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10 Questions for House Small Business Committee Hearing

Tomorrow, the House Small Business Committee will hold a hearing to mark National Small Business Week, “Celebrating our Main Street Champions.” Lined up to appear before the Committee are 17 small business owners and executives from around the country. The hearing, understandably, is meant to be celebratory—small businesses and their owners and employees have been through the ringer over the last 18 months. It is entirely correct to use National Small Business Week as a moment to pause and applaud the companies that employ half of the American workforce.

Yet the hearing is also a good chance for substantive questions to be raised. The House Small Business Committee has released its reconciliation provisions and the Small Business Administration last week announced new actions to further support small businesses. Congress and the Biden Administration are far from finished in their quest to help small businesses recovery. Members of the Committee should take this opportunity to ask the small businesses about their struggles and opportunities and what else public policy can do to support them. And the small businesses serving as hearing witnesses should ask questions of the Committee Members.

Here are our suggestions for what questions might be asked of the small businesses at tomorrow’s hearing—and what questions might be posed to Members themselves.

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Questions for the Small Businesses

  1. What type of financing environment is your business currently facing, and how has your use of government relief products (such as PPP and EIDL) affected that? Based on BPC’s recent work done in collaboration with the Goldman Sachs 10,000 Small Businesses Voices program, access to capital for small businesses remains complex. The Paycheck Protection Program and Economic Injury Disaster Loans were crucial in helping millions of small businesses make it through the pandemic. Many small businesses now find themselves in a tough spot, with recovery stalling, debt coming due, and emergency relief running out.

  2. What have you seen, in your local communities and in your own experience, that can help the federal government address disparities across the small business landscape? We know there are striking racial disparities in business ownership and growth. While rates of business creation have been higher among people of color over the last decade, their businesses are less likely to survive the early years. Public policy has not ignored this issue, but little progress has evidently been made in addressing it. The pandemic struggles of all small businesses—especially those owned by people of color—create an opportunity to make headway against lingering disparities.

  3. For those small businesses that currently are, have been, or would like to be federal contractors, what changes might be made to procurement processes? Expanding procurement opportunities for small businesses is a bipartisan priority—particularly given worrisome trends in small business participation in the federal procurement marketplace. While the agency-wide goal of directing 23% of contract spending to small businesses has been met seven years in a row, sub-goals such as for women-owned small businesses have rarely been met. Procurement reforms that expand small business participation—and the types of small businesses serving as contractors—are essential for competition, dynamism, and national security.

  4. What support organizations and resources—such as incubators and accelerators—in your local ecosystem have been helpful to your entrepreneurial journey? This Committee has proposed additional federal resources for incubators, training programs, and more. Further support should be informed by the ways in which small businesses use (or don’t use) such resources, including the SBA’s entrepreneurial development programs. Small businesses vary widely by size and age—which means their needs do, too. Understanding how the small businesses in this hearing utilize incubators and other programs should help shape how additional funding is deployed.

  5. How can public policy support greater adoption and utilization of digital tools among small businesses? There have been plenty of examples during the pandemic of small businesses expanding their online presence or using digital platforms to keep serving customers. Yet when the Census Bureau’s Small Business Pulse Survey asked about online tools in January 2021, 45% of respondents said their business “does not use online platforms to offer goods or services.” There is clearly scope for greater adoption of digital tools to help enhance small business productivity and growth.

Questions for Members of the House Small Business Committee

  1. How are you thinking about support for the new Main Street businesses that have come into existence during the pandemic? New business formation has surged since summer 2020. The latest data from the Census Bureau show that we are still at record levels of business creation. While businesses might employ the same number of people, their age gaps can mean differences in need and outlook. Members of Congress hear frequently from established small businesses. It’s more difficult to reach new and young companies but these businesses are the next generation of Main Street in local communities and their voices should be heard.

  2. How does this Committee think about its role working with other congressional committees and caucuses to support small business? The Small Business Committee has jurisdiction over the SBA, but there are dozens of programs across multiple federal agencies that engage directly with small businesses and entrepreneurs. This Committee, and its Senate counterpart, might be able to help coordinate these sprawling programs or, at the very least, help ensure that the government is learning lessons about what is and isn’t effective.

  3. What does the Committee see as the most effective ways in which public policy can help close persistent disparities and inequities in small business and entrepreneurship? Businesses owned by people of color entered the pandemic in weaker relative financial positions and were hit particularly hard in the opening months of the pandemic. While Black-owned businesses that are low credit risks are half as likely as white-owned firms to receive all the financing they seek, many Black business owners don’t even bother to apply for financing because of barriers in access. While additional government support for small businesses in “underserved markets” has been proposed, broader policy actions also seem warranted.

  4. In what ways does the Committee plan to help improve data collection for all dimensions of the small business economy? At one point in 2020, policymakers were relying on business owner data from 2012 to inform their actions. While improvements have been steadily made, there is still a generally underdeveloped statistical picture of American small businesses and entrepreneurs. This is true at a macro level but also for individual programs. The Committee has an opportunity, with the additional support it is seeking for incubators and training programs, to raise the bar for performance data collection and tracking.

  5. Can you describe what you see as the most likely bipartisan path for SBA reauthorization? The SBA has not been “officially” reauthorized in two decades, even though there is a shared bipartisan commitment to small business. Reauthorization offers a chance to reaffirm that commitment and come to bipartisan agreement on what changes might need to be made at the SBA to enhance its mission.

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