying to get the vaccine out, right? I think that that is the
+key. That is going to make customers feel comfortable going
+back into small businesses. And, as I mentioned before, the
+online presence part I think is crucial.
+ Mr. PHILLIPS. Thank you. Ms. Pinder.
+ Ms. PINDER. I believe that capitalization is I think the
+most important thing that can be done. And so I talked about
+no-interest loans, zero-interest loans, being cognizant of the
+need versus the demand of it. And providing capitalization I
+think is the greatest thing that can happen.
+ Mr. PHILLIPS. And, Ms. Pinder, do you believe existing
+programs, either amplified or in their current form, are
+enough, or do you think it is incumbent on us to consider new
+programs?
+ Ms. PINDER. I think it is incumbent upon you to consider
+new programs and look at existing programs to see how you can
+leverage it there. Like the Defense Production Act, you know,
+how do you do investments? Just new ways and innovative ways of
+how we make investments in businesses that are pivoting,
+businesses that are trying to survive, but, you know, bringing
+them to the table and understanding it is not a cookie-cutter
+approach, but how do we approach that need, based on industry
+or based on whatever that need may be.
+ Mr. PHILLIPS. I appreciate it. Thank you.
+ Ms. Kerrigan.
+ Ms. KERRIGAN. Well, access to capital I think is vital. And
+I agree if we could supercharge and work with the existing
+framework of programs, whether it is SBA loans or with
+investment crowdfunding and the platforms that exist there, I
+think it would be really important to do so.
+ Look, technology is so important, and making sure that the
+SBA resources in the programs are really focusing on
+technology. And we are going to move into a 5G world, right? So
+things are going to change again, and our businesses are going
+to have to pivot and adapt again. There are a lot of
+opportunities out there.
+ And lastly, you are right, access to broadband, that has
+been one of our top issues. If you don't have access to
+broadband, you don't have access to the tools or opportunity.
+So that I think is a very important piece to focus on.
+ Mr. PHILLIPS. And one more quick question, Ms. Kerrigan:
+Are you familiar with any countries, any nations around the
+world that support their small business kind of ecoculture, if
+you will, in ways that we can learn from?
+ Ms. KERRIGAN. Well, I think there is a lot on the microloan
+front. I mean, certainly over in the U.K. they are--you know,
+how they are supercharging investment crowdfunding there, both
+through the tax credit and also a match program, I think is
+something we can learn from. It has been highly, highly
+successful.
+ So we have a regulatory framework there. You know, they
+have this great program. I think if we can look at that and
+perhaps emulate that or least to explore it, I think it would
+be really important, particularly during the recovery period.
+ And the fact that, you know, we are going to have to
+leverage private sector capital, you know, we are going to have
+to do that in order to get through this--to move to full
+recovery.
+ Mr. PHILLIPS. I appreciate it.
+ And with our limited time that we have left, Mr. Schoaps,
+anything that you want to add, anything that you haven't shared
+that would be helpful to the SBA that we can be focused on and
+help the rebirth of small business?
+ Mr. SCHOAPS. Well, I think one of the main things is
+somehow we have got to get the communication out to small
+business owners of what is available. When I first got my EIDL
+loan, I mentioned it to several of my friends in the community.
+They didn't know what it even was. I think that we have got to
+somehow get that information out to the people that are in
+need.
+ And then I have to go back to what Dr. Fairlie said. The
+number one thing that would help us is to get the vaccine
+widely distributed and to get us at least people believing that
+we are going to get back to normal.
+ Chairwoman VELAZQUEZ. Time has expired.
+ Mr. PHILLIPS. I am grateful. Thank you.
+ Mr. SCHOAPS. Thank you.
+ Chairwoman VELAZQUEZ. The gentleman yields back.
+ The gentleman from New York, Mr. Garbarino, is recognized
+for 5 minutes.
+ Mr. GARBARINO. Thank you, Madam Chair. Thank you to all
+these witnesses that we have today.
+ Mr. Schoaps, I just had some questions for you. Can you
+share with The Committee how many employees you had before the
+COVID-19 pandemic and how many you have now?
+ Mr. SCHOAPS. Yes. We averaged about 12 employees before the
+epidemic, and--the pandemic--excuse me--and, right now, we have
+my wife and I, and that is it.
+ Mr. GARBARINO. Okay. And, before the pandemic, what was the
+average age of your employees other than your wife, not
+including your wife and yourself?
+ Mr. SCHOAPS. Probably about 17 to 18.
+ Mr. GARBARINO. And the average wage you paid those
+employees?
+ Mr. SCHOAPS. Average wage was $8 an hour.
+ Mr. GARBARINO. $8 an hour. We have heard a little bit about
+today how the increase of the minimum wage could be $15 an
+hour. That won't happen until 2024, but it starts--it goes up
+to $9.50 this year. That would be a pretty big increase from $8
+an hour.
+ Would that prohibit you from bringing employees back this
+year, especially if you didn't have access to the PPP?
+ Mr. SCHOAPS. No, it would not. We would--we are going to
+bring them back--we are going to open our business one way or
+the other. We are going to bring employees back. If it means
+our costs go up, we will have to figure out a way to increase
+our revenue to offset that, and our community will have to
+understand that it may include a price increase, it may include
+other things that we try to do to supplement what we do right
+now.
+ Mr. GARBARINO. Do you think you would--do you have to
+compete with other major chains--I know--I believe you are a
+small business--like Regal or AMC, or United Artists theatres?
+Do you have to compete with them? Are there any near you?
+ Mr. SCHOAPS. We have one about 20--we have one 20 miles
+away and one 15 miles away, and I don't think--we are really
+not in competition with them. We employ mainly local high
+school, local junior college employees, and they want to stay
+locally. So I really--we are not in competition for employees,
+no.
