[Senate Hearing 118-90] [From the U.S. Government Publishing Office] S. Hrg. 118-90 PATHWAYS TO WOMEN'S ENTREPRENEURSHIP: UNDERSTANDING OPPORTUNITIES AND BARRIERS ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP OF THE UNITED STATES SENATE ONE HUNDRED EIGHTEENTH CONGRESS FIRST SESSION __________ JULY 26, 2023 __________ Printed for the use of the Committee on Small Business and Entrepreneurship [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.govinfo.gov ________ U.S. GOVERNMENT PUBLISHING OFFICE 53-226 WASHINGTON : 2024 ----------------------------------------------------------------------------------- COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP ONE HUNDRED EIGHTEENTH CONGRESS ---------- BENJAMIN L. CARDIN, Maryland, Chairman JONI ERNST, Iowa, Ranking Member MARIA CANTWELL, Washington MARCO RUBIO, Florida JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho EDWARD J. MARKEY, Massachusetts RAND PAUL, Kentucky CORY A. BOOKER, New Jersey TIM SCOTT, South Carolina CHRISTOPHER A. COONS, Delaware TODD YOUNG, Indiana MAZIE K. HIRONO, Hawaii JOHN KENNEDY, Louisiana TAMMY DUCKWORTH, Illinois JOSH HAWLEY, Missouri JACKY ROSEN, Nevada TED BUDD, North Carolina JOHN W. HICKENLOOPER, Colorado Sean Moore, Democratic Staff Director Meredith West, Republican Staff Director C O N T E N T S ---------- OPENING STATEMENTS Page Benjamin L. Cardin, Chairman, U.S. Senator from Maryland......... 1 Joni Ernst, Ranking Member, U.S. Senator from Iowa............... 3 WITNESSES Ms. Adrienne M. Somerville, CEO, Somerville Consulting Group, LLC, Talent & Technical Solutions Corporation.................. 6 Prepared Statement........................................... 8 Ms. Patrice Onwuka, Director of the Center for Economic Opportunity, Independent Women's Forum......................... 14 Prepared Statement........................................... 16 Ms. Nik Sweeney, Founder/CEO, Amani Nicol Wellness............... 23 Prepared Statement........................................... 25 Ms. Catherine Koch, President & CEO, K-Tec Systems, Inc.......... 32 Prepared Statement........................................... 34 ADDITIONAL LETTERS/STATEMENTS FOR THE RECORD Engine Letter dated August 3, 2023.................................. 52 Rose, Kathryn Statement dated August 9, 2023............................... 56 QUESTIONS FOR THE RECORD Ms. Catherine Koch Responses to questions submitted by Ranking Member Ernst..... 58 Ms. Patrice Onwuka Responses to questions submitted by Ranking Member Ernst..... 60 PATHWAYS TO WOMEN'S ENTREPRENEURSHIP: UNDERSTANDING OPPORTUNITIES AND BARRIERS ---------- WEDNESDAY, JULY 26, 2023 United States Senate, Committee on Small Business and Entrepreneurship, Washington, DC. The committee met, pursuant to notice, at 10:00 a.m., in Room 106, Dirksen Senate Office Building, Hon. Benjamin Cardin, Chairman of the Committee, presiding. Present: Senators Cardin [presiding], Hirono, Rosen, Ernst, Hawley, and Hickenlooper. OPENING STATEMENT OF SENATOR CARDIN Chairman Cardin. Well, good morning, everyone. [Chorus from Audience.] Good morning. Chairman Cardin. Senator Ernst and I are not used to this type of attendance at our hearings. [Laughter and applause.] Chairman Cardin. We really welcome you to this hearing. We know that America is in great shape when we see the spirit that's in this room. The entrepreneurial spirit of women has really carried us into an unprecedented growth in small businesses during this period of time. So we applaud your entrepreneurship and we welcome you to our committee. We are looking forward to this particular hearing as we talk about how the Small Business Administration, how all of us work together to remove obstacles that have been in the way for women entrepreneurs. So we welcome you to the hearing and we look forward to the distinguished panel of witnesses and their testimony. I particularly--and I'll introduce the two witnesses that happen to be here from Maryland in a few moments, but whenever I have Marylanders in the room--I got some more Marylanders in the room--they get special attention. So I'm going to have special words to say about Ms. Somerville and Mrs. Sweeney. Every day I'm inspired by the tenacity and innovation of small businesses across the country, especially women-owned small businesses. Today, we are witnessing an historic rise in women's entrepreneurship under the Biden-Harris Administration. It has lifted individuals and communities across the country to prosperity. As Chair of the Small Business and Entrepreneurship Committee, one of my highest priorities is to ensure that our nation taps into the entrepreneurial spirit that is sweeping our nation to build a fair and more just economy for all. Women-owned small businesses, particularly black women- owned small businesses, are leading the charge post-pandemic with historic numbers of new small business startups but unfortunately still face systemic barriers to success as entrepreneurs. In a committee staff report released prior to this hearing, we outline how access to capital, gaps in mentorship, under- utilization of women-owned firms in federal contracting, and under-investment in childcare all make the job of operating a small business unnecessarily harder for women, and I want to compliment my staff for the production of this report. I encourage you all to please take a look at it because it provides a chronology of the challenges that we face today for women entrepreneurs and I hope this will be a guidepost for us moving forward in trying to deal with some of the changes in the Small Business Administration's tools that are in their toolkit that will help our women. That's why throughout my tenure in Congress I have been laser focused on comprehensive legislation to reauthorize several important programs that support American women-owned small businesses. Last month, for example, I introduced the Women's Business Center Improvement Act, which would increase federal support to women's business centers or WBCs by doubling the maximum annual grant to $300,000. [Applause.] Chairman Cardin. Both Senator Ernst and I appreciated your initial response. That was great. But I have to exercise the responsibilities of the Chair and ask that you allow our testimonies to go forward without response from the audience. The bill appropriates--even though I like the response. [Laughter.] The bill appropriates $31.5 million for each fiscal year from 2024 through 2027 and requires an annual report on the program. WBCs provide free or low-cost counseling and training focusing on addressing the unique challenges facing women who want to start, grow, and expand their small businesses. Just last year, I was able to secure a new Women's Business Center at Bowie State University, Maryland's oldest historically black university. The SBA awarded a grant to Rockville Economic Development to launch the center. The new center is the fourth WBC in Maryland, joining a WBC in Rockville, a WBC operated by Morgan State University, and a WBC in Salisbury operated by Maryland Capital Enterprises. American women-owned small business owners and entrepreneurs deserve the very best tools and resources to keep them growing. It's the right thing to do as for the values of our nation. It's also important for America's growth. Congress must do more to ensure women and particularly traditionally underserved women have access to the same opportunities as their male counterparts. I look forward to the testimony of our witnesses and I'm eager to learn more about what Congress can do to further advance the interests of women entrepreneurs. And now let me recognize the distinguished Ranking Member Senator Ernst. STATEMENT OF SENATOR ERNST Senator Ernst. Thank you, Mr. Chair, and thank you to all of our guests here today, as well. I walked in the room and I was incredibly impressed by having so many just wonderful strong women entrepreneurs. So thank you for joining us. I also want to welcome the Association of Women's Business Centers and thanks for all the work that you are doing and it's incredibly important that you're out there supporting women all across our great United States, and a special shout-out to T.J. Daniels of the Iowa Women's Business Center who is also---- Chairman Cardin. You can respond to that. Senator Ernst [continuing]. With us. Yeah. [Applause.] Who is with us here today. So thank you so much. Today, we will examine ways to help women-owned small businesses succeed. There are more than 12 million women small business owners contributing $2.1 trillion in total sales to our national economy. While women entrepreneurs are creating jobs and igniting local economies, according to the National Federation of Independent Business, the Small Business Optimism Index remains below the 49-year average for the 18th consecutive month. Inflation and rising interest rates are top concerns. Unfortunately, small businesses continue to suffer under Bidenomics. Despite the White House attempting to paint an optimistic view of the economy, small business owners aren't buying the narrative. President Biden has issued nearly $360 billion in new regulatory costs on our small businesses. Rather than focusing their time and energy on strengthening and growing their small businesses, many have to spend time figuring out how to comply with burdensome government regulations. In an effort to address this, I'm working on the PROVE IT Act to ensure small businesses have a voice in federal agencies' rulemaking process. Another challenge I hear from businesses and families is the lack of access to affordable quality childcare options. In Iowa, 53,000 women have left the