[Senate Hearing 118-233] [From the U.S. Government Publishing Office] S. Hrg. 118-233 VETERAN ENTREPRENEURSHIP: FROM SERVICE TO SMALL BUSINESS SUCCESS ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP OF THE UNITED STATES SENATE ONE HUNDRED EIGHTEENTH CONGRESS FIRST SESSION __________ NOVEMBER 15, 2023 __________ Printed for the Committee on Small Business and Entrepreneurship [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 63-160 WASHINGTON : 2026 ======================================================================= COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP ONE HUNDRED EIGHTEENTH CONGRESS ---------- JEANNE SHAHEEN, New Hampshire, Chair JONI ERNST, Iowa, Ranking Member MARIA CANTWELL, Washington MARCO RUBIO, Florida BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho EDWARD J. MARKEY, Massachusetts RAND PAUL, Kentucky CORY A. BOOKER, New Jersey TIM SCOTT, South Carolina CHRISTOPHER A. COONS, Delaware TODD YOUNG, Indiana MAZIE K. HIRONO, Hawaii JOHN KENNEDY, Louisiana TAMMY DUCKWORTH, Illinois JOSH HAWLEY, Missouri JACKY ROSEN, Nevada TED BUDD, North Carolina JOHN W. HICKENLOOPER, Colorado Sean Moore, Democratic Staff Director Meredith West, Republican Staff Director C O N T E N T S ---------- November 15, 2023 Opening Statements Page Jeanne Shaheen, U.S. Senator from New Hampshire.................. 1 Joni Ernst, U.S. Senator from Iowa............................... 2 Witnesses Col. Tim Green, USAF (Ret), Acting Associate Administrator, Office of Veterans Business Development, U.S. Small Business Administration, Washington, DC................................. 4 Prepared Statement........................................... 7 Dr. Mike Haynie, Vice Chancellor, Syracuse University, Director, Institute for Veterans and Military Families (IVMF), Syracuse, NY............................................................. 12 Prepared Statement........................................... 14 Ms. Lisa Shimkat, State Director, America's SBDC Iowa, Ames, IA.. 19 Prepared Statement........................................... 21 Mr. Chris Guerrette, Owner and CEO, Lickee's & Chewy's Candies & Creamery Dover, NH............................................. 25 Prepared Statement........................................... 27 Mr. Dustin Rhoades, CEO and Owner, Ability Tech, Sioux City, IA.. 29 Prepared Statement........................................... 31 Additional Letters/Statements for the Record National Association of Federally-Insured Credit Unions.......... Letter Dated November 14, 2023............................... 52 Senator Jeanne Shaheen........................................... Opening Statement............................................ 54 Questions for the Record Col. Tim Green, USAF (Ret)....................................... Responses to questions submitted by Senators Booker and Risch 57 Mr. Chris Guerette............................................... Responses to questions submitted by Senator Booker........... 65 Dr. Mike Haynie.................................................. Responses to questions submitted by Senators Booker, Hirono and Risch.................................................. 67 Mr. Dustin Rhoades............................................... Responses to questions submitted by Senator Booker........... 72 Ms. Lisa Shimkat................................................. Responses to questions submitted by Senator Booker........... 75 VETERAN ENTREPRENEURSHIP: FROM SERVICE TO SMALL BUSINESS SUCCESS WEDNESDAY, NOVEMBER 15, 2023 United States Senate, Committee on Small Business and Entrepreneurship, Washington, DC. The committee met, pursuant to notice, at 2:38 p.m., in Room 428A, Russell Senate Office Building, Hon. Jeanne Shaheen, chairman of the committee, presiding. Present: Senators Shaheen [presiding], Cardin, Hirono, Duckworth, Rosen, Hickenlooper, Ernst, Young, and Hawley. OPENING STATEMENT OF SENATOR SHAHEEN Chair Shaheen. Good afternoon. The Senate committee on Small Business and Entrepreneurship will come to order. I am really honored to welcome everyone today. And of course, because it is Wednesday and we are having a hearing, we have votes. So, we have finished the first one, so I expect members to--Senator Hickenlooper hasn't voted yet. Okay. So, as you can imagine, people will come and go while they finish this vote. Hopefully, we are only going to have one before the hearing ends, so we should be able to hear from all of you and have a chance for questions. Today, the committee is going to conduct a hearing on the state of veteran entrepreneurship and how we can work together to support our nation's veterans and their small business goals. I want to welcome our witnesses. Thank you for joining us today. I am really anxious to hear about your experiences and what you can share with us about what we need to do to better support veterans and their small business aspirations. I want to extend a special welcome to Chris Guerrette and the folks from New Hampshire who are here. I have been to Chris's shop, so I know what great candy he provides. We are going to introduce all of our presenters in just a few minutes, but I want to begin just by making some brief points about veteran owned businesses and their impact on the U.S. economy. There are approximately 1.8 million veteran owned businesses in the United States. They produce an estimated $1.2 trillion, with a T, in revenue. They employ approximately 5.2 million people, and they support over $232 billion in annual payroll. And through their military service, veterans often have the can do approach that makes them really good entrepreneurs. Their discipline, tenacity, and leadership abilities may be the reason that veterans are more likely to pursue entrepreneurship compared to their civilian counterparts. But of course, veterans are not immune to the struggles that face civilian small business owners. Access to capital, mentoring networks continue to be a challenge, regardless of military service. I think there is more we can do to support our veterans, and that is part of what this hearing is about. I am committed to working with Ranking Member Ernst and my colleagues on the committee to provide the support, including access to capital, counseling, technical assistance to the tens of thousands of veterans who aspire to start their own businesses. I have a longer statement that I will introduce for the record without opposition and look forward to the witness testimony. And now, I will yield to Ranking Member Ernst for her opening statement. STATEMENT OF SENATOR ERNST Senator Ernst. Oh, thank you. And good afternoon to our witnesses. Thank you very much for being here. And thank you, Chair Shaheen. Coming out of our Veterans Day weekend, and I hope everybody was able to celebrate that day with their loved ones, I am grateful for the opportunity to examine how the Small Business Administration can better serve our 1.7 veteran owned small businesses. As a combat veteran and a retired Lieutenant Colonel in the Iowa Army National Guard, I want to take a moment to thank our country's veterans for their selfless service. I also want to recognize the families of those who have served. In the Senate, I focused on ensuring our veterans have access to critical mental health services, and I am committed to holding the VA and other agencies accountable for recent telework practices that have created major department failures and have left calls from our veterans unanswered. As a Ranking Member of this committee, I am charged with ensuring our veterans' small businesses, especially in our rural areas, have access to the more than $25 million in technical services and resources provided by the SBA's Veterans Business Development Office. Veteran entrepreneurs are found in every segment of our economy. According to the U.S. Census Bureau's annual business survey, over 99 percent of all veteran owned businesses are small businesses. In 2019, my home State of Iowa had over 16,000 veteran owned businesses. It is critical rural and Midwestern veteran owned small businesses have a fair shot accessing SBA resources. My bill with a fellow veteran, Senator Duckworth, to reauthorize the SBA's Boots to Business Program is pending Senate passage. It also includes language that will ensure every service member population, including the National Guard, is equally weighted when SBA determines where to place new veteran business outreach centers. In addition, I have fought to reduce fraud and stop stolen valor in the SBA's service Disabled Veteran Owned Small Business Contracting Program by including in the National Defense Authorization Act a provision that encourages agencies to award more Federal contracts to certified veteran owned small businesses, discouraging awards made to self-certified firms. Veteran entrepreneurs and small business owners are an important piece of our communities, and I am looking forward to hearing from all of you about the challenges faced by veteran small business owners and exploring how SBA can better meet your needs. So, thank you, Madam Chair. It is great to be with you again today. Chair Shaheen. Thank you very much, Senator Ernst. And I will now introduce our five witnesses. First is retired Colonel Timothy Green. He is the Acting Associate Administrator of SBA's Office of Veterans Business Development, or OVBD. We always love acronyms here in Washington. As Acting Associate Administrator, Colonel Green is responsible for leading the OVBD team. We like them because that way we can use them instead of the full name afterwards. And formulating, implementing, promoting policies and programs that equip veterans, service members, and military spouse owned small businesses with counseling and training, access to capital, and contracting opportunities. Colonel Green retired from the U.S. Air Force in June of 2012 after serving on active duty for nearly 28 years. He holds a BBA, an MBA, and a master's degree in National Security Strategy from the National War College. Thank you for being here. Next, we have Dr. Michael Haynie, who is the Vice Chancellor for Strategic Initiatives and Innovation and Founder and Executive Director of the Institute for Veterans and Military Families, or IVMF. An Executive Director, Barnes Professor of Entrepreneurship at Syracuse University, Dr. Haynie is one of the foremost experts on veteran entrepreneurship in the U.S.. Prior to joining Syracuse University, Dr. Haynie served as an officer in the U.S. Air Force for 14 years. Chris Guerrette is the owner of Lickee's & Chewy's Candies & Creamery, located in Dover, New Hampshire, which is also right next to where I live, so I know it well. He is an Air Force veteran who grew up with a love for candy, which has only increased as he has tried treats from around the world. His candies and creamery store, Lickee's & Chewy's, is an homage to an old military slang term for sweets. Senator Ernst obviously knows that--yes. [Laughter.] Chair Shaheen. Within months of retiring from the Air Force and taking a civilian consulting job with the military, the candy bar and creamery in his hometown was for sale. Mr. Guerrette's wife bought the shop, added hundreds of items, and experienced over 50 percent year over year growth in the first four years. Mr. Guerrette has utilized several SBA resources and products throughout his business development and expansion, and we look forward to hearing more about his firsthand experience. I also want to welcome the two