Congressional Hearings
COMMUNITIES THAT THINK SMALL AND WIN BIG
Congressional Hearings
SuDoc ClassNumber: Y 4.SM 1
Congress: House of Representatives
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| hssm00 | H | S | Committee on Small Business |
[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
COMMUNITIES THAT THINK SMALL AND WIN BIG
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JUNE 20, 2018
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 115-080
Available via the GPO Website: www.govinfo.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
30-505 WASHINGTON : 2018
HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
TRENT KELLY, Mississippi
ROD BLUM, Iowa
JAMES COMER, Kentucky
JENNIFFER GONZALEZ-COLON, Puerto Rico
BRIAN FITZPATRICK, Pennsylvania
ROGER MARSHALL, Kansas
RALPH NORMAN, South Carolina
JOHN CURTIS, Utah
NYDIA VELAZQUEZ, New York, Ranking Member
DWIGHT EVANS, Pennsylvania
STEPHANIE MURPHY, Florida
AL LAWSON, JR., Florida
YVETTE CLARKE, New York
JUDY CHU, California
ALMA ADAMS, North Carolina
ADRIANO ESPAILLAT, New York
BRAD SCHNEIDER, Illinois
VACANT
Kevin Fitzpatrick, Majority Staff Director
Jan Oliver, Majority Deputy Staff Director and Chief Counsel
Adam Minehardt, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Steve Chabot................................................ 1
Hon. Yvette Clarke............................................... 2
Hon. Nydia Velazquez............................................. 14
WITNESSES
Mr. Greg Prestemon, President & CEO, EDC Business & Community
Partners, St. Charles, MO...................................... 5
Mr. Derek Miller, President & CEO, Salt Lake Chamber and Downtown
Alliance, Salt Lake City, UT................................... 6
Ms. Vanessa Wagner, Small Business and Entrepreneurship Manager,
Loudoun County Department of Economic Development, Ashburn, VA. 8
Mr. Gregg Bishop, Commissioner, NYC Department of Small Business
Services, New York, NY......................................... 10
APPENDIX
Prepared Statements:
Mr. Greg Prestemon, President & CEO, EDC Business & Community
Partners, St. Charles, MO.................................. 25
Mr. Derek Miller, President & CEO, Salt Lake Chamber and
Downtown Alliance, Salt Lake City, UT...................... 32
Ms. Vanessa Wagner, Small Business and Entrepreneurship
Manager, Loudoun County Department of Economic Development,
Ashburn, VA................................................ 36
Mr. Gregg Bishop, Commissioner, NYC Department of Small
Business Services, New York, NY............................ 43
Question and Answer for the Record:
Question from Hon. Adams to Mr. Greg Prestemon and Answer
from Mr. Greg Prestemon.................................... 53
Question from Hon. Adams to Mr. Derek Miller and Answer from
Mr. Derek Miller........................................... 55
Question from Hon. Adams to Ms. Vanessa Wagner and Answer
from Ms. Vanessa Wagner.................................... 56
Questions from Hon. Adams to Mr. Gregg Bishop and Answer from
Mr. Gregg Bishop........................................... 57
Additional Material for the Record:
National Main Street Center (NMSC)........................... 60
Thumbtack.................................................... 62
COMMUNITIES THAT THINK SMALL AND WIN BIG
----------
WEDNESDAY, JUNE 20, 2018
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 11:03 a.m., in Room
2360, Rayburn House Office Building, Hon. Steve Chabot
[chairman of the Committee] presiding.
Present: Representatives Chabot, King, Luetkemeyer,
Marshall, Curtis, Velazquez, Lawson, Clarke, and Schneider.
Chairman CHABOT. Good morning.
The Committee will come to order. And we are supposed to
have votes in just a little while. So we are going to try to
get off as quickly as possible and on time and then move pretty
rapidly so we can get through as many of the testimonies as
possible here.
So, before I begin my opening statement, I would like to
thank Mr. Kelly, who is not with us right yet, but he is
Chairman of the Subcommittee on Investigations, Oversight, and
Regulations, for inviting me to participate in Monday's field
hearings in Southaven, Mississippi. I enjoyed the southern
hospitality and appreciated the opportunity to talk shop with
rural small business owners. And I am happy to report that our
Mississippi witnesses reflected the surging optimism measured
in the latest National Federation of Independent Business
survey.
Here at the Small Business Committee, we like to think that
small business owners' optimism is, at least in part, a result
of the hard work that we do here in this room on both sides of
the aisle, because this, as I always like to say, is a
Committee that really does work in a bipartisan fashion as much
as possible.
Of course, the Committee cannot take all the credit. The
historic progress made to reduce tax and regulatory burdens on
America's small businesses is a result of congressional action
and support from the White House as well and, obviously,
particularly for the hard work of small businesses all across
America. That is where the real effort is, and we are seeing
the result of that now.
We rely on local policymakers and community organizations
to implement reforms, develop innovative support systems, and
advocate for our Nation's 30.2 million small businesses. From
Southaven to Simi Valley, small businesses are creating more
jobs, reinvesting in their employees, updating new equipment,
and setting higher goals for growth. That doesn't mean we can
take our foot off the gas pedal. There is a lot more work to be
done.
This Committee, we are here today to highlight communities
that have developed thriving small business ecosystems. In your
community, you may see shops run by local artisans and farmers
and restauranteurs, but you probably won't see what is
happening behind the scenes. Every small business ecosystem
relies on a delicate balance of support and resources to
survive.
The creation of a healthy ecosystem requires significant
investment by all participants, small business owners, support
organizations, and policymakers. To be successful, each
ecosystem develops according to the unique needs of its
location. No two Main Streets are identical. Each community
capitalizes on its own unique offering.
Policymakers and support organizations, like the ones we
have on this panel, have developed innovative strategies,
resources, and measurements to ensure local small businesses
are thriving. Our witnesses will detail the investments
required for a business-friendly community. They will also
discuss the economic, social, and cultural impact of small
business investment.
I have observed this phenomenon in my district,
specifically on the revitalized Over-the-Rhine neighborhood.
And I would look forward to hearing more success stories from
our witnesses today, and I am grateful for their participation
here and their efforts back in their communities.
And I would now like to yield to the gentlelady, Ms.
Clarke, for a purpose of making an opening statement. The
Ranking Member, Ms. Velazquez, is not able to be with us right
now, but I think will be here later.
Ms. CLARKE. That is my understanding, Mr. Chairman.
And I thank you for yielding to our panelists. We want to
welcome you and your expert testimony here today.
Thank you, Mr. Chairman.
Our nation's 30 million small businesses play a critical
role in their local communities. However, starting a small
business isn't easy. Nine out of 10 startups fail because of a
multitude of obstacles that stand between an entrepreneur and a
successful business.
For startups to succeed, they need access to capital, a
solid business plan, and a strong workforce. Although SBA
offers some of these services nationally, local entrepreneurial
and small business development programs can provide tailor-made
solutions to fit the community.
Today, we have representatives from several municipalities
that are filling this gap and helping Main Street America grow.
These programs are set up around the country and offer a
variety of incentives and services that make starting and
growing a business easier. From finding a business location to
developing the skills of young workers, such services provide
the catalyst for small businesses to thrive.
Some provide financial incentives like specialized grants
and loans so businesses can hire more workers or expand work
space. In fact, our witness today, the New York City Department
of Small Business Services, is offering a loan program for
women and minority business owners to help traditionally
underserved portions of the community.
But they offer much more than just financial incentives.
Local organizations provide site selection services to help
firms maximize exposure to their target markets and identify
new customers. Through professional counseling, which can range
from pro bono legal assistance to business planning, innovators
can learn how to optimally run their operations for success.
Finally, we all know a business is only as strong as its
workforce. To that end, some localities have begun offering
grants and tax incentives for apprenticeships and on-the-job
training. This allows workers to gain valuable new skills so
businesses are better able to compete in the marketplace.
This hearing gives us the opportunity to analyze the
innovative ideas deployed by our witnesses and explore what
makes a town, city, or county a great place for small business.
It is my hope that we can establish a set of best practices for
these programs, which can be used by other municipalities and
future federal programs to stimulate small business growth.
Thank you all for being here today. I appreciate our
witnesses taking time from their busy schedules to join us.
And I yield back, Mr. Chairman.
Chairman CHABOT. Thank you very much. The gentlelady yields
back.
And if Committee members have opening statements, I would
ask they be submitted for the record.
And we will take just a moment to explain our rules
relative to timing. They are pretty simple. You get 5 minutes,
and then we get 5 minutes to ask questions. And there are some
lights to assist you there. The green light will be on for 4
minutes; the yellow light will come on and will be on for 1
minute; and then the red light will come on to let you know the
5 minutes is up. And if you could kind of stay within those
parameters, we would greatly appreciate it.
And I will--now we will go ahead and introduce our
distinguished panel here this morning. And I would like to
yield to the gentleman from Missouri, Mr. Luetkemeyer, who is
the Vice Chairman of this Committee, to introduce our first
witness.
Mr. LUETKEMEYER. Thank you, Mr. Chairman.