workforce since 2020 due to lack of childcare options. While the Iowa Legislature and Republican Governor Kim Reynolds have made progress, there's much more work to be done specifically at the federal level. That's why I'm proud to say my bipartisan Small Business Childcare Investment Act with Senator Rosen passed out of our committee just last week. The bill allows nonprofit childcare providers, including religious nonprofits, to access the SBA loans. This legislation will create a greater number of affordable childcare options, especially in rural areas, like mine, and I will continue to advocate for this bill to be signed into law. Furthermore, accessing quality business training and coaching is critical to our women small business owners. By modernizing the Small Business Administration's SCORE Program, we will be giving entrepreneurs, especially our women entrepreneurs, access to quality mentorship. My SCORE Act of 2023, which revitalizes SBA's Mentorship Program by adding a team of women business leaders called the National Women's Business Coaches, will work alongside SCORE coaches and pair them with aspiring and existing entrepreneurs. These coaches will work to recruit individuals with expertise across all job industries to join the SCORE Program. This will help guarantee our young entrepreneurs receive the relevant and productive assistance to support their path to success. Lastly, I want to highlight a critical bill I introduced to close loopholes that enable fraud in the Women-Owned Small Business Contracting Program. The Accountability in Women-Owned Small Business Contracting Act eliminates self-certification in the program and holds federal agencies to task by forcing department and agency heads to testify before Congress when they fail to meet their own women-owned small business contracting goals. Since much of the discussion today will focus on the SBA's Women Business Center Program and I'm glad for that, I am thankful that we're able to focus on this, but I want to be very clear about my priorities as we consider any potential reauthorization of this program. The distribution of program resources must be made more consistent across all states, especially in our rural areas. Mr. Chairman, I do commend you for having four women's business centers in Maryland, but I'm sure you can understand my frustration that in Iowa we only have one, one center to service the entire state and our state is very large. Many of my colleagues on the Republican side share my frustration that as the Administration has added additional women's business centers to the program, they haven't seen the benefits in their own states, many of which like mine have only one service center. The placement of new centers and the allocation of taxpayer dollars by the SBA must be distributed broadly in the future. Again, I want to thank all of you very much for being here today and I look forward to our discussion on how we can best serve our women entrepreneurs. Thank you for being here. Thank you, Mr. Chair. Chairman Cardin. Well, Senator Ernst, thank you for your opening statement. I share your concern. I want to make sure the resources are fairly distributed in all parts of our country and you have a big state and it's difficult with just one center. So I recognize your concerns and I assure you I want to work with you to make sure that women entrepreneurs are served throughout the entire country. I'm now going to introduce our panel of distinguished witnesses. I'll be introducing you in the order in which you will be presenting--we'll rotate between my introductions and Senator Ernst's introductions. But I'm very pleased to introduce Ms. Adrienne Somerville, the CEO of Somerville Consulting Group, LLC, and Talent & Technical Solutions Corporation, located in Hughesville, Maryland. You have an impressive background of academic achievements from Norfolk State University, Florida Institute of Technology, Georgetown University, and Harvard University Kennedy School Executive Program. I was very impressed in your background that you were partnering with Apple and Google and developed and produced a Mobile Career Guidebook that is downloadable to smart phones and tablets. So we thank you for that service that you have provided to the community. And now for the introduction of Ms. Onwuka, I'll turn to Senator Ernst. Senator Ernst. Thank you, Mr. Chair. Ms. Patrice Onwuka, Director, Center for Economic Opportunity, Independent Women's Forum. The Independent Women's Forum is a nonprofit organization whose goal is to develop and advocate for common sense policy solutions that enhance people's freedom, opportunities, and well-being. The Center for Economic Opportunity specifically seeks to promote and develop policies that expand workplace choice, flexibility, freedom, and opportunity. Prior to her career at IWF, Patrice served as the Senior Fellow at the Alliance for Charitable Excellence and before that she worked as the Communications Director for Generation Opportunity. Thank you for joining us, Patrice. Chairman Cardin. We then have Mrs. Nik Sweeney, the Founder and CEO of Amani Nicol Wellness in Baltimore, Maryland. We're pleased to have you with us. In the spring of 2019, Nik was unemployed, recovering from surgery. She then decided to take her experience as a Zumba instructor and put that to entrepreneurship. In the fall of 2019, she made the big jump to become a full-time entrepreneur. She opened the first and only of its kind holistic wellness spa integrating self-care with lifestyle medicine and programming to meet the needs of women in under-resourced communities. Lastly, we have Mrs. Koch, Koch. Sorry. Senator Ernst. Thank you, and thank you, Mr. Chair. We have Ms. Catherine Koch and she is the President and CEO of K-Tec Systems. K-Tec Systems was founded by Koch in 1989 in Southeast Michigan. This small business is a global manufacturer of advanced control and automation technology, specializing in accurate and reliable temperature flow and pressure measurements. As a female entrepreneur in a male-dominated industry, Catherine is passionate about helping other women start their own businesses. As a Global Forum committee Member of the Women's Business Enterprise National Council and the Board Member and Vice President of--and it got cut off there. So we welcome you but thank you, thank you, Ms. Koch, very much for being here. Chairman Cardin. To our witnesses, your entire statements will be made part of our record without objection. You may proceed as you wish. We ask you to try to summarize your statements in about five minutes and leave a little time for us to ask you some questions. So we'll start with Ms. Somerville. STATEMENT OF ADRIENNE M. SOMERVILLE, CEO, SOMERVILLE CONSULTING GROUP, LLC, TALENT & TECHNICAL SOLUTIONS CORPORATION, HUGHESVILLE, MARYLAND Ms. Somerville. Good morning and thank you, Chair Cardin and Ranking Member Ernst and Members of the Committee on Small Business and Entrepreneurship, for this amazing opportunity to share my experience as a female business owner and government contractor in Maryland. My name is Adrienne Somerville and it's an honor to highlight my incredible benefit of how technical assistance helped me in my pursuit of business ownership. I am the Founder and CEO of two small businesses. I am Consulting Adrienne Somerville Consulting Firm and we collaborate with diverse leaders to ensure the success in providing ethical, transparent, repeatable, and affordable talent management solutions focused on improving accountability and ownership at all levels to build strong performance within each company to ensure strong profit margins. In addition, Talent & Technical Solutions, we focus on building IT solutions that result in a plethora of data analytics to help build companies that manage their talent portfolios. Throughout building a business, I experienced many challenges that I later learned are similar to those of other women across the nation. Today, I will highlight a few: accessing sources of funding, navigating available information and tools available for business owners, and identifying effective mentorship. By far, the biggest barrier, of course, to any business is resourcing. I was faced with difficulty identifying capital opportunities to support the purchasing of business development tools and resources which were expensive and needed to enable the success of my business and scale accordingly. Ultimately, it was my work with resource partners that helped me identify these avenues for private and philanthropic capital which took my business to the next level. As we identify opportunities to support women business owners like me across our nation, I ask this committee to consider capital solutions to incentivize both public and private avenues to capital. Additionally, another challenge I was met with was navigating resources available for entrepreneurs. SBA resource partners provided me with the tools and strategies during my entrepreneurship journey that set me up for success, sustainable success. The resource partners I worked with uniquely supported my needs throughout my entrepreneurship journey. I worked with four different small business resource partners in various capacities: the Baltimore-Metro Washington Business Center, the Virginia Women's Business Center, SBDC, and SCORE, all of which helped me as a business owner in different ways. I have firsthand seen the uniqueness and the value and the impact each resource partner has had in offering me various opportunities through the stages of my development. SCORE supported me with my pre-business establishment. This organization provided