+ Mr. GARBARINO. But my question is, if you had to increase--
+if you had to increase ticket prices or the costs of your
+concessions to cover the increase in minimum wage this year to
+$9.50 and then all the way up to 15, would--are you concerned
+that your customers would go to other major chains because it
+might be cheaper for them to go there?
+ Mr. SCHOAPS. I am always concerned that our customers are
+going to go to the major chains, because they can offer more
+than we do even with--not even counting the minimum wage issue.
+They will be under the same minimum wage requirements we are,
+and I think that, yes, of course I am always concerned about my
+competition. However, I think that we have a--in a small town,
+we have a very loyal following, and I think we will be able to
+get through it.
+ Mr. GARBARINO. One more question. Did you have--have you
+tried to bring back any of the 17- or 18-year-old employees
+since you were allowed to reopen? Have you tried to hire
+anybody back and they have refused to come back?
+ Mr. SCHOAPS. No, we have had no one refuse. As a matter of
+fact, we had everyone eager to come back.
+ What has happened was we opened back in--I think it was
+June or July, we opened, tried to open, and there was just no
+product. Movie theatres are a specialized small business
+because, without the movies there, we have nothing to sell.
+And, without the new movies being released by Hollywood, we had
+nothing really to present. We tried using old, classic movies,
+old blockbusters, and that just did not pay the bills. We were
+forced to close down again.
+ But, even now, we--when we are talking about possibly
+opening again in a month or two, we have already contacted our
+employees, and nearly all of them are eager to come back.
+ Mr. GARBARINO. Okay. Thank you very much.
+ And, Ms. Kerrigan, I have a question for you. It is
+something that I have heard back in my home State of New York,
+and I am wondering if it is something you have heard in your
+dealings, that the PPP and the extension of the increased
+unemployment insurance, $300 or the $400 a week extra, are
+counterproductive because they compete with each other.
+ Businesses want to bring employees back, but employees
+don't want to come back because they are making more on
+unemployment. That is something I have heard a lot in New York.
+Is that something that you have come across?
+ Ms. KERRIGAN. I think, initially, you know, at the
+beginning of that program and, you know, somewhat into 2020, as
+we moved to a more normalized environment and with the economy
+opening up and I think with employees thinking about sort of,
+again, you know, the long-term prospects, you know, after these
+programs are done, it has become less of an issue right now in
+terms of more employees wanting to go back to work, and then of
+course--and employers, you know, offering them incentives to do
+so.
+ So, I mean, I can ask more of our small business owners
+about that now in terms of the current state of play where they
+are and what their issues are, and I will be more than happy to
+get back with you on that.
+ Mr. GARBARINO. Thank you very much.
+ Ms. KERRIGAN. To see how that stacks up in terms of some of
+their other concerns and whether it is still a major issue.
+ Mr. GARBARINO. Thank you very much. I yield back.
+ Chairwoman VELAZQUEZ. The gentleman yields back, and now we
+recognize the gentlelady from Georgia, Carolyn Bourdeaux, for 5
+minutes.
+ Ms. BOURDEAUX. Okay. Thank you so much, Chairwoman
+Velazquez, and thank you to the witnesses here for testifying
+on behalf of our small businesses.
+ I am from Georgia's 7th Congressional District. It is a
+very, very diverse community. Twenty-five percent of the people
+in my district were born outside of this country. And we have a
+vast swath of small businesses, many of which are women and
+minority owned, and they have really struggled during this past
+year to try to stay afloat.
+ I just want to cut to the chase, though, and get to some
+questions. One, and this could be for Ms. Pinder or Mr.
+Fairlie. We have talked a lot about issues of disparity in
+terms of getting out the PPP loans, the outreach through the
+EIDL program, and things like that. But one of the things that
+has come to our attention is disparity in the administration of
+the funds, and one of our concerns is that it seemed from a
+quick survey that we did of some of our small businesses that a
+lot of the Black, other minority owned businesses were having
+to pay back the loans, whereas some of our White businesses
+seemed to be more likely to be able to find ways to get the
+loans forgiven.
+ And I wanted to see if that was something, Mr. Fairlie,
+that you have come across in your research, and for Ms. Pinder,
+something that you are hearing from minority communities about
+as a particular issue, and, if so, what we might do to address
+that?
+ Mr. FAIRLIE. I guess I can go first.
+ So, in some of--I haven't actually researched this directly
+myself, but I know that there are a couple of projects that
+have looked at discrimination in terms of, you know, when you
+have a minority lender coming in or a nonminority lender coming
+into a bank to get a PPP loan, but there was definitely some
+issues there.
+ And I think that that is really important, right, is that,
+if we don't have kind of an equal system from the very
+beginning, from getting information, from going into a bank and
+asking for help, or into going into somewhere else or looking
+into a fintech, that is a real problem, and I know that there
+is some evidence that that did occur early in the stages of the
+PPP program.
+ Ms. BOURDEAUX. Thank you.
+ Ms. PINDER. Congresswoman, we can certainly validate that
+that is absolutely true. Part of what we have been doing at the
+council and our MBDA centers is addressing issues our minority
+businesses have found themselves in relative to obtaining PPP
+loans, and then just a whole mystery around the payback of
+them, right? And, because it is a revolving door, the rules
+kind of shifted in midstream. It is very hard to get a handle
+on it.
+ And so those things that were problematic in terms of how
+we were able to even get the loans--we have had to make phone
+calls to banks to ask them to look at--to consider these
+particular companies, but we also saw a difference when money
+from--whether it was State level or money that was done from
+foundations or private-sector organizations, that they were
+much more successful in getting directly to the folks that were
+having the problems with the Federal funds.
+ Ms. BOURDEAUX. Okay. I just think this might be an area for
+further investigation and trying to understand sort of what has
+happened out there and sort of what is happening as these
+programs are going through the process.