I am pleased to introduce today one of my constituents,
Greg Prestemon, who serves as the President and CEO of the
Economic Development Council of St. Charles, Missouri, where he
has worked to provide startup assistance, small business
financing, and business attraction and retention programs for
St. Charles County there in my Third Congressional District.
Mr. Prestemon has dedicated his career to making St.
Charles County the most attractive destination for
entrepreneurs and small businesses alike. Prior to coming to
St. Charles EDC, Mr. Prestemon was the Executive Director for
the Grinnell 2000 Foundation, where he directed a
multicommunity development program.
Previously, Mr. Prestemon worked as a professional economic
developer in New York. We won't hold that against him because
he has become Missourianized now. He is one of us. Mr.
Prestemon attended the University of Iowa, where he earned a
Bachelor of Arts in political science and government and a
subsequent master of arts degree in economic development with a
concentration in development finance.
Mr. Prestemon, thank you for being here. Always a pleasure
to see you. Welcome, Greg, and look forward to your testimony.
Chairman CHABOT. Thank you very much.
And our next witness will be Derek Miller, the newly
appointed President and CEO of the Salt Lake Chamber and
Downtown Alliance. Mr. Miller previously served as Chief of
Staff to Governor Gary Herbert and as Managing Director of the
Governor's Office of Economic Development under Governor John
Huntsman, Jr. He began his career in Washington, D.C., and
spent 3 years as a Legal Counsel to House Transportation and
Infrastructure Committee, and we thank you for your
participation.
Our third witness will be Ms. Vanessa Wagner, who serves as
Loudoun County's Small Business and Entrepreneurship Manager.
In this capacity, she is dedicated to supporting small
businesses and growing the entrepreneur ecosystem in the
county. She has more than 10 years of marketing and program
development experience with small business and international
organizations.
And we welcome you here as well, Ms. Wagner.
And I would now like to yield to the acting Ranking Member,
Ms. Clarke, for the purpose of introducing our fourth and final
witness.
Ms. CLARKE. Thank you, Mr. Chairman.
As Commissioner of the New York City Department of Small
Business Services, Mr. Greg Bishop is charged with running a
dynamic city agency focused on equity of opportunity, economic
self-sufficiency and mobility for New York City's diverse
communities. SBS actively connects New Yorkers to good jobs,
creates stronger businesses, and builds a thriving economy in
neighborhoods across the five boroughs.
A New York City native, Mr. Bishop began his career at the
agency in 2008 designing programs to make it easier for
businesses to start and grow and to recover from emergencies.
After a number of successful promotions, he was appointed
commissioner by Mayor Bill de Blasio in November of 2015.
Mr. Bishop holds a master's degree from Florida State
University, a BS from Florida A&M University, and he is also a
graduate of Harvard Kennedy School's Senior Executives in State
and Local Government Program. Thank you for being here today.
And on a side note, Mr. Prestemon, once a New Yorker,
always a New Yorker.
I yield back.
Chairman CHABOT. The gentlelady's comment will be stricken
from the record. No, just kidding. Just kidding. I am not a
judge here.
Mr. LUETKEMEYER. Thank you, Mr. Chairman.
Chairman CHABOT. And I am from Ohio. Yeah. But we
appreciate the sentiments.
And before we get to Mr. Prestemon, I would just remind
folks that we are going to have votes here shortly. If you hear
the buzzers go off, just ignore them, and we will try to get
through a number of these. We have 15 minutes to get over
there. So we will probably--even after that--and then it will
go off again 5 minutes later, and we may still go on, but
members will have time to get over and vote.
So, Mr. Prestemon, you are recognized for 5 minutes.
STATEMENTS OF GREG PRESTEMON, PRESIDENT & CEO, EDC BUSINESS &
COMMUNITY PARTNERS, ST. CHARLES, MO; DEREK MILLER, PRESIDENT &
CEO, SALT LAKE CHAMBER AND DOWNTOWN ALLIANCE, SALT LAKE CITY,
UT; VANESSA WAGNER, SMALL BUSINESS AND ENTREPRENEURSHIP
MANAGER, LOUDOUN COUNTY DEPARTMENT OF ECONOMIC DEVELOPMENT,
ASHBURN, VA; AND GREGG BISHOP, COMMISSIONER, NYC DEPARTMENT OF
SMALL BUSINESS SERVICES, NEW YORK, NY
STATEMENT OF GREG PRESTEMON
Mr. PRESTEMON. Thank you. Well, I very much appreciate this
opportunity. I am really honored to be here.
Chairman CHABOT. Could you pull the mike up a little bit?
It will----
Mr. PRESTEMON. And I am proud of having spent a little time
in New York, so especially in August, which is much nicer.
I represent a 30-member board of directors that is a true
public/private partnership. We have 10 local government
representatives and 20 private sector folks. So--and I am
representing a county that has about 400,000 people, somewhere
north of 9,000 small businesses.
So we have a really simple mission as far as I am
concerned: It is to help businesses and the communities in our
county to succeed and grow, you know. And ever since the EDC's
inception in 1992, we have concentrated the lion's share of our
resources on small business development, for sure.
We do this through two main flagship programs. We are what
is called a Certified Development Company, or CDC, so we
operate the 504 Loan Program, which is ultimately under your
jurisdiction here, and we are a pretty big player in that. We
have a portfolio today of about 120 million and, you know,
almost 300 loans from all across the State of Missouri.
But we are also an important participant in the Missouri--
University of Missouri Small Business Technology Development
Center Program, which is a mouthful. While our local impacts
have been large, I think the statewide impacts are even more
important, I think are stunning. From 2015 to 2017, the
statewide network of SBTDCs, which are very thinly staffed, by
the way, have helped generate over $1 billion in annual sales
for those companies that they served and north of $1 billion in
procurement awards, which I know is something that is close to
the heart of this Committee; that is the PTAC program, which is
part of that SBDC network.
But enough about the numbers. I want to talk about the
principles that we use at the EDC, and I think you will find
some commonality between what we do and what the other speakers
were talking about. I think that we have been successful in
part because we believe that all small businesses are
important. We think the mom-and-pop retailers or the auto
repair shop is just as important as the IT technology startup.
We want those too, but we have had to kind of serve the
companies that come in front of us so we are market-oriented.
So our approach is not to target a particular type of
business but instead to help what the market provides. So all
small business is important, is our main principle. The second
one is that we strive to have all of our programs--and there
are many--kind of be in alignment with each other. Even in a
small organization, it is easier for silos to develop.
So, for example, whenever we have a 504 borrower, we try
very hard to make sure that they are SBDC clients as well and
vice versa. You know, that only makes sense because 504
borrowers need to repay federally guaranteed loans, and so we
want them to be healthy for that reason, if no other. And then
all SBDC clients, you hope, will get to a critical mass where
they are in need of long-term fixed-rate financing that a 504
program provides. So that alignment, I think, is important. And
I think that we are somewhat unique in doing that in terms of
the other CDCs around the United States.
Second thing, we are trying to strive for our programs to
be community sensitive. And I will tell you a story. About 2
years ago, a company called the Good News Brewing came to--an
entrepreneur came to us with an idea to set up a microbrewery
in an area in St. Charles County that would not be considered
to be trendy or chic and maybe out of favor.
And through that process, we found that there was indeed a
market. And fast forward, they now have a thriving microbrewery
business. Now they have come back to us for a second idea,
again in an area that is not particularly in favor, to open a
really kind of high-end coffee shop. You know, it is something
that--and this one will work too.
That kind of synergy between the best of the SBDC and the
best of the financing programs will be--you know, has really
borne fruit, and I think it potentially could be a game changer
for this kind of older area of St. Charles County. And I think
that story you could find all across the United States, and I
know I could tell you dozens of them, but that would be an
example.
And, finally, we are able to do this because of strong
partnerships. I mean, the--certainly the EDC made a difference
in this particular company. But, you know, between the
University of Missouri, obviously the SBA, the city of
O'Fallon, St. Charles County government, all of them had to
coalesce around the goal of helping this individual small
business and other businesses just like them.
No one participant had all the ingredients to get this job
done, but together they did. And this is a success story, and
it is not a bad day's work for all of the people involved in
this kind of thing. So, on behalf of businesses and communities
in St. Charles County, I want to give you thanks. Zero, phew.
Chairman CHABOT. Right on the dot. Thank you very much. We
appreciate it.
Mr. PRESTEMON. Sure.
Chairman CHABOT. Mr. Miller, you are recognized for 5
minutes.
STATEMENT OF DEREK MILLER
Mr. MILLER. Chairman Chabot, Ms. Clarke, and members of the
Committee, thank you for the invitation to speak to you today
about Utah's thriving small business ecosystem.
Utah's economy is one of the best in the nation. Utah ranks
number one in the U.S. for job growth and enjoys consistently
low unemployment. I am proud to say that small business is at
the heart of this success, with over 277,000 small businesses
that make up 99 percent of Utah companies and 57 percent of
total employees.
Now, you may be asking yourself, as a visiting Chinese
diplomat asked me recently, how did a state I have never heard
of become the fasting growing economy in the United States of
America? I want to share with you what I shared with this
diplomat, four areas that I believe are fundamental to Utah's
economic success.
