Congressman Kim Convenes Panel to Support Underserved Small Businesses
Washington, February 7, 2019
Washington, D.C.—Today, the Small Business Subcommittee on Economic Growth, Tax, and Capital Access under Chair Andy Kim (D-NJ) held a hearing to examine the challenges faced by women, minority, veteran, and rural entrepreneurs, and how Congress can help optimize their success.
“I joined this Committee because small businesses are the economic backbone of my district, and if we’re going to grow jobs and opportunities, we have to grow small businesses,” said Congressman Kim. “The numbers don’t lie; nearly two million people in New Jersey are employed by small businesses, women own approximately two hundred and fifty thousand businesses and veterans own approximately fifty-eight thousand businesses across our state. Those jobs are critical to the future of our state, and I was proud to hear from a panel of distinguished experts to hear how we can continue to grow in the future.”
The hearing focused on the unique challenges that minority entrepreneurs face such as a lack of access to capital and barriers to entering the federal procurement marketplace. The Minority Business Development Agency found that minority-owned firms experience financing denial rates three times higher than other firms. Despite a similar demand, 60 percent of veterans reported a financing shortfall and had approval rates 10 percent lower than all other firms.
“Starting or growing a business is not for the faint at heart,” said Marla Bilonick, Executive Director/CEO, Latino Economic Development Center-LEDC. “In an ideal scenario, an entrepreneur has the time and support to complete an in-depth business plan, complete with a detailed market analysis, elaborate revenue projections, a well-developed management plan, and options for financing their onetime start-up costs as well as the ongoing or variable costs to come. This plan provides a framework and sequencing that sets up the entrepreneur for success. Unfortunately, underserved entrepreneurs do not always have access to business planning information or resources.”
“Minority businesses typically have a harder time bootstrapping their businesses,” said Sharon R. Pinder, President of the Capital Region Minority Supplier Development Council. “Bootstrapping can be defined as operating your business without capital. Starting businesses without capitalization hinders the growth and trajectory of that business. The other key ingredient is relationships. Business is about relationships and turning those relationships into revenue. Minority businesses typically do not have the relationships that help propel businesses into the next level of growth.”
“Veterans continue to serve their country long after their military service by employing 5.03 million Americans, managing receipts in excess of $1.14 trillion dollars, and accounting for nearly 10% of U.S. Small Businesses,” said Davy Leghorn, Assistant Director, American Legion Veterans Employment & Education Division. “Despite strong numbers, veteran-owned small businesses continue to experience unnecessary bureaucratic obstacles and difficulties in securing government contracts.”
“Robust broadband must be available, affordable, and sustainable for rural small businesses and underserved populations to realize the economic, healthcare, education, and public safety benefits that advanced connectivity offers,” said Michael Romano, Sr. Vice President of Industry Affairs & Business Development at NTCA–The Rural Broadband Association. “It takes an effective mix of entrepreneurial spirit, access to capital (whether from RUS or otherwise), commitment to community, and federal USF support to enable and sustain deployment of communications infrastructure in many parts of rural America.”
“Unfortunately, as we heard today, women, minority, and veteran-owned businesses simply aren’t getting the support they need to get succeed,” said Congressman Kim. “As Chair of the Subcommittee, I look forward to working with my colleagues on both sides of the aisle to craft impactful solutions that truly levels the playing field for small businesses in my home state of New Jersey and across our nation.”
For video of today’s hearing, click here.