+ One other question that has come up a lot is we have a lot
+of small businesses that have--they need to make investments to
+improve ventilation to make their businesses appropriate for
+COVID and to allow them to stay open and operate in these
+situations. I know that some local governments gave grants to
+small businesses.
+ But do any of you all have a sense of the needs out there
+to make further investments in getting their operations to be
+COVID safe?
+ And I will start with you, Ms. Pinder, since I know that
+you have that--a very good perspective from the minority
+communities.
+ Ms. PINDER. I am sorry, Congresswoman. You said--what was
+the last part of your question?
+ Ms. BOURDEAUX. Do you have any sense of the additional kind
+of infrastructure needs that small businesses have to make sure
+that their businesses are safe and able to reopen at least
+partially safely right now?
+ Ms. PINDER. But, you know, part of it is just an education
+process of how do you safely reopen your businesses, right? It
+is also from the legal perspective, what is your liability
+around when your employees come in? Do you require them to have
+vaccinations? So a lot of it--what I am finding and what we
+have found is just an education program or education
+perspective of what are the rules?
+ And so there is absolutely the need to prepare our
+businesses or provide those resources so that our businesses
+can understand what they are liable for, how they can assist,
+how they can then--you know, what are the compliance efforts
+that they have to undertake in order to get that done? And, for
+some businesses, it is actually also where can they reside,
+because they can no longer afford their places of business.
+ Chairwoman VELAZQUEZ. Time has expired.
+ Ms. BOURDEAUX. Thank you.
+ Chairwoman VELAZQUEZ. Thank you.
+ Ms. BOURDEAUX. Thank you.
+ Chairwoman VELAZQUEZ. The gentlelady from California, Mrs.
+Kim, is recognized for 5 minutes.
+ Mrs. KIM of California. Thank you, Chairwoman Velazquez and
+Ranking Member Luetkemeyer, for holding this very timely
+hearing. I also want to thank the witnesses for taking the time
+to join us to share your experience and your relevant and
+important data.
+ As a small business owner myself, I am thrilled to be part
+of this Committee, and I look forward to working with my
+colleagues to support our small businesses during and after
+pandemic, because small businesses are the lifeblood of our
+economy and cannot be forgotten.
+ You know, in my district, California Authority 9, which is
+a suburban district, 99.8 percent of California businesses are
+employing over 7 million workers. Unfortunately, COVID-19
+shutdowns in my State of California have increased the number
+of small businesses closing, and I have witnessed many of them
+myself in my district.
+ More than 19,000 California small businesses have shut down
+permanently due to COVID-19, and every small business that
+closes takes away jobs, causing economic stress to families and
+communities.
+ Obviously all industry are badly hurt during the shutdown.
+So I want to ask--but, you know, all industries, but retailers
+in particular. So I would like to ask a question for Dr.
+Fairlie.
+ In your testimony, you mentioned trends in shopping habits,
+especially the mood towards online shopping. Do you believe
+small businesses are prepared for this trend to become
+permanent, and can you elaborate on some of the recommendations
+you mentioned in your testimony?
+ Mr. FAIRLIE. Yes. I would be happy to. I think that it is a
+trend that is not going to go away. I mean, I think that
+there--there could definitely be some pent-up demand where
+people are really excited when the vaccine is rolled out more
+completely and they want to go back to downtowns, they want to
+go to those vibrant communities, different shops, restaurants.
+ But I think that there is also this other, you know, trend
+happening, which is we are just more used to buying things
+online. We are used to that convenience of having, you know,
+UPS deliver a package to our house. And often, almost--well, I
+don't know if often, but very likely that package is not from a
+small business; that package is from a big-box store or an
+online retailer. And so we need to do more to get small
+businesses online.
+ You know, we talked a bit about broadband access could be
+essential for rural businesses and businesses in other areas
+that don't have good internet access. Certainly web page
+assistance might be another thing that the Federal Government
+can help out with.
+ And then of course, you know, anything that can help, you
+know, with search engines or any other kind of information that
+allows customers to find small businesses and buy from them
+online.
+ Mrs. KIM of California. Thank you.
+ As small businesses recover from this emergency, what
+should Congress concentrate on in order to create a small
+business environment that focuses on entrepreneurship and
+innovation?
+ This question is for Dr. Fairlie.
+ Mr. FAIRLIE. Okay. I wasn't sure if it was to me.
+ I think there are a lot of, you know, different ways.
+Certainly, you know, we have talked about financial capital as
+being one of the most important. I think that is kind of
+crucial, especially for firms that are creating innovative
+products that are kind of expanding on what we already have,
+that are giving America real strength, right? And so that can
+be crucial, as that kind of funding that helps them with
+scientific discoveries and innovative products.
+ Mrs. KIM of California. Thank you.
+ I have a question for Ms. Kerrigan. As Congress discusses
+next steps when it comes to COVID-19, what recommendations do
+you have for this Committee?
+ Ms. KERRIGAN. Well, when I talk to business owners, I mean,
+what they are really looking for is a period of certainty and
+policy stability. You know, last year was very, very tough in
+terms of the uncertainties, and, you know, obviously sort of
+the massive revenue reduction that they saw last year. So, to
+the extent that we can have a--sort of a period of stability,
+policy stability and certainty, I think that is very, very
+important.
+ I mean, obviously the whole issue that we talked about in
+terms of capital formation, access to capital, that will remain
+to be an issue, not only for existing businesses, but also for
+the start-ups and the new entrepreneurs that we see--just, you
+know, the surge in new business applications that we saw last
+year and that continue to this day, is what can we do to
+support them? Again, it is policy stability. It is, you know,
+access to capital.
+ And I have to say, you know, in terms of----
+ Chairwoman VELAZQUEZ. Ms. Kerrigan, I am sorry, but we are
+running late, and the gentlelady's time has expired.
+ Mrs. KIM of California. Thank you.