The first is a growing and educated workforce. Any business
will tell you, if they can't find good people, then nothing
else matters. Utah's public education system has a strong
partnership with our business community to identify and fill
gaps in our workforce. One way this collaboration is evident is
through the Talent-Ready Utah Initiative, which includes
technical training for students throughout high school so they
graduate not only with a degree but with a high-wage, high-
demand job.
The second factor is taxes and regulation. Utah benefits
economically from our flat 5 percent personal and corporate tax
rate. Low taxes are important to small businesses, but equally
important is a stable tax rate. Utah's tax rate has not risen
in nearly 20 years. In 2011, the state conducted one of the
most thorough regulatory reviews in the nation. The experience
that gave rise to this reform was a small business owner who
wondered aloud, why can I not fax or email my license renewal
instead of having to mail it? The question spurred a regulation
review, caused us to look at the regulation, and sure enough,
the rule only allowed for mail--no email, no fax, and certainly
no online renewal. A closer inspection showed that the rule was
written in 1973. Based on this experience, Governor Herbert
asked each member of his cabinet to review every state
regulation and asked two simple questions: Does the rule impact
business, and what is the public purpose? In nearly 400
instances, there was no good answer to that second question,
and so those rules were either modified or eliminated.
The third factor is incentives. Incentivizing business
creation and sustainable growth is key to Utah's thriving small
business ecosystem. There are several State programs that
assist new and existing businesses. One example is the Utah
Science, Technology, and Research, or USTAR, Initiative that
specifically assists startup and early stage tech companies,
like ENVE Composites, a small business that designs and
manufactures carbon fiber bicycle wheels and components.
The final area is international trade. It may surprise you
to find out how important trade is to an inland state like
Utah. Trade is not killing Utah; in fact, in Utah, Utah is
killing it when it comes to trade. Let me share with you a
story that illustrates the point. Butcher's Bunches makes all-
natural fruit preserves. The Butcher family began selling their
product at a farmers' market in Park City to tourists from
around the world. They began asking Liz Butcher how they could
buy her jam at their home. Liz had never considered selling
outside of the United States, but the encouragement from her
customers gave her the confidence to try, and today she sells
to Japan, the U.K., France, Australia, Canada, and Dubai.
These are all ways, I believe, Utah is doing it right when
it comes to supporting small businesses, but that does not mean
that those companies don't face challenges. In fact, in some
rural areas of our state, the economic story is very different
from what I have just described.
To address this, Governor Herbert set a goal to create
25,000 jobs in 25 rural counties. I was grateful to lead the
25K jobs tour that kicked off this goal. Over 20 business
service providers visited the 25 rural counties to connect
local businesses and job seekers with available tools and
resources.
Based on my experience on the 25K jobs tour, may I just
mention what I think is the most important element of Utah's
economic success: That is our people. Utah's small business
owners, whether in urban Salt Lake City or rural Salina,
epitomize our state's motto of industry. They are good,
hardworking people with a strong entrepreneurial spirit. Utah's
pioneering heritage is alive and well across the state from
Grouse Creek to Montezuma Creek. Thank you again for the
opportunity.
Chairman CHABOT. Thank you very much.
And the buzzer just went off. We have 15 minutes so we
should be able to get through the final two, if they keep on
their 5 minutes as these two did.
So, Ms. Wagner, you are recognized for 5 minutes.
STATEMENT OF VANESSA WAGNER
Ms. WAGNER. Great. Thank you.
I would like to begin by thanking the Congressional Small
Business Committee for inviting me to testify today on behalf
of Loudoun County Economic Development and our small business
partners.
As a Small Business Entrepreneurship Manager, I am charged
with building an entrepreneurial ecosystem to ensure we have
the programs, people, and places so that our small businesses
can thrive. While my focus is on technology startups, the
programs we support help our Main Street businesses as well.
So one of the things I would like to urge today is building
an ecosystem around your community's unique advantages will
prove more sustainable and impactful than placing a trend in
the middle of your city.
What I learned in my experience--and I will admit, when I
started as a stakeholder, I wanted to hit all the buzzwords. I
wanted to find out all of the new coworking spaces, the venture
capitalists. I chased around all of the pitch events. What I
quickly learned in my role is that we already had the resources
we need in Loudoun County to be successful.
And one of those biggest resources I encourage people to
look at and identify is the existing businesses within their
community. By utilizing a mix of your legacy businesses, your
large giants, in addition to your small, growing companies,
that is where you are going to find the talent and the
experience as well as the inspiration for your next generation
of businesses.
I want to start by talking about some of the giants in your
community or the legacy businesses that could help support an
entrepreneurial ecosystem. In Loudoun County and the D.C.
region, one of the most impactful organizations in our history
remains America Online, or AOL. From 1994 through its growth
into the 21st century, AOL had a giant impact on our region.
Not only did they develop the region's technology workforce but
also the spirit of innovation.
When AOL moved its headquarters from Dulles to New York in
2007, it continued to have an impact on our region. It left
behind a wake of tech talent but also executives that later
became future founders as well as angel and institutional
investors for our next generation.
Even after the presence of AOL began to slow down, the
company continued to have an impact. They worked to create an
incubator within their walls, allowing new startups to come
inside, utilize the existing infrastructure, the talent that
they had, the human resources, and today, our region is
benefiting from the results of these efforts. In Loudoun County
in particular, that has inspired a new wave of startups,
companies like MilAdvisor, ThreatQuotient, ParkMyCloud, X-Mode
Social, and many others in the area.
As the Entrepreneurship Manager in Loudoun, I didn't seek
to change what was working with this legacy business or their
impact; rather, it was my role to promote this opportunity to
the right startups. This could be as simple as an email
introduction or sponsoring events to be hosted at the facility
so that new entrepreneurs could be inspired by the potential.
These relationships--as Fishbowl Labs did end up leaving
Loudoun County, the relationships forged still continued to
help our community because when those companies were suddenly
finding themselves without a home or an incubator, we were able
to work with another entrepreneur in the community to place
them in a new building, Terminal 68. At that time, one of the
companies, X-Mode Social, only had 10 employees, but through
the investment of time made from the entrepreneurs and the
talent already in our community, that company had 10 employees
back in August and is now pushing 40. And that is utilizing our
legacy resources.
But relying on the largest employers is providing a
disservice to your entrepreneurs. Facilitating introductions
and relationships to your growing companies and early stage
entrepreneurs should be included in any community strategy.
Loudoun small business partners leverage growing firms such as
Omnilert, Cofense, Telos, K2M, amongst others. The advantage of
working with this new cohort of technology firms is that they
can provide recent examples of challenges and solutions faced
in building their business.
Our growth firms are invested in the region because, as
they say, all ships rise with the tide. A community has to seek
unique ways to make these interactions. For us in Loudoun,
leveraging our chamber in the Loudoun Technology Coalition is a
natural way.
For example, our cybersecurity firm Telos, one of the
fastest growing cyber firms in the country, they sponsor the
tech coalition and work to enhance the programming there. Just
last week, we had three executive members from Telos sit with
our small startups, our entrepreneurs, our solopreneurs to talk
about trends in cyber. And when I left, conversations were
still going. So the results of these interactions is still yet
to be known.
So, when entrepreneurship catalysts are seeking to build
onto their entrepreneurial ecosystems or their resources, they
don't need to look much further than their existing businesses.
This is where you are going to find strong assets for
mentorship, experience, and support in building your next
generation of entrepreneurs.
My testimony focuses on examples related to technology
enabled firms, but if I had more time, I could easily sit here
and give you examples of how this helped our rural community,
our craft beverage industry, and many more. One size does not
fit all for entrepreneurship, and I encourage you to look at
your existing resources first. Thank you.
Chairman CHABOT. Thank you very much.
Mr. Bishop, you are recognized for 5 minutes.
STATEMENT OF GREGG BISHOP
Mr. BISHOP. Thank you. Good morning, Chairman Chabot, and
sitting in for Ranking Member Velazquez Representative Clarke,
and other members of the House Small Business Committee. My
name is Greg Bishop, and I am the Commissioner of the New York
City Department of Small Business Services. I thank you for
this opportunity to testify before the Committee and share some
of the great work and best practices that we are seeing in New
York City.
At SBS, we aim to unlock economic potential and create
economic security for all New Yorkers by connecting them to
quality jobs, building stronger businesses, and fostering
thriving neighborhoods. Unlike other city agencies that work
with businesses, we do not enforce regulations but rather
provide the necessary services to help them start, operate, and
grow.
We provide services to New York City's 230,000 small
businesses through our network of seven Business Solution
Centers and eight industrial business service providers. At
SBS, we know that small businesses are essential to the local
economy and character of our neighborhoods. Despite the fact
that small businesses face challenges due to unprecedented
growth New York City has seen in recent years, our small
businesses continue to grow.
Over the last 10 years, the number of businesses in New
York City have increased by 10 percent according to the U.S.
Census County Business Patterns report. That is why I believe
it is critical for municipalities to incorporate small
businesses into their economic development strategy because it
not only helps small businesses grow but also provides their
city with good jobs, vibrant neighborhoods, and a better
quality of life.
