[Senate Hearing 116-517] [From the U.S. Government Publishing Office] S. Hrg. 116-517 CAPITAL ACCESS FOR MINORITY SMALL BUSINESSES: COVID-19 RESOURCES FOR AN EQUITABLE AND SUSTAINABLE RECOVERY ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP of the UNITED STATES SENATE ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION __________ JULY 23, 2020 __________ Printed for the Committee on Small Business and Entrepreneurship [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.govinfo.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 46-603 PDF WASHINGTON : 2022 COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP ONE HUNDRED SIXTEENTH CONGRESS ---------- MARCO RUBIO, Florida, Chairman BENJAMIN L. CARDIN, Maryland, Ranking Member JAMES E. RISCH, Idaho MARIA CANTWELL, Washington RAND PAUL, Kentucky JEANNE SHAHEEN, New Hampshire TIM SCOTT, South Carolina EDWARD J. MARKEY, Massachusetts JONI ERNST, Iowa CORY A. BOOKER, New Jersey JAMES M. INHOFE, Oklahoma CHRISTOPHER A. COONS, Delaware TODD YOUNG, Indiana MAZIE K. HIRONO, Hawaii JOHN KENNEDY, Louisiana TAMMY DUCKWORTH, Illinois MITT ROMNEY, Utah JACKY ROSEN, Nevada JOSH HAWLEY, Missouri Meredith West, Republican Staff Director Sean Moore, Democratic Staff Director C O N T E N T S ---------- Opening Statements Page Rubio, Hon. Marco, Chairman, a U.S. Senator from Florida......... 1 Cardin, Hon. Benjamin L., Ranking Member, a U.S. Senator from Maryland....................................................... 3 Witnesses Bayles, Ms. Talibah, Founder and CEO, TMB Tax and Financial Services, Birmingham, AL....................................... 6 Busby Sr., Mr. Ronald, President and CEO, U.S. Black Chambers, Inc., Washington, DC........................................... 14 Estrada, Ms. Fabiana, Director of Lending Southeast Region, ACCION, Miami, FL.............................................. 24 Bilonick, Ms. Marla, Executive Director and CEO, Latino Economic Development Center, Washington, DC............................. 29 Alphabetical Listing and Appendix Material Submitted American Indian Alaska Native Tourism Association Prepared statement........................................... 68 Bayles, Ms. Talibah Testimony.................................................... 6 Prepared statement........................................... 10 Bilonick, Ms. Marla Testimony.................................................... 29 Prepared statement........................................... 32 Responses to questions submitted by: Senator Cantwell........................................... 74 Senator Hirono............................................. 76 Senator Duckworth.......................................... 82 Busby Sr., Mr. Ronald Testimony.................................................... 14 Prepared statement........................................... 16 Cardin, Hon. Benjamin L. Opening statement............................................ 3 Coalition to Help Everyone Access Resources to Thrive (HEART) Prepared statement........................................... 83 Engine Advocacy Prepared statement........................................... 89 Estrada, Ms. Fabiana Testimony.................................................... 24 Prepared statement........................................... 26 Responses to questions submitted by: Chairman Rubio............................................. 94 Senator Cantwell........................................... 95 Senator Hirono............................................. 96 Inclusiv Prepared statement........................................... 97 National Association of Federally-Insured Credit Unions Letter dated July 22, 2020 to Chairman Rubio and Ranking Member Cardin.............................................. 100 Rubio, Hon. Marco Opening statement............................................ 1 The Spirit of Enterprise U.S. Chamber of Commerce Prepared statement........................................... 102 CAPITAL ACCESS FOR MINORITY SMALL BUSINESSES: COVID-19 RESOURCES FOR AN EQUITABLE AND SUSTAINABLE RECOVERY ---------- THURSDAY, JULY 23, 2020 United States Senate, Committee on Small Business and Entrepreneurship, Washington, DC. The Committee met, pursuant to notice, 10:07 a.m., in Room SD-430, Dirksen Senate Office Building, Hon. Marco Rubio, Chairman of the Committee, presiding. Present: Senators Rubio, Scott, Ernst, Young, Kennedy, Romney, Hawley, Cardin, Cantwell, Shaheen, Booker, Coons, Hirono, Duckworth, and Rosen. OPENING STATEMENT OF HON. MARCO RUBIO, CHAIRMAN, A U.S. SENATOR FROM FLORIDA Chairman Rubio. Good morning. Today's hearing on the Senate Committee on Small Business and Entrepreneurship will come to order. I want to thank everyone for joining us, both in person and virtually, for this hearing and sort of getting used to this new normal of doing hearing this way. I just want to alert everybody. We have two votes. One just started now at 10:00, and so what will happen here at some point is you will see members shifting in and out to try to get into the timing of it. That's the explanation for why you're seeing it. So I'm going to abbreviate my opening statement just to be able to accommodate all that. Obviously, we don't need to convince everyone about what impact this pandemic has had on all Americans from a health care perspective certainly, but also from an economic perspective. I also don't think we need to do a lot to convince people that small businesses have been disproportionately impacted by this pandemic, and all small businesses of every kind have been hurt by it across the country. The purpose of this hearing is to focus specifically on the even greater impact that the pandemic has had on minority-owned small businesses. Bad as it is for all small businesses, it is catastrophic and terrible. It has been even worse, if you can imagine it, among minority-owned businesses. Part of this disparity can be explained by the sectors that have been hit hardest by the COVID crisis. Construction, restaurants, hotels, transportation, these are sectors of our economy in which minority ownership is high, higher than it is in other sectors. But the data from the Census Bureau suggests that only 27 percent of small businesses have enough cash on hand to cover 3 or more months of operations. Those numbers, of the number of businesses that have enough cash, is much smaller than 27 percent when we are talking about minority-owned businesses. So today the major question we face is one of uncertainty. What happens next as communities--some are reopening, partially reopening. Some have reopened and have had to pull back. We are telling people not to go out. We are telling people not to go to places. So, in essence, we are--and they are following our advice, hopefully, but as they do, it has an economic toll. It is hurting all small businesses, but again, we are seeing that disproportionate impact is even higher among those that are minority-owned. So the two goals we have specifically to address is this disparity and the damage that is being done but also the concern that there will be a disparity in the recovery, that if some of these businesses go under, they will not be there to be able to recover and thrive. Part of what we have already talked about and continue to talk about as we try to prepare the next round of assistance to small businesses is not just so we can target the relief to more small businesses, but also how do we make sure that assistance reaches the most underserved small businesses as well. So one of the most important lessons we learned in PPP, some of the answers some from some of the sectors to save more jobs than others. The overall unemployment rate has dropped in April, from an April high of 15 to 11 percent; however, the African American unemployment rate remains at 15 percent. So there is just an example of an employment disparity that we need to address. There are some clues as to how to go after this. The first is, according to the SBA's data, only three sectors supported more jobs per dollar of PPP funds in low-income areas than they did for the Nation as a whole. So there are three sectors in which PPP funds helped support more jobs in low-income areas than they did nationally. The three sectors were manufacturing, health care and social assistance, and retail. So that tells us there that anything we do to be helpful to those sectors should have a positive outcome or impact on these communities. Another lesson is about access. Many minority-owned businesses have experienced problems accessing the capital because they lack relationships with SBA-approved lenders. There has been progress. As a proportion of the total quantity of loans disbursed, minority-owned businesses received PPP loans in equal or greater volume than their share of business ownership in the U.S. economy. I think some of that was due to some of the changes that were made to the program as it went on; for example, allowing as many lenders as possible to participate was key to this progress. We will need to do more. The CARES Act and the program within it approved 303 Community Development Financial Institutions, CDFIs, approved 171 Minority Depository Institutions, MDIs, and 19 FinTechs, financial technology companies, to provide these loans and more access. So that was helpful, and it is something we want to retain and build on. So we recognize that right now as we talk about the future, we are in a different place than we were in March when we first started talking about it. Some businesses will need additional short-term relief. Others are going to need access to low-cost, long-term working capital to recover, which was already hard for them to access. It will be even harder after this. PPP is basically a short-term grant to help keep a business open and their employees on payroll, but the hit that many small businesses are taking is much deeper than just staying open to make up for. They are not going to generate enough revenue in this environment to stay open under the constrictions that we are facing. So that is why one of my proposals, built on input and ideas that Senator Young first innovated, is proposing an expansion of the SBA 7(a) program to make available targeted long-term, low-interest loans to small businesses that are located in low-income communities. Obviously, that needs to be fleshed out further, but it is something we care about a lot. So that is what we will keep working on. Ultimately, anything we pass will have to be bipartisan. That has been the tradition of our work on this, both because it is better that way and because it is the only way to get it done. That is what we intend to do. We work very closely with the Ranking Member and Senator Shaheen and Senator Collins who is not a member of this Committee, Senator Lankford as well, who is not a member of this Committee, and then all the members of this Committee who have input. And that is what we intend to continue to do because we need to do something. We need to do it soon, and we need to make sure it is getting to the right people in the right way. With that, I want to recognize the ranking member, Senator Cardin, for his opening statement. OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, RANKING MEMBER, A U.S. SENATOR FROM MARYLAND Senator Cardin. Well, thank you, Mr. Chairman. I really want to thank you, not just for holding this hearing on access to capital for minority small businesses, but your commitment to deal with the inequities that minority small businesses have in our system. You have been a leader in bringing us together to try to find effective ways to make sure that those businesses that need the help the most, minority small businesses, small businesses in underserved communities get the attention of this Committee. I want to thank you for the process that we have been able to use in this Committee to bring about not only a bipartisan product but to get a product that can get to the finish line and provide help to businesses. Increasing Federal support for minority-owned small businesses as well as small businesses in underserved communities have been my top priority since I joined this Committee in entering the Senate in January 2007, and it has remained my priority as Ranking Member. My home State of Maryland boasts the highest concentrations of minority-owned and women-owned businesses in the country. So this issue is particularly important to Marylanders. Decades ago, Maryland leaders recognized the key role entrepreneurship had in efforts to close the wealth gap. In fact, the first Federal set-aside for minority-owned businesses was proposed in 1977 by the late Baltimore Congressman Parren J. Mitchell, who introduced an amendment to a $4 billion Federal public works program that required city and State recipients to set aside 10 percent of the funds for minority- owned businesses. Congressman Mitchell understood that any plan to shrink the wealth gap in America must include entrepreneurship, and that the Federal Government has an important role to play in helping minority entrepreneurs overcome the historic, pervasive challenges put before them. The most pervasive of those challenges is access to capital. Mr. Chairman, while our hearing is focused on ensuring an equitable recovery, I feel the need to place today's discussion in historical context. During a field hearing I held on this topic in September 2018 at Morgan State University, an HBCU in Baltimore, an executive of Harbor Bank, which is one of the few remaining black-owned banks in the country, stressed that lenders working with minorities need to understand borrowers, not only where they are going, but where they have been. It is vital that we in Congress approach this problem with the same understanding. Minority entrepreneurs' inability to get capital they need to operate and grow their businesses is not new, and, in fact, that minority-owned small businesses have been disproportionately harmed by the COVID-19 recession should not be a surprise. Prior to this pandemic, lending to minority-owned small businesses still had not returned to their pre-Great Recession levels. The protests sparked by the deaths of George Floyd and Breonna Taylor have further exposed the public health and economic disparities in communities of color, particularly black communities that have been made worse by the COVID-19 pandemic. There is a common saying that I have heard many times by black leaders in Maryland: ``When America has a cold, black communities have pneumonia.'' These disparities exist because Civil Rights and true equity are still the unfinished business of America. More than 50 years ago, the nonpartisan Kerner Commission created by President Lyndon Johnson warned of the negative consequences of continued inequality. The commission wrote in its report that America was headed toward two societies, one black, one white, separate and unequal. It is no question that our country has made progress in the decades since the Kerner Commission released its report, but there remains a rooted economic divide between communities of color and white America. In 1968, a typical middle-class black family had less than one-tenth of the wealth of the typical middle-class white family. It is the same today. For black small business owners and minority entrepreneurs, the wealth gap has worsened the disparity in lending. Minority business owners are two to three times more likely to be denied a loan than nonminority business owners and are more likely to receive less funding and pay higher interest rates on the loans they do receive. Mr. Chairman, it was with this inequality in mind that Senator Shaheen and I drafted the CARES Act provision instructing SBA and the Treasury Department to issue guidance to financial institutions participating in the Paycheck Protection Program to prioritize loans for underserved small businesses. Unfortunately, the administration did not issue that guidance, which led to the SBA's IG's finding that the implementation of PPP did not fully align with congressional intent in the CARES Act. Implementation of PPP was not the only program in which the administration failed to use every tool in its toolbox to prevent minority-owned businesses from falling behind during this crisis. The administration also failed to implement the EIDL and Emergency Grant Program in a way that would benefit more minority-owned businesses. So, Mr. Chairman, as we discuss how to ensure an equitable recovery for small businesses today, we must think about the problem historically. We must invest in the programs that we know work--the Minority Business Development Agency, which is the only Federal agency dedicated to supporting minority-owned businesses; the 7(a) Community Advantage Pilot Program, which has a long record of successfully getting capital to minority- owned businesses. I have introduced legislation to make both of these vital initiatives permanent and codified because right now they are not. We cannot stop there. I was proud to work with Senator Booker to release a plan outlining