+ Ms. KERRIGAN. I am sorry. Okay.
+ Chairwoman VELAZQUEZ. Thank you.
+ Now we recognize the gentlelady from Texas, Ms. Van Duyne.
+Is she here?
+ Ms. VAN DUYNE. Yes. Thank you. Thank you, Chairman
+Velazquez and Ranking Member Luetkemeyer, for holding this
+important hearing today.
+ As a former mayor and businesswoman, I have spent my career
+with people from a wide array of backgrounds and experience who
+fought tooth and nail to grow their businesses only to see
+their doors closed forced by the heavy hand of government due
+to coronavirus pandemic.
+ Since being sworn into office one month ago, I have been
+fortunate enough to speak with a number of small businesses and
+franchise owners in north Texas to learn more about their
+experiences in the face of the global health crisis and their
+struggles due to government restrictions that followed.
+ Just last week, I held a roundtable discussion to hear from
+these businesses in our community. Many expressed similar
+concerns, but one thing they all had in common, similar to what
+Mr. Schoaps has referenced in his testimony today, is that they
+are doing all that they can, everything in their power, to
+ensure their businesses weather the storm.
+ While loan programs, like the Paycheck Protection Program
+and the Economic Injury Disaster Loans Program, were critical
+in keeping their businesses operational, the pandemic has
+brought forth new challenges. And, over time, it became clear
+that these programs needed additional resources and support to
+uplift small businesses and entrepreneurs.
+ In north Texas, our economy is made better by the
+innovation and entrepreneurial spirit small business owners
+provide. In talking to the business owners in my community, I
+learned that they are hurting and needing help. They are scared
+that the powerful few in Washington will make politically
+expedient decisions that may force them to permanently close
+their doors.
+ Instead of calls to hike the Federal minimum wage to $15 an
+hour, which will kill many small businesses, we should be
+discussing how to improve programs, like the Paycheck
+Protection Program, that could keep them open past the
+pandemic.
+ Unfortunately, this administration stands ready to hand
+down destructive policies that will force north Texans out of
+business and demand many change the standards of who they hire.
+ I hope the calls for unity thus far are not shallow. Small
+businesses needed us to come together as a Congress, as a
+House, and as a Committee to fix the programs, keeping them
+alive, address their unique situations, and reopen the stores,
+the restaurants, and service centers that keep our communities
+running.
+ I look forward to working with this Committee to oversee
+the programs that have aided so many small businesses thus far
+and, as we move past this pandemic, advancing legislation that
+will allow America's entrepreneurs to prosper once again.
+ I thank all of the witnesses being here today.
+ And, for Ms. Kerrigan, an October report from the
+Government Accountability Office concluded that the streamlined
+process that the SBA implemented to administer COVID-19 loans
+has increased susceptibility to fraud and abuse. Are there any
+activities or program features that you believe we should be
+examining more closely in our congressional oversight of these
+programs?
+ Ms. KERRIGAN. Yes. And--yeah, that is a big issue, and
+obviously of concern. I actually read the recent SBA's IG
+report that was released on this very issue, and they have some
+very good recommendations in that report in terms of what can
+be done on the front end to ensure that there is not--in terms
+of the money does not get disbursed to people who may be or
+businesses who may be ineligible, and things that they can work
+on with Treasury--for example, the do-not-pay data source that
+they have over there--again, to sort of, you know, catch this
+fraudulent activity before the money goes out the door.
+ So I was happy to see that SBA IG report, the
+recommendations, and also the SBA following through on some of
+those recommendations, but more oversight and follow-up
+definitely needs to be done.
+ Ms. VAN DUYNE. All right. I appreciate that.
+ One of the biggest concerns for small business owners that
+the pandemic has exasperated has been providing healthcare to
+some of our frontline workers. Our smallest businesses employ
+low-wage workers and can't afford to pay for healthcare,
+especially with revenues dropping. But, due to the pandemic,
+workers are scared to go to work without that safety net.
+ So, Ms. Kerrigan, I am going to ask: How would you like to
+see the issue of small business healthcare addressed for our
+smallest of small businesses?
+ Ms. KERRIGAN. Well, to the extent that you can provide the
+incentives and support to the workers themselves in order to
+access health coverage, to allow for more, you know,
+flexibility, one size doesn't fit all, certainly when it comes
+to healthcare. And I do think some of the initiatives of the
+last administration, you know, have been helpful. I do believe,
+you know, the pooling initiative, you know, for allowing small
+businesses to leverage their numbers in terms of accessing
+healthcare, was very important.
+ But one other critical thing that I see is that we want to
+be able to incentivize. When it comes back to vaccines,
+employers, you know, are looking not to mandate, but to
+incentivize employees to get the vaccine, and we joined a group
+of our allies in sending a letter to the EEOC to make sure that
+proper guidance is put out there, that we are not running afoul
+of any laws. And so those----
+ Mr. MFUME. [Presiding.] The gentlewoman's time has expired
+unfortunately. Thank you so much. I do anticipate there will be
+a second round, but I don't want to get in front of the Chair
+on that. She will be back momentarily.
+ So, Ms. Kerrigan, if you would suspend, I would like to
+acknowledge Ms. Craig, who has been in the cue and who is up
+next, to be recognized.
+ Ms. Craig.
+ Ms. CRAIG. Thank you so much, Mr. Chair. Thank you for
+yielding.
+ Before I get to my question, I just want to welcome new
+members to the Small Business Committee. Looking forward to
+working with all of you. I have been proud of the work on a
+bipartisan basis that we have been able to accomplish. And I am
+happy to serve on this Committee with members of the Minnesota
+delegation as well.
+ Thank you again to our panelists for being with us today
+and for your insightful testimonies.
+ As I am sure is true for all of my colleagues, many of the
+issues discussed today have greatly impacted my constituents.