Many small businesses struggle to access credit so SBS
provides free financing services through our business centers.
We work regularly with more than 40 different lenders, the
majority of which are community development financial
institutions and other financial institutions. CDFIs play a
critical role in our efforts to providing financing to
businesses that are not able to access traditional bank
financing.
Since the start of this administration, SBS has connected
approximately 1,800 businesses to over $155 million in
financing. As we see businesses grow in New York City, the city
has also implemented necessary regulations to worker
protections. Regulations are important to ensure health and
public safety, but they should be fair and not overly
burdensome to small business owners.
In 2015, the mayor launched Small Business First, a major
multiagency effort to reduce the regulatory burden and help
businesses understand and comply with city regulations. To make
it easier, we built a state-of-the-art NYC business portal to
serve as a central repository of key business information and a
single place for business interactions with the city.
On the NYC Business Portal, a business owner can create an
account, link their licenses, permits, inspections, and
violations from city agencies onto one dashboard. In 2017,
there were more than 1 million visits to the NYC Business
Portal.
A key focus of our work is ensuring our program is
accessible to all New Yorkers, including women entrepreneurs.
Through extensive research and outreach, we developed WE NYC, a
series of programs to address the most common challenges women
entrepreneurs face.
Most recently, we launched WE Fund Crowd, a city-led
crowdfunding program that helps women entrepreneurs access
affordable capital and start businesses. WE NYC has been a
great success and other cities have taken notice, with Boston
recently launching their own women entrepreneurs Boston program
modeled on WE NYC.
Growing up with my grandmother in Grenada, who supported
our household as a women entrepreneur, I came to understand
firsthand that business ownerships can empower family and
support greater economic opportunity for future generations.
With approximately 6 out of 10 New Yorkers being either
immigrants or children of immigrants and nearly half of small
businesses owned by immigrant entrepreneurs, New York City has
always been and will continue to be a city of immigrants.
To that end, SBS created Building Your Business in New York
City, a guide for immigrant entrepreneurs which is available in
seven languages. Through the use of the city's purchasing
power, the New York City Minority and Women-owned Business
Enterprise Program aims to support the growth of minority and
women-owned businesses and ensure our vendors reflect the
diversity of our city.
At SBS, we provide essential capacity-building services and
technical assistance so businesses can compete for and execute
government contracts. The Procurement Technical Assistance
Center, funded in part by the Department of Defense and
administered by the Defense Logistics Agency, offers critical
support to small businesses.
We believe that in order for small businesses to gain and
sustain growth, they must be prepared to take advantage of
multiple revenue streams, particularly minority, women,
veteran, and service-disabled veteran-owned businesses that
have historically not had access to government contracting
opportunities.
As you can see, New York City has made small businesses a
priority, and as a result, we have seen them flourish. We hope
municipalities from across the country use New York City as a
model and replicate our successes by recognizing the strength
and diversity in our city and helping immigrant women, black
entrepreneurs, and other entrepreneurs of color to grow
thriving businesses and careers. We are ensuring every New
Yorker has access to economic security while growing our city's
economy.
Thank you for the opportunity to share the importance of
small businesses in New York City and cities across the nation.
I look forward to your questions.
Chairman CHABOT. Thank you very much. We appreciate all the
witnesses for staying right on time. We appreciate it.
We are going to be in recess for a little while. We have
votes. And then we will be back here to follow up with
questions. So I would encourage all members to come back as
quickly as they can after votes, and we are in recess.
[Recess.]
Chairman CHABOT. The Committee will come back to order, and
we will hopefully be joined by some of our colleagues here
shortly.
And we have been joined by our Ranking Member, the real
Ranking Member, Ms. Velazquez, although Ms. Clarke did a fine
job filling in for her.
So I recognize myself for 5 minutes. My first question, Mr.
Prestemon, you had mentioned that one of the loan programs that
you deal with in your capacity is the 504 Loan Program. And,
you know, we hear a lot about the 7(a) Loan Programs; the 504,
not quite as known by the public.
And I know that--we have Hamilton County Development
Corporation back in my area in Cincinnati, Ohio, and they do
use that program a lot. Could you kind of tell folks who may
not be familiar with it how it works and how businesses can
take advantage of it.
Mr. PRESTEMON. Sure. The 504 Program is a long-term, fixed-
rate, fixed-asset program, so, you know, typically, 20-year
amortization, and it is always done in partnership with a bank.
So, basically, the bank lends at the end of the process 50
percent of the proceeds, and we come in as the agents for the
SBA to underwrite the other 40 percent and then the borrower
would typically have a 10-percent equity.
Chairman CHABOT. Okay. And in general, how would a small
business qualify for that program or try to take advantage of
it?
Mr. PRESTEMON. Yeah. Well, they need to be--first of all,
they need to have a reasonable cash flow, so they need--it is
underwritten to standards very similar to what any bank would
underwrite it to, so they have to be able to show they can
cover debt service. And they have to be financing a fixed
asset, so land, building, machinery, and equipment. But there
is--virtually any kind of business can be financed through it
as long as it has a fixed asset that would be financed.
Chairman CHABOT. Okay. Thank you very much.
Mr. Miller, I will turn to you next. You had mentioned in
your testimony--I thought it was interesting; you mentioned in
particular a program. I think your Governor in your state, you
had gotten rid of a bunch of regulations which, you know, no
longer really made any sense. How important is it for us at the
federal level and also for local communities to get rid of
regulations that really don't have any real purpose anymore?
Mr. MILLER. Thank you, Mr. Chairman.
I recognize that sometimes when we talk about regulatory
reform, that can be viewed as a political issue or even a
partisan issue, but I don't believe it needs to be. And the
reason I shared the story that I did about the not being able
to email or fax, I think, is a good illustration of the many
regulations, at least in Utah, that we found were on the books.
No one had ever gone back and looked at it again, you know. Of
course, a law that was written in 1973 wouldn't talk about
email, wouldn't even talk about fax, and certainly wouldn't
talk about online.
But we like to say in Utah that regulations are like weeds
in the ditch. They just build up, and they impede the flow of
commerce, unless you go back on a regular basis and look at
what has been outdated, look at what doesn't make sense
anymore, and look at what needs to be updated, and certainly,
when we talk to small businesses in Utah, what they tell us--
they were grateful for the regulatory reform on the State
level, by the way--but what they tell us would not surprise
you, which is that regulatory review needs to happen on a
Federal level as well.
Chairman CHABOT. Thank you very much.
Ms. Wagner, I will turn to you next. How do you market your
community, like Loudoun County and the area, to prospective
businesses in the areas--well, when it comes to such criteria
as anticipated operating costs, operating conditions, quality
of life, those types of things, how do you--you know, how do
you go about marketing those when you are trying to get folks--
attract people to your community?
Ms. WAGNER. Sure. Thank you, Mr. Chairman, for the
question.
In Loudoun County, we have a team of over 20 members that
represent different industry sectors, those from agriculture,
aviation, transportation, cybersecurity, health information,
and those individuals go out and identify opportunities in
conjunction with our marketing team and strategic initiatives
team, companies from across the globe really to identify
companies that might be looking at new office space, expansion,
and making sure that we have solutions to their problems or
identify opportunities that fit that particular industry
cluster.
Chairman CHABOT. Okay. Thank you very much.
And, Mr. Bishop, I will turn to you with the remaining time
that I have. You are from New York City, and I represent the
city of Cincinnati, most of it, as well as the surrounding
area. Are there advantages and disadvantages that urban areas
like your community in New York has, say, compared to the State
of Utah or the State of Mississippi when it comes to marketing
and arguing, you know, the good things you have versus the
challenges? What are kind of the advantages or disadvantages
that you like to key in on when you are talking about an urban
area like New York?
Mr. BISHOP. Yeah. So thank you for the question, Mr. Chair.
So I think New York has--one of the advantages, of course, we
are a global city. And certainly there is a diversity of a
consumer base for a small business. There is certainly a number
of resources that small businesses can tap into, not only in a
local level but on the federal level in terms of actually
helping grow their business.
I think that also leads to the disadvantage in the fact
that there is a lot of price pressures, and we may not be as
forgiven in terms of, if you do not have a solid plan or you
are not sure of how to actually grow your business, you know,
in an urban area, where you may be able to--you may not be able
to recover as quickly if you are in a rural area, for example.
There is a lot more competition.
So what we do is we really try to make sure that small
business owners are equipped with the necessary tools, not only
to help them plan out their business but grow their business,
but also we provide a lot more resources for some of the things
that business owners may not know what they need to know.
Chairman CHABOT. Thank you very much. My time has expired.
The Ranking Member, Ms. Velazquez, is recognized for 5
minutes.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
And, Mr. Bishop, thank you for sharing--being able to come
here today and share your insights as to----
Mr. BISHOP. Thank you.
Ms. VELAZQUEZ.--how can we improve small businesses
opportunities.
I would like for you to talk to us about your agency's
initiatives that is undertaken to help immigrants succeed, and
what are the economic benefits in doing so?
