Statement of the Hon. Nydia M. Velázquez on A Discussion with SBA Administrator Jovita Carranza: Current Issues and the FY2021 Budget
Washington, February 26, 2020
Today, we have the opportunity to welcome the Honorable Jovita Carranza, the 26th Administrator of the Small Business Administration, to our Committee. While there are many political and ideological differences represented on this Committee, one thing we all agree on is the importance of small businesses to our nation’s economy. America’s 30 million small businesses are the cornerstones of our communities. When a Main Street business succeeds, America succeeds. Not only do hard-earned dollars get reinvested back into our neighborhoods, but we also see robust job creation and innovation.
But launching a business is no easy feat, it can be inherently risky. Even the most careful planner can underestimate the costs associated with bringing an innovative idea to the marketplace. Sadly, too many fail in the first 18 months. That is why, in 1953, Congress created the Small Business Administration. The SBA is the only federal agency tasked specifically with helping small businesses grow and succeed. Through its extensive network of field offices and resource partners, SBA connects entrepreneurs with technical assistance, capital, and federal contracting opportunities. It is imperative that the agency operates effectively, so that small businesses can get the most out of these vital programs. To that end, we have held numerous hearings to see what is working and what can be improved.
We have learned that one of the biggest challenges facing small businesses is access to capital, which is critical for a new business owner to start up, hire employees, and expand operations. Without adequate resources, small businesses fail to realize their full potential. SBA can play a vital role in filling the gaps through its loan programs.
The Committee has long supported the Microloan program and more recently the Community Advantage program. These two initiatives have gone a long way in reaching women, minorities, and veterans who otherwise would not be served by private sector lenders or even the 7(a) program. I hope we can work collaboratively to support and expand these initiatives. With that said, meeting the lending needs of women-, minority-, and veteran-owned businesses is a top priority for me. I know Ms. Carranza has expressed an interest here as well, and I look forward to hearing more about the steps you will take to reach more of these entrepreneurs.
Similarly, increasing contracting opportunities for small businesses, especially from underserved communities is a shared goal that I hope we can leverage to improve the 8(a) and HUBZone programs. When small businesses win contracts, they scale up quickly and create good-paying jobs. The result is a win for everyone.
Just like contracting and lending, the SBA provides invaluable counseling services through its nationwide network of resource partners. They provide expert advice on how to develop a business plan, market a product, and sell their goods overseas. Despite the incredible success of the programs, the Administration proposed to slash entrepreneurial development by a staggering $97 million, or 36 percent.
Helping small businesses succeed and educating the underserved and rural areas will require a real investment in SBA’s counseling and training programs – not cutbacks. I think it’s safe to say we all agree that small businesses are a cornerstone of our economy and deserve our full support. However, that requires more than “lip service” – it involves a real commitment to invest in programs that work.
With that, I look forward to hearing from the administrator regarding her priorities for the agency and on the FY21 budget proposal.