steps Congress can take to provide greater help for small businesses in underserved communities with regard to startup and operating capital, as well as technical training and mentorship. The aim of our plan is to ensure that when we make it through this pandemic and we have the next economic downturn, we will have the institutions, programs, and knowledge in place to support underserved small businesses in a timely way. Mr. Chairman, I want to thank you again for calling this overdue hearing, especially as we in Congress continue to negotiate and debate the next round of economic stimulus. Last time, we got the funds out the door quickly and helped a lot of people, but far too many minority-owned businesses were left behind. The truth is that even with the CARES Act, there was inequality in how resources were allocated, including inequality in some of the basic underpinnings of the PPP. The primary use of traditional financial institutions to disburse capital meant minority-owned businesses would have a harder time obtaining these important loans, and the focus on payroll made the program less useful to many minority-owned businesses, which not only have fewer employees on average, but are less likely to have any employees at all. This next stimulus gives us an opportunity to improve the success of the CARES Act and do a better job of providing help to minority-owned small businesses. Let us take advantage of this opportunity to avoid the consequences predicted by the Kerner Commission 50 years ago, so America is not two societies, separate and unequal. Thank you, Mr. Chairman, and I look forward to hearing from our witnesses. Chairman Rubio. Thank you. So let us move to the witnesses. As I said, there is a vote that started now. It will probably end around 10:45, and then there will be a second vote. So we will try to time it out so someone will be here. I think if we stop and try to restart, it is going to be more complicated. Our witnesses today are Talibah Bayles. She is the founder and CEO of TMB Tax and Financial Services, which is a full- service tax and revenue planning firm that assists small businesses with financial strategies promoting growth and stability. She sits on the city of Birmingham's Inaugural Small Business Council serving as the chair of the Women Minority and Disadvantaged Business Enterprise Subcommittee, belongs to the National Small Business Association Leadership Council and the National Association of Women Business Owners. That is a lot of meetings. Mr. Ron Busby serves as the president and CEO of USBC, which supports African American chambers of commerce and business organizations in their work developing and growing black enterprises. He currently serves on the Pfizer Small Business Counsel, the National Newspaper Publishers Association Foundation board of directors, and the White House African American Leadership Council. Ms. Fabiana Estrada is the director of Lending for South Florida ACCION. ACCION is a Community Development Financial Institution helping connect underserved communities to needed capital. She was recognized by the U.S. Small Business Administration in 2018 with the Mission-Based Lender Award. Ms. Marla Bilonick is the executive director of the Latino Economic Development Center. She previously worked at Seedco supporting businesses in Lower Manhattan that were affected by September 11th. She is a member of the board of directors of the National Association of Latino Community Asset Builders, the Montgomery County Comprehensive Economic Strategy Advisory Group, and the Institute for Community Economics. I thank you all for being here. Why don't we begin with Ms. Bayles because you are here. Thank you for being here. We will begin with your opening testimony and then go to Mr. Busby. We will do it in the order in which I presented, but thank you so much. STATEMENT OF TALIBAH BAYLES, FOUNDER AND CEO, TMB TAX AND FINANCIAL SERVICES Ms. Bayles. Good morning, Chairman Rubio, Ranking Member Cardin, and members of the Committee. My name is Talibah Bayles, and I am the founder and CEO of TMB Tax and Financial Services, a 100 percent black and woman owned firm located in Birmingham, Alabama. As a small business owner and a small business advocate, I thank you for the opportunity to speak on today's hearing focus of capital access for minority small businesses. TMB Tax and Financial Services is a full-service tax and revenue planning firm with clients across the United States. We are on a mission to help small businesses thrive with air-tight financial strategies and tools such as small business tax preparation, tax planning, bookkeeping and payroll, and business credit and financing coaching. I started this company here in the D.C. Metro Area while working for the Department of Justice where I worked for over 12 years. Prior to working for the Department of Justice, I was an employee right here in the Senate, where I worked for 3 years. With over 15 years of Federal Government and small business experience, I made the decision to relocate back home to Birmingham as a full-time entrepreneur. And my company has hit the ground running. So today I have come full circle and am extremely honored to have a seat at the table from this view. Today's focus on equitable and sustainable small business recovery is vital to the fabric of local, State, and Federal economies. As you know, small businesses employ nearly half of the Nation's workforce. Small businesses have traditionally created approximately 2 million jobs a year. In Alabama, there are over 400,000 small businesses, which represents 99.4 percent of the State's total business count. However, since the official COVID-19 declaration of emergency on March 13, 2020, small business job creation has declined nationally by 17 percent. Small business legacies are disappearing. Companies like mine have found themselves on a battlefield trying to assist troops who are fighting without the proper armor. Of course, there were challenges that existed prior to COVID-19. In the interest of time, I will only highlight two that I believe are the greatest challenges for minority-owned businesses. The first is the small business survival rate. Eighty percent of small businesses survive their first year. That number drops, however, to 70 percent at the end of the second year. By year five, if businesses are still around, there are approximately 50 percent of small businesses that are still operating. The second greatest challenge is the credit profile of a typical small business owner. According to NAV's Small Business American Dream Gap Report from 2015, one in five business owners who applied for funding in the last 5 years were denied, and 82 percent of all business owners surveyed did not know how to interpret their credit scores. I believe the root of both challenges is a small business financial literacy failure. Even further, inequitable access to information and expert-level technical assistance should be the focus on this Committee. Without the information provided to small business owners through the services of small business tax preparation, bookkeeping and payroll, and financial planning, there will continue to be a lack of access to capital for minority-owned businesses. Equitable access to information and expert-level technical assistance, it properly equips the small business troops on this COVID-19 battle because now they can see what they are fighting against. Said differently, equitable access to information allows business owners to see the areas that they need to fortify in their business. If the deficiency is becoming compliant with taxes, well, now they know and now they know how to do it. If the deficiency is not having an accounting software so that they can produce a profit and loss or a balance sheet to show the health of their business, well, now they know it and now they know how to do it. If the deficiency is the need to restore personal credit or to build business credit so that they can actually be approved for funding, well, now they know it and now know how to do it. Equitable access to information and expert-level technical assistance yields equitable access to capital for minority business owners. TMB Tax and Financial Services has become the perfect blend of small business financial literacy and trusted financial services. Therefore, through my business, I have launched a movement to Get Bankable, and we have experienced wins for our clients during this COVID-19 crisis. I am a part of a team of six other black women in accounting, financial planning, and bookkeeping that has collectively accomplished over $1.5 million in CARES Act funding for minority-owned businesses. And with a couple more weeks left of PPP, we will surpass this accomplishment. My clients' high PPP approval rates were accomplished as the result of year-round technical assistance in the areas of tax preparation, bookkeeping, and payroll. Well before this COVID19 crisis, we provided small business financial literacy to our clients. For our Schedule C entrepreneurs, we trained tax compliance and small business tax strategies. We not only focused on the importance of year-round recordkeeping of business income and expenses, but most importantly, we discussed the importance of reflecting a positive net income on the Schedule C tax form. We deployed what we call the ``leave something for investors and the underwriters'' strategy. Without advising our clients of this strategy, we found that most Schedule C entrepreneurs were inclined to ``write off'' as much of their expenses as possible which results in either a very low net income or a negative net income for the business on the Schedule C tax form. Those clients that actually deployed the ``leave something for investors and underwriters'' strategy obtained PPP loans, and those loans ranged between $4,000 all the way to $15,000 for those who applied as Schedule C or Sole Proprietor applicants. And I think it is very important to note that clients that were approved for the smaller PPP loans were just as happy as if they had received a million dollars because it motivated them to keep their doors open if just for a little longer. For our corporation entrepreneurs, we trained on the importance of having a formal payroll system in place. We stressed the importance of payroll tax withholding and compliance and the adverse effects of paying through other platforms that do not account for payroll tax compliance. And because my company is also a payroll provider, we were able to create and maintain formal payroll structures for these small business owners, and this actually allowed business owners to have those quarterly 941 tax forms and other payroll documentation that was required by the PPP process. So those clients that deployed the strategy for implementing a formal payroll structure, they obtained loans, and some of those loans were between $7,000 to $250,000. So for these approved applicants, that amount translated in the ability to cover payroll and to divert the money saved by that loan into keeping the doors open and other expenses paid for just a while longer. PPP was a necessary short-term lifeline for small businesses, and it certainly addressed an immediate need for the business owners that were approved. However, to weather the storm over the long run, it is critical that business owners have access to flexible long-term working capital. Minority businesses often do not have significant cash reserves or access to traditional capital, and any effort of Congress to provide long-term loans with low interest will help sustain these businesses, and I wanted to add that especially coupled with a blend of expert technical assistance with real financial tools so that these business owners can actually be approved for these long-term loans. In closing, the information that I have shared with everyone today is from the front line. I again state equitable access to information and expert-led technical assistance grants access to capital that businesses owners need. Small business owners are ready for it, and we expect it. Small business owners whisper stories of courage and strength into the fabric of the American dream. I grew up seeing the American dream of small business. I practically grew up in my parents' office supply business, Bayles & Company, which was once located on Second Avenue North in Birmingham, Alabama. And today my daughters are practically doing the same thing in my office, with the original Bayles & Company sign donned on the wall. The grit, the successes, the failures, the motivation, the legacy of the small business entrepreneur. Again, thank you for the opportunity to come full circle and testify today. I wholeheartedly offer my blended background to a continued discussion on what this very important topic is and what it means, and I look forward to working with this Committee in the future. [The prepared statement of Ms. Bayles follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Rubio. Thank you. Mr. Busby? [No response.] Chairman Rubio. I think your microphone is muted. Just stand by one second. There we go. STATEMENT OF RONALD BUSBY SR., PRESIDENT AND CEO, U.S. BLACK CHAMBERS, INC. Mr. Busby. Thank you, Chairman Rubio, Ranking Member Cardin, and distinguished members of the Committee for the opportunity to share testimony with you this morning. Again, my name is Ron Busby, and I am the president and CEO of the U.S. Black Chambers, Inc., where we serve 145 black chambers located in 42 states, with a membership base of 332,000 members. U.S. Black Chambers, also known as the USBC, for the past decade has been providing committed, visionary leadership, and advocacy in the realization of economic empowerment. Through the creation of resources and initiatives, we support black chambers of commerce and business organizations in their work of developing and growing black businesses. As the leading voice for black business owners in the Nation, U.S. Black Chambers stands on our five pillars of service to foster entrepreneurial growth and wealth creation within the black community. Our five pillars of service are advocacy--the U.S. Black Chamber fights for legislation that promotes small business growth, particularly policies that address the challenges of black business owners. Access to capital. The USBC works with financial institutions with a strategic focus on black-owned institutions to create avenues in which black businesses can gain greater access to capital, credit, and other financial institutions. Three, contracting. The U.S. Black Chamber educates members on contract opportunities, helping them increase their capacity to vie for large-scale contracts and offering resources and information that enhance black owners' abilities to compete. Four, entrepreneur training. The USBC provides quality educational opportunities and professional development resources that help our members manage and grow successful businesses; and five, chamber development. The USBC leverages our roles as the national organization to provide technical assistance and leadership training to member chambers, assist with establishment of new black chambers, and facilitate the sharing of best practices and industry data amongst our members. Decades before the advent of the coronavirus pandemic, historical discrimination has consistently distorted the advancement of black America. The structural and systemic racism continues to this day. Unfortunately, the ongoing economic and health crisis sparked by the pandemic have drastically exacerbated preexisting disparities. Many of them have been stated. For example, the coronavirus-related labor losses have been especially devastating for black America due to the historical struggles from higher unemployment rates, lower wages, lower income, and the resulting higher poverty rates. On the health disparities front, black Americans still face the brunt of the crisis. Across the country, black citizens experience COVID-19-related deaths at rates nearly twice that are present in the population. Remarkably, the rate is three or more times greater in some States. Clearly, the pandemic and resulting economic disruptors have proved particularly disastrous for the Nation's small business community. Notably, the onslaught of coronavirus closed over 3.3 million, 22 percent, of businesses within a 2- month period from February to April. In that time, black firms suffered at a greater damage among other demographics, as we lost 41 percent of black-owned business, nearly 450,000. Today's hearing on improving COVID-19 relief resources for minority businesses is opportune, but it is really much more than that. This is an opportunity to change the course of history in a way our country addresses race, discrimination, and equity. We at the U.S. Black Chambers believe that today's discussion should lead to the creation of equitable and sustainable Federal policy that will address our Nation's most marginalized and underserved entrepreneur population, which are black business owners. Earlier this