Mr. BISHOP. So, as I mentioned in my testimony, New York
City is an immigrant-rich city, and certainly, when you look at
our 230,000 small businesses the assumption is that the larger
businesses are actually the economic drivers of the city in
terms of the workforce, but it is actually our small
businesses.
Our small businesses employ over 3.9 million New Yorkers,
and over 52 percent of those small businesses are owned by a
foreign-born New Yorker. So it is essential for us to connect
with immigrant communities. It is essential for us to provide
resources to immigrant communities.
So we actually have worked not only in developing programs;
we have worked with the private sector as well in terms of
funding some of these programs. So we work with local
organizations to tap into some of those communities, to connect
to our resources because, most likely, entrepreneurship is
something that immigrants would veer to, and certainly, if they
are creating businesses, then they are creating jobs within the
community. So that is important to New York City.
Ms. VELAZQUEZ. Thank you.
One of my top priorities in this Committee as the Ranking
Member is helping the traditionally underserved communities
access capital. What can you share with us in the federal
government that you are doing in New York to help women and
minority communities access capital.
Mr. BISHOP. Right. So thank you again for that question.
One of the things that we are doing--particularly when we did
our outreach to women entrepreneurs, we found out that women
entrepreneurs face other barriers than their male
counterparts--so we built out a program called WE NYC
specifically for women entrepreneurs that not only covers
access to capital. We have teamed up with an organization
called Kiva where the city is now putting in the first 10
percent of their loan request. That is up to $10,000. We also
are putting together resources for women entrepreneurs to
connect with other successful women entrepreneurs. Mentorship
is one of the biggest things that we found that women
entrepreneurs were looking for. Access to capital was the
other. And then some of my colleagues have talked about in
terms of recruiting and finding the right workers.
In terms of helping minority business owners, the city of
New York is using its purchasing power. We spend anywhere
between $12 billion and $13 billion a year to run the city, and
we want to make sure that a percentage of that actually
connects to small business, especially minority and women-owned
businesses.
But access to capital is an issue for minority
entrepreneurs. So we actually created a $10 million fund where
we--business owners can borrow up to $.5 million if they have a
city contract. So that helps that business not only mobilize on
the contract but build their credit to then become a bank-
worthy customer.
Ms. VELAZQUEZ. Thank you.
Mr. Prestemon, the gender wage gap is an issue across the
country. It is my understanding that, in St. Charles County,
men earn an average of 1.4 times more than women. Are there
ways your organization can incentivize businesses to close that
gap?
Mr. PRESTEMON. Oh, boy. I am not familiar with that
statistic specifically. I can tell you that I am not--I would
say that about 40 percent of the entrepreneurs that we work
with are women-owned businesses. So women are certainly active
participants in the ecosystem, the entrepreneurship ecosystem
of St. Charles County as well as in the St. Louis area.
But I think, you know, the wage gap, it is kind of above my
pay grade in terms of----
Ms. VELAZQUEZ. Sure.
Mr. PRESTEMON.--our ability. We don't have a policy-setting
role.
Ms. VELAZQUEZ. Okay. So I am going to give you an easy one.
Mr. PRESTEMON. Thank you.
Ms. VELAZQUEZ. So the United States is losing manufacturing
jobs to outsourcing every day. However, St. Charles County's
top employer is the manufacturing sector----
Mr. PRESTEMON. Right.
Ms. VELAZQUEZ.--accounting for 26,000 jobs. What can the
federal government and other municipalities learn from your
ability to attract manufacturing jobs?
Mr. PRESTEMON. Well, although I was--I can't take credit
for it from the EDC standpoint, I think that we have a vibrant
workforce and a workforce development system that is working
well. So our community college has been actively engaged with
training and retraining workers.
We were very fortunate that General Motors, even in the
aftermath of the downturn in 2007 and 2008, ended up expanding
in St. Charles County, and that has driven a good portion of
those jobs based in St. Charles County. Manufacturing is a big
targeted sector for sure, and we are seeing successes all
around us.
Ms. VELAZQUEZ. Thank you.
I yield back.
Chairman CHABOT. The gentlelady yields back.
The gentleman from Utah, Mr. Curtis, is recognized for 5
minutes.
Mr. CURTIS. Thank you, Mr. Chairman and the Ranking Member.
It is a delight for me to be here.
I am grateful for all four witnesses, but I will give you
some bias that, Mr. Derek Miller from Utah, particularly
pleased to be here with you. Thanks to all of you for making
this trip, and, Derek, thanks for coming.
I don't think it would be--hopefully, Mr. Chairman, it
wouldn't be out of line if I gave a shout-out to Mr. Miller's
family who has accompanied him on this trip and is here with us
today. Thank you for joining us.
Mr. Miller, you have served as a CEO for the Salt Lake
Chamber. You are serving now in that role. You have served as a
CEO for the World Trade Center. You were the Chief of Staff to
the Governor of our State. You have spent some time back here.
Thank you for bringing all those qualifications with you today
to answer some of these questions.
It makes me really proud to come from Utah where we are
doing so many things right, but we need to continue to improve,
especially for our small businesses. We are really proud of the
work we have done with deregulation. Could you speak to how
important it is that we don't overregulate particularly our
small businesses, and, in addition, what else can we be doing
here in Washington for our small businesses?
Mr. MILLER. Thank you, Mr. Curtis. It is great to be here
with you and the other members of the Committee. And I shared
the story about the email already, and I think there may be
some who would think, you know, come on, that is a small thing,
you know, being able to email a business license instead of
having to send it by U.S. Postal Service. And it is true. It is
a small thing.
But I guess the point that I want to make is that small
things matter a lot to small businesses. Small businesses bear
a disproportionate share of the burden when it comes to
regulations because often they are either a family-owned
business or a sole proprietor. They don't have resources. They
don't have time to hire an army of lawyers to go out and study
this stuff. They don't have the resources or the time to have
compliance officers in their business. They are just working
hard every single day to try to be a successful business, live
the American Dream for themselves and their family.
And so you asked the question, what could the federal
government do? I think it would be a great place to start by
doing what we did in Utah, which is to look at those
regulations. It doesn't have to be political. It doesn't have
to be partisan. But those that are just simply outdated, those
small things add up to be a very large burden to our small
businesses.
Mr. CURTIS. I appreciate you pointing that out. Sometimes
we think, well, they can just send that off to another
department to have it done, right, and that is usually----
Mr. MILLER. And they are the other department.
Mr. CURTIS. They are the other department.
We are experiencing an unusual economy in Utah and have for
a number of years. Your unemployment in the Salt Lake Valley is
3 percent or maybe slightly less than 3 percent and in Utah
County. A lot of my district is rural, and in some places, we
are in double-digit unemployment.
Can you address your thoughts on what can we do and how can
we team with you and local leaders to help the rural economy
and the rural small business owners.
Mr. MILLER. Sure. Thank you for that question.
So, when we went out on our 25K Jobs Tour, we discovered a
couple of things. The first one is we have some parts of our
state where the greatest challenge for the business is finding
qualified workforce. That is their number one top challenge.
Yet we go out to some of the rural counties in our state,
and their greatest challenge is finding jobs. Okay, well, you
know, I don't claim to be a genius, but I can at least add two
and two. And when you do put two and two together what you
realize is that there are opportunities, especially in today's
economy with so many of the tech businesses that you represent
in your district, Congressman, who they have jobs that don't
need to be located at headquarters, whatever headquarters
means.
There is an opportunity to take those jobs, either by
telecommuting or other technology, so that we are leading an
effort right now that is part of Governor Herbert's 25,000 jobs
goal to challenge our businesses that are part of the Salt Lake
Chamber, challenge them to do a thorough review of the jobs
that they currently have unfilled to identify which of those
jobs don't need to be located along the Wasatch Front or our
urban core, and then we will help them connect with the local
Chambers of Commerce and work with them to match the unfilled
job with the person in those rural communities who is looking
for a job.
Mr. CURTIS. I hope you will consider me and my colleagues
partners in this, whether it is nothing more than the bully
pulpit or facilitating or work that we can actually do here,
but I definitely want to be a partner in that goal. It is a
great goal.
Lastly, you described in your testimony that trade is not
hurting Utah but actually helping. Could you elaborate on that
and talk about why and how that is so important in the State of
Utah?
Mr. MILLER. Sure. Utah, as I mentioned, is a trade State.
If we were only selling to our 3 million citizens, we would not
be seeing the economic success that we are. Nevertheless, we
recognize that free trade is good, but it has to be fair trade.
So we believe that, and we believe that Congress also ought to
assert its role in making sure that, for example, NAFTA is
modernized. If we are going to pull out of other trade
agreements, like the TPP or the TTIP, then let's put something
in its place.
Our small businesses need rules-based trading. Again, they
don't have the opportunity to go out and make those deals on
their own. They look to the U.S. Government. They look to you,
Members of Congress, to go establish their rules for them that
will give them the predictability and the stability they will
need to continue to be successful.
Mr. CURTIS. Thank you.
I am out of time, Mr. Chairman, but I would love just to
underline that predictability that they are looking for that we
need to give them. Thank you very much.