witnesses who have been called by the minority and we will yield to Ranking Member Ernst for the introduction. Senator Ernst. Once again, thank you, Madam Chair. And welcome to Colonel Green, Dr. Haynie, and Mr. Guerrette. Thank you very much for joining us. I will now introduce my fellow Iowans who have joined us today. And the first is Ms. Lisa Shimkat. And Lisa serves as the State Director for the Iowa Small Business Development Center. SBDC provides business counseling for entrepreneurs and small business owners at 15 centers across the State of Iowa. Ms. Shimkat currently serves as the Board Chair of America's SBDC National Association Board and has served on the Iowa Economic Development Authority Board since 2019. Ms. Shimkat has also served on the Securities and Exchange Commission Advisory Committee on Small and Emerging Companies. She has earned several awards and recognitions for her outstanding service to Iowa small businesses. Ms. Shimkat earned her Associates of Arts at Iowa Central Community College before going on to earn her bachelor's degree and MBA from the most excellent university in the universe, Iowa State University. So, thank you very much for joining us, Lisa. Next, I will introduce Mr. Dustin Rhoades, and Dustin is the Founder and Owner of Ability Tech, which creates custom adaptive technology for individuals with disabilities. He founded Ability Tech after creating a device enabling his son to play baseball. And I first met Dustin and his son a number of months ago up in Northwest Iowa, where I actually was able to play baseball. I was catching a baseball thrown by his son with this device that he created. It was just a truly wonderful evening, and Dustin, I am so glad to have you here. So, Dustin also leads the Ability Tech Foundation, a nonprofit organization supporting families and caretakers of individuals with disabilities. A veteran of Operation Iraqi Freedom and Operation Enduring Freedom, Mr. Rhoades served four years in the United States Marine Corps. He earned a degree in Computer Science and Cybersecurity Engineering from Colorado Technical University. Thank you to both of you for making the trip to Washington, D.C. to share with this committee how we can better support our veteran entrepreneurs and business owners in Iowa, as well as across the country. So, I yield back, Madam Chair. Thank you for convening this committee. I appreciate it. Chair Shaheen. Thank you very much, Senator Ernst. Now we will turn to our witnesses. We ask each of you to try and keep your testimony within five minutes. If you have longer that you would like to submit for the record, we would be happy to take those as well. And, Colonel Green, we are going to begin with you and go straight down the line. STATEMENT OF COL. TIM GREEN, USAF (RET), ACTING ASSOCIATE ADMINISTRATOR, OFFICE OF VETERANS BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C. Colonel Green. Chair Shaheen, Ranking Member Ernst, members of the committee, thank you for the opportunity to testify today on SBA's efforts to empower veterans, service members, National Guard and Reserve members, and military spouses with the tools to start, grow, and build resilience small businesses. We are grateful for this committee's continued support of SBA programs that provide training and counseling, access to capital, and Federal contracting opportunities to our nation's heroes and job creators. In 2019, I joined the SBA as a Deputy Associate Administrator in the Office of Veterans Business Development. Prior to SBA, I worked at the Department of Labor in their Veterans Employment Training Service, where we focused on military spouse and veteran employment issues. I retired from the Air Force in 2012 after serving active duty for about 28 years. SBA is dedicated to serving and highlighting the impact of America's nearly 2 million veteran owned small businesses. To honor them, we recently celebrated our 10th anniversary, National Veterans Small Business Week, where we hosted about 250 events across the nation. These events highlighted and empowered veteran and military spouse business owners in their local communities and connected them with local SBA resources. Within our office, veteran business outreach centers, or VBOC, are the cornerstone of our service delivery model. Last year, VBOC served over 55,000 clients, and thanks to the support of this committee, our network has expanded from 22 to now 28 VBOCs. SBA is also charged with assisting transitioning service members as they prepare to leave military service. SBA teaches the Boots to Business Program, which is an introduction to entrepreneurship, as part of the Department of Defense Transition Assistance Program. We teach it at 195 installations worldwide. Last year, we had over 21,000 individuals attending to Boots to Business classes. And since that program was established in 2013, with the help of IVMF, we have trained over 196,000 service members, veterans, Guard and Reserve members, and military spouses. We also have a version of Boots to Business called the Reboot, which is taught to veterans, and Guard and Reserve members that maybe have already separated in their local communities. And we also recently launched a military spouse Pathway to Business Training Program to help military spouses looking to start their entrepreneurial journey. SBA facilitates access to capital for veterans and small businesses through three loan programs, the 7(a), 504 micro loans. And thanks to this committee, the SBA is able to waive the 7(a) express loan upfront guarantee fee for veteran and military spouse owned small businesses. SBA also helps veteran firms gain access to contracting opportunities. In Fiscal Year 2022, the Federal Government awarded 4.6 percent of its prime contracts to service disabled veterans owned small businesses, exceeding the 3 percent goal. In January, we implemented the Veterans Small Business Certification Program directed by Congress in the National Defense Authorization Act, transferred the responsibility from the Department of Veterans Affairs to SBA. SBA Administrator Guzman refers to VetCert as the gold standard for veterans certification programs. We now have a streamlined process that makes it easier to apply and get your certification, and it is just not easier, it is faster. To date, we have certified well over 8,500 new veteran owned and service disabled, veteran owned small businesses. To ensure we are effectively serving veterans and small-- small business community, we convened two Federal advisory committees, both of them looking at how we can improve services for our veteran clients. I want to thank you today for the opportunity to testify and highlight our mission in SBA's Office of Veterans Business Development and our continuing efforts to empower veterans, service members, National Guard, Reserve members, military spouses. We want to give them the tools to start, grow, and build resilient small businesses. Thank you very much. [The prepared statement of Colonel Green follows.] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chair Shaheen. Thank you, Colonel Green. Dr. Haynie. STATEMENT OF MIKE HAYNIE, VICE CHANCELLOR, SYRACUSE UNIVERSITY, DIRECTOR, INSTITUTE FOR VETERANS AND MILITARY FAMILIES (IVMF), SYRACUSE, NEW YORK Dr. Haynie. Chairwoman Shaheen, Ranking Member Ernst, members of committee, thank you very much for the opportunity to be here today. I have worked to advance the cause of military spouse and veteran home business ownership for now close to 20 years. And over that period, I deeply appreciated this committee's commitment to supporting entrepreneurial opportunity for our service members, our veterans, and our military families. Your past actions have directly served to empower those who have served to meaningfully leverage business ownership as a strategy to successfully transition from military to civilian life. And as an example, I would like to commend Chairwoman Shaheen's bill, the Heroes Business Opportunity Act of 2023. Access to capital is consistently year over year the top barrier to venture creation and growth that is identified by both research and by veterans directly. And I think this bill is positioned to enhance access to capital, and both growth and startup capital by waiving the SBA guarantee fee for 7(a) loans made to veteran small business businesses. It is a commendable step, and I think if may law, will have an enduring impact on the community that I serve. It is important context, I think, for any discussion about veteran business ownership to acknowledge the challenges associated with navigating that transition from military to civilian life. And given that challenge, research also clearly demonstrates that multiple pathways to post service jobs and careers are critically important for our transitioning service members. And for a great many veterans driven by an entrepreneurial spirit that I think is cultivated through military service, the path they choose as business ownership. And demand for business ownership training and resources in this community is strong and is increasing. You know, you heard Tim mentioned, you know, my number was 194,000, but I just learned 196,000 transitioning service members, veterans, and spouses now through the Boots to Business Program, and that is tremendous. And while the SBA does stand at the forefront of our public sector efforts to empower veteran entrepreneurs through funding programs, mentorship opportunities, it is also true that the SBA can't do this alone. I think public, private partnerships really have evolved to become central to serving veterans via what is a proactive and really needs driven ecosystem to ensure that the tailored solutions to the many and diverse challenges that transitioning service members and veterans face in the pursuit of entrepreneur opportunity are addressed. And, you know, as an example, the organization that I am here to represent today, the D'Aniello Institute for Veterans and Military Families at Syracuse University, we have been a longtime and close partner to the SBA and currently operate a portfolio of business ownership initiatives that include 11 different national training programs and 3 tailored information hubs, each of those designed to meet veteran entrepreneurs where they are in the venture creation and growth lifecycle, and all offered at no cost to veterans and military families. And like for the SBA, demand for these training opportunities and navigation services is strong and continues to grow. Over the past decade, the Institute for Veterans and Military Families has provided entrepreneurship training to just over 70,000 transitioning service members, veterans, and spouses, and just over 35,000 of that community have leverage the navigation services that we offered--that we offer to help them identify resource partners in their own communities to get them to help they need when they need it. You know, importantly, I am an academic and I would be remiss if I didn't mention that we also each year conduct a national survey of military affiliated entrepreneurs, which is the largest data collection outside of Government of the veteran business ownership community. And that research really does help us identify opportunities to do better. And I think one of those, back to this issue of capital access, there is an opportunity for us to do more and better. If you look at our findings, what we realize is veteran military connected entrepreneurs are about 3.5 times more likely to encounter access to capital barriers than their non- veteran counterparts pursuing business ownership. So, on this front, we do need to do more. And I think hopefully our discussion will tease out some of those opportunities. I will close just very quickly by stating something that I think everyone in this room recognizes. The value proposition for doing this work is very, very high. Chairwoman Shaheen, you mentioned the economic contribution that this community makes in terms of sales, and revenue, and employees. I think there is also this idea of this community contributing now that they have taken the uniform off to the economic freedom of this country is clear and compelling, and it serves the values of citizenship that really are the underpinnings of our all-volunteer military. With that, I will close. [The prepared statement of Dr. Haynie follows.] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chair Shaheen. Thank you. Very well said. Ms. Shimkat. STATEMENT OF LISA SHIMKAT, STATE DIRECTOR, AMERICA'S SBDC IOWA, AMES, IOWA Ms. Shimkat. Chairwoman Shaheen, Ranking Member Ernst, and distinguished members of the committee, thank you for this opportunity to testify today on the topic of veteran entrepreneurship. I want to speak to the opportunities and the challenges faced by veterans when starting their own business, particularly in Iowa, the Midwest. As you already know about America's Small Business Development centers, we are continually trying to work with each of our 15 regional centers, and we are an outreach program of Iowa State University, Ivy College of Business, and the Office of Economic Development and Industry Relations. The State of Iowa is committed to serving and empowering veterans in their post-military career pursuits. We work closely with Home Base Iowa, HBI, to enhance employment opportunities for veterans, service members, and their spouses. The HBI program has made significant strides in assisting veterans. The collaboration spans 29 certified higher academic military partners, the Champs Program, 129 designated communities, and over 2,000 HBI businesses statewide. One of the programs to assist veterans that we have started is the annual Iowa Veterans Entrepreneurship Conference. These are commendable and successful initiatives. They are critically important as veterans encounter unique challenges when attempting to transition into entrepreneurship. There is certainly more work that needs to be done, though. Another challenge for veterans is a lack of adequate resources. It is imperative to understand and to address the resource disparities faced by veterans in rural areas. The SBA data reveals a shortage of resources impacting the ability of veterans to access essential support for their entrepreneurial endeavors. Veterans who live in rural areas often lack access to resources, broadband challenges, etcetera. While the vitality of rural communities is a priority, serving those rural areas costs more due to travel and time. Increased funding for programs performing significant rural outreach will translate to expanded coverage in rural areas. But I want to also note, sometimes it is not always more money, but it is about encouraging different Federal agencies to work together and utilize the existing resources on the ground to extend their own efforts at minimal cost to the taxpayers. Veteran businesses employ more than 70,000 people and generate over $3 billion in annual sales in Iowa alone. Iowa's thriving veteran owned businesses underscore the resilience of veterans who pursue entrepreneurial ventures. Despite the challenges, the success rate of veteran owned businesses demonstrates the significant contributions they make to economic growth and impact. We are committed to maintaining this positive trajectory and increasing the number of successes for our veteran entrepreneurs. To do so, we do offer several considerations. Access to comprehensive data. Mirroring the U.S. Army Soldier for Life Initiative. Occupational licensure reciprocity. Seek DOL approval to serve additional populations through the Jobs for Veterans State Grant Program. Early access to entrepreneurship resources to get in front of servicemen and women before they are on their way back home--to get in front of them so we can talk about those resources earlier. Streamline information organization. And the biggest one that I wanted to point out specifically today was streamlining SBA programs and leveraging the SBDC network that is already on the ground and has been a proven resource for small businesses. To maximize the impact of SBA programs and reduce duplication of services, there is a critical need for closer alignment and collaboration among the initiatives. The SBDC network, with its extensive reach and expertise, can serve as a robust base for various resources and programs. Leverage the strength that is there. Now, these suggestions aim to enhance the efficiency of existing programs and partners. We partner with the APEX Program, which is a DOD initiative that has been crucial for the success, and it is about working together with those partners to help those entrepreneurs and see them thrive more quickly and have a stronger business moving forward. Ultimately, we want to create a more favorable environment for veteran owned businesses to thrive. While Iowa and other States have made substantial strides in supporting veteran entrepreneurs, challenges do still persist, exacerbated by resource disparities. By addressing these challenges, we can create an environment where more veterans thrive as successful entrepreneurs. Thank you for the opportunity today. [The prepared statement of Ms. Shimkat follows.] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chair Shaheen. Thank you very much. Mr. Guerrette. STATEMENT OF CHRIS GUERRETTE, OWNER AND CEO, LICKEE'S & CHEWY'S CANDIES & CREAMERY, DOVER, NEW HAMPSHIRE Mr. Guerrette. Chairwoman Shaheen, Ranking Member Ernst, committee members, thank you for inviting me to testify today. It is an honor to provide testimony on veteran entrepreneurship and the Small Business Administration's role in assisting veteran small business owners. I am a retired Air Force officer and the owner and creator of Lickee's & Chewy's Candies & Creamery in Dover, New Hampshire. It is a 5,000 square foot candy, ice cream, and chocolate shop that hosts an average of 40,000 guests per year, employs 20 people, 6 of which I am proud to say are full time, and we currently are expanding into an additional 5,000 square feet of space to build a chocolate factory and warehouse as well. None of this would have been possible without the support of the SBA, the Small Business Development Center, my mentor, and the programs that support veteran small business owners such as the Boots to Business Program. My journey began shortly after I retired from the Air Force in 2014, when a small shop in the town I lived in came up for sale. Seeing as I love candy and because I always wanted to work for myself, I decided to meet with the current owner just to see if there was any reason not to buy the shop. Needless to say, it was an easy choice, and in late 2014, my wife and I took ownership of a small 500 square foot candy shop. At the time, I was also working full time as a GS-13 Government employee at Hanscom Air Force Base. So, my wife ran the shop during the day, and at night I would come in and place orders, make chocolate, and work till midnight taking care of things and putting out new displays. Long story short, our sales grew and grew, and in September of 2016, I was able to leave my Government job, which, you know, was a pretty big surprise to everybody I worked with, and go full time candy, as I like to call it, with grand plans to build a new, much larger store. My plan was to expand and build a new 5,000 square foot shop that would become a destination. And thankfully, I was working with an advisor from the New Hampshire's SBA Small Business Development Center, and we worked for months on the business plan, funding options, and business design. He helped to match me with banks in the area, apply for and secure SBA loans to provide the capital necessary to get things going that I needed to borrow. It turns out I borrowed about $250,000 for construction expenses, equipment purchases, and inventory. Now, granted, the 250,000 was a best guess-estimate, and as you can imagine, there are often several unexpected expenses that come up during the early stages of starting and growing a business, and our actual startup costs ended up being closer to $350,000. We paid for that with our own cash and credit, and those extra expenses included construction costs, higher equipment costs, and several other items, including an SBA loan fee. It can be frustrating and challenging to pay for fees and expenses for items that do not directly result in creating profits for a small business when they are starting. It is one thing to pay for tangible items such as equipment or construction that can lead directly to a result in increased business, or at least in creating smoother business operations. But those fees tend to deplete the capital and put a new business further behind the eight ball, or further in the hole, before they even open their front door. Thankfully, our business took off and we were able to pay back our loans and continue to grow. As a matter of fact, we have borrowed other amounts from the SBA, another $55,000 a couple of years ago to purchase more equipment, and that was done using the SBA Express loan, where thankfully the fee was waived because cash flow is tight. That was right in the middle of the COVID pandemic. The frequent and multiple unexplained expenses when starting or growing a business can be high and can definitely create barriers to starting a business or even create a financial hardship under which a new business will not succeed. And in the event that is a veteran with perhaps 4, 6, or maybe 10 years of service who is relying on their new business to be successful in order to make ends meet, then they will need all the help they can get. And I believe it is legislation such as the Heroes Business Opportunity Act that will waive the SBA guarantee fee for loans made to veterans, that creates another tool to make it easier for veteran owned businesses to access capital, and it will quietly but powerfully help veteran owned small businesses succeed. Thank you. [The prepared statement of Mr. Guerrette follows.] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chair Shaheen. Thank you very much. Mr. Rhoades. STATEMENT OF DUSTIN RHOADES, CEO AND OWNER, ABILITY TECH, SIOUX CITY, IOWA Mr. Rhoades. Chair Shaheen, Ranking Member Ernst, and members of the committee good afternoon and thank you for the opportunity to testify today about the challenges and opportunities facing veteran owned small businesses. With profound gratitude, I stand before you as the CEO of Ability Tech, a company committed to revolutionizing accessibility through innovative technology solutions. Our journey is deeply personal and began with my son, who was born missing 97 percent of his brain. In 2019, I created a piece of adaptive technology to enable him to play baseball. That inspired us to start Ability Tech and created adaptable technology for individuals from all walks of life. This, coupled with a sincere aspiration to impact the lives of individuals with disabilities, is what got us here today. On our mission at Ability Tech is both simple and profound, to serve each unique individual, to support the disabled community, and importantly, to alleviate the financial burdens faced by families dealing with disabilities. We understand that fixed income limits that many of these families confront. We believe that families and caregivers shouldn't have to choose between medical treatments, bills, therapies, or quality of life inventions that could transform their world. At Ability Tech, we do our best to build affordable, adaptive tech, and work with families on a budget to ensure they can get the technology that they need. Pursuing entrepreneurship as a veteran has its unique challenges. To transition from military service to the unpredictable nature of business world was a constant challenge. During the early days of our venture, access to capital emerged as a hurdle, compounded by our rural location and our niche nature of the adaptive technology industry. Convincing traditional lenders of the societal impact of our business model became a mission in itself. Given the smaller percentage of the population composing our demographic, our journey has been enriched by local resources, such as the Chamber of Commerce, the Small Business Development Centers, and the Iowa State University Pappajohn Center for Entrepreneurship. These entities have played a pivotal role in our growth, providing essential guidance, networking opportunities, and resources. Yet challenges persist, particularly in accessing capital and navigating the intricate landscape of Government contracting. Government contracting emerged as a pivotal part of our growth strategy. Events like Senator Ernst's Entrepreneur Expo in Iowa and Iowa State University Pappajohn Center for Entrepreneurship, Iowa Veterans Entrepreneurship Conference, opened our eyes to the possibilities within the Government contracting. However, the bureaucratic landscape, particularly dealing with the language and the time commitment involved, demanded a steep learning curve. We commend the efforts made to ensure that the taxpayer funds are allocated to American companies, but the process requires further simplification and support, especially for smaller businesses. The current economic inflation has impacted our business. Rising costs across the board have led us to adapt our strategies to navigate these economic challenges. Our operational costs, encompassing everything from raw materials to utilities, have increased and directly impacted our bottom line, prompting a review of our budgeting and expenditure strategies. We have had to explore cost effective alternatives without compromising the quality of our products or our services. Our engagement with the Small Business Development Center has been positive, facilitated by strong relationship with our local SBDC director. However, we emphasize the need for more local tailored resources for veteran owned businesses. Initiatives like the Pappajohn Center Veteran Entrepreneurship Conference have started addressing this gap, but at a State level, but require further support and expansion. Our journey has been enriched by the guidance and mentorship of other small business owners who have walked a similar path. Entities like the Siouxland Chamber of Commerce has played a pivotal role in holding networking events and local business forms, fostering connections within the business community. Again, Senator Ernst's Entrepreneurship Expo and the Pappajohn Center Veterans Entrepreneurship Conference provided invaluable opportunities for engagement, sharing experiences, and receiving advice. However, the ongoing challenges lies in finding seasoned mentors who are more experienced or established business leaders who understand the need for support. Looking ahead, our biggest priority is access to funding. As an early stage small business operating out of our garage, still the demand for our products outpace our capacity. In conclusion, I urge the State--or the State--the Senate committee on Small Businesses and Entrepreneurship to explore opportunities for better supporting veteran entrepreneurs. Strengthening small business, particularly those led by veterans, require multiple approach, streamlined communication, tailored training programs, flexible funding options. I hope, as we collectively work together towards these goals, we pave the way for more vibrant and resilient entrepreneurial landscape. Thank you for your time and consideration. [The prepared statement of Mr. Rhoades follows.] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chair Shaheen. Thank you all very much for your very compelling testimony. We will now have a round of five-minute questions each. And Mr. Guerrette, I am going to start with you, since you are from New Hampshire. And you and Dr. Haynie did such a nice job of providing a commercial on my legislation, the Heroes Business Opportunity Act. I have to ask you about that. You talked a little bit about this in your testimony, but talk about why waiving the fees up front for 7(a) loans are really important for entrepreneurs just starting out? Mr. Guerrette. Yes. When I started the company, it was a kind of a dream, and it was very much amounting to we are just going to make it happen. But at the same time, I did have kids still in high school and we had to consider the fact that, you know, they were going to be things to pay for down the road like college, and we didn't know how that was going to work out. So, when I had to pay for fees and things that I just didn't even know existed--I will be honest, I didn't know until a couple of weeks ago when I did a little bit of research and found out I had actually paid those fees. You know, that is just more capital that went away. That fee was almost $3,000. And when you are already borrowing $250,000 on a hope or a dream, then that extra cost really made it, you know, risky because, like I said, those are fees that are just being paid to someone. They are not paying for a piece of equipment or inventory that I can sell. And in my business, when I am selling something that is $2, I am keeping about $0.15 out of it. So, it is really tough to make up that $3,000. That is a lot of things that have to be sold to make up that--you know, that profit difference there. So, I think if they were waived, especially if you are a smaller company--and I would like to focus on the fact that a lot of veterans owned businesses are folks that are not retired. I had the lux--I say the luxury, you know, but I did do 25 years of military service, of being somebody who had a retirement to back up my personal expenses and use a little extra capital if necessary. But if you are coming out of four, six years, you don't have an income and you are going to jump into a business, the last thing you need is to have another $3,000 bill or $2,000 bill that doesn't go directly to getting that business off the ground. Chair Shaheen. Thank you. We will use that endorsement as we are moving the legislation. Colonel Green, virtually everybody who has spoken has talked about the need to be aware of what resources are available if they are thinking about starting a business. You talked about the 100--and I think 196,000 people who had been through the Boots to Business Program. Can you talk about what percentage of people that is who were eligible for the program? And how do we get the word out to more veterans about what is available to them? Colonel Green. Chair Shaheen, that is a great question. Thank you very much for the opportunity. So, in our office, we want to make sure that all of our customers are aware and make informed decisions about entrepreneurship. So, what really, we really try to do is make sure there is an awareness of programs available, and--first of all, and then accessibility of those programs, whether it be virtual or in person, and then the ability to navigate those resources. And the resources we are talking about, we are part of a network, an ecosystem I could say, which includes small business development centers, our veteran business outreach centers, women business centers, and SCORE chapters. That is just part of the SBA connected ecosystem. We also have organizations like the Institute for Veteran and Military Families that actually helped us develop the Boots to Business curriculum back in 2013. Now, the Boots to Business Program for active duty is pretty well laid out in the Department of Defense's Transition Assistance Program. They are very aware of it as they go through. You know, it is an optional, two-day course, but they are supposed to be providing them opportunity to take that. The Reboot Program, where we teach in the communities, that is where we really need the help of our SBDCs, because we only have 28 VBOCs. We need help of our resource partners to get the word out of those opportunities of the, you know, taking that Boots to Business Reboot. And then the military spouses, that Pathway to Business Program I mentioned, that is a program that was rewritten to focus--military spouses weren't really feeling like Boots to Business was for them, the naming convention, the graphics. So, we redesigned that course to make it feel more military spouse centric. And then, we just started teaching those classes in August. And now, we have probably had 10 or 12 classes so far with a few hundred military spouses signing up. So, we are looking to slow rollout, but we are reaching out for every opportunity to get the word out. Chair Shaheen. Thank you. I know the timer says I have more time, but I think I got additional time. So, I am going to stop and turn it over to Senator--[technical problems]. Senator Ernst. Thank you, Madam Chair. And a big thanks to all of our witnesses that are here today. We really appreciate your testimony. Mr. Rhoades, we will go ahead and start with you. Thanks for joining us again. I really appreciate your testimony and thanks for sharing your experience with Federal contracting as well. And you mentioned a couple of times how the Entrepreneurship Expo and the Pappajohn Center's Veterans Entrepreneurship Conference were helpful. But what are the main deterrents or barriers to entry facing small businesses seeking to break into Federal contracting, in your experience? Mr. Rhoades. Ranking Member Ernst, thank you for that question. From my experience, it is the process to get started is very--for small businesses, our biggest resources is our time. And when you have to sit there and understand the language, and what is needed, and gather those resources to apply, it is very hard on our time. And that is where we have benefited a little bit with the APEX accelerator. We had somebody that was able to eventually sit down with us and walk us through that process. But to be honest, if I did not have that person, I believe that I would have probably given up on the Government contracting side at that time. So, I think that is the biggest barrier. And then the other one is, once you get into it, is the bidding process. It is very unfamiliar what happens next, what the steps are to do next. And if you are awarded a contract, where to go from there and things like that. So clear direction or somebody to kind of--to point you in the right direction. Senator Ernst. That is really good. And it is probably not surprising to you that I have maybe heard those same comments before, so. And I know I saw Colonel Green nodding his head as well. And Tim, if you have additional comments that might build upon what Dustin had