month, I provided testimony at the House Committee on Financial Services Subcommittee on Diversity and Inclusion hearing entitled ``Access Denied: Challenges for Women- and Minority-Owned Businesses Accessing Capital and Financial Services.'' I testified that despite the presence of black-owned businesses in many of the Nation's fastest-growing markets, we still experience above the index, economic disruptions and revenue loss before the pandemic in part because black-owned firms are overwhelmingly represented in a high-impact industry, as was stated, lack of accommodation of food service, personal care, luxury service, health care, and social assistance, which I am so happy that Senator Rubio acknowledged because we are already in a weaker financial position. The U.S. Black Chamber applauds the Committee's recent work to mitigate the pandemic economic impact on small businesses with the CARES Act, and its subsequent relief legislation has deployed over $518 billion to the small business community through the Payroll Protection Plan. Likewise, the CARES Act has provided nearly $140 billion to businesses through the Small Business Administration and the EIDL loan program. Black business owners, though, went largely underserved by the Federal relief programs. In early May, the SBA's Inspector General report on implementation of the PPP found that the Trump administration was unsuccessful at prioritizing underserved and rural markets. In that same time since, the Department of Treasury and the SBA have worked to correct the structural barriers within the programs. Despite regulatory actions, the truth for black businesses remains. Black-owned firms continue to be overlooked and underserved in the Federal relief measures across the board. I will be around to address many of the questions as well as the opportunity for a recommendation as we continue this conversation this morning. Thank you. [The prepared statement of Mr. Busby follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Senator Cardin [presiding]. Mr. Busby, let me thank you for your testimony. As you can see, we are doing a little bit of rotating here. There are two votes on the floor of the U.S. Senate. So Senator Rubio just went over to the floor to vote. I have already voted on the first vote. He will wait for the two votes and then come back. So we are going to continue with the witnesses, and we thank you very much for your understanding and patience. This is an extremely important hearing, and I can assure you that we are listening to all the testimonies, and we value your input. We will now turn to Ms. Estrada. Glad to hear from you remotely. Hope you are safe. STATEMENT OF FABIANA ESTRADA, DIRECTOR OF LENDING SOUTHEAST REGION, ACCION Ms. Estrada. Hi. How are you? Good morning, Chairman Marco Rubio, Ranking Member Cardin, and members of the Committee. Thank you for inviting ACCION to testify about the recuperation phase for the small business owners during the COVID-19 pandemic. As Chairman Rubio just introduced, I represent ACCION, a Community Development Financial Institution, CDFI, whose role is to provide financial services in the form of access to capital and economic education in low- to moderate-income areas, LMI. ACCION also assists underserved small business owners with the objective to be considered by the traditional financial system in the near future. ACCION began funding small business owners back in 1991 in New York City. Last year, we supported over 1,000 small business owners with $15 million in capital through microloans, traditional microloans and also SBA microloans, and SBA Community Advantage loans. We disbursed over $1 million per month in 2019. 2020 started with the implementation of our traditional industry-related products, like the one supported by the Tory Burch Foundation for women entrepreneurs, Brewing the American Dream supported by Samuel Adams that supports food and beverage entrepreneurs, and our Child Care Express Program which supports child providers throughout the State. However, the pandemic immediately had us to implement a recovery program. One such important program that we implemented was our Paycheck Protection Program response. Our response has been threefold. First, we educate our clients on the criteria and eligibility. We found that many minority-owned businesses were confused about the conditions on who could apply. For example, some business owners were not aware that they could apply as sole proprietors. Second, we created an easy process for those borrowers who found themselves left out by their traditional lenders. Third, we implemented a technical assistance component to the process to help ensure that our clients' loans are going to be forgiven. We worked to certify that the correct forms were completed so that the loan amounts were accurate and effective. In addition, our business owners needed guidance on proper documentation on how to use those funds for the loan to be forgivable in the near future. All these steps were done on a one-on-one basis by our organization. To date, in Florida we have disbursed $970,000 to 87 minority-owned businesses. Our average loan size is around $11,000. At ACCION, we used to say that ``we offer more than a loan,'' and during this pandemic, we have continued to live out this teaching. We serve minority-owned businesses who without our support would have been left out of the PPP program. One such client we supported through this process was Myriam Encio. She is the owner of Pet Avenue Grooming and Boarding, located in Allapattah, but here it is called the ``Little Santo Domingo in Miami.'' Myriam approached us with a business that had proven steady gross sales that is around $200,000 yearly and a strong net income of $63,000. However, her business had no W-2 employees, and nobody was there to guide her with her application or to help her think through how to sustain her independent contractor employees. A local community organization introduced her to ACCION, and we were able to process her PPP in the amount of $12,000 to keep her store open. Due to the pandemic, she has to follow current guidelines and open at a limited capacity. The PPP loan allowed her to pay her groomers, skilled in working with furry clientele. If not for the PPP program, Myriam would no longer have been able to support paying her groomers. She would have lost her skilled labor. Due to the pandemic, Myriam had to redesign her business. She has gone mobile for booking appointments and for managing client visits. A second wave of PPP will benefit Myriam and others like Myriam with access to capital to a level where she could pay accordingly and invest in her sustainability as she works to stay open through these very insecure times. In conclusion, a small business owner, in particular, minority-owned businesses, have other capital needs that has to be addressed in order to stay open and keep their employees employed. Extending the PPP will allow organizations like ACCION to continue to play an important role in serving the most vulnerable with a small loan amount, with SBA and microloans as well, with the community advantage as well, and the traditional microloan program, so business could remain open. Furthermore, clients need advice on how to re-envision their businesses, and here at ACCION, we can play that important role of getting funds to those that need it most. My last words will be for gratitude for your interest in mission-based organizations like ACCION and to your technician and your team that they were able to make this online meeting possible. Thank you very much. [The prepared statement of Ms. Estrada follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Senator Cardin. Ms. Estrada, thank you again for your testimony. We appreciate it very much. Our final witness will be Marla Bilonick, who is the executive director of the Latino Economic Development Center, which is one of the largest SBA microlenders in the State of Maryland. Ms. Bilonick? STATEMENT OF MARLA BILONICK, EXECUTIVE DIRECTOR AND CEO, LATINO ECONOMIC DEVELOPMENT CENTER Ms. Bilonick. Thank you very much. Good morning, Chairman Rubio, Ranking Member Cardin, and members of the Committee. It is my sincere honor to be speaking with you all today about the challenges that minority-owned businesses are facing in light of the COVID-19 pandemic and how your decisions can positively impact their return, recovery, and rebuilding. My name is Marla Bilonick, and I am the executive director and CEO of the Latino Economic Development Center, LEDC, and I am also a mom. I have my daughter right here next to me. LEDC is an organization that is 29 years old with the mission to drive the economic and social advancement of low- to moderate-income Latinos and other underserved communities in the D.C. and Baltimore Metropolitan Areas as well as Puerto Rico. We operate out of six offices, with over 50 professional and bilingual staff providing top-notch, culturally competent services to our clients. On an annual basis, we serve well over 5,000 low- to moderate-income residents, 90 percent of which represent an ethnic or racial minority. We are an SBA Microlending Intermediary, an SBA Community Advantage Lender, a USDA-designated Rural Lender, and certified Community Development Financial Institution, CDFI. Since we began lending in 1997, we have rolled out close to $20 million in capital in small business and consumer loans. We have forged close and longstanding relationships with the businesses in the communities we serve, and to say they are struggling given the implications of COVID-19 would be a severe understatement. Our businesses are fighting to stay open, keep their employees on payroll, and work on their businesses while caring for children that are at home indefinitely. These blows to businesses come at the grave cost of business owners' livelihoods and the livelihoods of the people they employ. The ripple effect on communities will be felt for months and years to come. This year, we have led the charge in our region providing PPP loans to small businesses in the markets we serve. This was no easy feat, as we had to hustle to fundraise for the liquidity needed to make PPP loans on an extremely tight timeline as well as aggressively assert our eligibility to provide PPP as a certified Community Advantage Lender. An analysis of our PPP loans to dates shows that 84 percent went to minority-owned businesses and 62 percent to women-owned businesses. Eighty-two percent of all of our PPP loans were made to businesses in the following six industries: food, health, construction, consulting, cleaning, and child care. To give you a sense of the demand for COVID-related assistance that we have seen, we have provided PPP loans to almost 100 small businesses since late April. For context, our organization typically provides around 200 small business loans per year. So, in just one quarter, we have done almost half of our traditional annual volume of loans with just this one product. We have also partnered with local governments to help deploy their small business COVID financial assistance products. For example, in partnership with the District of Columbia's government, we have provided $4.5 million in microgrants to just over 1,100 businesses since April. Our staff has been working literally around the clock to serve as many businesses as we can humanly support. At the national level, the PPP program has not been as successful in reaching true mom-and-pop, minority-owned small businesses as it could be. I was pleased to see the CDFI set- aside that came into play during the second round of PPP funds in May. However, it feels like engaging CDFIs was an afterthought, which is puzzling when CDFIs have historically been the most highly leveraged tool that commercial banks have used to reach the hardest-to-reach populations in the United States. Of the more than 5,400 PPP lenders, only 303 are CDFIs as of the SBA's July 20th PPP report, yet in under 3 months, those very CDFIs made a total of $7.5 billion in PPP loans. Our average PPP loan made has been around $30,000, and our overall PPP efforts stand to retain 373 jobs to date. As of July 20th, the Nation's average PPP loan size was $105,000, and nearly 87 percent of all PPP loans were for less than $150,000, which is to say that the PPP program investment stands to have substantial impact if distributed properly and equitably. It is extremely disheartening and disappointing to see high-wealth individuals with direct ties to the Trump administration accepting PPP loans in the $350,000-to-$5- million range. With the funds in just one of the PPP loans made to the likes of the Kushner family, Elaine Chao's family, or Kanye West, a CDFI like LEDC could have helped more than 10 times the businesses we have been able to support to date, retaining at least 3,700 community jobs. This is a glaring example of the perpetuation of systemic inequality that has rightfully propelled our country into civil unrest in the past weeks. In May, Senators Cardin and Booker penned a white paper that contains practical suggestions for preventing underserved small businesses from falling even further behind than they already have due to the implications of COVID, disproportionate to the general small business population. We are particularly encouraged by the following recommendations of this proposal: the recommendation to allocation $1 billion in emergency appropriations to the CDFI fund to increase liquidity for CDFIs; the suggestion to create an Office of Emerging Markets specifically focused on and more attuned to the needs of underserved communities; recommended support for SBA's core programs to expand them and make them more affordable; the suggestion to move SBA Community Advantage from pilot designation to permanent program status; and recommendations around expanded support for minority-owned, women-owned, and returning citizen-owned businesses. The House of Representatives has taken an important first step by including $1 billion in grants to CDFIs in the HEROES Act. Congressional leaders on both sides of the aisle understand that CDFIs are the lenders to reach the businesses that have been left out of PPP for the most part. The Senate and administration must approve $1 billion in rapid response CDFI fund grants. In addition to financial resources, small businesses affected by the implications of COVID-19 require technical assistance to navigate their new reality. They have sought out support from LEDC in the areas of legal advice, which includes commercial lease negotiation, accounting, and reimagining their businesses for survival in this new time. We have helped countless clients with adding e-commerce, take-out, and delivery options into their business models. It is worth noting that funding made available through the CARES Act restricts access to funding to provide entrepreneurial assistance, 80 percent, to SBA-designated Small Business Development Centers, the vast majority of which are operated by the universities and colleges and a small portion, 20 percent to SBA's designated Women's Business Centers. The legislation does not recognize that SBDCs and WBCs are not the only critical elements of our Nation's infrastructure for providing entrepreneurial assistance. In closing, while there are many stories that make the evening news around unicorn businesses that have turned the pandemic's lemons into lemonade, the distillery that is making hand sanitizer or the T-shirt company that is making face masks, the truth is that the majority of small businesses are in trouble. I am very grateful to this Committee for considering my remarks and for the time and effort you dedicate to making sure America's small businesses survive and thrive during these unprecedented times. Thank you so much for your time. I look forward to our discussion. [The prepared statement of Ms. Bilonick follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Rubio [presiding]. Thank you so much. I am going to turn it over to Senator Young to start. My only request is that apparently our--are those on the WebEx? If you would just make sure your mic is turned up as loud as you can, just because there are some challenges over here from time to time listening to it, so thank you. Senator Young? Senator Young. Thank you, Mr. Chairman. I know all of us feel a share of ownership for the PPP program, but I want to commend you and members of your team for helping to put that program together and get it done. It has provided major relief to thousands of hardworking Hoosiers. Of the nearly 80,000 Indiana businesses that have received PPP loans, over $9 billion in total, over 85 percent of these businesses received loans under $150,000. So we know that this program has fulfilled its intent, helping those smaller enterprises. Ms. Bayles, you have experience working with a diverse mix of small businesses, particularly those firms who have been applying for PPP loans. In your testimony, you state that PPP was a necessary short-term lifeline; however, to weather this storm