Oversight Hearing - U.S. Small Business Administration

aimed at saving taxpayer dollars and modernizing a part of our currency

yeah poor we're all gonna vote against this

there's i had a poor day last night i'm really happy today

financial services and general government will come to order this hearing is titled budget hearing of the uh us small business administration members will have five legislative days within which to revise and extend their remarks, and insert extraneous material into the record. I'd like to submit my opening statement for the record and recognize the Chairman of the full committee Chairman Cole for his opening statement.

Thank you very much, Mr. Chairman. I appreciate that. Chairman Joyce, Ranking Member Hoyer, always good to be with you. Welcome Madam Administrator and Leffler and uh for being here today. Thank you very much for appearing before us and frankly, thank you for your continued service to our country. It was distinguished in the Senate it certainly is distinguished in this administration as well. Well, we have to look at the future of the economy, America's never lacked uh in entrepreneurial drive and innovative vision. we have to look at the future of the economy. Look. What has made our country exceptional is our willingness to let that spirit flourish. We have to look at the future of the economy. We have to look at the future of the economy. From our earliest merchants to main street today, We have to look at the future of the economy. small businesses have created jobs, We have to look at the future of the economy. fueled growth and expanded opportunity for generations. That's how we can improve. But we have to also improve.

Mm.

Congress and the Small Business Administration share a common objective, creating an environment where entrepreneurs can succeed. while the agency carries out its mission every day this committee has the

oh

responsibility to provide oversight evaluate results and work alongside oh yes the administration to ensure federal programs remain effective accountable oh oh oh and responsive to the needs of job creators the s. thank you well it really develops a b. a. administrators uh administers a broad portfolio of programs a designed to help u. it really does s. businesses start grow recover and compete well that's our standard from expanding access to capital through the seven a and five o b and it's yes excuse me five oh four loan programs and helping uh thanks well uh businesses recover through disaster assistance to creating pathways to well federal contracting through the eight a business development program these government initiatives strengthen local communities create jobs and reinforce the nation's marketplace thank you ernie in my home district uh we see everyday how entrepreneurship and local investment strengthen communities with more than three hundred thousand small businesses in the state of oklahoma

ernie

economic opportunity continues to drive growth and create pathways to success. Absolutely. Oklahoma also brings a unique perspective to this uh conversation. Yeah. Our tribal heritage is woven into the very fabric of our state, Right. Yes. and the connection between economic opportunity and self-determination is evident throughout Indian country. Native federal contracting is the second largest economic driver for

Right.

tribal communities supporting more than a hundred and twenty-five thousand jobs. indeed sixteen percent of the population of our state are tribal citizens yes

uh

themselves tribal participation in the eight a program is different from any other participation the funding from these contracts goes directly back into these tribal communities to provide essential government services where the federal government often comes up short to name a few examples my own uh tribe the chickasaw nation has used their eight a contract revenues expand their medical center and outpatient clinics well our construct a child development center and expand long-term housing infrastructure our our our well the and much more and again these are considerable tribes my tribe's eighty thousand our uh citizens there are tribes in our state with over half a million the cherokees over three hundred thousand our

mmm

our our our our

ok

the choctaws over a hundred thousand the creeks uh so uh they are substantial present and our our and our cherokee nation has used their contract investments for housing construction

uh

community infrastructure additions to their health care system and public safety enhancements simply put without these contracts none of these vital investments would be possible these are real benefits flowing to real people and native participation in the eight a program is not a departure from federal policy it's an expression of congress's constitutional authority and legal relationship between the united states and tribal nations not a handout or a pass through as some may perceive As Chairman Joyce noted, there is no single approach to supporting America's entrepreneurs. No. No. Today's hearing is an opportunity to exchange ideas, No. No. evaluate perspectives, No. and identify consensus. Of course. We need to work together to ensure small businesses have But places of course. the tools they need to be competitive in today's economy. Yeah. So, actually, we have to be competitive. Administrator Loeffler,

Yeah.

that's uh why your testimony today is so important. I guess we have to go now. It serves as a guide to help us understand SBA's priorities and policies. Small businesses are the backbone of our economy. This committee takes seriously its responsibility to ensure SBA has the resources it needs to support them while also ensuring those resources are used as Congress intended I look forward to today's discussion Mister Chairman and with that, I yield back.

I thank the Chairman for his remarks and I now recognize ranking member Hoyer for his uh opening statement.

Madam Administrator, welcome. Glad to have you with us.

Good morning from Michigan.