robust access to tools and training materials early in my process. I was able to leverage the tutorials, the manuals, the books, the algorithms, and the structural outlines. They helped me with the groundwork and the creation of my business. Once established as a business, I connected with the benefits of SBDC, the network in Maryland, as well, which helped me develop the application of the tools, the identification of resources, the establishment of mentorship. Through this resource I was able to identify local opportunities in my community in which I could have the greatest targeted impact. As my business infrastructure was built, the Baltimore-Metro WBC and Women's Business Center of Virginia enabled me through a Guide of Designated Programs that were very targeted and rich for my business. This resource was critical in providing assistance to support my needs as a woman business owner. Through initiatives like UpScale, certification, training, digital training, conferences, networking events, and specialized finance sessions, I was able to build a true access plan. Through this program, I was able to apply for the WOSB Certification for the State of Virginia which will also open doors for my business and increase opportunity in terms of visibility in my network. As a business owner with only six employees, the WBC helped me provide a one-stop shop when approaching this certification process. When considering additional solutions that will support women entrepreneurs like me in pursuit of ownership, I ask that you consider the following: expand reach to economically-disadvantaged regions, equal encouragement for resource partners to collaborate with other agencies and organizations, focus on technology adopting in this hybrid work environment, focus on streamlining reporting. We heard a little bit of that today in terms of the administrative requirements. Designated marketing specifics for resource partners, the reauthorization of the WBC Program along with other resource partners, and also support increased appropriation and funding for the WBC. I thank you for your time today and I look forward to answering any of your questions. It's truly an honor to be here. [The prepared statement of Ms. Somerville follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairman Cardin. Thank you very much. [Applause.] Chairman Cardin. And you did it exactly in five minutes. That's really good. Mrs. Onwuka. STATEMENT OF PATRICE ONWUKA, DIRECTOR OF THE CENTER FOR ECONOMIC OPPORTUNITY, INDEPENDENT WOMEN'S FORUM, WASHINGTON, D.C. Ms. Onwuka. Good morning. Thank you, Chairman Cardin, Ranking Member Ernst, and the Members of the Committee, for having me to appear today. I work for the Independent Women's Forum and, as mentioned, we want women to value free markets and personal liberty and so we advance policies that enhance people's freedom, opportunity, and well-being. I've got to say entrepreneurship has created ladders of opportunity for women of all ages, backgrounds, and races. So it's critical to ensure that government policies do not erect barriers to opportunity for women. Now the growth of female entrepreneurship over the past few decades has been tremendous. As the Ranking Member mentioned, women own 12 million businesses, small businesses, or 43 percent of them. Interestingly, only about one in 10 actually employ workers. Most women that own businesses are one-woman shops and they tend to be concentrated in sectors that track closely with where women's labor force participation is. Most female business owners strike out on their own because they're looking for independence, flexibility, and the ability to fulfill their passion. This actually sets them apart from a lot of their male counterparts. Now despite many bright spots, women's businesses face struggles. Some challenges are universal to men- and women- owned businesses, such as labor shortages. We've seen this in the national economy. Inflation, unfortunately, still has not gone back down to pre-2021 levels. Regulations, taxes, and uncertain economic conditions. Average women's revenue for women-owned businesses are rising but they lag behind those of firms owned by men, a lack of capital. I'm sure we're going to hear a lot about that. Interestingly, men start their businesses with six times as much capital as women do. Women also lack robust networks and that particularly is true in rural environments. Almost half of female founders cite a lack of available mentors or advisors as an impediment and so it's important that government programs where private programs are not available be a support to them. Two additional challenges to starting businesses that I actually think are directly the result of government-imposed barriers to building human capital, Number 1, overly restrictive occupational licensure at state levels, and Number 2, restrictions on independent contracting. I'll skip a little bit on the occupational licensure since that tends to be a state level issue. But on independent contracting, many women have found the flexibility and the freedom to balance work-life-careers by being an independent contractor, and unfortunately we see some congressional legislation currently pending that would impose restrictions on the nation's 65 million freelancers in this country. I bet you we have some freelancers right in this room today. They're not traditional employees. They work for themselves. They define when, where, and how they work, and for women flexibility is what allows them to continue to raise their families, to take care of aging parents and sick family members, and, frankly, just to fulfill their passions. So it's important that Congress does not needlessly reclassify independent contractors across this country. We would lose thousands of jobs, millions of jobs, frankly, and raise business costs on small businesses by anywhere between $18 to $64 billion each week. So Congress should not be nationalizing independent contracting. A piece of that, though, a piece of the entrepreneurship and what makes it so interesting is that it allows for flexibility for care-giving and I dropped my kids off right at daycare before this, so I understand how important it is. That's why we should make childcare options more affordable, plentiful, and diverse. Diversity is key. Not every parent wants a formal childcare center. Some informal childcare options that are home-based care, for example, or, frankly, staying with relatives is really important and, unfortunately, unnecessary regulations that don't have anything to do with the quality of care in childcare centers is increasing costs by up to $1,800 per child each year. So there's opportunity for us to look at legislation that would make it easier for small businesses to be able to offer quality childcare for their employees and I thank Senator Ernst for mentioning the Small Business Childcare Investment Act because I think that's one of those opportunities. Congress needs to consider also just reducing the burden on small businesses. On average, regulatory costs amount to $11,700 per employee each year, and small businesses, they are the ones who bear the brunt of those increased regulatory costs. So there are lots of measures that are floating around that look at how do we ensure that the Small Business Administration is ensuring that every new piece of regulation that is passed by Congress does not impose new compliance costs on small businesses. I have lots of other ideas but I will stop right there. Thank you. [The prepared statement of Ms. Onwuka follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairman Cardin. Thank you very much for your testimony, appreciate it very, very much. Ms. Sweeney. STATEMENT OF NIK SWEENEY, FOUNDER/CEO, AMANI NICOL WELLNESS, BALTIMORE, MARYLAND Ms. Sweeney. Good morning, Chair Cardin, Ranking Member Ernst, and Distinguished Members of the Committee. It is a pleasure to be here and I'm honored today as a business owner in Baltimore, Maryland, sharing my experience with the Baltimore Metropolitan Women's Business Center. I'll first start with Amani Nicol Wellness, where we are today and how we would not be in the position that we are if it was not for the support of the WBC. So in 2019, unemployed with this big mission and only $2,000 in my pocket and an opportunity to make this dream happen, we developed an innovative approach to help disrupt the health care system when it comes to prevention and management of diabetes. But how are we able to do this? Well, at this time we are a for-profit social enterprise which means there are two sides to our business model, one specifically for women who are looking to get well while we're able to leverage those resources to fund our programs for women in underserved and under-resourced communities. We are a CDC-recognized prevention program with the highest rank that the CDC delivers which is 4+ recognition because of our ability to sustain our impact. We partner with Notre Dame School of Pharmacy as an accredited diabetes self-management provider to support women specifically with Type 2 diabetes. We were accepted to Innovation Works and Accelerated Program that helped us to raise our first six figure capital raise and we have partnered with the Office of Women's Health to help support self measuring of blood pressure, our Blood Pressure Program. In 2021, in the midst of the pandemic, we were fortunate enough to be able to relocate from a top office to a professional office park that more than doubled the size and helped us to become ADA-compliant so that we could benefit from becoming Medicaid-approved, contracted with six managed care organizations