over the long run, you indicate it is critical that business owners have access to flexible, long-term working capital. I could not agree more, which is why I introduced the RESTART Act to provide low-interest, long-term loans, which allow small business owners greater flexibility. Can you expand, Ms. Bayles, on the need for minority-owned businesses to have broader access to relief, longer-term loans, and greater flexibility for expenditures and loan forgiveness, as I propose in my RESTART Act? Ms. Bayles. Absolutely. As I mentioned in my testimony, the PPP was an immediate fix, and so having the flexibility to have funding that will last, larger amounts will definitely go a longer way because nothing is more frustrating than getting just a short toss in the pot. So having that long-term flexibility, larger amounts would greatly be appreciated. The biggest piece that I stress in my testimony that I add and that has been mentioned by the other witnesses and other Senators is really just going to be that technical assistance, because even for a long-term loan, you still are going to have the credit challenges. You still are going to have the financial documentation challenges. So any sort of funding opportunity is going to have to be matched with equal access to technical assistance to actively get those businesses prepared. Senator Young. And when you think about barriers that minority-owned businesses face with respect to PPP access and financial services education, is this what you are speaking to---- Ms. Bayles. Yes. Senator Young [continuing]. or are there other barriers that we should be thinking about? Ms. Bayles. Well, for PPP, the challenge was a formal payroll system, and so getting out there and proactively providing the tools to businesses so that they know the advantages of using a formal payroll structure would have certainly maximized the amount of minority-owned businesses that qualify for the PPP. But the Schedule C option did certainly help. So just going down that road in a more refined fashion, I think, will have the greatest impact. Senator Young. So this Committee should be aware of what you have discussed as we try and support the SBA in advancing minority business-related services. Ms. Bayles. Yes. Senator Young. I think that is really important. Ms. Bilonick, in your testimony, you know the critical role that NDIs and CDFIs play in providing the needed sources of capital to minority- and women-owned businesses, but also as related to what Ms. Bayles said, but also as educators on financial services and lending tools. We can authorize new forms of funding, but it is community lenders such as yourself that will ensure the underserved have true access to these opportunities. So, Ms. Bilonick, my time is running a bit short, but can you briefly speak to the importance of prioritizing these kinds of institutions as in my RESTART proposal when extending credit to businesses operated by traditionally underserved entrepreneurs? Ms. Bilonick. Absolutely. Thank you for the question. You know, I would say I think there is sort of a narrative going around that the challenge or the main challenge for underserved businesses in terms of accessing PPP is a challenge around filling out the application, gathering the necessary documents, and while that may be true for a subset of our clients, I really think the challenge was around accessing the product. We had many, many clients come to us that sort of had a false-start attempt with their bank and never got to the end of the process because they just simply were not a high enough priority for their commercial bank based in terms of their depository accounts or other factors that put them lower on the list of priority. So what I really think is that Community Development Financial Institutions working in neighborhoods, working in communities where we have the trust, where we have the track record. We are the resource that small businesses in our communities are going to trust and come to first and rightfully so. This process has just been an example that underlies the fact that commercial banks often turn away our clients who are perfectly viable loan clients. Senator Young. Thanks so much. Chairman Rubio. Thank you. Senator Coons, are you ready? He just arrived. Do you need to catch your breath, or are you ready to go? Senator Coons. I am happy to proceed, if I might, Mr. Chairman. Chairman Rubio. All right. Senator Coons. I just want to take a second and thank all the witnesses and thank you, Mr. Chairman and Ranking Member Cardin, and to my colleagues from Indiana. I just spent time on the floor discussing the RESTART Act with our lead co-sponsor and look forward to figuring out with you how we might find a path forward together. I just wanted to share by my own opening, if I might, that I am really grateful we are having a constructive and bipartisan hearing. I am grateful, Mr. Chairman, that this has been a broadly constructive bipartisan part of what has otherwise been a very difficult process for responding to the pandemic and moving forward. I recently spoke with Blanche Jackson. She is the CEO of Stepping Stones Federal Credit Union in the East Side in Wilmington. They are also a CDFI, Community Development Financial Institution, and they provide their services at no cost to low-income communities in Wilmington. They became a PPP lender. They provided over $1 million to small businesses and nonprofits, overlooked by other PPP lenders, even those seeking loans under $10,000. So I was encouraged to hear that at least in that instance, this worked out very well. Let me direct a question, if I could, to Ms. Bilonick. In my experience in the conversations I have had in Delaware, it is clear from Stepping Stones and other CDFIs in my home State that additional funding to the CDFI fund is critical getting this assistance out to underserved communities. I am advocating in this next package for $1 billion for certified CDFIs. How do you see additional funding for CDFIs actually affecting the viability of the survival, short term and long term, of minority-owned businesses? Ms. Bilonick. Well, first, let me thank you in advance for advocating on behalf of additional funding to CDFIs. Of course, that is a self-serving compliment, but I do really think that that is where the money needs to go. From our perspective, it would be extremely helpful, both in terms of additional liquidity, that we could then put out to our clients. As I mentioned in my comments, we really struggled initially because we did not have sufficient liquidity to take on this new demand, and so luckily, we had three partners who stepped up and were able to provide us with the capital to be able to do the additional lending. But, obviously, funding through the CDFI fund, which is one of our primary sources of capital, would be extremely helpful and then in addition to support our operations. So those would really be the two pieces of what would help us to be able to serve our businesses even in a more robust way. Senator Coons. If I could, Ms. Bayles, I have heard--and you have testified--there is a lack of community outreach in some of these relief programs. A program that was actually founded in my hometown of Wilmington, Delaware, called SCORE in Delaware has done a great job at providing easy accessible outreach in terms of getting a business plan done, getting started. How can we reach business owners more broadly? How can we do a better job of outreach in terms of connecting available SBA relief programs to minority businesses? Ms. Bayles. Thank you, Senator. I would say that the training and the technical experience needs to be more diversified to finding businesses where they are. So SCORE, as you highlighted, focuses on a business plan and sort of the startup functions of a business. That is definitely helpful. That is vital. However, my experience, particularly during this round of CARES Act funding, you are dealing with businesses that are already started. They are already open. They are trying to keep their doors open, so sort of a more advanced approach covering things that I testified on, payroll compliance, tax withholding compliance, so a more refined technical assistance that finds businesses where they are. So it is a little past the startup phase. That is where we have had the most success. Senator Coons. Mr. Chairman, how much of your patience can I prevail upon, given the absence of other members? Because I have got two other questions, I am happy to ask, but---- Chairman Rubio. Go ahead and do those. Senator Coons. Thank you. Ms. Estrada, if I might. Just interested in whether or not authorizing another round of PPP lending, as I am sure you have heard from Senators Cardin or Shaheen, we have been working hard on a bill to prioritize Paycheck Protection Program, which would provide a second forgivable loan to the smallest and hardest hit businesses with a set-aside for firms of 10 or fewer. And I know we have been in active conversations with the Chairman and others. But I just would be interested, Ms. Estrada. If Congress authorizes another round like that of PPP lending to the smallest and hardest hit, how do we make sure that underbanked businesses actually are aware and participate? Ms. Estrada. Thank you for your question, and it is true. There is some need in reference of making the awareness, in reference of the CDFI, that we are the ones that we could have the relationship with the business owner. And we are the ones that we are working close to the minority business owner. So the idea for these funds, it will be that we need to make sure that this money is going to be in the right hands for the ones that they are looking for this assistance, or the ones that probably they already covered the payment for the employees, and they need right now just to have some additional working capital. So every business is different, and every business is run different. Probably, a major lender, a credit union, maybe they do not have the ability to understand in detail what is the real need of the business. So the CDFI with the SCORE, with SBDC, we are the ones that we are providing this technical assistance, this financial allocation, like we used to call it, and that is the reason it is important to make this program available for the near future. Senator Coons. Well, thank you, Ms. Estrada. Thank you, Ms. Bayles. Thank you to the audio system which just kicked in. Let me just in closing say that in addition to the prioritized Paycheck Protection Program I just spoke about, which I am excited to work with Senators Cardin, Shaheen, and others on, I also think an extension of the Small Business Debt Relief Program would make a great deal of sense. It is already pay the interest and principal for nearly 300,000 SBA 7(a) and 504 borrowers, which are, a quarter of them, minority business owners. Black-owned businesses are two times more represented among SBA borrowers than among small businesses more broadly. I think we should extend this critical debt relief program and finalize a competitive entrepreneurship fellowship program that would focus on distressed areas, both urban and rural, providing a living stipend, mentorship, and capital access. And I am hoping that I can work with my colleagues on that. Thank you very much, Mr. Chairman, for your indulgence, and to you and the Ranking Member, I am excited to work with you on what I think is a critical part of this next bill. Chairman Rubio. Thank you. Senator Kennedy? Senator Kennedy. Thank you, Mr. Chairman, and I want to thank all of our witnesses today. I would like each of you to give me a one minute summary of your testimony, and specifically, here is what I have in mind. In the first 30 seconds, if each of you could tell me why you think there is an absence of access to capital, and number two, what laws would Louisiana--or rather the Congress should pass, not just impacting Louisiana, but impacting every State? And I will ask our Chairman to designate the order in which the witnesses should go. Chairman Rubio. Well, we will start with Ms. Bayles. She is sitting right in front of us, and then we will go from there. It gives everybody else a chance to think about how to put all that in 1 minute. Ms. Bayles. I know. Great. I get to start off. Okay. So I would say, just to reiterate what was in my full testimony, is access to information. So there is a huge busy, congested information highway that is out there, and there are numerous factors that would prevent a small business owner from being able to grasp that, first of all, and then interpret that exactly to the fit of their business. So that information is then inequitable, and so again, opening up and clarifying all the information that is out there through the technical assistance is going to be something that I will continue to emphasize, and that technical assistance has to be diversified to fit more businesses than at the startup phase. So as far as the particular laws, I would have to say without seeing the individual proposals that are currently on the floor, what we have discussed so far, and that is providing long-term options for financing and more flexible terms for those applications is a step in the right direction. Chairman Rubio. Ms. Estrada? Ms. Estrada. Yes. Thank you, Chairman. It is a really interesting question just to give an answer in one minute, but what we are seeing is that we cover certain gaps, the CDFI, in the financial invitation, education, in reference of how it is going to be the process for the PPP. But we are seeing right now that there is--okay. We pay the employees right now. We have this covered, but I need money. Just for example, right now in Florida, we are expecting a storm. So we have people that they are doing the landscaping, and they need probably money just to buy equipment. And you know what? There is nobody who will be doing a loan under these terms. If this person, this business owner is going to their bank, there is no way that he could get a microloan. Do not think about it, something for $10,000 or maybe $15,000, and if they are coming to us, we are in a really tough position where we need more money just to allocate in the right hands of the business owners. So it will be a program where we could have the amount of money that they need in reference to continuing operation with flexible terms, something that we could help with the cash flow. Remember most of the business owners, they were financing their business with credit cards. So the interest rate that they are paying is really very high, a lot of confusion, because they were applying for the EIDL. They received the advance. They do not know if they have to apply. So the information is there. We have the ability to digest the information for the small business owner, but anyway, we need to guide them through the process, because what we are seeing, if we are not guiding them through the process, predatory lenders, payday lenders, they are going to take advantage of the ones that are working hard. And they are the ones that are moving our economy. So that would be something that we need also to consider. Chairman Rubio. All right. Mr. Busby? Mr. Busby. Thank you so much. I will try to make it quick. Seven quick points. First, transparency. We must understand the information early on. Second, the information must be clear when we get it, and it must be early. Third, we must monetize the CDFIs. We understand that 70 percent of loans made to black homeowners and black businesses come through CDFIs. So when we fund CDFIs, we are, in fact, funding our citizens, and are funding our communities. Third, the 8(a) program. We understand that many black businesses have gained great deals of revenue and success through the 8(a) program, but we are asking for the program to be extended for black-owned businesses. Currently, it is 9 years: 5 years of growth, 4 years of entrepreneurship, and then exit. We are looking for a much longer program, especially during the years of 2021 to 2026 for particularly black-owned businesses. Fourth, prompt pay program. During the Obama administration, there was a program that said government contractors, they need to get paid within 15 days. That would change the outcome of many businesses that have to go and, in fact, get a loan just to cover the government's float. We think that is something that during these difficult economic times, it could definitely be changed. Next, codify MBDA. It is the only agency in the United States that has the word ``minority'' in it. We have got to make sure that they have the resources and the funds that they need to have long term. And then lastly, fund chambers of commerce, as we have discussed. They have boots on the ground. They understand the importance of entrepreneurial training, relationships, contracting, and making sure that there is a connect between what happens in Washington, DC, as well as what goes on, on their local communities and local businesses. Thank you very much. Chairman Rubio. Ms. Bilonick? Ms. Bilonick. Thank