+ I would like to address my question to Dr. Fairlie first.
+Thank you for your important research and specifically
+addressing the negative impacts that COVID-19 has had on
+minority owned businesses.
+ In your testimony, you touched on the issues that
+restaurants have faced as well amid the pandemic. We are seeing
+the consequences of government-ordered shutdowns on, in
+particular, hospitality and restaurants.
+ On top of the financial losses and shutdowns, people are
+anxious to know that it is safe before they return to
+restaurants, and that is not going to happen until vaccines are
+more broadly available in each of our communities.
+ The combination of these issues has devastated the
+restaurant industry, and the relief grant program for
+restaurants to address these unique challenges was widely
+supported by my colleagues on this Committee last Congress,
+including Chairwoman Velazquez.
+ As we roll out vaccinations, do you believe a targeted
+relief grant program, which would go to independent
+restaurants, similar to last Congress' RESTAURANTS Act--120
+billion would go to the industry in grant--would that assist
+the recovery of these smallest and hardest hit Main Street
+businesses, help them to stay open, and accelerate the recovery
+of our Main Street businesses?
+ Mr. FAIRLIE. Yes. I think it could help a lot. I think it
+is important that we save our restaurants. Certainly, you know,
+just going around my own town, I have seen a lot of them closed
+up, and they have closed up permanently. You know, they have
+put up signs saying that they are done. They--you know, they
+are not going to reopen at any point in time.
+ And it is sad, right? You sort of--like we really
+experienced these downtowns as part of, you know, what makes
+America great, and, you know, is that being able to go and walk
+through a town with a lot of diverse restaurants and shops, we
+need to provide that assistance to them. And I think directed
+assistance, especially financial assistance, so that they can
+weather the next couple of months to get that vaccine out is
+crucial.
+ Ms. CRAIG. Well, we see that light at the end of the tunnel
+for sure.
+ I want to open this up to, I guess, any of our panelists
+here just as we circle back around to this topic of the second
+round of Paycheck Protection Program forgivable loans obviously
+did a much better job of assisting minority owned businesses.
+But one of the challenges that I saw in our community is that
+minority owned businesses don't always have access to the same
+information. There are language barriers, et cetera.
+ So any thoughts on how we can encourage, really, at the
+local level--how the Federal Government can support making sure
+that the communication and the dollars are getting to these
+minority owned businesses?
+ Ms. KERRIGAN. Congresswoman, I can start out with that.
+ One of the things--it has been great to, by the way, engage
+with the SBA already early on in the administration where they
+are already having this discussion about how you use local
+organizations, community organizations, sort of a navigator
+approach to actually reach those types of businesses, because
+many of them don't think they are eligible. They are unaware of
+the program. They have technical issues to overcome in terms of
+the financials and all those other things that they need to
+apply for these loans.
+ So I think there is--and they have some good models that
+they shared of how this worked in certain areas of the country,
+and I think using that nationwide, I think, would really be
+beneficial----
+ Mr. MFUME. Ms. Kerrigan, I am sorry, but the gentlewoman's
+time has expired. I don't want to always have to interrupt you.
+It is----
+ Ms. KERRIGAN. I am sorry.
+ Ms. CRAIG. I am sorry. I would have done that for you. I
+thought I had 20 seconds left, so apologies to the Chair.
+ Ms. KERRIGAN. All right.
+ Mr. MFUME. Don't worry. We will roll it over with interest,
+Ms. Craig, trust me.
+ Ms. CRAIG. Okay. Thank you.
+ Mr. MFUME. The Chair would like to recognize the gentleman
+from Florida, Mr. Donalds.
+ Mr. DONALDS. Thank you, Mr. Chairman.
+ First of all, to the panelists, thanks for taking the time
+out of your day. This is obviously a very important subject
+matter facing our country through a very important time.
+ I am not going to get into speeches. I want to just kind of
+get right to it in the interest of time. This actually--my
+first line of questioning is really for Professor Fairlie.
+ Professor, I was going through some of your testimony here,
+and the one thing, especially with respect to the closure rate
+of minority owned businesses, specifically Black-owned
+businesses and even Latin-owned businesses, in your research,
+did you take into account the actual location of these
+businesses, like where they actually reside around the United
+States, or does your research pay no deference to that?
+ Mr. FAIRLIE. I did look into kind of regional differences,
+and I found that it was pretty consistent across, you know,
+broader regions of the country. I wasn't able to look at--there
+is a lot of concern that urban areas were hit the hardest,
+right, in terms of closures and also customers being very
+careful about going back to small businesses when things
+started to reopen. Unfortunately we don't have the data on
+that, and that was difficult.
+ But the kind of thing that I did look at with the
+California tax data is different types of businesses, and that
+is where, you know, the numbers were just devastating. You
+know, 91 percent of hotels closed down. More than 50 percent of
+clothing stores, more than 50 percent of restaurants closed. A
+lot of those are owned by minorities and immigrants in
+California, and so that is the real concern, is, you know, what
+is happening there.
+ Mr. DONALDS. A quick follow-up on that point. So, you know,
+since you have such rampant closures obviously in the State of
+California, could you specifically attribute that to the
+emergency regulatory environment put in place in California by
+Governor Newsom and, with respect to that, local city councils
+and local mayors in the State of California?
+ Mr. FAIRLIE. Well, it is attributed to two things, yes. One
+is the mandatory shutdowns for a lot of nonessential
+businesses. But the other is customers. Customers were nervous
+about going to businesses. Often they were very nervous about
+going to small businesses, small restaurants, places where they
+thought they might catch the disease.
+ And so that is where, you know, as I mentioned before, this
+kind of shift to online shopping has occurred, that, you know,
+individuals are worried about it, they are waiting to get the
+vaccine, they are waiting for this to get under control before
+they start to go back to small shops and small restaurants and
+back to kind of downtown areas.