from Aetna to BlueCross, as well as Medicare. Why is that significant? Because in Baltimore City alone, one of the cities with the highest disparities in terms of diabetes, we are one of only four Medicare providers when it comes to diabetes prevention. We're happy to note that we're also the only diabetes prevention program for the deaf and hard-of-hearing in the entire country and yet we're facing many challenges and barriers. While all that success if notable, it would not be possible without the support of the Baltimore-Washington WBC where as soon as we closed doors in March of 2020, within a week we received a mentor, Carmen Braxton, who for nine months walked us through strategically to keep us on point so that those goals that we just outlined could become realized. So as a result of that, we were able to contract federally. We were able to expand access, including to the Hispanic-Latino community. Our Diabetes Prevention Program that was launched in 2022 was the first one launched in the state of Maryland next to Johns Hopkins. So while all that sounds great, what about these barriers? Well, interestingly, we had just provided access to women and the deaf community and three months later, April 2022, I was diagnosed with breast cancer. With capacity constraints, revenue suffering, and trying to figure out how to keep working because there was no option to close, what mattered most would be the resources and the ecosystem like that provided by the WBC. You see, it goes full circle with support. Being able to access other resources like additional funding would not have been possible. Being able to benefit from Morgan State University who is a partner for us because we are able to benefit from interns and a Master's of Public Health Program and Doctorate Programs. We are excited because that program is the reason why Amani Nicol Wellness did not become one of those businesses that failed. In less than four years in the heart of a pandemic, we are supporting the health in Baltimore and Maryland as a whole because of their efforts. So reauthorizing that program, sustaining the money that it needs in order for it to continue is not just about helping the women entrepreneurs like myself to feel good about the dream that's been realized but it is a powerful impact on the community as a whole and not just for today but we're talking about the ability to affect generations to come. Thank you. [Applause.] [The prepared statement of Ms. Sweeney follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairman Cardin. Thank you very much for your testimony, but thank you for what you have meant to our community in Baltimore. We appreciate it as a fellow Baltimorean. Mrs. Koch. STATEMENT OF CATHERINE KOCH, PRESIDENT & CEO, K-TEC SYSTEMS, INC., ST. FERNDALE, MICHIGAN Ms. Koch. Chairman Cardin, Ranking Member Ernst,---- Chairman Cardin. Your mic's not on. Ms. Koch. Chairman Cardin, Ranking Member Ernst, Distinguished Committee Members and guests, good morning. My name is Cathy Koch. I am the Founder and Co-Owner of K- Tec Systems, a Detroit area manufacturer of temperature sensors, wire harnesses, and control systems. We serve diverse industries, including automotive, aerospace, food, medical, and chemical. I am also an alumni of the Goldman Sachs 10,000 Small Business Program. It is an honor to be here today. I appreciate your invitation and your attention to leveling the playing field for female small business owners. I would like to begin by thanking the committee for its bipartisan work last week to pass a series of bills to modernize the Small Business Administration. I'm here today to share my personal experience and the unique barriers I have faced and, importantly, what can be done to create equity and leveling the playing field. Let me start from the beginning. It was 1989. I had a one- year-old daughter. I was a recently divorced single mother and I was working in sales in a male-dominated auto industry. '89 was a different time. I loved sales and I loved being a mom, but I was told by my male boss that a woman couldn't do sales, let alone a new single mom. I disagreed. I knew my value and my talent. So I went to a competitor. While things were better, I was still held back. Eventually, I realized the only way I could reach my true potential was to start my own business. I put together a business plan. I sought a loan from a traditional lender but because I was a woman, I couldn't get one without a co-signer. In fact, I hadn't been able to secure a loan without a co-signer until three years ago, even though I've been profitable in business every year. Do you think male small business owners face similar circumstances? I can honestly say the women I speak to are not aware of the Women's Business Centers and I don't know the programs they offer. Wow! Since I couldn't get a loan to start a business, I bought a house with a land loan. I used $10,000 from the loan to finance the start of K-Tec. I had succeeded in overcoming the first challenge female small business owners face, far more limited access to capital than their male counterparts. Starting a business is hard. I made sacrifices. I brought my daughter to work with me regularly because like many female small business owners access to affordable and reliable childcare was another barrier I faced. Eventually my hard work paid off. We were doing business with every major automobile manufacturer and had broken into other industries. Then COVID-19 changed everything. I didn't think my company would survive. Thanks to PPP, EIDL Loan, seed loan from Great Lakes Women's Business Council, and my amazing employees, K-Tec pulled through COVID and is thriving again. In fact, we are doing some of our most meaningful work yet with the new contract to supply temperature sensors for the transportation of a new cancer drug. Here's the truth. My story, while troubling, is a success story. The challenge that I faced and still face didn't stop me but they persist. The extra challenges female women businesses face in our nation's economy output. Think of the charge we could put into our economy if we weren't wasting time and energy breaking through these barriers. As this committee continues to work, I offer these perspective where Congress and the SBA can focus to give us a fair shake. First, make mentoring and coaching opportunities more accessible and tailored to the women they serve. I wish I had more female mentors who understood my situation and could help me navigate the challenges of starting a business. That is why I mentor female entrepreneurs. I can honestly say that women I speak to are not aware of the Women's Business Centers and don't know the programs they offer. Second, reform the procurement process. It is nearly impossible for small business owners to sell their product to the Federal Government. Even though I am a WOSB, I've effectively given up and I'm far from not alone. It's no wonder the SBA regularly misses its five percent contracts awarded to female small business centers. Here's a true story that should resonate. My products are currently purchased by the U.S. Air Force. They aren't bought from me. They're purchased from a larger male-owned business who quite literally is the middle man because he can afford the resources to navigate the procurement process. If that doesn't trouble you, consider this. The Federal Government is paying more for them than they would be purchasing directly from me because he marks up the price. The only reason for this is because the procurement process is too difficult and resource-intensive to navigate. And third, continue to modernize the SBA to address the challenges of today's small businesses. A lack of access to childcare is a workforce issue and a small business issue and it must be treated as such. I'd like to thank this committee and Senator Ernst for working to address the childcare challenges small owners face. We must also examine how the SBA Federal Government can increase access to affordable capital for small businesses. I could share more as this is a real passion for me. However, in the interest of time I would conclude by thanking the committee. I look forward to answering any questions you have and stand ready to work with you to find solutions. Thank you. [The prepared statement of Ms. Koch follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairman Cardin. Well, thank you very much for your testimony. [Applause.] I must tell you we've always been impressed with the Goldman Sachs 10,000 Small Businesses. We now see a face for one. So thank you very much for your testimony. Well, I just want you to know, Senator Ernst, I know, will agree with me, we hold many hearings during the course of a Congress. The four of you, very impressive testimony, very helpful to us, and each one of you stayed exactly within the five minutes. That's the type of--that's right. It is unheard of here. So thank you very much for the input that you've made to our committee. I just really want to underscore a couple points. I'll start with Mrs. Sweeney. We had a hearing that I chaired in the Senate Finance Committee last week on transplant needs which basically we do a lot of kidney transplants because people are not taking care of their diabetes and hypertension. So what you're doing is critically important for the individual, but it's also important for our health care system because dialysis and transplants are extremely expensive, necessary but expensive, but if you do the maintenance and prevention of diabetes or management of diabetes and dealing with hypertension, you reduce significantly the number of renal diseases, particularly end