shared as well. Colonel Green. Thank you, Ranking Member Ernst, and thank you for your service. Federal contracting is really, you know, challenging, I can say. One of the things that were written up in Institute for Veterans and Military families report was the challenge with certification. We took that one ahead on. We simplified the VetCert Program to make it easier, faster. So that is one small piece. The other thing is training. We do have a little bit of a cumbersome. It is a learning curve that, you know, is a challenge. And we do provide some funding to the Veteran Institute for Procurement. And Mr. Cardin, or Senator Cardin is very aware of this program, but they do have training for those that are looking to, you know--existing businesses that are looking to grow into Federal contracting, increase their businesses. And I know after the first year of their program, they are looking at about a 50 percent--56 percent growth after one year in the Veterans Institute for Procurement. So, I think that program has been very successful for us, and we have been investing in promoting that program across the country, and I know they have had attendees from every State participate in that. Senator Ernst. Great, great. No, thank you. We need more of that. And for Ms. Shimkat as well, thanks again for being with us. And in your testimony, you had highlighted the resource disparities impacting veterans, small business owners, and entrepreneurs in Iowa and across the Midwest. So, two part question. What can SBA do to better provide outreach and support our veterans? And would you be supportive of enabling SBDCs to host veterans business outreach centers? Because you mentioned the sharing of capabilities. Ms. Shimkat. So, let me answer the second part first. Having an SBDC host VBOC, absolutely. And for many reasons, we spend a lot of money on databases, for example, to be able to get information. So, when somebody does start their business, we are minimizing that risk. We are helping them figure out, is there a market? Is there somebody that is going to buy it after my family and friends buy it? Will there be somebody else? And that is what--we already have access to those databases. We are already paying for it. And so, to be able to start right there, that is saving some money on that aspect. Another one is we are already out in the communities. And for anyone who has lived in a rural area or from a real estate, it is trust. And in the rural areas, having somebody, that local person, because you could have like a VBOC where they come in, they work with them, and then they go back to where they are housed. But the SBDC and other resource partners are living in that community, and that is crucial. For SBA, for better outreach, a couple of things that we could look at is, and Colonel Green, retired Colonel Green spoke earlier, and I offered to speak with him after this so we could talk about let's pull some of these resources together instead of having so many programs in silos. We do this and here is our metrics. Guess what? We are doing the same thing. Now, there are many entrepreneurs out there that we need to still get to. We can't do it all in small business development centers. They can't do it all as VBOCs. But working together, we can have a larger impact and really reach more of those. So, I hope that answers your question. Senator Ernst. It does. Thanks so much, and I yield back. Thank you. Chair Shaheen. Thank you. Senator Cardin. Senator Cardin. Thank you, Madam Chair. Let me thank all five of our witnesses. Ms. Shimkat, I am going to follow up on the SBDC and the VBOC. Maryland is one of the newer veterans business outreach centers, and it is co-located at College Park where the SBDC is located and thank goodness they were co-located because they needed--the new VBOC needed help and the SBDC was there to help. And is that type of shared resources that I think give us the best value for the dollars, so I just really want to underscore that. Colonel Green I want to follow up on the point that you said. I am concerned that we have under-resourced our services to our veterans. 28 centers in the nation to me is not enough, just--with the number of veterans we have, the geographies of our nation, we need more resources. So, one of my concerns is how do we get more resources into the program? And thank you for mentioning the Veterans Institute for Procurement. For the members of our committee, this was a program started in maybe 15 years ago by the Montgomery County, Maryland Chamber of Commerce. No public funds, private funds. And this is a Montgomery County local chamber, they set up an institute to help veterans with procurement and accepted veterans throughout the entire country. So, it was a commitment to give back to the community for those who have served our nation. And it was a very successful model, and I thank the SBA for picking it up, and becoming a partner, and providing some help. And in this past cycle, Senator Van Hollen and I--it is helpful to have the chairman of the subcommittee that has the SBA. With Senator Van Hollen, we were able to get some help to the program. And you are right, they are now going to double their capacity as a result of it, and the waiting lists are there, the needs are there. So, I guess my question to you is, how do we get more resources into these programs? Don't throw back on me you need more money. But how do we--we need to do a more effective job. You talked about how you handle certification in a more efficient way. In the women's business center legislation that I authored, we set up standards to improve quality through the process. Do we need to do that with the VBOCs also? Or how do we expand the capacity of the veterans centers to help our veteran community? Colonel Green. Senator Cardin, that is a great question. We are, you know, we are extremely proud of the work that the V-B- O-Cs, or the VBOCs, are doing across the country, but there are 28 of them. If I had 54 of them, it would take a little pressure off, obviously. But they--I think the key to that is really collaboration and partnerships. Many of the veteran business outreach centers have to serve multiple States, so we have to figure out technology solutions to make sure we are reaching our customers, especially our rural customers, underserved. But I think we do that through partnerships, leveraging the resources of the Small Business Development Center. We have 68 district offices, and within those district offices at SBA, we have veteran business development officers that coordinate directly with our veteran business outreach staff. So, we leverage them, as well as other partners. We provide some grant funding. Again, the Institute for Veteran and Military Families has the entrepreneurial boot camp for veterans. We have--they help us teach our Boots to Business overseas. So, collaboration, partnership is crucial. We do have a really strong relationship with the American Legion. We have a working agreement with them. The American Legion helps us reach some of the rural communities, because if you drive around any small town, you will see an American Legion post. We partner with VFW, Disabled American Vets, anybody that will help us get the word out. So, we try to leverage other organizations and--so we can get the word out about our VBOC Program. Senator Cardin. And I think you are doing a very effective job with the resources that you have. But there are underserved communities that it is very difficult to reach if they don't have a partner that you can partner with. It makes it challenging for those communities, for veterans in those communities to get the services they need. I think we need to work together to figure out how we can fill up those gaps. Thank you, Madam Chair. Chair Shaheen. Thank you, Senator Cardin. Senator Hirono. Senator Hirono. Thank you, Madam Chair. Thank you all for testifying. Colonel Green, I am glad that you noted how important it is to leverage the resources of the SBA and partner with a lot of other community resources, especially probably in some of the rural areas where access to the kind of support that a veteran needs to start his or her own business might be more challenging. So, that is a good thing. I did want to ask you. Recently, the West Maui town of Lahaina burned to the ground, and I know that there were veterans there. The SBA administrator, Guzman, who came very shortly after the horrendous wildfire there, said that there were about 700 or so small businesses registered, I suppose, there that she was aware of. Some of them had to be veteran owned. Do you--after disasters like that, is there a way that SBA tracks the veterans in that area who may have small businesses? Colonel Green. Senator, that is a great question. We have been--at SBA, we have been spending a lot of time focused on the tragedy that took place in Hawaii. We do have a veteran business outreach center in Honolulu, and they have an extensive database that--they actually know all the businesses that they have worked with, all the business that they currently work with, and they are sharing that information through--I guess they call it a BRAC, a disaster recovery assistance center. And so, there is participation there. SBA, they have taken a whole of SBA approach. All of our offices meet on a regular basis. We meet daily for a while now, on a weekly basis, to figure out how we can really support those businesses as they recover from the tragedy that took place. Senator Hirono. And I think that as we are experiencing more of these kinds of natural disasters, and wildfires, and hurricanes, there are a lot of these kinds of events that happen. That there are probably lessons learned and ways that SBA can, you know, make sure that you know which businesses are veteran owned, and to have that in your database before a horrendous event like the Maui wildfires occur. And so, good. We noted that you have recently streamlined your business certification process. Can you just give me an example of something that was more complicated than necessary and how you streamlined that? And what--I would like to hear a description of what you consider streamlining. Colonel Green. Yes. So, they did reduce the amount of forms you had to fill out. And what is really exciting is under the Administrator, she has gone with my SBA program, which includes a loan portal, as well as our certification program so far, and she is going to add more. So, as you go through other certification programs within SBA, you will be able to use the same information. You won't have to fill it out each time you go through. Recently, we had a roundtable of business owners hosted by the SBA Administrator, and we talked about the certification program. We went around and around. And the lesson they learned that they told us they learned from that was the communication and the marketing and the information provided to all the business owners was outstanding. So, they hadn't seen that before in a lot of rollouts for Federal Government, and they were able to--they knew what was going on with the certification. They knew when it was going to take place and when they had to recertify, so. Senator Hirono. For any of the panelists, are there some unique differences when you are dealing with a woman veteran versus a male veteran? Are there any unique elements that, for example, women veterans need? And are you meeting those needs? Anybody? Yes, Ms. Shimkat. Ms. Shimkat. Thank