Chairman CHABOT. Thank you very much. The gentleman's time
has expired.
And we are going to go briefly into a second round. We had
votes, as you know, that interrupted this, and unfortunately,
many of our members had other things they then had to go to. We
usually don't have votes in the morning that interrupt us, but
we had a lot of business this week that we had to take care
of--still do--so I apologize for that.
So I just have one question that I will throw out, and
anyone who would like to take it can, or if you want to go down
the line, we can do that too. The question is this: Many
communities use geographic targeted economic development
programs to create jobs and attract investment.
What role do small businesses play in neighborhood
revitalization plans, and have you ever--are there any
socioeconomic returns that you have observed over the years in
this area? So whoever wants to tackle that is--you are welcome.
Ms. Wagner.
Ms. WAGNER. Sure. When we talk about geographic targeted
plans, one of the opportunities we take advantage of in Loudoun
County is we do have a designated HUBZone program. And we work
very hard to foster our government contractors that are in that
sector that are small businesses by providing resources through
our Small Business Development Center, partnered with George
Mason University's Procurement Technical Assistance Program, as
well as with our Loudoun Chamber's Government Contracting
Initiative because helping those HUBZone companies, they are
hiring within the HUBZone, which is historically an
underutilized business district, for those not familiar with
that, and we are creating jobs in that community by supporting
the entrepreneurs in our HUBZone in Leesburg, Virginia.
Chairman CHABOT. Very good. Thank you very much.
Any of the other panel members like to address that? Mr.
Miller.
Mr. MILLER. Thank you, Mr. Chairman.
You are probably thinking I haven't bragged on Utah enough.
So I will just take another moment. We have great geographic
assets from our Rocky Mountains in the northern part of the
state to our Red Rock in the south, and we use that to our
advantage in a couple of ways: The first one, of course, is the
quality of life that it presents there.
And when I talked earlier about the need that we have for
talented workforce, you can believe that we use that quality of
life to market the heck out of Utah and attract talent from all
around the world to come and work in our businesses.
We are the fastest growing state in the nation, and most
people think that comes from a high birthrate, but that is only
half the story. That is something we do in Utah very well, by
the way, is have families. But half of our population growth
comes from net in-migration, people moving into Utah.
And the second way that we use that is in the economic
clusters that we have identified where we believe we have a
competitive advantage, and one of those is our outdoor
recreation industry. So we have not just the talented workforce
to build all of the equipment that can be used to recreate
outdoors, but we also have the playground to go out and test
the equipment.
Chairman CHABOT. Very good. Thank you very much.
Any of the others? Yes, Mr. Bishop.
Mr. BISHOP. So one of the things--I can't let the gentleman
from Utah show up New York State, New York City. But one of the
things you will hear consistently is that, you know, small
businesses are essential to the success of all our communities.
Certainly, in New York, we focus--because, you know, in
Brooklyn alone, we have 3.2 million people--the city as a whole
has 8.9--we have to make sure that small businesses understand
some of the neighborhoods that they are operating in because
they are just unique and distinct.
We do have industrial business zones because we want to
focus on maintaining the manufacturing businesses that are in
New York City. So the businesses within those areas also have
special services and incentives to remain in those areas to
provide the much-needed jobs.
And we really work to integrate the work that is happening
in those manufacturing, because manufacturing is changing--the
type of manufacturing is changing to make sure that we--our
educational system actually keeps up with that. So there is a
lot of connectivity between not only small businesses and the
different neighborhoods of New York City but also our academic
institutions to make sure, as you have heard all of us say,
that our workforce is prepared for the future of tomorrow.
Chairman CHABOT. Thank you very much.
Mr. Prestemon, anything you want to add?
Mr. PRESTEMON. I would just add the--I think even in a
place like St. Charles County that is, you know, very, very
prosperous, there are areas of the county that are not doing as
well. And, you know, I think that the illustration that I made
with this Good News Brewing company was that, first of all,
there was indeed a market but that it had to be discovered. It
wouldn't have been obvious. So I think, you know, increasing
the sophistication of the entrepreneur in and of itself is a
good thing.
And then--and there is a synergy that takes place once
investments start. You know, disinvestment cycles are tough to
reverse, and that is--but they, you know, require, I would say,
coordinated public investment in roads and that kind of thing.
But also you have to find that entrepreneur that has that fire
in his or her belly and just won't be denied, and that is what
we found in this case, so----
Chairman CHABOT. Thank you very much. I have got 10 seconds
left. So I would just mention that you had mentioned
microbreweries and how successful.
Mr. PRESTEMON. Yeah.
Chairman CHABOT. We have had a slew of them in Cincinnati
that are doing very well----
Mr. PRESTEMON. Oh, yeah.
Chairman CHABOT.--and so it is a phenomenon this happened
all over the country. America like its beer apparently.
Mr. PRESTEMON. Apparently, yeah. And coffee.
Chairman CHABOT. Yeah. Coffee as well. That is right.
And the gentleman from Utah is recognized for 5 minutes,
and it will be our last questioner here today.
Mr. CURTIS. Thank you. Not that we are tag teaming on how
great Utah is, but we don't do a lot of beer and coffee, but we
have got great ice cream. You know, I was a small business
owner before, and I can't tell you how many times I said to
myself and my partners, why don't they get this in Washington,
right?
So I would like to give all four of you a moment to say
what is it that you would like to express that you talk about
around the coffee and saying, ``I wish in Washington they got
this one thing,'' in New York, in Virginia, in Missouri, in
Utah. Is there something that you would like me and my
colleagues to hear? And let's start with Mr. Miller from Utah.
Mr. MILLER. Thank you, Mr. Curtis.
So we have talked about regulatory reform, and we have
talked about trade deals. Let me hit what I think is the
other--the big three, and that is immigration reform. That is a
hot topic in Washington, D.C., right now. It is important to
Utah. As you know, as someone who owned a business in Utah, we
need those qualified workers. We need them to be part of not
just our agricultural businesses, but we need them to be part
of our tech businesses, our manufacturing businesses, all up
and down the line.
Utah was a state, as you know, that was founded by
refugees, religious refugees, who at the time they got there
were outside of the United States, had been driven out. And so
we are a state that is very sensitive to that topic, not just
from a business issue but from a cultural and a moral issue as
well. And so immigration reform would be so critical to keeping
the good thing that we have going in Utah going.
Mr. CURTIS. That is also very timely.
Mr. Prestemon.
Mr. PRESTEMON. My observation would be, one-size-fits-all
regulation that applies equally to a company of 5,000 employees
to a company with 5 is a recipe for big problems. I hear far
more about navigating regulatory burdens than I do about high
taxes. Not that there is not a need for, you know, continued
attention to tax--tax burden, but I think regulatory burden is
the main thing.
And I can only imagine the difficulty of crafting rules
that work in that environment, but that is a persistent
complaint that you will hear about. You know, it is pretty much
to your point, if you are a really small business, you can't
just hand this over to the regulatory division either. You
know, you are that too.
Mr. CURTIS. I am often out among businesses, and I say:
Well, how did you like tax reform? And they say: Well, it was
nice, but what has really helped is deregulation.
Mr. PRESTEMON. Yeah. That would be what I have heard too.
Mr. CURTIS. Ms. Wagner.
Ms. WAGNER. For the clients I serve, which are a lot of
technology startups, the biggest challenge they have overcoming
is the attraction of tech talent and the availability of that.
So investment in our technology workforce, both in uptraining
and upscaling the current workforce as well as investing in our
next generation of technology employment is probably the
biggest concern facing many of my clients today.
Mr. CURTIS. Thank you.
Mr. Bishop.
Mr. BISHOP. So I am going to cheat a little bit and say
that I have two things.
Mr. CURTIS. I would love to hear both.
Mr. BISHOP. Certainly, you have heard it from Mr. Miller,
the importance of immigrant and immigration. And, you know, New
York City, as I said, is powered by immigrant entrepreneurs,
and certainly, we want to make sure that we create
opportunities for immigrants to create businesses because those
businesses will hire within their communities. And I want to
stress that. It is so important. It is important to New York
City's economy.
The other part, the other thing that I said that I wanted
to make sure that you understand is that the success of
American businesses is dependent on our workforce. And we have
to make sure that our workforce is prepared for the
technologies of tomorrow. And in certain areas, they are not.
And certainly, we have to make sure we have made
investments in New York City to ensure either through
apprenticeship programs or working with industry to identify
and project in the next 3 to 5 years what are the skill sets
that those companies need in order to grow, because if they are
not going to--if we as a country can't provide the workforce,
then they are going to go to other countries that can, and
certainly, we need to make sure that our education system
provides the pipeline of the next engineers, the next computer
programmers, et cetera. So that is very important for the
success of our small businesses.
Mr. CURTIS. Those were four great messages. We need to make
sure our colleagues hear all four of those. Thank you very much
for your time today, and I yield my time.
Chairman CHABOT. Thank you very much. The gentleman yields
back.
And I spoke too soon because the gentleman from Florida,
Mr. Lawson, who is the Ranking Member of the Subcommittee on
Health and Technology is recognized for 5 minutes.