stage renal disease. So I just want to thank you for that, and you're focusing, which I thought was really extremely impressive, on underserved communities. So how did you get into that commitment and does the system reward you for reaching out because, as Mrs. Koch said, a lot of people don't know about the services. You have to do outreach. So how did the SBA tools help you in reaching this very vulnerable community? Mrs. Sweeney. Well, thank you. With the WBC, we were able to focus on prevention right at the heart of the pandemic. That has always been our focus, but with the impact of COVID, that's where we narrowed down on prevention as the primary focus. One out of three adult Americans have pre-diabetes which is the precursor. So what is the support that we have? Well, (1) we are reimbursed through Medicaid and Medicare. Those are small numbers. Where the barrier comes is that there's a lot of administrative responsibility on our staff and medical reimbursement does not cover it all. We're also a for-profit. So that limits our ability to get a lot of the funding that's in place. Maryland alone has received millions just these past few years related specifically to diabetes prevention and management, but we're rarely ever in those conversations. So that's one of our goals, but we do a lot of outreach in the community and a lot of that is done with our outreach team and that is primarily because that is the only way we're going to keep the conversation going about these preventable illnesses. Chairman Cardin. Thank you. The report that I referenced in my opening statement points out the disparities with women-owned small businesses. The number of loan rejections are higher than the male businesses. The number of women-owned businesses that have to use their own savings and resources and family resources versus their male counterparts is much, much higher and the list goes on. The number of 7(a) loans, the number of 504 loans are much lower than the demographics would have you think would be right, and then you go to venture capital which is almost nonexistent in women-owned small businesses. Then on the contracting side, you mentioned this, Mrs. Koch, the government has reached all of its goals on small business set-asides, except for women. We have not reached the five percent which is not acceptable. So, Ms. Somerville, you mentioned the use of the Women's Business Centers, the SCORE Program for mentoring, and we talked about the need for mentoring, and it seems to be working well for you. Mrs. Koch, you had some concerns as to whether we have women mentors available which I think is a really strong point in the SBDCs. How do you put together the tools that are there today and how can we make them more effective? Ms. Somerville. I had a really good experience in terms of outreach and exposure to the different tools that are available at each of the SBA resources and one of the greatest take-aways was the building of the networks that are offered that allowed me to have access to other ways to generate revenue. For example, with the Women Business Center, I was introduced to philanthropic opportunities in which I was able to compete at a pitch competition, if you will, to gain additional resources. I was able to win about $14,000 and it enabled me to buy the IT tools I needed, my computers, licenses to build my company and so I think it's the outreach and it's the resources that they exposed me to that were also in the community available. I simply would never have been aware had they not granted me the opportunity, access, and exposure. Chairman Cardin. Senator Ernst. Senator Ernst. Thank you, Mr. Chair. Patrice, I'll start with you. In your testimony, you had highlighted findings from the U.S. Chamber of Commerce that demonstrated businesses with 50 employees or fewer incur regulatory costs that are nearly 20 percent higher than for the average firm. Earlier this year, I introduced the PROVEIT Act which will hold federal agencies accountable when they overlook important due diligence requirements as they impose sweeping regulations that maybe aren't right for small businesses. Do you think that businesses with 50 employees or fewer should be subject to the same regulations as businesses with over 500 employees? Ms. Onwuka. Well, Ranking Member Ernst, I mean, I think that they are unfair. A lot of mom and pop shops, they don't have the same resources as large companies do, particularly when it comes to compliance costs and legal experts that they have. So that they can dive into the minutia of all of the federal code and figure out what regulations are new and how they can, you know, abide by them. When we think about women entrepreneurs, I mean, the members here, the panelists here have talked about it, but I've also talked about the research that, you know, you're starting with a capital deficit to begin with and so you're trying to build your business and at the same time trying to figure out what the regulatory burdens are at the federal level, not to mention state and local regulations that add a new layer of challenge. So, absolutely, I think your bill and there are other bills on the House side that look at, you know, every piece of new regulation coming out from every single agency, from Energy all the way to Labor, to ensure that there's going to be zero costs on small businesses and then to ensure that at least small businesses understand what those regulations are so that they can figure out how they can comply with them. Senator Ernst. So the regulatory burden is pretty heavy on our small businesses. What about those broader economic challenges, like the high interest rates, workforce challenges, how do those affect our women entrepreneurs, as well? Ms. Onwuka. Sure. Well, labor shortages are obviously not new. For decades some industries, like construction, have had them, but we're seeing them in industries where women are concentrating their businesses. In the retail industry but particularly in caring industries, whether it's home care services and in AIDS, whether it's, you know, daycare centers, childcare, a lot of businesses, small businesses find it hard to find people to compete with larger companies that can offer greater pay and benefits and so, you know, all of these make it difficult for you to be able to hire and retain your folks and then add to that the regulatory costs that can come with keeping people employed. Senator Ernst. Thank you. As I mentioned in my opening statement, women in rural communities lack the same resources available to those that are living in more densely populated areas and as I mentioned, there are four WBCs located within a 50-mile radius of Washington, D.C. and yet there's only one that is located in the entire state of Iowa. So how can we better assist women in those rural communities? Ms. Onwuka. Well, interestingly,--thank you, Ranking Member. Interestingly, there are a couple of different pieces that I think rural female entrepreneurs--challenges that they face. I mean, women, they tend to have lower incomes to begin with. Obviously that means less capital to start their businesses. They have higher poverty rates, interestingly, and then there are the infrastructure gaps and particularly when it comes to technology, we're seeing that rural women have-- they're the least likely group to have internet access at home. So when we look at the information system today and how many new entrepreneurs are starting their businesses simply with this little gal right here in their hands, if you don't have access to internet at home, then it's going to make it very difficult for you to be able to sell your wares on the internet and to find folks. So I think looking at how we build infrastructure, make sure that infrastructure is particularly high-tech infrastructure is available, it's going to be important, and then, you know, I think the mentoring and the peer-to-peer coaching is very important and so while it may be hard to find mentors, there may be peers in your area. You mentioned the fact that there are so few women business centers in rural areas, but maybe there are peer networks that can be built up and utilize technology to tap into all of the other women centers that are in other states or in other regions. That can be a way of helping to ensure that our rural female entrepreneurs have access to the resources that they need. Senator Ernst. Yes, and I appreciate you mentioning how much work we do on our phones, and I think a lot of women do actually start by using this type of technology and in Rural Iowa I know of one woman that lived in Southern Iowa. She did not have internet access at her home and she lived on a farm and so she would drive into her little tiny rural community in the evenings and sit outside of the Iowa State Extension Office and draw off of their Wi-Fi and do all of her ordering and distribution on her phone. So we've got to figure out better ways of doing business. So thank you very much, really appreciate that. Thank you, Mr. Chair. Chairman Cardin. Senator Hirono. Senator Hirono. Thank you, Mr. Chairman. Welcome all of the panelists and you brought your cheering section, I see. So welcome to all of the women in the audience. Aloha. [Applause.] So for our entire panel, how many of you had trouble getting access to capital? Raise your hands. [Show of hands.] Senator Hirono. So obviously and I bet, yes, I see some hands from people in the audience, that that is one of the often-cited very practical concerns is access to capital. Is there anything more that Congress can do to enable small businesses, especially women-owned businesses, to have access to