you. Yes. I would concur with the comments that I made and that my colleagues made, but I would also add that just sort of in a nutshell, the point that I would like to drive home is that because the majority of PPP loans that are going out are in the $150,000-and-below range, that with equitable distribution of the PPP program, there is a high impact to be expected with regard to retaining jobs. I would say sort of legislatively that the most important recommendation that I would make is around the investment of a $1 billion emergency appropriation to the CDFI fund to pass through two CDFIs that are on the ground working with small businesses to access this and other Federal programs. And lastly, to answer your question around why there is no access, I think we still are struggling with discrimination in our country, and I think that is one of the primary reasons why our clients are not accessing PPP through the commercial banking system and going to CDFIs and other alternative lending resources. Thank you. Senator Kennedy. Thank you, Mr. Chairman. Chairman Rubio. Senator Cardin? Senator Cardin. Well, let me thank all four of our witnesses for their testimony, and I think that your answer to Senator Kennedy's question really pinpoints an agenda. And I certainly agree with the CDFI points that have been raised. Mr. Busby, I want to drill down on what we could do within the SBA. They have an Office of Capital Access, but there is no specific point person to deal with access to capital for minority businesses or women-owned businesses or businesses in underbanked communities in rural America. Senator Duckworth and I have introduced legislation, and one of the things it would do, it would set up an office to deal with those underbanked communities. Do you have recommendations as to how we can sensitize the SBA itself to be more aggressive in helping the underbanked and underserved communities? Mr. Busby. Great question. Thank you so much for the opportunity to speak to that. A couple things. One, currently, there is no real certification for a black business owner. The government as well as private sector understands the importance that the role that business owners play in their local communities as it relates to moving our agenda forward, but right now if you ask the government or private-sector firms how much they are actually spending with black firms, they cannot really tell you because there is no SBA certification currently that says I am a black-owned business. It states that I am a minority or a woman or a small business, which I am none. I am black when I wake up. I am black in the evening when I go to sleep. We have to make sure that we are counting the black businesses that are participating in these programs. Next, there was $130 billion that was left in the Payroll Protection Plan, but at the same time, we lost 441,000 black- owned businesses. It is not because they did not understand the program or did not need the funds. It was about early participation, clarity of the program, and ensuring that they knew where and how to get the funds. We think that many black- owned businesses now have the opportunity to grow through mergers and acquisitions. Again, we lost nearly half a million firms. We have now got to go and find those firms, those contracts, and make sure that those revenue dollars are staying in our communities, and that is going to need a different type of funding. It is not going to be based on payroll but based on opportunity as well as growth. So we would like to look at the difference that the next funding has in reference to how do we move our communities forward, keep the businesses that we currently have, as well as make sure that there is new opportunities for new businesses to grow. Senator Cardin. Thank you. I want to ask Ms. Bilonick the same question, but I also want, if you could, to expand on your point about mom-and-pop minority businesses. What effort can we make to deal with the really small, small businesses which are more likely to be a higher percentage of minorities in addition, if you could, respond to whether there is a need for a point person within the Office of Access Capital? Ms. Bilonick. I think it would be very effective to have a point person. I think any sort of deliberate and thoughtful way of approaching access for minorities, small, black, Hispanic, however you want to break down the pie, businesses, can only be a positive. I think that one area of focus--and I mention it in my remarks--is to try to funnel through agencies not only CDFIs but also technical assistance providers that work directly in communities. I think that is how we will really reach the mom- and-pops. I understand that a lot of the dollars were funneled to SBDCs, and with all due respect to SBDCs that are doing fantastic work in the communities that we serve, there are some limitations around what they are able to do and their reach. And so I would say if there were a way to perhaps take the SBA PRIME recipients of the past 4 or 5 years and funnel dollars through them, I think it is just a little bit of an oversight to suggest that the SBDCs are the primary technical assistance provider in communities when there are organizations that are doing this work fully entrenched and sort of very deeply enmeshed in the community. Senator Cardin. One of the reasons why we focus on the CDFIs--and I would also put MDIs, minority depository institutions--is that to make a smaller loan is not as attractive to lenders as larger loans, and when we deal with the smaller the small businesses or you are dealing with minority-owned businesses that tend to be smaller loans. It is not quite as attractive. So one of the things I think we need to do is how do we focus on making it more attractive for the smaller loans to be made by traditional lending institutions. Ms. Bilonick, do you have a suggestion on that? Ms. Bilonick. Yeah. I almost wonder if there would be a way to sort of designate different lenders in different ranges for lending. So, for example, the CDFIs could be lending in a certain range. As I mentioned, our average loan size is $30,000 under PPP. So I do not know many banks that would be chomping at the bit to make that kind of a deal. So if there were a way to sort of concentrate the higher- dollar loans perhaps the commercial banking sector, those that are in the millions of dollars, and then keeping those, you know, even $150,000 and below, having sort of designated tranches. Now, this is just what is coming off of the top of my head right now. I would happily discuss it further with your team and really fully flesh it out. Senator Cardin. I would just point out we have allocated certain funds to smaller lenders as part of our efforts. Senator Coons has suggested walling off a certain amount of money for the smaller small businesses. I think there are ways that we can try to work together to do this, but there is also the need to look at making it more financially attractive for lenders to make loans to smaller companies. Thank you, Mr. Chairman. Chairman Rubio. Senator Cantwell? Senator Cantwell. Thank you, Mr. Chairman. I wanted to see if I could ask Mr. Busby a question. Obviously, we want to have a variety of voices communicating about what the capital needs are from various aspects of our society and certainly have worked on these issues in the past when I was the chair of the Small Business Committee, women and minority businesses getting such a small percentage of access to capital. So that told us that you needed larger voices to communicate to people about the programs and make the programs work, all of the above. But one of the things, Mr. Busby, that we are facing is that African American news sources are also being challenged by the COVID crisis. They are being challenged by the fact that advertising revenue is falling off. They are being challenged by consolidation of newspapers, and when they get consolidated, they do not always--let us just say they are not always investing in diversity of local news and opinion. So one of the things that we would like to fix in the next COVID package is a provision that at least the House has considered, which would allow those radio stations or TV stations that are owned by a larger consortium to get funds if they are going to invest in local content. Unfortunately, newspapers and broadcasters owned by larger groups were left out of the Paycheck Protection Program. That means African American radio stations that are part of Urban One and Spanish language stations that are part of Univision could not get much needed relief. I have been pushing to change that along with Senators Ernst and others and still believe we need to find a way to help them in the next round of COVID assistance and I hope Chairman Rubio and Ranking Member Cardin will help as well. So, Mr. Busby, what about that issue? Mr. Busby. That is a great point. Many of our businesses across the country said that the reason that they did not either apply for payroll protection or the EIDL program was just lack of information. We have partnered early on in our existence with NNPA, the National Newspapers Publishers of America, which are the black newspapers, and last year, we partnered with NABOB, the National Association of Black-Owned Broadcasters, which represents roughly 170 to 180 black-owned radio stations and roughly 12 black-owned TV stations. It is important, especially during these times, for us to get the information that is out timely, accurate, and most importantly that is coming from individuals and voices that we know and trust. So for there to be an opportunity for the black media to participate in this, I think, is a very positive step in the right direction to ensure that our businesses have the opportunity to compete and have sustainability in our communities going forward. Senator Cantwell. Thank you. Could you just expound on that trust issue for a second? Because I think it is not fully understood how important these radio stations and newspapers are. I would say in my State, the Asian publications have the same force of veracity. I would say in Indian Country, the same thing. People listen to information that--I am sure in the Chair's case, there is probably Hispanic publications all throughout Florida that are the go-to source of information. Why is having this trusted source so important? Mr. Busby. It has been gaining that trust over decades, and for most of us, it is not just the entertainment piece of it, but it really is the information, the data that has been shared. And I will give you a great example. The U.S. Black Chambers was touting and yelling at a lot of our voices, about 35 to 40 percent of black-owned businesses, we felt were going to be closed during the pandemic. No one really heard that, and then it came out to our black media that the Bloomberg Report came out and actually said that we had lost 450,000, almost 41 percent of our businesses. The information that we get is reliable based upon who is telling it, and for black communities, black citizens, that information coming from black media is trusted. It has been tried, and over the decades, we have learned and gained relationships with them to make sure that our voices are being heard as well as our concerns are being brought both back to D.C. as well as from D.C. to local communities around the country. Senator Cantwell. Thank you. I hope that the Chair and Ranking Member will work with us on this important issue. Senator Ernst and other members of this Committee are big supporters of this concept, and to me, I think it is just something that is a little misunderstood. And if people are going to make the investment in local content, I think we should try to help them. So thank you. Mr. Busby. Agree. Thank you. Senator Cardin. Mr. Chairman, if I might just thank Senator Cantwell for her leadership on this issue. This is an extremely important issue, and I hope we all can work together on this. Chairman Rubio. Thank you. Senator Hirono? Senator Hirono. Thank you, Mr. Chairman. This is a question particularly for Ms. Estrada and Ms. Bilonick because you are both direct lenders. So even in normal times, pre-pandemic times, it was really hard for minority-owned businesses to have access to capital. So based on your experience, because of this pandemic, what have you observed? What have you learned? What can we do to streamline the process, create some new methods, whatever we need to do? Because, as I say, even in normal times, it was really hard for minority-owned businesses. And I think that, Ms. Bilonick, if I heard you correctly, you said that part of the issue was that there has been discrimination---- Ms. Bilonick. Yeah. Senator Hirono [continuing]. against minority-owned businesses. So, anyway, going forward, what can we do as a result of this pandemic to lessons learned? What can we do to improve access to capital for minority-owned businesses? Ms. Bilonick. I can jump in, Fabiana, if that works, unless you want to go. Ms. Estrada. Okay. Ms. Bilonick. Great. So I was just going to say something that is interesting in this time period is that, yes, it is always a challenge for small and minority-owned businesses to access capital, but I think that right now, CDFIs and community lenders are actually able to do loans that traditional banks are not--well, we are always able to do loans that traditional banks do not have an appetite for, but I think right now, we are even doing our normal lending. We have businesses that are taking advantage of new opportunities that are provided by this strange new world that we are living in, and I think there are lessons that can be learned from CDFIs that perhaps traditional lenders could take a look at around more flexibility, around credits or alternative sources of judging credit, more flexibility just in general. I mean, I think that nonprofit organizations are known for being agile and flexible, and that is really what these times demand. So to the extent possible, it is feasible that traditional lenders could sort of take a page out of the CDFI playbook and be a little bit less rigid around their requirements. Of course, we have a higher appetite for risk, but it often comes with a great payoff at the end. Ms. Estrada. If I may, I would like to add as well that our entrepreneurs, they need to understand the process for the loan application aspect because most of the time, in the older times, we have our entrepreneurs that they visited the CDFI or the banks, and they are asking for a large amount, let us say $50,000, and probably, they are not ready for that loan amount because they do not have the financial allocation that our colleague mentioned, taxes, or there is an issue with cash flow. So we need to work with programs that probably could feed different realities. In one point of myself being a business owner, maybe I need $5,000. There is no need for me to get a loan for $50,000, and also the flexibility in reference of inside the allocations for the payment, low-interest rates, requirement deferments or maybe grace period that it will be okay just to avoid affecting the cash flow issues with the borrowers. So, anyway, there is a lot of work that we are doing at the CDFI level because most of the time when we--let us say in January this year. We were working with entrepreneurs, that we are frustrated because that were applying for 150- to $50,000, but they were not having the capacity to repay this loan. So, as well, we need to understand our business. We need to understand our credit. We need to understand our cash flow. So we need to continue providing the financial allocation. And the ones that they are doing during this pandemic, that probably, unfortunately, they have to close down doors because there is no way that they could recuperate, the idea for us, the CDFI and all the community organizations, it will be to provide a friendly hand just to close business with their pride, taking the right tact, because we do not want for them eventually in 2 months or 3 months, reopening another type of activity, and they have something negative on credit or they were not able to close down their credit cards. So we need to also try to avoid in certain circumstances, as well any major decision, that it will be affecting the life of this program or for the future. So the ones that they continue working, continue helping them out with flexible terms and conditions, and the ones that they probably--they need to face the reality to close down business, also give them the hand to close in the proper ways. Senator Hirono. All right. So I have one question, Mr. Chairman, for Mr. Busby. I know that you have participated in the 8(a) program. I am a big supporter of the 8(a)'s, but you mentioned just now that we need to start thinking about a different kind of funding not based on payroll because, as you noted, that half a million or so of black-owned businesses have already gone under. You mentioned that we should be looking at some sort of a program to create new opportunities for them to