+ Mr. DONALDS. My last question really is more so for the
+panel. I could get into $15 minimum wage, but I think it has
+been covered pretty extensively here, and I--you know, I think
+it is pretty clear in the record of what happens when you make
+major shifts to your minimum wage in a short period of time,
+even in normal economic circumstances, not to mention the
+current economic circumstances.
+ But what I would--my last question is really for the
+overall panel. Does the overall panel think it is appropriate
+for emergency regulatory orders to be essentially cast across
+an entire State with no reflection on whether it is an urban
+area, suburban area, or a rural area? And do you think that the
+impacts on suburban or rural areas in particular provide just
+as many disastrous impacts to small businesses as they would in
+an urban area?
+ Anybody can answer that one.
+ Mr. SCHOAPS. Well, I think that the effects of the COVID
+pandemic across the State--in our State, rural or urban, has
+been terrible, of course. I don't think the shutdowns would
+have affected us any more than they would have in a rural area
+or an urban area. So I don't--I don't really think there is any
+difference there. It is going to affect all small businesses
+the same.
+ Ms. KERRIGAN. I would just say on that, the one-size-fits-
+all approach, you know, that is--I mean, obviously that is a--
+that is a big problem, both when it comes to government index
+regulation, and certainly when it comes to this, is that it
+would be--would have been ideal if local governments and
+localities were given a little bit more flexibility and
+authority, you know, to make decisions based on local
+conditions.
+ So, anyway, one size fits all is--you know, obviously hurt
+a lot of small businesses in areas where the pandemic situation
+was much different than it was, say, in urban areas.
+ Mr. DONALDS. All right. I will yield back the rest of my
+time.
+ Thank you, Mr. Chairman.
+ Chairwoman VELAZQUEZ. [Presiding.] The gentlelady yields
+back.
+ Now I will recognize the gentlelady from Florida, Ms. Maria
+Salazar.
+ Ms. SALAZAR. Thank you very much.
+ Chairwoman VELAZQUEZ. Five minutes.
+ Ms. SALAZAR. Thank you, Chairwoman Velazquez, and thanks to
+all of you, and to all of the panel--the panelists that are
+willing to donate their time to enlighten us.
+ I come from Miami, Florida, district number 27, where 70
+percent of the constituents are minorities, 80 percent of my
+businesses have less than ten employees, and 70 percent have
+less than five people. So obviously the impact has been brutal,
+specifically for the minority owners.
+ For that reason, I promised my constituents something that
+is very unusual, but I think very necessary as time passes--
+something called a prosperity center, and what is the
+prosperity center going to do?
+ Well, basically three things. Helping everybody find a new
+job or find a job, helping my constituents to learn some--learn
+something new. If they lost their job at the restaurant and
+they wanted to become a welder or an electrician, I could help
+them find those courses.
+ And, third, and for me the most important, the one that is
+closest to my heart, is to become a client of the Federal
+Government. I am sure that you guys are aware that the Federal
+Government has $175 billion available to be bought from goods
+and services made by minorities or for minority businesses.
+ So what we are going to be offering in the prosperity
+center is a variety of services that includes roundtables, job
+fairs, job training courses, offering the constituents
+computers, personal guidance for my staff, for them to be able
+to regain their economic lives.
+ So my question is for the overall panel: If you were to be
+in my shoes, what else would you be offering in that prosperity
+center in order to help those small business owners get back on
+their feet?
+ Ms. KERRIGAN. Well, I will just start by saying information
+is power, education is power, and I applaud you, you know, for
+putting this center together.
+ Ms. SALAZAR. Yep.
+ Ms. KERRIGAN. I would say that there are a lot of self-
+employed minority businesses, individual entrepreneurs that do
+not know they are eligible for PPP, EIDL programs, and that
+type of support. And, also, there is a lot of tax credits and
+tax incentives as well. To the extent that you can provide the
+technical information and the training to access these
+programs----
+ Ms. SALAZAR. Yep.
+ Ms. KERRIGAN.--I think would be vital.
+ Ms. SALAZAR. So, when you tell me tax credits and technical
+training, could you please expand on that?
+ Ms. KERRIGAN. Well, yeah. So, you know, in the CARES Act
+itself and in the year-end package, there--for PPP and both for
+individuals, there are--well, let's start with tax credits.
+There is tax credits for employers, but also there is tax
+credits for self-employed people. With PPP, there is rules for
+employers, and then there is rules for self-employed people.
+ Ms. SALAZAR. I want to stop you there for a minute. So what
+you are telling me is that the government will pay the employer
+to hire the employee?
+ Ms. KERRIGAN. Well, no. To maintain--well, and to hold on,
+you know, to their employee, right, so the employee retention
+tax credit, that they held onto that employee despite a drop in
+revenues, okay?
+ Ms. SALAZAR. Correct. So that means that the person keeps
+the job. So that is what we want.
+ Ms. KERRIGAN. That is exactly right. And so--and those tax
+credits became even more valuable, and they have been extended
+through June 30, I believe, of this year. But, also, individual
+self-employed people have access to these tax credits as well.
+ But they--again, many of these entrepreneurs and small
+business owners, they just need the technical expertise and the
+accountants and, you know, the people to help them get through
+these very complicated--not that it is complicated, but just
+the forms that they need, the financials that they need in
+order to take advantage of these programs.
+ Ms. SALAZAR. So the information is power, like you said, so
+now we got to another layer where we are going to be providing
+them sort of accounting for legal guidance so they----
+ Ms. KERRIGAN. Correct.
+ Ms. SALAZAR.--know how to find their way through the maze.
+ Ms. KERRIGAN. Through the maze, and then all the way, if it
+is a PPP loan, through the forgiveness process as well.
+ Ms. SALAZAR. Now, you kind of--that is one of the most
+important information that we could provide, PPP loans, or the
+info that comes with it, and where to look for opportunities--
+for tax opportunities?