capital? Any of you have very specific ideas about what Congress can do? Anybody? Go ahead. Ms. Koch. Thank you. They could access more--the greater loans. They have a micro loan that SEED has in our local community. It's only $50,000. It's been the same for, as I know, the last 15 years. Nothing's changed. Then also look at second stage companies. As myself, you know, you start out at one point, you need different needs as you grow. Let us continue to grow. Senator Hirono. Anybody else? Yes, Ms. Sweeney. Ms. Sweeney. Yes, thank you. The beauty of the WBCs is their ability to provide additional resources. There has to be an opportunity to include access to capital internally. From micro grants, other private funding within Baltimore, there's a huge resource, so an ecosystem built on nontraditional funding. Being able to tap into those resources and leverage those opportunities within the WBC so that it increases access to capital for mentees. Senator Hirono. Anyone else with other ideas? Ms. Onwuka. Yes, Congresswoman. I would just add that and underscore particularly small business in the childcare sector that are nonprofits being able to have access to the for-profit SBA loans and then broadly I think it's important that women are able to keep as much income coming into their households as possible and that gets into tax policy but also gets into regulatory sides, but that's what I would suggest. Senator Hirono. Ms. Somerville, did you want to add something? Ms. Somerville. Yes, ma'am. Thank you for the opportunity to share. I'd also like the recognizing of larger business and the strengthening of the partnerships between the larger business and the small business in terms of mentorships. That's another way to continue to enable our success. Thank you. Senator Hirono. I know some of you, I think at least two of you have benefited from the mentorship opportunities that were provided through the Women Business Centers. So was that a very critical aspect of your ability to start your businesses, the mentoring? What can we do to increase those mentoring opportunities, Ms. Somerville? Ms. Somerville. It was truly a significant supporter. I think the biggest thing was with the WBC and applying for my women-owned certification as a small business was the handholding aspect. The flexibility, as the Ranking Member Ernst mentioned, that we do a lot of things in the evenings. I think they were relentless in being accessible on weekends and late evenings and literally enabling me line by line, step by step because the process can be extremely challenging navigating through that. The support was unyielding and I think the flexibility that the program offers in terms of accessibility was bar none. Senator Hirono. I have visited the Women's Business Center in Honolulu and I know that it makes a really big difference. One of you mentioned the need to access broadband. I think that's very true and that is why some of the funding that we provided for this purpose, especially for rural areas, through the Infrastructure Bill and others, I think that's going to be really critical to enable entrepreneurs in the rural areas of our country to be able to sell their products. So I think that was Ms. Sweeney who mentioned that. So thank you very much. I think one of the challenges is the need for affordable childcare and our country provides less support for early childhood education and childcare than just about any other developed country, probably the least, and so there are some bills that would provide additional support for access and affordability to childcare. Would you agree that for the panel that that is an important element of enabling business women to--yes, to have successful businesses? Ms. Koch. It is hard. I lost most of my female workers. It was hard for them. We have a training program that we started because we partnered with a local organization called COTS. They are a nonprofit that helps take women off the street with children. They teach them skills and we bring them in and teach them how to make wire harnesses and provide a place for them to work. If we don't have work, we sub them out to our competitors. Senator Hirono. And, frankly, the only three countries that do worse than us in terms of supporting childcare affordability and availability, Ireland, Costa Rica, and Turkey. So we need to do a heck of a lot better and there are a number of bills that would enable the affordable access to childcare, and I think that's something that we need to do for the women in our country and I say about time. Do you agree in the audience? Go ahead and clap. [Applause.] Senator Hirono. All right. Thank you. Thank you, Mr. Chairman. Chairman Cardin. Certainly. Senator Hawley. Senator Hawley. Thank you very much, Mr. Chairman. Thanks to the witnesses for being here. Ms. Koch, could I just come on to you? I'd like to talk a little bit more about your manufacturing background as well as about women in the industry. Can you just give us a sense of what some of the biggest constraints are to success in manufacturing in particular for women-owned businesses? Ms. Koch. There's not enough women-owned manufacturers to get mentorships from, but the things that are hurting us today are the employee rates, the finding the good talent, learning-- I didn't have a manufacturing background. I had a marketing background. I just had a passion on making things. So I did. But there's a lot of--we need help with capital, being able to get to that next step. I've been presented to companies that wanted to do work with us but I couldn't get the funding or they thought we were too small and we do work with all the automotive companies, but, you know, to get to the next level is difficult, especially in this field of manufacturing. Senator Hawley. Absolutely. Let me just ask you about an issue in your industry, in the manufacturing industry, which is offshoring, particularly with regard to China. I'm just curious if the offshoring of our manufacturing capacity to China over decades now has created any challenges for you that you see, whether that's in the educational pipeline as it were that we used to have in this country that we've now lost in many instances because now those jobs have gone overseas and so now we don't have the education to train workers any longer or whether it's other things. I'm just curious about your firsthand experience. Ms. Koch. Okay. I can talk about the education piece. Senator Hawley. Please. Ms. Koch. STEM. Okay. I'm heavily believing that STEM is very important right now. It's where the future of manufacturing is. It's where the future of the jobs are. So we have to start early in our schools partnering with manufacturing companies, letting us bring them in early, at an early stage, also have mentoring and good programs to start with children at early ages, even in elementary, to show how important STEM is. Today, even just in the female sector, 29 percent of women of the whole STEM industries are holding those positions. That's still very low in this day and age. Senator Hawley. Yeah. Yes, thank you for that. You talked about the need to cut red tape and reform the procurement process, and I'm just wondering if you have any specific recommendations for this committee that maybe we could help with when it comes to that. Ms. Koch. Navigating the system is difficult. You can get certified as a WOSB through our local chapters and our local thanks to WBENC and our local Great Lakes Women's Business Council. However, once you get certified, then you go to the system and there you just get a runaround. If you ever try to go get into their--you have to go hunt and find the contract and then when you get the contract, the language is so difficult to understand because it's a military language, it doesn't break it down to what we're used to in the industries. So I think that the other thing is that having more of a networking group where you bring your procurement agents to some of our events to find us, help connect those procurements, the purchasing to see what we do, that would really help. They have events all the time through WeBack where women bring and show their products. Why isn't the military, why isn't the government there? Senator Hawley. Very good. Thank you very much. Thanks to all of the witnesses for being here. Thank you, Mr. Chairman. Chairman Cardin. Senator Hickenlooper. Senator Hickenlooper. Thank you, Mr. Chair, Madam Ranking Member. I thank all of you, the entire audience for being here, but especially you being on the firing line here. I had the great fortune. I was an entrepreneur that had a very hard time raising money to build my first brew pub, a restaurant that brewed its own beer. I got turned down by 33 banks and I was just trying to get $50,000. You know, no one knew what it was back then, but the process, the bank that finally took the risk on me was a women's bank, which I thought was ironic. [Applause.] Senator Hickenlooper. But they understood the concept of doing something that someone hadn't done before and they also understood the challenge of having to deal with the bureaucracy that we often find. I think we're in a global competition in terms of technology and innovation. I think whether you're talking about climate change, whether you're talking about quantum computing or artificial intelligence, we need all hands on deck and we cannot leave a large portion of our population not part of the effort, and I think it's going to have to be a national effort. I think you're all working in different aspects of this that really are important and going to bear fruit. It's not a question of fairness and making sure