Mr. LAWSON. Thank you, Mr. Chairman, and welcome to the
Committee. I am sorry I am late, but I was addressing a small
business group from Florida who is up on Capitol Hill. And one
of the things that I wanted to say is that there are more small
businesses in this country than any other type of businesses.
Yet a lot of the incentives that states and counties,
countries offer are for larger companies to move into the
cities and the towns to create jobs, and we hear that all the
time. And we have the Chambers of Commerce that are going out
and recruiting, and most of the time, they are not recruiting
small businesses. They are always recruiting large firms.
What incentives are available--and specifically, if you
have already discussed them, I would hate to go back over--for
small businesses to create jobs that States should consider?
And that is extremely important.
Even from the standpoint of having served in the
legislature in Florida for a long time, 28 years, 18 years in
the House, 10 years in the Senate, before coming here, the
Governors and everybody come. When they come in the state, the
first thing they do, their focus is on recruiting those
businesses from Canada, every place else and say we are going
to bring more jobs, but still the largest employers are small
business.
So what should we focus on to make sure that small
businesses get the same kind of consideration? And that is a
question for everyone on the Committee, wherever you want to
start.
Ms. WAGNER. Thank you for that question.
I am going to start with a line we use a lot in Loudoun,
that no amount of incentives make a bad location a good
location. I am proud that Virginia does offer various programs
to support our small businesses through Virginia Jobs
Investment Program, which provides credits and opportunities
for small businesses that are hiring employees and making small
investments into their infrastructure.
We also have the CIT GAP Funds Program, which is a state
program that is a seed venture to help our technology-based
businesses scale up quickly. It also helps them connect with
future investors for subsequent fundraising rounds. And we do
put a lot of effort in Virginia into helping technology firms
better understand the grants available through the federal
government, like SBIR and STTR funds that really is America's
seed fund.
What I will say is I do feel that communities, when they
are looking at investments or incentives for their small
businesses, should really look at how they can maximize their
current programs. If you can help your small business
development centers, your chambers, those can have a greater
reach and reach a greater amount of small businesses versus one
or two companies that you can pour an incentive into.
So, in Loudoun County, we support our Mason Enterprise
Center Incubator and the Small Business Development Center so
that they can reach--you know, this past year alone, they
reached over 300 businesses in their programs. And that is--we
are seeing that trickle-down effect as those companies are
remaining in the community, adding jobs, and growing, and then
can hopefully qualify for some of those larger incentive
programs down the line. Thank you.
Mr. LAWSON. Okay. Mr. Miller.
Mr. MILLER. Thank you, Mr. Lawson, for the question. And
you are absolutely right when you talk about the importance of
small businesses. I can tell you, in Utah, they represent over
99 percent of all of our businesses and the majority of the
employees work for small businesses.
In Utah--I happened to in a previous career run the
incentive program for the state, and so I am very sensitive to
the question and the issue that you have raised. In Utah, we
created what we call the BEAR Program, the Business Expansion
and Retention Program, specifically designed for and targeted
to small businesses.
However, at the time I was working for the state, our
largest incentive program, we refer to it as the EDTIF, for
Economic Development Tax Increment Financing Program--with that
long name you can understand why it goes by its acronym--that
program was only to recruit new business in the State of Utah.
When our current Governor was elected, he asked the very
important question: Why? Why is that program not available
either for existing businesses or for businesses of any size?
And so that program was modified, and I am pleased to be able
to tell you that today more than half of all of the companies
that receive incentives do fit in those existing small business
categories.
Mr. LAWSON. Okay. Mr. Prestemon.
Mr. PRESTEMON. Oh. Well, I--actually, I do agree with you
about the focus being on really, really big projects typically
on economic development programs. We have not gone that
direction in St. Charles County. But I have four Cs that we
work off of. You know, this is my little slogan here: Counsel,
so at a council meeting, you know, technical assistance, that
is important to the companies; capital, which is, you know,
through both publicly sponsored as well as other programs; I
would say connection, which refers back to things like the
procurement technical assistance centers and programs that
help, again, upgrade the connection today that small companies
have to compete for large contracts; and then my final one is
community. That is probably the softest one of the four, but I
think it is not to be dismissed, in that entrepreneurs tend to
make mistakes because they are in isolation. And so anything
you can do to bring entrepreneurs together on a regular basis
to guide and advise each other and support, I think that
enhances the chances of their success.
Mr. LAWSON. Mr. Chairman, could I be granted 30 more
seconds?
Chairman CHABOT. Yes, indeed.
Mr. LAWSON. Mr. Bishop, I understand you are a Rattler?
Mr. BISHOP. I sure am.
Mr. LAWSON. Would you care to comment on that?
Mr. BISHOP. Of being the Rattler or--the best experience
ever.
Mr. LAWSON. Yeah.
Mr. BISHOP. But I think it is important, and we are in
line, as you probably heard from the rest of the panel. At--in
New York, we actually have--our agency, Department of Small
Business Services, was created to focus on small business
services. We are actually not--we have another agency called
Economic Development Corporation, so we actually have the two
separate, because we know that we need to provide additional
resources of small businesses.
So, when a small business, when we are interacting with a
small business, we connect them to a host of services, not only
from education but the incentives that we have for small
businesses. So, for example, energy cost savings, we have
customized training grants to help those small businesses train
their employees. So we actually created a separate and distinct
agency focused on retaining and helping small businesses, so--
--
Mr. LAWSON. Okay. Thank you, Mr. Chairman. I yield back.
Chairman CHABOT. Thank you very much. The gentleman yields
back.
And we want to thank our distinguished panel here both this
morning and this afternoon. Sorry about the votes falling in
between here and any inconvenience there, but for your
excellent testimony. We rely on local experts like yourselves
and your innovative strategies that you have put in place to
better understand the needs of small businesses.
And we are seeing success stories, I think, all over the
country. And it is improving not only local economies but
people's lives, and we want to thank you for being an important
part of that and explaining to us how what we do here can help
you to help people all over the country.
So I want to thank folks on both sides of the aisle for
being here.
I would ask unanimous consent that Members may have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
And if there is no further business to come before this
Committee, we are adjourned. Thank you very much.
[Whereupon, at 12:45 a.m., the Committee was adjourned.]
A P P E N D I X
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Question for the Record
Committee on Small Business
Hearing: Communities That Think Small and Win Big
June 20, 2018
Congresswoman Adams Question to Mr. Greg Prestemon:
1. Unfortunately, we know that minority-owned businesses
are more likely to face obstacles, like difficulty accessing
capital. According to a 2016 study, white owners were three
times more likely to say their loans were always approved than
were African-American owners.
What policies could Congress implement to provide greater
access to capital for these types of small businesses?
Answer:
Capital availability for small business is a daunting
challenge in any environment, but it is particularly
challenging for entrepreneurs from minority backgrounds.
Uniform or ``one size fits all'' underwriting standards will
often have the presumably unintended effect of excluding any
borrowers operating in minority neighborhoods or for minority
borrowers operating in predominantly white neighborhoods.
Because my organization lacks experience in providing services
in minority neighborhoods, I am at a disadvantage to provide
guidance. On a general level, preserving and expanding the
incentives for lending under the Community Reinvestment Act
would likely be beneficial. Since much lending in distressed
neighborhoods often is done through non-bank sources, this
argues for strong regulatory approaches to fend off predatory
lenders.
Direct capital investment from micro-loan funds holds
promise, although the administrative costs for operating such
programs are high. Covering minimal staff and other expenses
from program income is usually not possible. Perhaps an
increase in grants for operating support for microlending
organizations would be impactful. The organization that I lead
has not engaged in microlending, primarily because we did not
see a path to breaking even.
In terms of programs like the 504, we would recommend
consideration of relaxed approval standards for the 504 loan
for minority borrowers. For example, in most instances the 504
program will require a 20% down payment/equity injection for
startup businesses. Lowering that requirement for minority
borrowers is worthy of consideration.
Finally, the Small Business Development Center program is
extremely beneficial to small businesses, irrespective of the
ethnic background of the owner. This program is woefully
underfunded on a national basis. Increased appropriations for
the SBDC program should be considered, and there could easily
be provisions within such appropriations legislation to target
the increased support to SBDC's with a track record of
supporting minority entrepreneurs as well as other segments of
the population that are at a market disadvantage. Rural
locations have high needs and relatively low resources, for
example.
Gregory D Prestemon
Chief Executive Officer
EDC of St. Charles County
Question for the Record
Committee on Small Business
Hearing: Communities That Think Small and Win Big
June 20, 2018
Congresswoman Adams Question to Mr. Derek Miller:
1. Unfortunately, we know that minority-owned businesses
are more likely to face obstacles, life difficulty accessing
capital. According to a 2016 study, white owners were three
times more likely to say their loans were always approved than
were African-American owners.
What policies could Congress implement to provide greater
access to capital for these types of small businesses?
Answer:
In Utah, we recognize that access to capital is the
lifeblood of all small businesses. At the Salt Lake Chamber, we
run a program called the Women's Business Center of Utah that
supports women and minority owned businesses. The Center
provides entrepreneurial training, networking opportunities and
business consulting including assistance in accessing capital.