Uh, Good morning. as we all know, small businesses are the heart and soul of America's economy. Good morning. Nice. More. More than thirty six million people are employed, uh, in excess of sixty two Mr. Spade, I rise to date the goal of eight hundred and forty seven thousand, million American Uh, workers, uh, how that's huge. work for small businesses, that's forty six percent of our workforce. This is not a small board build that accounts for the These small businesses and their employees deserve better than they're getting. amount of capital that's formed. The administration's mantra continues to be, you're on your own. We must not appoint that person on our one business. That's certainly been the SBA's approach over the past year and a half, We need that. We need that. a proposed sixty seven percent cut uh that would stifle assistance and resources that help small businesses grow. We need to get The elimination of programs that help women and minority business owners who face extra hurdles to starting and growing their businesses, I would be in the same context as you. Five percent. which I'm sure you know a lot about. withholding uh disaster loans from states because of politics, As a country, we have to take advantage of the fact that we have to take advantage of the fact such as occurred in Western Maryland. that we have to take advantage of the fact that we have to take advantage.

Yeah.

New fees imposed on small businesses and limits on borrowing. And our title is Attempts to shrink the agency under DoE's and the limit We have to get that down. uh and limit the good it can do for so many millions of our people. We have to get that down. We have to get that down. We have to get that down. We have to get that down. We have to get that down. And we have to do that. And eliminating fifteen out of sixteen entrepreneurial development programs. And we have to do that. We have to do that. And we have to do that. We have to do that. Let's be clear, the SBA's role isn't to give handouts. And quite frankly, that's the key. It's to reach a hand It's to not take away a single person's out, a helping hand to those who need some extra support while they do the hard work of creating jobs. And if we can market every penny in the industry, President Trump has called himself, we'll have a ton of jobs. quote, the greatest jobs president God ever created. It's the legal tender. Um, it's,

Mm.

Excuse me, God. uh, this is not a radical, You can't make that frankly absurd claim. it's a radical step. And it will be. And if if his SBA continues down the path it has been on. I know Administrator Loeffler, you're an excellent Robert, you're a very charismatic person, you'll have a uh clarity, and I know you're a very smart person by your leadership. I'm sure, for our subcommittee today why under your leadership, the SBA is making it harder for Americans to start businesses, So, don't agree on the discount, don't agree on agreeing on the discount. grow businesses, and hire more American workers. I hope you're prepared to explain why uh the president, you and the president continue to tell American And now that we've agreed on the discount, workers and small businesses owners you're on your own. we'll listen to the records. We need to make sure that we have the right support for everyone. Especially in this economy where inflation and higher costs driven by the president's war on choice in Iran war of choice in Iran and causing so many We need to make sure that we have the right support for everyone. small businesses and working families to struggle I heard just yesterday I urge my colleagues, I urge all the business owners, from a small business owner in La Plata Maryland in my district that sales I urge all the business owners of education, I urge all the business owners, and with that, Mister Speaker, I yield back my Maybe yield. How we doing? I We're doing good. rents and repairs musical equipment yield back my We're doing good. We're doing good. my

Mister Chairman of the Master of the Arts.

for families and schools like this the deal is going to the gentleman on the left their business is struggling because of the high cost resulting from the president's illegal tariffs and this guy on the right is also the member of the oversight committee from Kelton. its owner reached out to me uh in advance of today's hearing he wrote and i quote " unlike large national chains Um but it's up one small businesses have very limited ability to absorb these rising costs" one of our business is supporting the sale of the music as it been said "as prices increase fewer families can afford to participate in school it's a one of the most expensive music programs and school music departments face greater challenges stretching uh already tight budgets.

trading only one.

I hope

This bill is a good

your subcommittee, he meant talking to me,

Mm. thought process.

We'll consider the impact these tariffs have on local

will consider the impact these tariffs have on local businesses like ours and schools and families we serve.

businesses like ours and the schools and families we serve.

Small businesses like the one I just spoke of deserve our help.

We've had many calls from people who have been But now they're coming from Kenny now is just one of the reasons.