restart businesses or something along those lines. So I would like you to talk a little bit more about what you had in mind. Mr. Busby. Sure. On the 8(a) program, we are looking to extend that past the 9 years that it currently operates for a business owner. We think that it could go anywhere from 16 years up to 20 years for black-owned businesses. We feel like this will provide some generational wealth for a 9-year business, and then to be placed on your own really provides challenges that many of those firms cannot handle. If you look at the Black Enterprise Top 100 list, every year, the top 10 to 20 firms, many of them fall off because of their no longer opportunity to be in the 8(a) program. So as soon as we get and gain opportunities in statute, we are forced out of the program. We would like to---- Senator Hirono. So we want to change the statute, the 8(a) statute, so that it is a longer timeframe for them to be participating? That would be a big positive for black-owned---- Mr. Busby. We think so, and then we think the program would also be a big factor, something that could easily be done and would then provide real access to capital that many business owners do not have to go and get a loan. They could actually just live off of the cash flow that the Government is now making them go and get credit for. Senator Hirono. Thank you very much for that very specific suggestion, Mr. Busby. Mr. Busby. You are welcome. Chairman Rubio. Thank you. Senator Duckworth? Senator Duckworth. Thank you, Mr. Chairman. I just want to thank all the witnesses who are here today. I do want to sort of focus a little bit more on some of the provisions the Microloan Program Enhancement Act of 2019. Ms. Bilonick, as you know, several microlenders have seen an uptick in need for microloans, in particular, including intermediaries in Illinois. Senate Democrats have released proposed changes to the microloan program, many of which are included in the Microloan Program Enhancement Act. That bill would give intermediaries additional funding for technical assistance and lending. It would increase an aggregate and annual lending cap, and it would repeal the 155th rule that restricts lending in the first half of the year. Can you discuss how these changes, Ms. Bilonick, would help intermediaries, such as yours, get dollars into the hands of borrowers more efficiently and give you the increased resources you need to save micro borrowers, particularly at a time when there is increased demand such as we are in right now? Ms. Bilonick. Absolutely. Thank you, Senator Duckworth. I think these changes would be extremely helpful. One thing I note, I do appreciate sort of the parallel with technical assistance as well, which we find to be useful with regard to getting our businesses in the queue and funded. While I said that our PPP average loan amount was $30,000, our traditional, even though we do go all the way up to $250,000 as a community advantage lender, is more in the 13- to $17,000 space. So the microloan program is extremely helpful for us. It is the most reasonable debt that we have to be able to turn back over to our clients versus from either foundations or commercial sources, and so it would hugely expand our capacity to lend from the microloan program. I would also just say with regard to that, the 155th rule, we are in support of striking that. It sort of creates a false bottleneck that does not need to be there with regard to distributing money equitably during the whole course of the fiscal year, rather than splitting it up with the first half and second half, and so we would certainly view that as a positive for our lending ability. Senator Duckworth. Thank you. And I want to touch also on the need for the SBA to dedicate resources toward minority business owners. We have already touched on that, on this so far, my colleagues from Maryland, but I want to come back to this. We know that small businesses, borrowers of color, had a harder time receiving adequate capital from traditional lenders prior to COVID-19, and unfortunately, this pandemic has only made this issue worse. Last month, SBA and Treasury created additional set-asides in the Paycheck Protection Program for CDFI lenders to better serve borrowers of color. While this is a step in the right direction, more must be done when it comes to helping these folks have access to lenders and capital. And I will give you an example. I was just in East St. Louis just last week meeting with small business owners, and one of them was a black-owned business. All the others were white-owned businesses. Some of them were women-owned, but they were all white-owned. They, for the large part, received all the PPP loans through the full amount that they asked for, and yet this black businessman who had a better balance sheet and a longer track record only got a small percentage of what he applied for. And he could not figure out why he would have gotten a smaller percentage. In this discussion, it was very interesting because they were comparing their backgrounds, how much capital they had. They were on similar businesses, and there was no other reason where he was different from the others. In fact, he had more experience, had better balance sheets, except that he was a black-owned business. So, Mr. Busby, can you discuss what additional changes Congress must make to PPP and to traditional lending structures to make sure borrowers of color can access small business loans and capital? You touched on this before, but I want to give you more time to really emphasize this issue because it is very real. And I am seeing it on the ground today. Thank you. Mr. Busby. Thank you so much for the question because it is a real concern. Access to capital is the number one, number two, number three concern for black business owners. Discrimination exists, and so we are asking for all barriers for access to capital to be removed for black-owned businesses. We also know that 70 percent of black firms that applied got denied, of U.S. Black Chamber members, and 96 percent of our members that applied that did get some funding did not get what they requested. So either they did not get it, or if they did get it, they did not get what they need. And we found that to be historic. That is not just now. That is a historic pandemic as it relates to our community in reference to access to capital. Thus, we cannot grow, so we cannot hire, and if we cannot hire, then we cannot continue to have sustainability in our communities. The credit scores need to be twice as high as our white friends. When we go in and ask for a loan, we only get 40 percent of the funds that we ask for. We have to have twice or somewhat almost twice the credit scores of our white peers. I could own my home. My white peer could own their home. I could go in with a great business plan looking for $100,000. I will walk out with $40,000, praising to God for allowing me to get that $40,000, only understanding that 90 percent of businesses fail within the first year, and the majority of the reasons is because they did not have the access to the capital that they needed when the first emergency happened. The average black family has less than $400 for an emergency. The average black business, only 30 percent of them have any credit at all, and so when we are in situations where things come unexpectedly, it is only going to exacerbate the problems that black business owners have during pandemics and just regular challenges of businesses itself. Senator Duckworth. Thank you. I yield back, Mr. Chairman. Chairman Rubio. Thank you. And before I turn to Senator Scott, Mr. Busby, just to clarify, the figures you gave, the 70 percent were denied and 96 percent got less, was that for PPP? Mr. Busby. That was for PPP. Yes, sir. That was our members of the United States---- Chairman Rubio. I want to address that when I get to my--I am trying to give everybody a go, but I want to talk to you about that. I just want to make sure we are talking about PPP. Got it. Mr. Busby. Yes. Chairman Rubio. Senator Scott? Senator Scott. Thank you, Mr. Chairman. Thank you for your interest and your passion around helping small and minority businesses have access to the Paycheck Protection Programs. As we look at this pandemic, the one thing that we can conclude without question is that 41 percent of African American-owned businesses from February through April declined. We know that those numbers are stunning, frankly, especially when you compared to other groups. Hispanics declined by about 32 percent, Asians around 26 percent. So that means that this pandemic not only created a health crisis, which African Americans, unfortunately disproportionately impacted by this global pandemic, and then on top of that, the employers started vanishing. Mr. Busby, I think this is an accurate depiction? Mr. Busby. Very accurate, Senator Scott. Things that were being challenged for our community just exacerbated through the pandemic, and so for many of us, we said the country was willing and able to write a $2 trillion check for a stimulus package. The black community is saying, ``Hey, where is our support that we desperately need to continue to have sustainability in this country?'' Senator Scott. And I will say to answer that question, in part, I just finished an Instagram Live with Secretary Mnuchin talking about the important role that CDFIs and MSIs play, especially in the second tranche or the second iteration of the Paycheck Protection Program, working with folks like Robert Smith and others. We were on the call with Secretary Mnuchin and redesigning the second half of the PPP. I think if that part of the story was in isolation, that part of the story is a far more positive part of the story than the overall story because we were able to put the focus where it needed to be, and if we do that in this next round, we may have far better success than we did in the first iteration. Is that about right, Mr. Busby? Mr. Busby. That is fair to say. I just think that it needs to be very transparent, and it needs to be a commitment from both the financial institutions that are making the loan as well as the Government to ensure that there is accountability to the organizations, the banking institutions, to ensure that there is equity in loaning and the individuals that they reach out to make sure that all businesses have opportunity. Senator Scott. Thank you. I will say this. I think accountability and responsibility goes on both sides because I have been an African American- owned business for 15-plus years and started three or four other businesses, and we definitely have to address some of the challenges from the beginning into the crisis as well as the crisis on as it relates to minority-owned businesses. One of those challenges is that our banking relationships, frankly, as African American businesses were weaker. So when you come into an institution and they are prioritizing their clients, too often we found ourselves frankly in the back of that line, and I do not think that is an overstatement. I think that is an accurate statement. And that lack of relationship creates a domino effect throughout the entire Paycheck Protection Program but frankly through the entire life of a small business, having been one, and I can tell you it is painful when you need something and you are trying to get in line after the crisis starts. But what I did realize during this crisis--and I think this is a part of the silver lining and the good news to come--is that FinTechs and technology can be an equalizer when the relationship is not there. So if you would help me understand how the PPP and the EIDL is in a better place when we have FinTech and technology as a part of the solution. Can you speak to the importance of that? Mr. Busby. I think there are some benefits as well as some challenges when FinTech gets involved. The benefits there are that it is quick, but for our community, we are not as---- Senator Scott. Savvy? Mr. Busby. No. We are not as committed to quick as we are long term. We understand that this is not going to be the last opportunity, and what they told us is when this fund came out, they said go to your existing banking relationship. FinTech is not a banking relationship. That is a transaction. I want my individuals to go to the bank, shake that banker's hand, because understanding that we are going to have opportunities to grow and the only way you are going to be able to grow is to have access to capital, access to credit, and relationships. When I talk about the future of my businesses, I may want to acquire. I may want to merge. I may want to do a joint venture. I am going to need a banking partner who understands my needs as well as the opportunities that they provide, and many times, that does not happen over a FinTech relationship. Senator Scott. Well, it is certainly harder to happen over technology, without any question, and that is part of the problem, and it was the foundation on which we stand was not there. So when the crisis happened, I think it only exacerbated and brought more light to the actual challenge of banking relationships and the importance of those relationships pre- crisis and frankly during the crisis. I know my time is out. Thank you very much, Mr. Busby, and I look forward to having a longer conversation with you at a later time. Mr. Busby. Thank you. Chairman Rubio. Senator Booker? [No response.] Chairman Rubio. You are muted. Senator Booker? Go ahead, Senator Booker. Senator Booker. Thank you. Thanks. I just want to start by thanking the Ranking and Chair. It is clear with the attention and care that this Committee is really just trying to focus on what is fair, focus on what is really important, and I am just happy to hear a lot of conversation of my colleagues today. So I want to jump right in. The stakes are so high in this, not only for each small business owner and employee, but really what we are talking about today deals with the entire economy. So a July poll just found that 7 percent, 7 percent of minority business owners are very confident they will be able to maintain payroll if no further Government relief is provided. Just 7 percent have that confidence, and McKinsey estimates that black communities enjoy the same level of economic activity, if they did enjoy the same level of economic activity as white communities, our country would enjoy a 1- to $1.5 trillion boost to our overall economy. So this is about all of us. It is not just about making sure that African American businesses get a fair share, fair opportunity, equal opportunity. That is obviously important. We all have a stake in this. Earlier this week, Leader McConnell proposed a second round of PPP in this next package. That is wise. That is important. I say vital. But we cannot simply put forward the same policy again and expect a different result. As I see it, the PPP was successful in getting emergency assistance to many small businesses to help cover payroll for a short limited time, but there are deep structural challenges with the program that prevent it from lifting very small minority-owned businesses up. And that is the challenge I have. Maybe, Mr. Busby, I can just ask you. Could you comment on what I believe are facts? And if you have issues with any of these facts, I want you to say it, but number one, unbanked and underbanked businesses are disproportionately minority-owned, and they are less likely to participate in PPP, given the program's reliance on a mainstream banking system. For minority-owned businesses that do have actually lending relationships and have been able to participate in PPP, discrimination actually still exists. If there is any doubt in that, the National Community Reinvestment Coalition just conducted a blind test, in fact, sending black borrowers for PPP and white folks in for PPP and matched all the payer testers. So the black and the white, they matched them on all the details, but they experienced widely different treatment when applying for PPP loans, including different levels of encouragement to apply and different products offered by banks, just by the color of their skin. So we know how the fee structure works. This is hurting black businesses. Banks also prefer to originate, say, a $5 million loan than they would a $250,000 loan, a dynamic that really disadvantages small businesses and disproportionately black businesses. Then, finally, Ms. Busby, the last point I would like for you to comment on is that many very small businesses have short-run, nonpayroll expenses that exceed the 40 percent threshold permitted under PPP. All of these things combined, Mr. Busby, would you agree to make a serious impact on the fairness that African American businesses are facing? Mr. Busby. So true, Senator Booker, and thank you for the comments. Let us start with the title of the program: Payroll Protection Plan. Of the 2.6 million African American-owned businesses today, 2.5 million have no employees. So they are not mom-and-pop. They are mom-or-pop, single-employer firms doing great