These services are provided at no cost to the women and
minority small business owners, which is possible because of
federal grants available for this purpose. I encourage Congress
to continue its support of these grants.
Question for the Record
Committee on Small Business
Hearing: Communities That Think Small and Win Big
June 20, 2018
Congresswoman Adams Question to Ms. Vanessa Wagner:
1. Unfortunately, we know that minority-owned businesses
are more likely to face obstacles, like difficulty accessing
capital. According to a 2016 study, white owners were three
times more likely to say their loans were always approved than
were African-American owners.
What policies could Congress implement to provide greater
access to capital for these types of small businesses?
Answer:
This crucial question has been the subject of important
research and reporting by a number of federal and nonprofit
organizations. They all confirm that minority businesses are
denied loans at a much higher rate than non-minority
businesses. When minorities are able to secure loans, it's at a
much higher interest rate than rates secured by non-minorities.
The Congressional Black Caucus Foundation has made these
recommendations: ``While there are laws prohibiting loan
discrimination on the basis of face, regulatory agencies need
to improve upon enforcing regulations at a national level ...
the U.S. Department of Justice must ensure that these laws are
enforced by streamlining oversight of banks and their lending
practices ... The Government Accountability Office could also
perform an investigation of whether or not the DOJ is
effectively enforcing these regulations and how funds are being
appropriated.'' Improving access to capital for minority
entrepreneurs will ultimately result in the creation of more
jobs and prosperity for the nation as a whole.
(FYI: This response is based on info on pages 3 and 4 of
the attached document. This article gives related info: https:/
/newsonecom/3428232/barriers-to-financing-undermines-black-
entrepreneurship/)
Questions for the Record
Committee on Small Business
Hearing: Communities That Think Small and Win Big
June 20, 2018
Congresswoman Adams Questions to Mr. Gregg Bishop:
1. Minority-owned businesses are an integral part of my
District's economy. And a large source of these minority small
business owners is Johnson C. Smith, a Historically Black
University in Charlotte. In my state there are 10 Historically
Black Colleges and Universities--the most in the nation--but
there are more than 100 Historically Black Colleges and
Universities nationwide.
In your view, how can local officials, Chambers of
Commerce, and other local stakeholders work more closely with
our nation's Historically Black Colleges and Universities to
create more small business owners?
Answer:
1. Importance of Historically Black Colleges and
Universities
Historically Black Colleges and Universities (HBCUs) are
vital institutions that produce highly skilled and ambitious
graduates. As an alumnus of an HBCU, I understand the
importance of connecting with these institutions to ensure
young black men and women know the power of entrepreneurship to
uplift themselves, their families, and their communities. In my
time as Commissioner of New York City Department of Small
Business Services, I have made it a priority to meet with
alumni associations, fraternities and sororities to raise
awareness about our free services and resources. I would
encourage elected officials, chambers of commerce and other
stakeholders to build relationships with their local HBCUs and
do the same. Some examples of how these stakeholders may work
with HBCUs to support burgeoning entrepreneurs and jobseekers
include:
Hosting entrepreneurship workshops to
provide guidance to enterprising students and alumni
networks
Host innovation competitions in partnership
with HBCUs to encourage potential entrepreneurs to
pitch their business ideas
Work with employers to provide necessary
workforce development training resources to students in
growing industries. One model program could be New York
City's Tech Talent Pipeline Residency, run by the New
York City Department of Small Business Services, which
works directly with employers to train undergraduate
students, helping them develop the necessary skills to
have a successful career in tech.
2. Last week this Committee held a hearing on the
difficulties small businesses, and particularly minority- and
women-owned small businesses, face in competing for federal
contracts. In your testimony, you talked about New York City's
Procurement Technical Assistance Center (PTAC), which offers
support to small businesses, including minority, women, and
veteran-owned businesses that have historically not had access
to government contracting opportunities.
Can you tell us more about that Center, and how it works to
enable these small businesses to compete in the federal
marketplace?
2. Procurement Technical Assistance Center
The New York City Department of Small Business Services'
Procurement Technical Assistance Center (PTAC) provides support
for businesses interested in government procurement. The
Procurement Technical Assistance Center is funded in part with
the help of the U.S. Department of Defense and the Defense
Logistics Agency. The services provided by the center help
small businesses navigate the entire government procurement
process, from bidding to completion. By empowering NYC
government contractor's with education, mentorship programs and
targeted workshops and training resources, we are providing
businesses with the capacity to grow their businesses into the
federal and state contracting arenas. Our services help
businesses to:
Become certified as Minority and Women-owned
Business Entities (M/WBEs), SBD, 8(a), Small
Disadvantaged Business (SDB), HUB Zone, Woman Owned,
Service Disabled and Veteran Owned Business programs
Understand how to do business with the
government
Learn how to respond to RFPs effectively
Access a range of one-on-one assistance and
training to help ease into government contracting with
New York City, New York State and Federal agencies
More specifically, topics covered by PTAC include:
Introduction to Government Contracting
Small Business Certifications
Doing Business with General Services
Administration
Navigating System for Award Management
Contract Accounting, Response to RFPs/
Proposal Writing
With technical assistance to help
businesses understand requirements for
government contracts
Teaming Arrangements and Subcontracting
Finding the Right Contracting Opportunities
Includes notifications of government
contracting opportunities and how to locate
these opportunities
Successfully performing a contract
Managing and completing contracts,
submitting payment requests and resolving issues with
government agencies
3. Unfortunately, we know that minority-owned businesses
are more likely to face obstacles, like difficulty accessing
capital. According to a 2016 study, white owners were three
times more likely to say their loans were always approved than
were African-American owners.
What policies could Congress implement to provide greater
access to capital for these types of small businesses?
3. Barriers for Black Americans to Access Capital
Due to generational inequalities in wealth distribution
created by discriminatory local, state and federal policies,
many black Americans face barriers to accessing capital.
Traditional measures of credit-worthiness continue to be an
especially difficult barrier for black entrepreneurs.
Alternative criteria for evaluating credit-worthiness (e.g.
strength of a business plans, testimonials from trustees,
history of rent payments, etc.) would help address the
persistent disparity between black and white business owners'
credit scores.
To make it easier for small businesses to access capital,
SBS provides free financing services. Through NYC Business
Solutions, one-stop business centers located in every borough,
we match businesses with the right lender for their needs and
business profiles and walk them step-by-step through the loan
process. Since 2014, SBS has connected approximately 1,800
businesses to $155,000,000 in financing. For Minority and
Women-Owned Business Enterprises (M/WBEs) contracting with New
York City, SBS offers the Contract Financing Loan Fund. This
revolving fund offers loans of up to $500,000 capped at 3% APR,
one of the lowest interest rates available in the market. Since
the program's launch in 2017, we have lent more than $7 million
to small businesses.
Sincerely,
Gregg Bishop
Commissioner
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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|---|---|---|---|---|---|---|---|---|
| Velazquez, Nydia M. | V000081 | 8073 | H | D | COMMMEMBER | NY | 115 | 1184 |
| King, Steve | K000362 | 7918 | H | R | COMMMEMBER | IA | 115 | 1724 |
| Clarke, Yvette D. | C001067 | 8072 | H | D | COMMMEMBER | NY | 115 | 1864 |
| Chabot, Steve | C000266 | 8091 | H | R | COMMMEMBER | OH | 115 | 186 |
| Luetkemeyer, Blaine | L000569 | 8017 | H | R | COMMMEMBER | MO | 115 | 1931 |
| Chu, Judy | C001080 | 7837 | H | D | COMMMEMBER | CA | 115 | 1970 |
| Schneider, Bradley Scott | S001190 | H | D | COMMMEMBER | IL | 115 | 2124 | |
| Adams, Alma S. | A000370 | H | D | COMMMEMBER | NC | 115 | 2201 | |
| Brat, Dave | B001290 | H | R | COMMMEMBER | VA | 115 | 2203 | |
| Knight, Stephen | K000387 | H | R | COMMMEMBER | CA | 115 | 2228 | |
| Blum, Rod | B001294 | H | R | COMMMEMBER | IA | 115 | 2241 | |
| Kelly, Trent | K000388 | H | R | COMMMEMBER | MS | 115 | 2294 | |
| Comer, James | C001108 | H | R | COMMMEMBER | KY | 115 | 2297 | |
| Evans, Dwight | E000296 | H | D | COMMMEMBER | PA | 115 | 2298 | |
| Murphy, Stephanie N. | M001202 | H | D | COMMMEMBER | FL | 115 | 2318 | |
| Marshall, Roger W. | M001198 | H | R | COMMMEMBER | KS | 115 | 2328 | |
| Espaillat, Adriano | E000297 | H | D | COMMMEMBER | NY | 115 | 2342 | |
| Fitzpatrick, Brian K. | F000466 | H | R | COMMMEMBER | PA | 115 | 2345 | |
| Norman, Ralph | N000190 | H | R | COMMMEMBER | SC | 115 | 2361 | |
| Curtis, John R. | C001114 | H | R | COMMMEMBER | UT | 115 | 2363 |
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