you for that question. The answer is it depends, truthfully. There could be additional needs when it comes to transportation, childcare. We could have different needs when it comes to just the form of communication as well. And the biggest thing that we do is focus on that communication, figure out what is the root of what we need to work on first, put a clear plan together, and then step by step working with veterans of, you know, both genders so that we can figure out what do you need. Because sometimes coming into a conversation, here is what I think I need, but in actuality, this is where we need to be. And I think for us, having veterans on our staff is step number one. And that has been huge for us to really take a step forward in the right direction. Senator Hirono. And when you noted that, I think that for women, since childcare still falls mainly on the woman, to have specific ways that you are going to assist female veteran with childcare. I just want to mention, Mr. Guerrette, I really love hearing your candy story. My best to you. Thank you, Madam Chair. Chair Shaheen. Yes. Imagine Willy Wonka and you have got Lickee's & Chewy's. Senator Hickenlooper was here earlier, so we will go to him next. Senator Hickenlooper. I am ready. Thank you all for being here. Madam Chair, thank you for calling this. And, Chris, why don't we start with you? When I opened my first business, which was a restaurant that brews its own beer. I was a geologist, had been kicked to the curb. We had to explain our business to banks that had never seen it before. And as is often the case with a good idea for--an entrepreneur might have, it is hard to put just in words what something-- something people haven't experienced yet. And that is why it is a good economic opportunity because no one else is doing it. I think in a funny way, veterans face a similar challenge in communicating to banks how their past military experience is going to translate to a successful business, right? I spent a fair amount my time trying to describe in words what the brewpub was and why a geologist would be especially suited for that. So, what obstacles did you face when securing capital to start the candy shop? Mr. Guerrette. Thank you for that question, sir. We were a little bit lucky, and that is because the first shop that we opened was very small and we were able to purchase it with cash. And when we continued to grow that, and thankfully my wife worked there for a year while I was still a Government employee, we were able to see growth there. And because of that growth and the financial data we were able to show the banks from the growth at the first store, they were happy to move forward with a small loan. Thankfully, the next location I was going to build wasn't in the millions of dollars. And, you know, so the $250,000 we needed to borrow was reasonable relative to our current sales at our tiny location. That being said, I did have to go to a couple of banks and provide extensive amount of data on not only what we had for cash, but collateral as well. And thankfully we had accumulated a little bit of equipment. But at the end of the day, probably the scariest thing was when I had to sign on the bottom line saying I was personally responsible for that $250,000 if things didn't go well. So, that was the scariest part for sure. Senator Hickenlooper. Yes. No, I did--I mean, I got turned down by 33 banks and we had a commitment from the city and county of Denver to give $125,000 if we could get $50,000 from a bank. And I got turned down by 33 banks, and we offered them--we signed our houses. They tied the deeds to our house. They had about 120--the stock, when I got laid off, I had some company-- my retirement benefits were in stock, and I had a partner who had some stock. We had like $250,000 plus they got first right of all the brewing equipment, the kitchen. They still wouldn't, you know. Mr. Guerrette. Exactly. Sure, I had the same situation. They had--you know, I had to sign over basically everything I owned. Senator Hickenlooper. Yes, exactly. Mr. Guerrette. My wife, she was really scared about the house. Senator Hickenlooper. Yes. Mr. Guerrette. Well, I am retired, so we still have some income, you know. They can't take that. Senator Hickenlooper. Yes. Exactly. Mr. Guerrette. It was a little scary, but thankfully, the banks were very helpful, and it all worked out. Senator Hickenlooper. Dr. Haynie, upon leaving military service, veterans with security clearances are sometimes led to believe that their clearance is a sure ticket to success. However, if prospective contracting opportunities that require security clearances are not advertised well, then veteran entrepreneurs new to the contracting world may not know about the opportunity, even though they would qualify for it. So, can you share your thoughts on ways that we could better connect recently, newly become veterans, newly separated from the military that still hold a--how can they still hold a security clearance with classified contracting opportunities to put their qualifications to work? Dr. Haynie. Thank you, Senator, for the question. It brings back in listening to Mr. Rhoades' response earlier. I was an Air Force contracting officer while I was in service, so I understand the pain uniquely. And if I am being very candid here, I don't recommend--you know, 70,000 veterans or so through the programs that we run to help them become small business owners, and I don't recommend that they start with Government contracting. I would instead, and as a way to answer your question--that security clearance, however, is valuable. And, you know, my counsel, my mentorship in a situation like that would be actually leverage that clearance in the context of a firm that already has Government contracts. Build some experience such that you can leverage that past experience to then subsequently launch a business. But I wouldn't recommend they start there, candidly. Senator Hickenlooper. That is good advice. All right. I am out of time somehow. It is impossible, but I have---- [Laughter.] Senator Hickenlooper [continuing]. I have other questions I will submit in writing, and you will get them some time and hopefully you can answer them--more at your leisure, right. Yield back to the chair. Thank you. Chair Shaheen. Thank you. We will do a second round of questions for anybody who was able to stay. Senator Duckworth. Senator Duckworth. Thank you, Chair Shaheen and Ranking Member Ernst for holding this hearing today. Dr. Haynie, I would like to direct my questions to you. Given your role in overseeing the Institute for Veterans and Military Families at Syracuse University, and its work administering the Boots to Business Program. As you may know, for the past two Congresses, I have introduced bipartisan legislation with Ranking Member Ernst called the Veteran Entrepreneurship Training Act, which would codify the Boots to Business Program into law. I have long supported this program because of its successful track record helping service members, veterans, and military spouses to build critical small business development skills and prepare them for professional success after military service. Dr. Haynie, from your experience administering the Boots to Business Program, how has the program contributed to the entrepreneurial journey of the more than 194,000 veterans, servicemembers, and spouses that have gone through the program since 2013? And can you share any positive outcomes you have witnessed in your work? Dr. Haynie. I can---- Senator Duckworth. There is no better softball than that. And that is like slow pitch--coming in off plate---- [Laughter.] Dr. Haynie. And Senator, I will say if there is-- there are few people on the planet that are bigger evangelists for your legislation than me. And it is a good way to start answering your question, because when I started doing this work all the way back in 2006, 2007, there was no pathway out of the military for business ownership. As a matter of fact, service members transitioning from military to civilian life were discouraged on a regular basis from pursue--for pursuing entrepreneurship. And you know, so much has changed since then. And I think Boot to Business, what it does is it makes for an informed consumer, is how I like to describe it. I think that is the power in Boots to Business. And not just an informed consumer for those that eventually go on to pursue business ownership, but an informed consumer of those who, through Boots to Business, learn that business ownership maybe isn't a good fit for them, for their families. Those are metrics we don't collect, and I wish we did, because I think that there is real power in the program in helping individuals also see that this isn't a good fit for me, my family situation. And because business ownership is not like going out and getting a traditional job, if it doesn't work out, you leave that job and find another one. You are putting, as you heard these stories, you are putting personal capital at risk, and you do want to be an informed consumer of making that choice. That said, when you look at what has come from Boots to Business, it is beyond powerful. You know, about six years ago, my institute partnered with Inc. Business Media and in the Inc. 5000 to create something called the VET 100. This is an annual listing of the 100 fastest growing veteran owned businesses in America. The 2023, that 100 just came out, and there are--of those 100, there are 25 veterans this year that are--that went through this ecosystem. That their businesses were birthed through this Boots to Business to partners, whether that is in procurement or programs at the IMF. You know, and they are now running four, five, six years later, the fastest growing, privately held veteran owned businesses in America. You know, I think that is the power of the program and the model and making informed consumers of those leaving military service. Senator Duckworth. Thank you. Do you believe cementing the program into statute would bring increased ability to program administrators and future participants? And what more can SBA and Congress do to expand opportunities for veterans, servicemembers, and their spouses who are interested in small business entrepreneurship? Dr. Haynie. So, I absolutely do. I couldn't even wait for you to finish asking me the question to say that I think the stability that you describe is critical. I think it also, you know, a question that Colonel Green was asked earlier about getting the word out. I think one of the challenges, and it is not fair for me to say this, DOD isn't in the room, but it really is for DOD and, you know, the sergeants and captains to make sure that folks transitioning are aware of the--that is the first point of contact and first point of awareness. And regularizing, if you will, Boots to Business will signal to DOD that this is not something that year in and year out could go away. It is a commitment of the country to the program, and I think that would make all the difference. Senator Duckworth. Thank you. Thank you, Chairman. Chair Shaheen. Thank you, Senator Duckworth. Senator Rosen. Senator Rosen. Well, thank you, Chair Shaheen, Ranking Member Ernst. Thank you all for being here. I am going to submit a question for the record building on this. If you are seeing trends in particular sectors in your top 100, maybe that is something that veterans should know about, too. So, we will submit that for the record, because