WASHINGTON, D.C. – Today, Congressman Dan Meuser (R-PA), Chairman of the Small Business Subcommittee on Economic Growth, Tax, and Capital Access led a hearing titled “Exploring SBA Programs: Reviewing the SBIC and SBIR Programs' Impact on Small Businesses.” Subcommittee Chairman Meuser issued the following statement after today’s hearing.

“The SBIC and SBIR Programs are two successful public-private partnerships that we must continue to improve to meet the needs of American small businesses while ensuring taxpayer dollars are safeguarded,” said Subcommittee Chairman Meuser. “I thank the witnesses who joined us today and shared their expertise in utilizing SBA programs to deploy private capital and federal research dollars to worthy small businesses. I look forward to advancing the many worthy suggestions offered during the hearing to improve the SBIC & SBIR programs, including my bill HR 5333, the Investing in All of America Act.”

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Watch the full hearing here.

Below are some key excerpts from today’s hearing:

Chairman Meuser: “Real world examples of what the SBIC has meant to the overall organization, meant to the SBIC, individual companies and to those that they were providing investments to. And how would the bonus leverage improve things and benefit small business access to capital?” Mr. Palmer: “Sure, the SBIC capital, as I mentioned, is the first institutional capital to go into most businesses. So a lot of this is professionalizing the business and helping them scale up. So the number of employees increases significantly in almost every case, I can't think of a case where it hasn't been, which has been helpful. Now the bonus leverage is designed specifically to make it so there's an incentive, not a mandate, an incentive to look off the beaten track to parts of the country that haven't been invested in. So if you have a fund, the funds have a ten year lifespan, five years of which they invest, and then five years they harvest in the first five years, that's an incentive to look out for low income areas, in rural areas and industries that are in these national security sectors. And if you find a business there that you might not have otherwise gone to, you can access more leverage and that doesn't preclude you from doing another deal.”

Chairman Meuser: “Mr. Valetta, SBIC, private investments fueling the development and innovation of your small business clients?” Mr. Valletta: “Yes. These America’s seed funds are paramount to small business innovation as well as growth. And for organizations like ours that are, venture investment and development organizations, it's extremely important because part of our, a portion of our funding comes from public sources like state government, public authorities or bonds and federal programs like the Small Business Credit Initiative, the SSBCI, very important programs.”

Rep. Williams: “So, the Department of Defense SBIR program often lacks instructions for small businesses to follow, you've said that and I agree with you. We've heard from many frustrated small business owners who have left with more questions than answers about the requirements and what would be needed for follow up on contracts, when to apply for the SBIR program, or even which DoD innovation initiative actually they should use. So this caused many small businesses, as you talked about, to walk away, from the defense market and not participate in the program because they do not have a clear picture of what the full investment will be and cannot justify navigating the complicated regulations. So simply, how can this concern be addressed and how widespread is the issue?” Ms. Bresler: “Thank you for the question. So, I think the easiest way to assess this would be trying to go through this process yourself, having as many people who are involved in designing the process actually go through it and make notes. I think relative to some of the complex technological challenges that the Department of Defense tackles on a daily basis, this is relatively simple, but the cultural piece is significant, and you would need to look at not only creating the appropriate systems policies, having the right tools, but also requiring that new steps be taken, requiring certain metrics to be tracked. So even this notion of how many new businesses are working in the SBIR program every year, the reason you can hear different numbers is because there isn't a standard way in which they track that.”

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