+ Ms. KERRIGAN. That is right. There is a lot of them in, as
+I said, the CARES Act, and then things that were put in at the
+year-end package as well that was signed into law.
+ Ms. SALAZAR. We are going to make the Kerrigan Prosperity
+Center Division. Thank you.
+ Chairwoman VELAZQUEZ. The gentlelady's time has expired.
+ Now we are going to go to a second round.
+ Professor Fairlie, so much has been discussed here
+regarding the impact that the minimum wage increase will have
+on small businesses. I would like to relate for the record here
+that, since nearly 70 percent of our economic activity comes
+from consumer spending, raising the minimum wage will put money
+back into consumers' pockets, back into our main streets, and
+back into our economy.
+ In fact, the Boston Federal Reserve data demonstrate that
+raising the minimum wage leads to increased spending on
+groceries, household necessities, and at local restaurants.
+Many of the businesses are saying that they need foot traffic,
+and that they need consumers to walk through their doors.
+ The reality is that, unless we successfully vaccinate most
+of the people in this country, consumers will not feel safe
+going into a restaurant, going into a mall, and spending their
+money.
+ There has to be synergy between being successful at
+vaccinating most of the people in this country and increasing
+the minimum wage so that we increase consumer spending. The
+people that are going to benefit from increasing the minimum
+wage are not going to go to Florida or Arizona and purchase a
+second home. They are going to go into the grocery store. They
+are going to go into the gas station or local restaurant. Small
+business owners see and know that this is the reality.
+ So, Mr. Fairlie, do you see any interconnection between
+being successful in terms of a national strategy of addressing
+and crushing the pandemic, the virus, and also infusing money
+into people's pocket so that they will go out and spend?
+ Mr. FAIRLIE. Yes. I mean, I think that, you know, one of
+the issues that we have been discussing in this conversation is
+about increasing the minimum wage, but the fact is the minimum
+wage has gone down over time. If you adjust it for inflation,
+what we have done is we have let it slip. And so the goal here
+is to bring it back to where it was in the past.
+ It is one of the only things the Federal Government does
+that is not indexed for inflation. You know, some other
+benefits are often indexed for inflation, but the minimum wage
+is not. And, when you look at the numbers, someone getting paid
+at the next round, you know, a little over $9 an hour, you
+multiply that by a full-time worker over the entire year, they
+are still under the poverty line--the Federal poverty line.
+ So there is issues there about, you know, well, what is a
+reasonable amount of money that someone should get in a job?
+And, if they do get that reasonable pay, then they will put
+that money back, as you are saying, in the local economy. They
+will spend it. That will increase their income, and it will
+just shift some income over to these--you know, these low-wage
+workers.
+ Chairwoman VELAZQUEZ. Thank you. Thank you.
+ Now I recognize the Ranking Member, Mr. Luetkemeyer.
+ Mr. LUETKEMEYER. Thank you, Madam Chair.
+ And I would like to thank the witnesses today, too, for
+hanging in there. I appreciate your time and your expertise.
+You have been great.
+ This responds to a couple of comments that were made by
+some of the members. A couple of them talked about the fact
+that the Raise the Wage Act was phased in, and I mentioned
+that, or at least I--in the report that I asked to put into the
+record, which is an NFIB Research Center report, it is a report
+on the Raise the Wage Act, which is phased in. But the report
+takes into account the phase-in of the minimum wage, and still
+winds up with 1.6 million jobs being cut and a real output loss
+of $2 trillion.
+ You know, I understand the need for the minimum wage, and I
+think, to me, it is a testimony on the lack of an economy. When
+you see the economy going down or stagnating, that is the time
+whenever there is the need for--that is where the argument can
+be made, anyway, for the need for a minimum wage. When the
+economy is growing, you don't need a minimum wage.
+ We had 1.2 million more jobs right before the pandemic hit.
+They needed people to fill them, and we didn't need a minimum
+wage. Why? Because there was a competition for the workers. The
+wages were going up. That statistically shows that, across the
+board, every demographic was improving wage-wise as well as
+with unemployment numbers going down.
+ So we can have an argument on the minimum wage for a long
+time. I am more than happy to get into that.
+ Dr. Fairlie mentioned in response to my question a while
+ago with regards to the lockdowns, do populations live
+differently between New York and Florida? I didn't have time to
+really go into a response to that.
+ But my response to it is: Yes, they live in a--perhaps a
+little differently the way they are spread across their State,
+but Florida had or New York had twice as many people die from
+COVID as Florida did, and yet their own survey--New York's own
+survey shows that the cause of the cases of COVID were not from
+businesses. 1.4 percent from restaurants, less than 1 percent
+from personal hair care folks.
+ That is my point, is that the lockdowns were minimally
+effective, at best, with regards to keeping COVID cases down,
+and yet the suffering by the small business community is
+devastating, as given by my State, Missouri, which did not lock
+down anytime after November, or mid-May. Some communities did.
+Some of them didn't. But, in the process, we have got a 5
+percent increase in revenues and a 4.4 percent unemployment
+rate.
+ So that is my point in making this, is that it goes back to
+leadership in the States and the devastating effect that it has
+on small businesses and the jobs that are there for those small
+businesses.
+ With regards to my question to Mr. Schoaps with regards to
+his banking relationships, I appreciate his comment. Obviously
+he has got a good relationship with it--with his banker, but
+perhaps part of it could be because, in the first COVID bill
+and the second bill as well, we had provisions in there to
+suspend the TDR, troubled debt restructuring rule, which helped
+banks and credit unions be able to accommodate more lenient
+terms for their customers with regards to how they can approach
+this, with regards to the regulators not going in and forcing
+the banks to foreclose on people.