I want to talk about something near and dear to my heart, which is the Veterans Business Outreach Center. Obviously, we can maybe talk about those trends and what sectors, as we are getting the first ones in Nevada. Because we are home to more than 200,000 veterans, over 23,000 veteran own small businesses. That is actually one in eight small businesses in our State, which 99 percent of businesses are small businesses. So, despite this, we have been without a dedicated in-state veterans business outreach center that is just for Nevada. And so, the absence of an in-state VBOC, a one stop shop providing small business support to veterans, transitioning servicemembers, and their families has really meant limited information and resources for Nevada veterans looking to start or grow a business. And so, earlier this year, I called on the SBA to establish a VBOC in Nevada to ensure that tailored support is provided to our veterans and transitioning service members to address their unique needs and concerns. And I am so thrilled to report to the committee here today that in April, the SBA authorized the establishment of a VBOC in Nevada. There will be multiple locations, one Northern Nevada, one Southern Nevada. So, Colonel Green, can you speak to the importance of the veterans business outreach centers and helping to ease the transition from active duty to civilian life for veterans who want to start a small business? And how can the VBOCs support the existing veterans businesses and help them grow? Colonel Green. Yes. Senator, thank you for the question. I know we are excited about the Nevada VBOC. We did open one in Colorado as well, so we are excited about those opportunities. They were chosen because of data. When we looked at areas where there was, you know, a lot of installations or there was a lot of tap classes. There was--you know, we historically Boost to Business. So, there was a very thorough, data driven decision there to put one in Nevada. And because there are a lot of veterans and veteran owned small businesses, it will make a big impact in there. Again, I think we have one in Nevada office with a satellite office in Reno, and they are going to be able to expand their reach into some of the rural areas. But again, you know, they are going to be providing training and counseling, and partnerships is going to be critical for them with the small business development centers. Our district offices are already there. So, they have a great opportunity. And their primary role for a VBOC there, number one role is teaching the Boots to Business Program at the installations, at the National Guard and Reserve bases, and in other areas. So, we are really excited to have one there. I think the Administrator is excited about it. She will be out as well. Senator Rosen. Yes, I am very excited. We are going to be doing that soon. And you kind of led me into my next question, which I will kind of shorten up a little bit because a lot of our businesses, just like I see Colorado and Indiana, in our rural areas, and a third of all of the veterans owned businesses in Nevada are in our rural communities. So, they are extremely frontier. They are very mountainous. They face unique challenges, and they have much less access to in-person resources. So, to Dr. Haynie and then Ms. Shimkat, what is your experience reaching the veterans owned small businesses in the rural areas? What can Congress do to help you fill in any of those gaps so those folks who can't just get to the city easily, how do we support them? Dr. Haynie. Just very briefly, it is again, from the research we do, it is a significant challenge. Veterans looking to start and grow a business in rural areas are significantly under resourced from the perspective of those supportive services. One of the things that we have done is create partnerships with community colleges. Community colleges in many instances are in those rural areas. They are great partners to us. So, we took a program that we have been running for a long time called the Entrepreneurship Bootcamp for Veterans Program, and created a version of that that we are now offering through a consortium of community colleges around the country. Ms. Shimkat. I will start by echoing my colleague with the community colleges. We utilize the community college network for training. That takes it off of our plate so then we can focus on the direct one to one counseling. We have 15 centers across the State. What we do, though, is we also have 50 satellite offices that we have in partnership with the Main Street Iowa Program, with the Chambers of Commerce. And a struggle that we have, as you had mentioned, broadband. You know, people say, well, you go to the rural areas, just do it online. That doesn't work. And so that is why we have to get out there. We have to have that windshield time for our advisors to be one on one with them. That is the biggest impact for us, is just being able to utilize other partners and other resources, and that is probably the biggest answer I can give you. Senator Rosen. Well, thank you. We love our community colleges, and I can tell you we have been investing in broadband and we are going to get it to every single home and every single community because we can't function as a nation without it. So, thank you--to Madam Chair---- Chair Shaheen. Thank you, Senator Rosen. Senator Young. Senator Young. I thank our Chair and Ranking Member for holding this important hearing, and thank you all, for our witnesses, for serving our veterans in important ways. I have a limited amount of time, so I am going to try and focus on one distinct barrier that many of our veterans are facing today. It is called a contracting cliff. Some of you may be familiar with this dynamic. If you look at the current rules for Federal contractors, there is this clear challenge, when small businesses grow into mid-sized companies. They suddenly find themselves ineligible for crucial set aside contracts, and instead they face competition from major global firms. This is the contracting cliff. It is not just a hurdle, it is a barrier that is stopping small businesses from growing, and it is reducing the diversity of our Federal marketplace at the same time. So, Colonel Green, I ask you that, you know, based on your experience, given your understanding of veteran owned businesses, can you discuss the specific challenges that the firms have identified, encounter in retaining current Government contracts, and scaling their operations for larger contracts? And then additionally, how is the SBA currently equipped to help these businesses navigate and overcome these obstacles? Colonel Green. Senator, it is a great question. Federal contracting is complicated. And I think you are referring to probably to the 8(a) program that runs about---- Senator Young. That is right. Yes, I am. Colonel Green [continuing]. Nine years. We do have--we do run across a lot of businesses that after they get to a certain size or they run out of time, they do have challenges with getting other contracts. That is a lot of the reason we refer them to like programs like the Veteran Institute for Procurement to help them grow and expand to the next level. So, we know it is a challenge and we will be taking--take it back and take even more of a look at it. Senator Young. Well, I appreciate that. We see these sorts of cliffs in other areas of public policy, and they always seem to lead to various distortions, and they oftentimes lead to the opposite of what you want to happen. So, you know, you see them with respect to benefits cliffs. People stop working so they can be eligible for certain Federal benefits. The vast majority of my colleagues don't want people to stop working. In this case, you don't want people who establish a small veterans owned business to be disincentivized from growing that business. It is just sort of asinine. And I suspect all of you agree. And I know you didn't develop all those provisions, but I am not coming to offer a mere lamentation, though I have done that. I introduced a piece of legislation that I think would fix this perverse anomaly. It is called the Success Act. Senator Hickenlooper has also joined me on this, and our aim is to tackle this contracting cliff dynamic. To be brief, my bill would create a seven year off ramp to allow growing businesses in the construction and engineering sectors to keep competing for set aside contracts during their transition to mid-size status. I am open to other solutions. I think this one does the trick and is worth a try. And I want to see, Mr. Green, though you may not be familiar with the specifics of the Success Act, I respect that, could you give us your thoughts on how policies like an off ramp program could influence growth in Federal contracting opportunities? Colonel Green. Yes. Thank you again for the question. It does seem like a reasonable approach to getting them off the program. I know the program was designed to be a certain length of time, to give them an opportunity to grow into their next level. So, I--sir, I respectfully would have to take this back with my Government contracting business development office. And that is, the individual that runs that used to run our office, so he is very familiar with veterans and veteran programs, and he is taking a lot of these challenges head on. So, we will take that back and give you a better answer. Senator Young. Please do. Thank you for that. Offer your constructive feedback, your critical feedback, whatever. And I am hoping that together, perhaps, if you if you think there are deficiencies in our approach, you can offer another approach, and maybe we could tackle this issue. So, thank you again to all of our witnesses for your service. And Madam Chair, I yield back my two seconds, I think. Chair Shaheen. Thank you. We will make good use of your two seconds. Dr. Haynie, virtually everybody there has testified to the challenge of accessing capital for veteran owned businesses. Are there additional policy recommendations you have for the committee to help address access to capital? Dr. Haynie. You know, so, yes. You know, I think, one, we need to study the problem more than we have. We need to truly understand the barriers from not just the perspective of veterans and servicemember, but, you know, for lenders. We need to understand this from the perspective of lenders. We need to understand--and I think maybe more actionable in the near term. You know, one of the big barriers we identify is the credit history or lack of, of those leaving the service. And, you know, a lot of folks like to jump to it is bad credit history, therefore they can't get a loan. It is not always bad credit. A lot of times it is just no credit history. You know, so the extent to which on the DOD side, we can continue and emphasize financial readiness and programs designed to support a credit history when someone transitions from military service. You know, the stories that have been shared by my fellow panel members about, you know, background and experience. The reality is when someone puts on the uniform, they put the rest of their life on hold to serve. And their peers are out there gaining relevant experience and in industries where they are looking to start a business, therefore, they can tell a different story to a lender than someone coming out of the service that doesn't have that same experience. So that also speaks to, you know, programs like DOD Skill Bridge and continuing the