people get good jobs. That's great. That's very important. But the nation needs everyone to be committed to this effort because we are in this incredible competition. So, Ms. Somerville, let me just ask and, you know, roughly 25 percent of all our innovation firms are led by women. I think that's a generous estimate. How can the SBA better implement education programs among its resource partners to provide young women with the hands-on training to develop tech businesses and to support innovation? Ms. Somerville. Thank you for that question, sir. One of the things I think we focus on in my company is internships, partnering with academic institutions to develop curriculum that will enable individual students from high school and college to apply the academic piece in the real world, so looking at what those technical competencies are needed in the real world and infusing them in the academic curriculum, and then offering those internships sponsorship, ally ships, mentorships, if you will. We also integrate in terms of being keynote speakers to tell many students what it's like in the real world. We sponsor a lot of STEM events which is also good in terms of IT because one of the things we've been able to do is to with the resources we receive from WBC and other partners was to build out our IT infrastructure so we can employ people and educate people throughout the nation. We even have an employee in a teeny tiny home in the middle of Colorado somewhere, very rural area, and so it actually works, but exciting, our youth, about the opportunity and giving them opportunities to demonstrate that and partnering with academic institutions, podcasts, being very relevant and relatable with today and STEM is definitely, as mentioned earlier, it's key in terms of our IT infrastructure. Believe it or not, that mentorship goes both ways because we learn from the amazing bright future leaders of women and young men in our communities. So the future looks bright and when we get out there and have that outreach opportunity, but it starts with the academic institutions, sir. Senator Hickenlooper. I love your emphasis on apprenticeships and partnering with those. I think you all at various times in your materials support that and, you know, the Department of Labor has apprenticeships. I mean, Commerce has apprenticeships. Everyone's got apprenticeships but no one's really focusing on making that a national movement because I think especially for people that are from lower income backgrounds apprenticeships allow them to have those models. In Colorado, I was partners in a project with a woman named Joyce Meskis who started the Tattered Cover Bookstore which was the most amazing bookstore any of us had ever seen, and she told me one time, she said the hardest thing was I didn't have any role models as a woman entrepreneur. There was no one I could go and hang out with and she said, you know, if I hang out with the guys, they didn't treat me as a guy, you know, and I think that's something we too often overlook. Ms. Sweeney, research shows that women are less likely to choose being entrepreneurs and that there's a resistance there, largely it is because they don't encounter other women entrepreneurs. So what type of public/private partnerships should we think about expanding to foster an environment where we create an ecosystem where women have more access to mentors? Ms. Sweeney. Well, a good example of that is actually the Baltimore Metro Women's Business Center because they are connected to Morgan State. So they are right there amidst other programs that have already launched. Their entrepreneurial programs are designed for college students and they have extended beyond that to high school students. For us particularly, we're a partner. We take on summer youth workers and now we're moving into taking in youth workers throughout the entire year starting in the fall. So it goes back to some of those partnerships that was mentioned earlier that we get into not just the high schools and colleges but we start working our way through middle schools and we can build from the WBC because of all the partners that they're leveraging so that we can begin to have real world experiences and I'll say I'm a 10K SB alum, as well. So that partnership already there has a built-in system to help us to continue to help the next generation of entrepreneurs. Senator Hickenlooper. All right. Well, I'm out of time but not out of heart and I love what you guys have all done. I think it's inspirational and delighted to see ways we can help expand and accelerate the progress you all have made. Yield back to the Chair. Chairman Cardin. Senator Rosen's timing is just perfect. Senator Ernst has already mentioned, several of you have mentioned one of the initiatives that we have taken to expand the tools of the SBA for childcare businesses, nonprofits, and I want to congratulate Senator Ernst for her leadership on that and Senator Rosen for her leadership on that, and we're now joined by Senator Rosen. Senator Rosen. Thank you, Mr. Chairman. Thank you, Ranking Member Ernst, for your patience. We were in a Homeland Security markup. We just finished and I ran over. So I appreciate your timing and thank you all for being here today. Obviously we're here talking about women-owned businesses and I'm going to talk, of course, about my state Nevada and in Nevada, women make up 45 percent of all businesses throughout the state which is equivalent to more than 80,000 small businesses that are women-owned. In fact, Nevada has led the nation in women-owned businesses for the last decade and so I'm so proud of all the women entrepreneurs and I want to see women-owned businesses increase in the years to come and so one way to ensure that increases is to prioritize, of course, the proper resources for women and other underserved communities and so it's why I introduced the Minority Entrepreneurship Grant Program with Senator Tillis and this legislation would establish a minority entrepreneurship grant program at SBA. It's going to award grants to minority-serving institutions, historically black colleges and universities to promote and increase opportunities for minority student business ownership and entrepreneurship. So, Ms. Sweeney, can you speak to the resources that you utilized to start your business and how did you hear about them and what do you wish you had known or had available to you so we can maybe potentiate that? Ms. Sweeney? Ms. Sweeney. Thank you, Senator. I've benefited greatly right at the start of the pandemic from the Baltimore Metro WBC. That connection was pivotal for us being able to be able to strategize what our next step would be at a time of great uncertainty. So I was thankful that I knew about the WBC, but what wish I knew before, before I jumped into entrepreneurship that I had a mentor prior to. So a lot of our initial meetings was to clean up some of what needed to be cleaned up. So the first step, of course, is how important it is when a woman is ready to start a business, how connecting with the WBC is so important from the entrepreneur education perspective. Thank you. Senator Rosen. Thank you. I do agree. Mentors make all the difference in so many things, so many things. Next, I want to move on to reducing burdens for our small business owners, something that I think you all know about, as well, and because there's many factors, as we know, that go into starting a small business, develop your business plan, you register your business, you have to understand perhaps your compliance requirements, and, of course, so much more, depending on what type of business it is. I've heard from Nevadans about the complex process of starting their businesses and not fully knowing every operating requirement to ensure their business is up to par for their state standards. So it's important that the Federal Government creates a streamlined process for Americans to work through the oftentimes bureaucratic red tape to start a small business more easily. It's why I introduced The One Stop Shop for Small Business Licensing. It's going to require the SBA to create a central website for licensing and business permit information. All these materials kind of in the wish you had known before you started category. So again, Ms. Sweeney, can you speak about your experience in getting the proper licensing and permit requirements and how difficult was it and what else do you think we can do to streamline a little bit? Ms. Sweeney. Thank you. Because we are medical, we are part medical, so there's a lot of compliance around Medicaid, Medicare. The biggest piece, as you mentioned, is not just being able to go to a website because you have access to the site. Senator Rosen. Right. Ms. Sweeney. So what has helped me specifically has been mentorship within the State of Maryland and that mentoring has actually come through some of our managed care organizations, our direct contact with our partners, like Aetna, like Notre Dame School of Pharmacy. So what I think of and in my experience, wouldn't it be awesome, especially with the burden of health care right now, if there was actually a committee in place or an infrastructure in place that would help people who are interested in tapping into health care to be able to navigate the compliance much better and we know then we would see a huge increase in especially small business owners that would be willing to tap into Medicaid and Medicare reimbursement which means more support for communities that need it the most. Senator Rosen. Well, thank you. I appreciate especially working on the workforce, skilled nursing, long-term care, all of those