work, not because they are small, but because they have 1099s or they have subcontractors or they work differently. And the whole idea of young people saying, ``I want to create my own business, but I want to have the flexibility of being my own business owner. I do not necessarily want to be your employee,'' and so that is the way of the future. And now you are telling black business owners, who have grown. If you look over the last 10 years, black businesses, particularly black businesses, have been the fastest growing sector in the country. We have got to now look at them differently than we look at the majority of businesses in America because we operate differently, and as it relates to credit, again, only roughly 30 percent of black firms have any credit relationships. And that has a lot to do with the discrimination that we have faced over the decades of years, the amount that we pay for the credit when we do get it and the way in which we are treated when we go in the bank. A couple of things, when I go in the bank, I am never called by my last name. When I go in the bank, I never meet a bank loan officer or a bank president. When I go in the bank, I am only having a conversation with a teller. So for now you to tell me to go into a bank and apply for a loan on a Saturday where the bank is already closed due to COVID is only going to put me that much further behind when it talks about getting the capital that I need to make it through the most difficult times that we have seen in this country. Senator Booker. Right. Then just the study where they were sending people in with all the same details, the only thing different was a black person versus a white person, and they found that while differences, all of these are just compounding. That kind of discrimination is just compounding a lot of the structural inequities that are already there. So if we do not address this with a sense of urgency, that McKinsey data I showed you before, our overall economy is suffering upwards of a trillion-plus dollars annually, and so we have to find ways of getting additional channels of capital distribution to very small and minority-owned businesses or we will fail our overall economy, not to mention--not just the discrimination but compounded, because in a crisis time, so often minority entrepreneurs or minority communities face greater levels of impact than the overall community. So I know there is a lot of good energy on this. This is why I am grateful for this hearing and we are having this conversation again. I have got a bipartisan proposal, the RELIEF for Main Street Act, that I am pleased also has the support of my fellow Small Business Committee colleague, Senator Young. The bill would send $50 billion to States, cities, and counties to seed and scale small business relief funds. We have seen that the funds that pop up in every State of this country, but they are massively oversubscribed. These funds are over demand, and so our bill would push funding closer to the communities that they serve and allow funds to make loans and grants to very small businesses less likely to benefit. So I just want to thank again the Ranking and Chair for this business. This is imminent. We are obviously coming up in negotiations for this final COVID package. If we fail in this moment, we hurt all of America. We hurt our entire economy. We hurt a considerable amount of our entrepreneurs and job makers in this country, and we perpetuate structural racism in a way that unacceptable. We have to address this. Chairman Rubio, thank you very much for the time. Chairman Rubio. Thank you. Senator Ernst? Senator Ernst. Thank you, Mr. Chair, and thanks to all of our panelists for being here today. We do know that our minority-owned small businesses play a critical role in the success of all of our communities, and I am glad we are having this conversation about how we can get these essential businesses the tools that they need to survive this crisis and lead then on the front lines for economic recovery. Earlier this month, I had the pleasure of meeting with a number of local leaders of our black community in Des Moines, and one of the gentlemen that I spoke with is Izaah Knox. He is the executive director of Urban Dreams, which is a nonprofit that is focused on financial empowerment for underserved and underrepresented populations, very important. I was happy to hear about Izaah's experience receiving a PPP loan as well as the positive impact it has had on his nonprofit. Of course, relying on technical assistance and that longtime relationship that he had developed with the bank, he was able to overcome some of those initial obstacles to receive the loan, and he stressed the importance, just as we have heard today, of having a lender who knows the community and has more than just the transactional relationship with the borrower as well as the training that he had received in this area. So we have discussed a lot about that today, but I did want to give a shout-out because I think it has been echoed so many times over how important it is that our local lenders, our local credit unions have that relationship with those in our underserved communities. So what I will not do, I will not dive into that because we have heard a significant amount about how to develop those relationships, and we need to lean on our lenders to work on developing those relationships. But what I would like to pivot to is an area that I am very concerned about with the impact that COVID-19 is having on our child care businesses, which has seen the significant declines in enrollment and revenue. Of these child care businesses, half are minority-owned. Forty-five percent of our child care workforce are black, Latino, or Asian, and according to a recent survey, the National Association for the Education of Young Children, two out of five child care providers and half of minority-owned child care businesses are, quote, ``certain that they will close permanently without additional public assistance,'' end quote. So it is critical that we are providing additional relief to stabilize these businesses, which is why I recently introduced legislation that would create back-to-work child care grants, and it would provide 9 months of financial assistance for child care programs to make sure that they can safely reopen and make it through this pandemic. Just very briefly, if I could ask our panelists--and maybe if we could go to Marla. If you could answer the impact of keeping these child care providers afloat and its impact on those minority communities, that would be very helpful. Thank you. Ms. Bilonick. Absolutely. I did not get to it in my testimony because the written comments that I made were longer than the time allotted, but one of the client profiles that I featured was a Latina-owned child care business in Washington, DC, Little Angels Child Development. They currently serve seven families and have only had three of those seven families confirm that they are considering continuing to use them, just given all the considerations around COVID, both from a safety point of view and then their own economic capacity to pay for the service. So, yes, child care is actually one of the six industries that has been sort of the highest hit of the PPP loans that we have made. It is one of the six highest industries that is represented in the portfolio of PPP loans that we have made. We have always seen, in the Latino and African American community, this to be a very strong and vital business type, both for starting and expanding. And it has so many ripple effects because it is also affecting the ability of the people who use the child care center to work. As you may have seen earlier, I had my daughter. My daughter is literally sitting next to me right now. I do not have child care. My other children are in high school, so they are less labor intensive. But that being said, this is a real struggle that we are all facing, and the child care centers are so essential, not just for the owners and their livelihoods and their employees and their livelihoods, but for those of us who are trying our very best and in many cases having to work even harder than ever while juggling children, homeschooling, all of this. I think part of the reason why I had my daughter show her face is because I think we are all sort of living in this fallacy that we are not all really juggling this insane balance or lack of balance in this time period, and so I think it is excellent that you are bringing that bill to bear. Senator Ernst. Yes. Thank you very much. This is all very important, one, to be able to provide the services and lending necessary for our minority communities, but then also the ability to provide care for their little ones as well. I struggled with that as a young mother, myself, and so we want to make sure that all of our businesses are successful. And this is one way that we can do it. So thank you so much. Incredibly important topic. I appreciate it, Mr. Chair. I yield back. Chairman Rubio. Did Senator Hawley drop off? [No response.] Chairman Rubio. Senator Rosen? Senator Rosen. Thank you, Chairman Rubio, Ranking Member Cardin. This is really an important, critically important hearing to ensure that we are doing all we can to support our Nation's minority-owned businesses, and I want to thank all the witnesses for everything you do and for spending your time with us today. Over the past few months, the coronavirus pandemic has devastated small businesses in Nevada, across the country, and put millions out of work. Many minority business owners in Nevada work particularly hard due to lack of access to capital, like we have discussed. Congress stood up emergency lending programs to fill in these gaps. My office has heard countless stories from minority-owned small businesses struggling with the SBA's Economic Injury Disaster Loan, or EIDL, and one of the common complaints is that 1,000 per employee cap on EIDL Advance grants. And it is arbitrary $150,000 cap on EIDL loans, a 93 percent reduction from the $2 million level, we in Congress authorized in the CARES Act. Small business owners. They have contacted my office telling me that $150,000 does not provide the support they need, and that without further help, they will likely be forced to permanently close their businesses. This is why earlier this week, I introduced, along with Senator Cornyn, bipartisan legislation to address this problem, the EIDL for Small Business Act. This bipartisan bill would prevent the SBA from imposing any arbitrary limits on EIDL and EIDL Advance, including providing $10,000 grants to all eligible small businesses, regardless of their size, but also appropriate $100 billion of EIDL and $80 billion for the EIDL Advance program. So, with that in mind, Mr. Busby, as you know, EIDL Advance program, well, it has run out of funds. I know that business owners in Nevada feel this is a particular problem. Ken Evans, he is the president of our Urban Chamber of Commerce in Nevada, and he supports my effort. And I want to quote him. He said, ``The EIDL for Small Business Act will help our businesses secure much needed capital to counter the impact of COVID-19 in the Southern Nevada region.'' So can you please discuss why it is so important for us to recapitalize the EIDL and EIDL Advance programs and why it is critical that our smallest and most vulnerable minority-owned businesses receive the full $10,000 grant, regardless of their size? Mr. Busby. Thank you so much, and also thank you to Ken who is a member of the U.S. Black Chamber, one of our chamber members there in Las Vegas. So, again, tell him thank you. For us, again, many of our businesses were not able to participate in the Payroll Protection Plan. The title was difficult to understand. There was a real concern about ``Will I be eligible? Do I have to pay the funds back?'' and the transparency was really unclear. So for many businesses, we said take the other avenue of the EIDL loan. The challenge with the EIDL loan was a couple of things. Credit was tied to the EIDL loan program, and so many of our businesses were not able to apply or to get funding because they did not have the credit score appropriate to be able to get funding. Secondly, I think there was an either/or conversation for most business owners. Either I apply for PPP, or I apply for EIDL. For us, now that we understand, all of us understand a better clarity of both programs---- Senator Rosen. Right. Mr. Busby [continuing]. we are telling folk, ``It is not an either/or. It really should have been about both,'' and for the businesses that did not have payroll, the EIDL loan was a much more appropriate program for them. And so we are looking for that to be funded fully. As it relates to the smaller businesses, the microloan businesses, they should be able to apply for that in the EIDL loan, and it should be up to $10,000. It should not be based upon other criteria. What we heard was during the first tranche of funds, those firms that got it did not have the same accountability, criteria, and questions that many of the small business owners are now having to face as it relates to the EIDL loan program. So we are asking for it to continue to be funded. We want to make sure that it is there long term so that our businesses can be able to participate. Senator Rosen. Thank you. I just have one last quick question to everyone on the panel. How can we strengthen these relief programs to get the money out more quickly? Do you have a suggestion what we can do to get the money out more quickly to those who need it? Mr. Busby. I will start. I think that putting the money directly in the hands of the CDFI that we know fund the businesses in those local communities. Nothing wrong with the big banks, but again, based upon the financing of those large loans, many black businesses were not able to get it from the larger banks. I think, again, as all of us have said, it really is about relationships, and many of our businesses have those relationships with the CDFIs. And so I would say fund directly to the CDFIs as well as funding the nonprofits that can make the microloans and the microgrants, I think, are extremely important. Thank you. Senator Rosen. Anyone else like to give a suggestion to us quickly? Ms. Estrada. For me, nothing more to add because it is clear that we have the relationship, and we know the small business owner and where is the need. And we could provide the financial allocation because, again, the frustration with the disaster loan with SBA, sometimes it is related to the cash flow, to credit, like Ron mentioned. We need to be sure the credit, if there is something we need to work, just to fix credit or wrong information that is in credit. So, again, we need to give the support, but the financial allocation is key because, if not, there is another emergency, there is another situation where they are going to be set to fail. And we do not want our small business owner to be setting to failure. Senator Rosen. Thank you. I believe my time has expired. So I thank you all for being here. I really appreciate the work you do. Thank you, Mr. Chairman and Ranking Member Cardin. I appreciate it. Chairman Rubio. Thank you. So just to close the loop now, to use my turn to talk about it, let me just first say that there are three common themes in the testimony today. The first is the technical help, the assistance with all the technical aspects of understanding who qualifies, how much do you qualify for--talking about PPP--and where can I go get it. The second is the access, finding the places that will actually do it for you, and then the third is the long-term capital needs, which I think is a critical component of it. And I want to take it in that order. So on the first point about the technical help, I actually think that the point that was raised earlier, the statistic that I had asked Mr. Busby to confirm--70 percent of black- owned businesses were denied, 96 percent that got it got less than they asked for--is an important point. The way PPP works, not to be redundant here, but it is important because it is a new program. This thing was thrown together. Senator Cardin and I were there, Senators Shaheen, Collins, and others. So we had to come up with something that could get out there quickly. I assure you had we put all that money in through an existing program, we would still be talking about 5 percent of the people having gotten it because it is just on the infrastructure for something that is brand-new. And there was confusion, and the rules were thrown together. Something this big and this new is always going to have those problems. But the way the PPP works is you apply, and once you apply and the banks have it and they run it through SBA, the banks do not make the decision about getting it or not getting it. They cannot deny you a loan, and if they have, then they have broken the law. What they can deny you is the opportunity to apply, but they cannot deny you the loan. They cannot say you cannot have a loan. The loan is 100 percent