opportunity for folks that do apprenticeships, if you will, as part of their transition so they can gain that experience. But it is a very complex problem, this problem of access to capital, for veterans and servicemembers. Chair Shaheen. Well, your point about more study, I think is a really important one. And this committee ought to look at that and see how we can be helpful. And, but one of the things that veterans do have are skills that you have learned in the military, that you bring to a business, if you start it. So, I don't know, I thought Mr. Guerrette, Mr. Rhoades, both of you talked about some of the challenges of getting into business. But can you talk about what skills you brought from the military that you think were helpful as you were starting up your business? Can start---- Mr. Rhoades. Yes, ma'am. Actually, I can speak to two things. What I did bring--what I am actually missing. So, leadership and management, definitely. As an officer, I had been trained in multiple ways and I have been able to actually transfer some of that leadership and management training to my managers and teach them about leadership and management. And so, that as well as just kind of the discipline that you get after being in the military for 25 years about kind of that work ethic and knowing that sometimes you are going to work 12, 14, 16 hours and that is just the way it is. And so, it is like they say, you quit your 40-hour job, start your own business so you can work 100 hours a week. And so, that happens sometimes, whether it is because I have to cover a shift or just because that is the amount of work we have to do. What I am missing and what I think I would like to go and search out is marketing, you know, business management, some of that. I have actually considered hiring somebody with a business management degree because sometimes you get to the point, yes, you are running this little business, but it has gotten a little bigger than just a little business. You know, it is a seven-figure business all of a sudden and you are like, what should I really be doing right now? What should I be focusing on? And so, I think I would like to find avenues where I could learn a little bit about marketing. I have taken classes at college on finances. But, you know, marketing and business management are a couple of things I would like to search out in the future. Chair Shaheen. So, Ms. Shimkat, can't the SBDCs help with that? Yes, I want Mr. Rhoades to answer, too, but I just thought---- Ms. Shimkat. Absolutely. That is one of the things that especially--you know, we have 15 directors plus counselors out there that have a lot of knowledge. And one of the things that we have really tried to do internally also is I have a director that is really focused on marketing, another one that has the finance depth. Another one who is an attorney, a CPA. And guess what? They can work together. Similar to what I have been talking about with some of the SBA programs. So yes, that is definitely something we can help you out with. And I know for a fact the folks in New Hampshire can do it as well. Chair Shaheen. Yes, I know you know the SBDC at UNH. So, I am sure you are familiar with that. Mr. Rhoades, do you want to answer the other question? Mr. Rhoades. Yes, I agree a lot here. You know, one of the skills that wasn't mentioned that I believe that I came out with was, you know, the ability to adapt to change. Because in the business world you may be thinking you are going one way, then all of a sudden something happens and you got to pivot, which I think is huge. But one of the biggest things, like it was mentioned before, I don't remember who said it was, when I was getting out of the military, it was pretty frowned upon to want to start your own business. And I hope that is starting to change. And then, the other aspect of it is, is having somebody help you translate the skills that you may have, that you just don't know that you have or gained in your military service, and how those can help you outside, I think would be very beneficial as well. Chair Shaheen. Yes, really important. Thank you both. I want to--with the Ranking Member's tolerance, I will ask a final question of Colonel Green, because Senator Ernst and I both serve on the Armed Services committee and one of the things that we hear a lot about are the challenges that spouses of members in the military have as they are supporting their spouse in their service. And talk about, if you will, some of the ways in which SBA is thinking about helping families and the spouses of veterans as they are transitioning to civilian life. Colonel Green. Chair Shaheen, this is probably one of the most important subjects in my mind for us. With military spouses--[technical problems]. My daughter, I will never forgive her because she married a Marine. [Laughter.] Colonel Green. She was a contractor for Ernst & Young in-- [technical problems]. Like, it was great money. So, she married and--[technical problems]. So, what she did--part of the reason she is doing successful now--[technical problems]--telework. She does financial stuff and it kind of made sense. So, her story is good. Seven months on the job. I told--before, I was 28 years in the military--[technical problems]--my wife was a teacher. [Technical problems]--so all of those challenges hit home to me. So, what we did recently was all about the military spouses. The Halfway to Business Program I talked about earlier. The curriculum is on spouses--[technical problems]. Partnerships are critical. We partner with the Department of Defense, the Military Spouse Education and Career Opportunity Office. And they have a great network of military spouses that can either mentor, and you can go there for employment, or-- [technical problems]--includes entrepreneurship. We also partner--we are trying to get the word out on all of our programs. So, we try to partner with the Chamber of Commerce, has an Amplify Program. Department of Labor has a transition program for military spouses called Teams. We got our curriculum in there. So, it is really important, I think. Military spouses are hard to reach, and we are doing everything we can to reach them. And when we do reach them, try to make it as effective as possible. But it is still, it is a big challenge and will be a big challenge for the future. Chair Shaheen. Thank you very much. Senator Ernst. Senator Ernst. Thank you. And if I could go back to you, Mr. Rhoades, I really again, appreciate it. You mentioned the importance of networking and in-person connections, as well as the need for seasoned mentors. And, in your view, would you find it helpful to get mentorship from just anyone? Or is it better for that veteran, small business owner who understands the landscape you are navigating be a little more helpful than just anyone? Mr. Rhoades. Ranking Member, thank you. It is somebody that has gone through it. Because I have done a lot of networking and my problem that I have ran into is from being in a small rural area, you have amazing business leaders, but all of them may not know the landscape of--a veteran's owned business may need. So, it is finding that right mentor for your business structure, I would say. Senator Ernst. Thank you. I appreciate that. I do believe in having someone that has walked in your boots, provide that counseling and mentorship. I think if you can relate with someone that has been there, done that, I do think it is important. And that is whether it is veterans owned business or women owned small business, whatever it might happen to be. Yes, so thank you. I appreciate it. And Colonel Green as well, and this has been tricky, and I have heard it mentioned a little bit from some of the others here, but I have been concerned about the Administration stripping our States of the SBA district office support, but they are growing staff here in Washington, D.C. headquarters. And in Iowa alone, we have gone from 12 personnel down to 4 in a very big rural State, and that was 12 in 2015 and 4 today. The ongoing remote work policies at headquarters further reduces the SBA's ability to serve small business owners. So, we have seen this in many States. How does the Administration justify stripping Iowa, New Hampshire, and other States of district office support while moving the positions to Washington, D.C., and further complicating this, having folks here in D.C. oftentimes teleworking, so they are not even in the office. Then, how does that help our rural areas? Colonel Green. Ranking Member Ernst, I appreciate the concern you have with--I am really focused on serving veterans through our programs. I can't really speak to the district offices and how they are managed. We do have--we do get extremely strong support from the administrator and for our programs serving veterans, and for the VBOCs, and for the Boots to Business Program. So, I really can't comment, but I can take that question back for our Congressional staff. Senator Ernst. Yes, I appreciate that. Let's--I will submit that for the record. I just want to voice the concerns because we have heard many times over from so many of us that are in rural areas and how we have lost staffing in rural communities. It is not just going to impact, you know, everyday Joe on the street, but it is most certainly going to impact our veterans as well. States like New Hampshire, States like Iowa. A lot of our veterans members are also National Guardsmen and Reservists. And oftentimes those numbers are not rolled up into the metrics that SBA is looking for when they are placing VBOCs. So, we do need to make sure that we are adequately representing veterans, regardless of whether they were an active duty service member or whether they are a veteran that is coming home from a deployment and needing to start a new experience--whether that is owning their own business or starting into a new job. I know that many of the soldiers I served with had those complications, coming home from those rapid deployments through the global war on terrorism. So, we do need to make sure we are representing all veterans to the best of our ability. So, Madam Chair, I appreciate this panel. Wonderful service. Thank you all so much for what you have done, and for being with us today. And I am so glad that we have been able to focus really on our veterans community. And thanks for everything that you do for our veterans, and congratulations to our business owners as well. Thank you for joining us. Chair Shaheen. Well, thank you very much, Senator Ernst. And just for the record, let me point out that I share those concerns about a reduction in staff in district offices, because our district offices, our SBDC, our VBOCs, all of those centers that serve small businesses are really critical and it is critical to be there in person to have somebody that people can talk to. To all of you, thank you so much for being here today, and for the work that you do on behalf of our nation's small businesses and on behalf of the veterans community. We look forward to staying in touch as we try and take some of the ideas that you have given us today and think about how to translate those into legislation or into better service for our veterans. The record will remain open for two weeks because of the holiday, for additional questions and statements. And with that, the committee stands adjourned. Thank you. [Whereupon, at 4:15 p.m., the hearing was adjourned.] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]