things, we're all going to need it. Thank you again, Mr. Chair and Ranking Member, appreciate it. Chairman Cardin. Senator Ernst. Senator Rosen. Okay. Yes. I just want to expand upon that because so many members of the committee have asked about mentorship and I want to make sure that once again I highlight The SCORE Act of 2023 which is seeking to strengthen mentorship and coaching opportunities for women, especially in our rural communities. Cathy, Ms. Koch, in your experience, what obstacles do women small business owners face when it comes to accessing the mentorship program and especially maybe in some of the rural communities? Ms. Koch. Well, I did not know where to find one. Access to female mentors that understand my challenges, my challenges from the time I started my company to the challenges that I still face today as a growing manufacturer. I need mentors that are more like someone said earlier. I had a lot of male mentors early on because that's all there were and I didn't even know there was such a thing as a coach. I didn't have access to that. Today I do. Senator Ernst. So did you--I'm sorry to interrupt, Ms. Koch. Did you have experience with The SCORE Program? Ms. Koch. Yes, I did early on and it was--so then it was-- they paired me up with an engineer that was, you know, a retired engineer. I was young in my career. He didn't understand anything about running a business and he didn't understand anything I was trying to ask or say. It was so embarrassing for me that I just gave up. Senator Ernst. Okay. And that's unfortunate and I think it's important to point out when we do have failures in the system and then how do we correct those failures and I think that's why it's important that we continually take a look at The SCORE Program and make sure that we're meeting the right fit with the needs of the individuals that are accessing the program. I want to close with just a final question about childcare and maybe you can just share your story, as well, because I know probably a number of you have struggled with childcare and many in our audience and even as a young worker, I would take my daughter to work after hours because we didn't have access to nontraditional times and I think we need to modify the way we think about childcare because not everybody works a 9 to 5 position and having access afterhours or before school, a lot of that is really important. But as a single mother with a young toddler when you were working, what obstacles did you face when you were starting your business? Ms. Koch. Finding the affordable childcare, so that's why she came to work with me. After school programs that I felt were good for her, not just a daycare, you know, options, something that she could still excel and learn in. Even though bringing her to work with me, I felt like, you know, now I learned later in life because my daughter is now a--she's a chemical engineer and she is now a partner at one of the largest consulting firms and a young mother and she's a female partner. So to me, it was probably bringing her here was--now I look back and think it was probably good for her to see a role model. However, you know, I felt guilty when I was at work and she was with me working and I was not paying attention to her. So having those programs are so important and they're also important for my employees. I said earlier we partnered with this program to bring women off the streets and teaching them. Part of the problem is when we pay them a salary and we pay twice the amount of our local Michigan wages to start with no experience and they still can't afford childcare. Senator Ernst. Wow! That is incredible. Patrice Onwuka, you had mentioned earlier, as well, thinking about childcare differently. If you could just help close us out on how we should think differently about childcare. Ms. Onwuka. Absolutely. Thank you, Ranking Member. Childcare is so important to women and women small business owners because many small business owners have children and they're trying to balance how they can raise their kids but they're also employing, as my colleague here mentioned on the panel, they're employing workers who need childcare and so, Number 1, I think we want to be careful about suggesting that there should be a one size fits all solution to childcare. I think daycare centers are one form of childcare. You also have in-home-based childcare that a lot of parents would rather have someone in a home that they trust than, you know, necessarily a daycare center. So we want to make sure that there is many different types of options as possible and I think you can do that through the Tax Code. I think you can do that through, you know, different acts. We talked about the Small Business Childcare Investment Act. I think that's a really smart way of looking at it and then ensuring that the SBA provides those resources as a clearinghouse to where employers can find information about different childcare options and resources to offer at their centers. Senator Ernst. Thank you very much. Thank you very much, Mr. Chair. Chairman Cardin. I want to thank again our four witnesses and thank those that are in attendance for what you do every day to help entrepreneurship in America. Senator Ernst and I recognize we have a responsibility as the Chair and Ranking Member of the Small Business Committee to modernize and update and oversight the small business laws of our nation and unfortunately that hasn't been done for a long time. So some of the issues that you are referring to, such as micro loan caps or some of the issues concerning oversight of The SCORE Program, Congress has not acted on these areas for a long, long time. The same thing with the financing tools, we haven't done that. Well, we're determined to exercise our roles as legislators in that regard and we've already started that process. We started that process with the passage last week of 12 bills. One of those bills dealt with the financing issues by recognizing we need permanency with mission lenders, with the Community Advantage Program, and modernizing the 504 Program. So we are taking steps to try to respond to many of the concerns that you have already expressed. We talked a lot about childcare. Childcare is absolutely essential for women to be able to enter the workforce and become entrepreneurs and so we have taken steps to remove the disqualification of childcare businesses from participating in the SBA financing tools. So we are taking those steps and there's several others that we've already looked at. You've made a lot of really good suggestions that we are going to absolutely take a look at. The SCORE Program, we need to make sure that we have mentors that are contemporary with the needs that are out there and your example points out that there's improvement that needs to be made. We need a mentoring program, as some of you have pointed out, extremely important to your successful start up of business, but let's make sure that the program is done correctly. Women's Business Centers are absolutely essential and you've pointed out that, yes, there is a difficulty in figuring out how to deal with the tools that are available through the SBA, but then when you get to the private sector, which is another important source for help for small businesses, women are at a tremendous disadvantage and the Women's Business Centers can make a big difference. I just want to point out to my Ranking Member four years ago we had no Women's Business Centers in the Baltimore Region and Baltimore was our largest city in Maryland. We now have a center located at Morgan State University and it makes a huge difference. We also have one at Bowie, I might say. They happen to be HBCUs, but connecting to a college campus allows us to connect to mentors. It allows us to deal with some of the technical needs that businesses need by connecting the dots and having the programs available. So it's important to update the Women's Business Center laws to make sure that we have the resources to take care of the people of Iowa as well as the people of Maryland. So it's past time that we look at how we can exercise our responsibilities as legislators to update these laws. I might tell you the Administration took steps in the Rules. We think we have responsibilities to make sure that there is legislative oversight and so we also want to make sure that we don't go a long period of time without us reviewing and we also want to make sure that as we allow lenders into our program that there's protection for the public from unscrupulous-type lending practices. So all of that is part of our responsibility and we think we are making progress. Contracting reform is desperately needed. Many of you have mentioned that. I understand the DoD has a foreign language in their rules and we really do need to be able to allow the access from small businesses, women-owned small businesses to be able to access government contracting in an easier way. You don't have the large staff that can get you through those types of challenges. The resource partners help you, but we also have to make sure that the agency helps you. So these are all part of what we're trying to do on contracting reform. The bottom line is the suggestions that you have made here will help us in our process in our reauthorization of these programs and we thank you very much, the four witnesses plus the people that are in the room. You're invited back again. [Applause.] Chairman Cardin. Thank you all very much. The Committee stands adjourned. [Whereupon, at 11:20 a.m., the hearing was adjourned.] APPENDIX MATERIAL SUBMITTED [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]