+ So I think--you know, Ms. Kerrigan, I have gone on here a
+little bit, but I wanted to clarify some of those things,
+because I think it is really important to understand the
+precise problems that we are talking about here and the
+solutions that were in the CARES Act, for instance, with
+regards to the troubled debt restructuring rule and CECL, for
+instance.
+ So can you explain to me what you have seen or what you
+think is happening here with regards to the small businesses
+being worked with as a result of the TDR extension and banks
+and their customers?
+ Ms. KERRIGAN. I think that a lot of the changes that have
+been made to PPP have just been very, very important for small
+businesses, really responded, you know, to many of their needs.
+And so, you know, we, you know, applaud the Congress and this
+Committee's leadership, you know, for making that happen.
+ And moving forward, I mean, I think it is just really
+important that we continue to identify [inaudible] as well as
+opportunities, you know, in this next round as it goes out the
+door to make other changes, and maybe--as they may be needed
+where we are in the pandemic right now. So--and I look forward
+to working with you on those.
+ Mr. LUETKEMEYER. My time expired. Thank you.
+ Chairwoman VELAZQUEZ. The gentleman's--the gentleman yields
+back.
+ I now will recognize the gentleman from Maryland, Mr.
+Kweisi Mfume, for 5 minutes.
+ Mr. MFUME. Thank you, Madam Chair. At this time, I will not
+take the whole 5 minutes. You were very gracious.
+ I would like to go back to the point I was making with
+respect to innovation and finding a way to create more capital
+opportunities, and I didn't get a chance to get to Ms. Pinder.
+And, Ms. Pinder, thank you very much. It is good to see you
+again. I appreciate, whether it is this Committee or other
+Committees, your willingness always to come before members of
+the House and to share your perspective.
+ Some of the numbers you gave are a bit startling. I guess
+for those of us who have watched this closely, maybe not as
+startling, but the number of minority owned businesses that are
+Black, Latino, Asian, that have pretty much gone under, those
+that are facing severe budget drains, and those, quite frankly,
+looking for capital--innovative capital initiatives coming out
+of the government.
+ The Mentor Protege Program is something that I originally
+wanted to talk to you about, but hearing your testimony, I
+wanted to go into your suggestions that we look at the Defense
+Production Act, which the current administration is looking at;
+specifically, Title III with respect to targeted investment
+initiatives that would create the kind of wave under the small
+businesses that we are talking about that will allow them to
+sail into the future.
+ I assume you have got some specific ideas there, and if you
+could take a moment to talk to the Committee about some of the
+things you think that we ought to be arguing for and making a
+case for under the Defense Production Act, specifically Title
+III, as this administration looks at enacting that. That would
+be very helpful.
+ Ms. PINDER. Thank you, Congressman.
+ I think that part of what we can examine is showing a
+preference--using that vehicle by showing a preference for sole
+source provision and 8a.
+ I am having some audio issues. Can you hear me okay?
+ Mr. MFUME. I can hear you.
+ Ms. PINDER. Okay. By expanding use of sole sourcing with
+provision under 8a, I mean using that act to do that.
+ It is an opportunity to look at, as we--as we talked about
+businesses pivoting as a result of COVID, the manufacturing
+industry, of which, under the Defense Act, has supported in the
+past, you know, can we take the opportunity to help engage
+minority businesses in manufacturing? An idea that we have been
+discussing is looking at maybe some foreign investments in
+order to do that, looking at companies that would want to
+invest in U.S., having that partnership, whether it is through
+teaming agreements and joint ventures, with minority
+businesses, and having that as an entre into the manufacturing
+world.
+ And so it is looking at that and looking at Buy American as
+to how do we pivot some of these companies to help with--I am
+sorry--to help with supporting our minority businesses.
+ The other thing that I think we need to take into
+consideration, Congressman, is the partnering with the private
+sector. You know, my organization, the Capital Region Minority
+Supply Development Council, which is part of a national
+network, is--you know, I think that partnership in with--with
+private-sector organizations can help in writing what some of
+our businesses are doing with support of capital.
+ I do apologize. I am having all kinds of issues here.
+ So that is--that is basically what I was talking about.
+ Mr. MFUME. Okay. Okay. Thank you.
+ Before you conclude--and the Chair will interrupt in just a
+second, because time is running out. You had mentioned Title IV
+also of the Defense Production Act, which concerns me, because
+I think it is something a lot of people are not looking at, and
+what you have talked about specifically was reworking the 8a
+program.
+ If you could get back to the Committee in writing with some
+of your thoughts, suggestions, or ideas are in terms of
+rewriting or reworking that 8a program, that would be very,
+very helpful, and I would appreciate it.
+ Ms. PINDER. No. I appreciate the--I appreciate the
+opportunity.
+ Chairwoman VELAZQUEZ. Gentleman's time----
+ Mr. MFUME. Madam Chair, I yield back.
+ Chairwoman VELAZQUEZ. Thank you. Oh, he left?
+ Okay. Well, thank you again to our witnesses for the
+testimony. We appreciate all you have shared with us. As
+Congress continues to debate additional COVID relief for small
+businesses, it is clear the time to act is now. Big and bold
+relief is needed, and it should be targeted to small firms and
+industries that need it the most.
+ As we continue to vaccinate more and more Americans, we
+move closer to the end of this crisis, but we are not there
+yet. Until that happens, small businesses will struggle to
+return to pre-pandemic performance, and they will need our
+support.
+ That is why targeted EIDL grants for micro businesses left
+out of PPP, supporting those hardest hit sectors of the small
+business economy, and improved entrepreneurial development and
+government procurement programs are so vitally important.
+ I ask unanimous consent that Members have 5 legislative
+days to submit statements and supporting materials for the
+record. Without objection, so ordered.
+ If there is no further business before the Committee, we
+are adjourned.
+ [Whereupon, at 12:35 p.m., the Committee was adjourned.]
+
+
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