guaranteed by the Federal Government. There is literally zero risk for the bank. In fact, the bank pushes its cash out the door and within 8 weeks can take it to the Fed and sell of the loan, and they make a 5 percent fee on the smaller loans to begin with on top of it. So there is no denial process. You either qualify or you do not qualify. What they can deny you is the application, ``We are not doing any more PPP loans. We do not do loans for people that are not clients,'' that kind of thing, or as was cited, I think, by Senator Booker, they can discourage you from applying at the bank level. And that is one thing. On the amount, the amount is automatic as well. They do not get to decide, well, you qualify for 50, but we are only going to give you 25. If you are approved, you are approved for up to two and a half times of payroll. There is no discretion involved there. There is no bank decision, again, because it is not their money. They are basically acting as the intermediary between the Federal guarantee and the pushout. So that drives me to the point that it is--I do not know this to be true, but I am guessing that a substantial number of those that are a denial are actually not a denial of the loan. They are a denial of the ability to even apply, that in essence, they went to whatever their existing banking relationship is, and they told them, ``We are not doing any more PPP loans,'' or they did not have ones they could go to. Which leads me to the second point that everyone has raised, and that is lender access. I can tell you had it not been for regional banks--because the way we had to do it is how do you do something like this in 6 days. Well, first, you start with a baseline of 1,000 preapproved designated lenders who are a part of 7(a), and then you build on it. And it has built over 4,000 additional lenders, basically everyone, FinTechs and obviously the push to get CDFIs in later in the game as well. It was a process to get to 5,000. It is an important stable of lenders. But the regional banks, I think it was Senator Ernst that raised this. Without the regional banks, this thing would not have worked. It is just that simple. What we found out with a lot of the bigger banks is if you were a large account, you were processed by the commercial division. If you were a smaller account, you were processed by the small business or the business division, and there are a lot more business applications than commercial applications. The commercial applications just moved a lot faster. The other thing that I think we learned in time through all this, is that one of the things that they did do which worked really well is that the SBA designated like a 12-hour window in which they would only accept applications from smaller lending institutions, and it kind of cleared some of the backlog. It allowed those to get--because you can imagine. I mean, these larger banks had loaded everything up when that second tranche of funds became available, and they just smashed the system with these automated applications and almost crashed it. So that is important. By the way, one of the things that I did want to point out, because the mention was made of 1099 employees, they actually for the first time ever were eligible for this sort of assistance. That is something we added into the bill. They would qualify for two and a half times whatever it is they make. I get it. It does not cover all their needs, but I think that goes back to the technical assistance piece, which is explaining to people these are your rights, this is what you are eligible for, and this is where you can go. So that, I think, highlights that. It also highlights the lender accessibility. And then the third is the long-term figures because all of these impediments that I say do not exist or should not exist in PPP most definitely exist going to the market and saying I want a long-term, low-interest loan to be able to survive as a business, and that is a piece that I think we have to address and that we have some ideas on, others have some ideas on. But it is one we want to make a priority. So just on those first two points, the technical assistance and the lender access, I think the point has been made repeatedly that CDFIs, whether it is not just making them eligible to be lenders, but infusing them with the cash to have the capital to transfer the funds, because you have to have the money. Money does not come from the SBA. It comes from the lending institution. So you have to have the cash in your accounts to push it, and then 8 weeks later, you could sell it. But you have to have it for 8 weeks, and if you do not have enough of that money, it limits the number of loans you can do. So that has come through loud and clear. On the technical assistance piece, all of you had some different ideas about what the appropriate organizations are, and maybe I could just flesh out with all four of our witnesses. Obviously, all of you are a part of that assistance process, but if we wanted to make sure that more of these small businesses were aware of what they could get and where they could get it--because, by the way, one last point I would make is that is valid even now. We have over $100 billion of PPP money sitting there right now that has not been accessed. So there are small businesses out there that are eligible for this that are not applying for it as we speak, and that is through to August 6th, thanks to Senator Cardin extended it to August 6th, right? Senator Cardin. The 8th. Chairman Rubio. The 8th, August 8th. So they could still do it today. So that tells you that there has to be--something is blocking between eligibility of people who need it that did not get it and getting after. This program has not ended, and now we are going to go into round two of it, which is going to be more tailored for the kind of businesses we are talking about. This impediment is still there. So who is it that can help really sort of create the awareness and then the guidance to make sure your application is filled out right, you are getting what you are entitled to, and then on the forgiveness side, you are getting the pieces of it forgiven? Let me start with Ms. Bayles, who is here now, and then I will go just down the list. Ms. Bayles. Thank you, Senator Rubio. I would like to maybe provide a deeper level into the technical assistance that my testimony did not specifically say, and that is the role that service providers like myself play in all of this discussion. So we get the money out quickly to CDFIs. Great. We allow flexible terms, longer terms. Great. But if that business does not have a relationship with a service provider, a year-round service provider that can make sure that all of the application requirements you have taken care of--tax, compliance, bookkeeping, to have those financial documents--if they do not have a relationship with the service provider, access to a service provider, this is all for naught, because they are not going to have the capacity because they are not looking at their numbers. So that is a little bit more than technical assistance. I am educating you on the information that is out there, how you would qualify for the loan, but now I am also interpreting your data so that you can remain a healthy business and have the capacity to really use those funds to the max. That comes from the service provider perspective. That comes from companies like mine that are actually sitting down with the employee on a year-round basis after you have received the money or even in preparation of the money, but you are going to have to have a relationship with a service provider that can help you maintain the health of your business once you get the money. So I think I want to add that piece and make sure that piece is not lost in this discussion, the vital role that a company like mine plays when it comes to just making sense of all of this to the business owner so they can stay open and really operate successfully. Chairman Rubio. And I would add be eligible for forgiveness---- Ms. Bayles. That is right. Chairman Rubio [continuing]. because you have to be able to document all that. Mr. Busby? Mr. Busby. Thank you. I think that we should and could fund the Minority Business Development Agency. We have seen their work. We know that they were created to help and support both technical as well as just boosting their acumen in reference to business readiness. In our letter, we have requested a $10 million financial support to MBDA. We want it codified, and we believe that they have made direct relationships with many chambers of commerce and other nonprofit organizations around the country to ensure that those smaller and many times unrepresented firms get access to the capital that they need. MBDA is great at the technical assistance as well as the relationships, and they have boots on the ground through relationships like the U.S. Black Chamber and our 145 chapters around the country. Chairman Rubio. OK. Ms. Bilonick? [No response.] Chairman Rubio. Ms. Bilonick? Ms. Bilonick. Yes. I would say that I believe the best sort of conduits for the technical assistance would be community- based organizations and CDFIs. It would not necessarily only need to be CDFIs. There are plenty of organizations that strictly provide technical assistance and educational services to small businesses, but I just think the idea of funding in organizations that are entrenched in the community is an extremely important priority. Chairman Rubio. How are those normally recognized? Are those normally (c)(6)s? Ms. Bilonick. (c)(6)s? No. (c)(3)s. Chairman Rubio. (c)(3)s? Ms. Bilonick. Yeah. Or CDFIs. Chairman Rubio. Okay. Ms. Bilonick. The one thing that I wanted to add, though, just to sort of color this is that while we are all saying that we have really deep relationships in the community, which is true, I think there is an untapped market of businesses that could use our services that do not know about the CDFI industry at all. I was on a call yesterday where someone said it is less about what our name it and it is more about what we do. I think the name ``CDFI'' is not very easy to digest, and so I think it is just an unknown resource that is out there for small businesses. I could not tell you how many times we have had clients walk in and say had it not been for my neighbor or had it not been for my brother, I would have never known that this kind of organization exists. So in cities like D.C., where we have been for 20 years, we do not have that much of a challenge, but I do think there is something that could be done. I do not know that it is the role of the Federal Government to do it, but there is something to be done around broader marketing of CDFIs in general, because I believe that there are many, many businesses that could use our services, many more than currently use it, that are just simply not aware that we are here. Chairman Rubio. Okay. Ms. Estrada? Ms. Estrada. Yes. I have to be in agreement that we need to have more awareness about the CDFIs and what we are doing, and remember that probably the service that we provide, we work really well with the major lenders, with the banks, because our mission as well as for this business owner to graduate for the traditional lending system. Also, with our clients, that they work really very well with the MBDA. Also, they work really very well with the SCORE. Another, they work really very well with local community organizations. So my suggestion, if I may, it should not be just to identify only one organization. It should be a network of organizations, that we could work well together because, like mentioned here today, we need to be all together in order to sabotage the economy. Chairman Rubio. Okay. Senator Cardin, did you have a follow-up? Senator Cardin. Yes. Thank you, Mr. Chairman. I just really want to thank all four of our witnesses. I think this has been an extremely important hearing. I just want to make a brief comment. On the PPP program, we had some challenges, but we knew from the beginning that there were going to be challenges using existing and new lenders. And that is why we put the language in there urging the administration to make a special effort to deal with the underbanked community, and we were disappointed by the initial response. We then adjusted the program. The Treasury was certainly much more responsive than SBA to these issues, and we made certain changes. And it helped the underbanked and underserved and minority communities. But we also recognized that we needed the EIDL program in there. Mr. Busby, I agree with you completely. The EIDL program, we anticipated would be a program that could help the smaller small businesses, the minority small businesses to a greater extent, and you should not have chosen between the PPP and EIDL. Both were available, and the EIDL was supposed to give you some grant money up fast, quickly, and it didn't. And the EIDL program is supposed to be there for filling in the gaps, and it was not available. The window was closed, and the dollar amount caps were set. Then the information was not out there about how these two programs work together, not as an alternative. So I just mention all of that because as we look at COVID 4 legislation, the legislation that hopefully we will be considering as early as next week, I hope that we can figure it in a way to deal with the issues that we have talked about today, about making sure that we get it right from the beginning, and we do what is right for the underbanked, underserved communities that we have seen were at a disadvantage at the beginning of the PPP program and were not served as well as they should have been under the EIDL program. So whether we adjust these programs or we look at the other programs that you talked about or we have set-asides, we have to make sure that we do a better job from the beginning, and I think this hearing has really helped us. And I very much appreciate the manner in which the Chairman manages our committee, gets the input of all of our members, and we all share the same objective, to make sure that all businesses in our community are served and there is access to capital for those who traditionally have had a much more challenging time getting access to capital. So thank you, Mr. Chairman. Chairman Rubio. Thank you. And I took want to thank the witnesses because, I mean, the goal coming in here is the following. Set-sides were important because it prevents you from running out of money, but I think we can all predict that this second round of assistance will be much more narrowly targeted at truly smaller businesses and those that have suffered tremendously. So there will still be pressure on money running out, but it will not be as acute as it was the first time. It will still be significant. So set-asides are important, but in essence, the targeting itself is a set-aside in that way. The bigger challenge is we are sitting here saying there are still thousands of businesses out there that could be using this help and are not accessing it--why is that?--answering that question, and I think we have gone a long way today toward getting answers to some of those questions. And they are complex. Some of it is the organizations that could help connect them either do not have the funding or the resources to reach them. Some of it is just awareness. We take for granted how small businesses, frankly, are just not aware of all the stuff that is out there, because they are busy surviving as a business, especially in these times. So I think today we went a long way toward really pinpointing what more can we do. It is not just enough to have more lenders. You also have to have people know they exist. You have to have people help guide them, how to fill out the application, how to manage the funds once they get it so they can survive, and how to position themselves for forgiveness as well. Otherwise, you wind up in a situation where you actually owe some money when you should not be because you could have easily met the criteria. Again, that is tough to do when the president, the treasurer, the CFO, and the employee is the same person, and they happen to be the only employee of the company. So the smaller you get, the harder that is. So I really do think today's hearing has helped us hone in on some of those impediments. So thank you for your patience. We are two and a half hours, as you saw a lot of member interest in this topic. I appreciate everything you have told us today. Believe me, it is meaningful. I was taking notes and have already passed on a bunch of them, if they can understand my handwriting, and then I will tell them what it meant. And for the members, the hearing record will stay open for 2 weeks. Any statements or questions for the record should be submitted by the 6th of August at 5 p.m. With that, this hearing is adjourned. Thank you to our witnesses. Thank you. Thank you. [Whereupon, at 12:27 p.m., the hearing was adjourned.] APPENDIX MATERIAL SUBMITTED [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]