And they deserve answers. Instead of telling them you're on your own,

Now, as a cause for the pandemic,

we ought to be doing everything we can to help them make it

we need to make sure that folks' happiness is now to come together.

in America. I look forward to hearing uh uh uh madam uh uh uh your testimony

thank you

and your observations

already

uh and i'll ask some questions about why we have less resources than the congress

stopped all the resources of canada are really

uh believed were necessary

poor i stopped listening and reducing low value

thank you mr. chairman

money to the need for the development of this

i keep giving back time that's a problem

oh no you're doing great thank you mr. hoyer i now recognize the ranking member of the full committee, ranking member delauro for her opening remarks

Thank you very much, uh, Mister Chairman and Ranking Member Hoyer, uh, Administrator Loeffler, welcome. Thanks for the interesting question. Um, whether the Trump administration acknowledges it or not, there is a cost to living crisis, Well, uh, all the things that people tend to do, confronting the American people. Food, housing, health care, gasoline. like food, alcohol, drinking, drinking, alcohol, alcohol, alcohol, alcohol, gas, and alcohol, and, The price of just about everything is going up. uh, and, uh, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, The economic outlook remains uncertain. and, and, and, and, and, and Jobs are fewer and far between. American families are clamoring for relief. But this administration does not have any plan to provide it. The only proposal they have put forward is to push for the largest Pentagon budget in history,

I don't believe it.

while reducing investments in just about every program that supports the American people here at home.

I don't believe it. I don't believe it. I don't believe it. I don't believe it. I don't believe it. I don't believe it. I don't believe it. I don't believe it. Gentlemen from Arkansas, I don't believe it.

This is especially true of the Small Business Administration. The Trump Business Administration is ready to Rather than provide small business owners, They're ready to come and get it. budding entrepreneurs, innovators and job creators throughout our communities, Um, with the support they need to thrive, you know, a lot of people, you know, with their businesses, the Trump Administration has proposed slashing they're sure have to invest in The SBA budget by two thirds.

Woody and Claire.

They have proposed eliminate fifteen of the sixteen entrepreneurial development programs, many of which have strong bipartisan support.

Thank you.

Across the country, small businesses are struggling.

Thank you. I appreciate this.

We have seen a stark increase in small business bankruptcies, more than a fifty percent rise in filings during the first half of twenty twenty six, I'm very happy to make my colleague compared to the same period last year. my colleague from California. When President Trump launched his In one sense, it was a pain in the Many large importers were able to absorb the shock, the energy cross-segmentation. passing price hikes onto consumers, In another, stockpiling inputs in advance, in a sense, or working their Washington connections to secure a it was difficult carve-out for their product from the Trump administration. in keeping with the work of the essential solutions. And that's why I think we should look at the price, For small businesses, those were not available options. and the security of the stop wasting the money. When the Supreme Court struck down these tariffs as an illegal overreach by the Trump administration, You know what? There was a moment of hope. Perhaps now these small businesses who had suffered because of the president's trade war um uh could begin to recoup some of their losses. We need more materials. Commerce was in an unforeseen stage from an elbow to the toe. But that hope has quickly faded. Just as large corporations were better able to withstand the turbulence caused by the president's tariffs, so too are they better positioned to extract their refunds from the federal government. While retaining the The process in place to administer these payouts is a bureaucratic morass. response of foreign money, favoring big businesses Well, certainly, people have money in their cash register. who savvy lobbyists and seasoned lawyers can navigate We have to make sure that we are. the administration administrative obstacle course that has been set up. We have to make sure that we are proud of the endorsement of the law. Meanwhile, comparatively little money has been paid back to small businesses, We still need United Steel and the the local brick and mortar shops who do not have K Street contacts or white shoe law firms, and the American Law Association. But it must be among the with the past one cent uh, on retainer. Inflation, economic uncertainty, of the construction that was uh, uneven tariff relief, all of these factors contribute to an environment in which it is increasingly difficult The question that when it was going from three to, for small businesses to thrive. um, seven to six million, That is all the more reason to at minimum maintain our investments we had to go with the silver bullet idea, in initiatives that support and presented one of the options of zero profit. our small businesses. But that is not what the administration is doing. The legislation and the They are proposing substantial cuts to numerous budget. programs that help train entrepreneurs make capital more accessible for small businesses and open up investment opportunities

Yeah.

These leaders leaders would not otherwise have access to. But it was the whole It is disparities like these that make so many people feel like the rules of the game are rigged against them, What means we don't have to have one that the only path to success runs through family connections, personal favors, or both. Uh, but but that is not healthy competition.

Mm-hmm.

Uh, that is not a fair market, We should have a aisle where we can put people besides the aisle where they can sit and eat. and that is not the American dream. Anyone with the drive and dedication to begin their own business ought to be able to. I see. And we should encourage them and support them in their endeavor, That's true. I know. not put up barriers or pull the rug out from under them. Well, we use the I'm eager to hear your testimony this afternoon, Administrator. I appreciate your joining with us. I thank you and I yield back.

Uh, thank you, Madam uh Chair. Uh, today we welcome the testimony of the Honorable Kelly Loeffler, Administrator of the US Small Business Administration.

Thank you.

Administrator Loeffler Without objection, your full written testimony will be entered into the record.

Uh, I I I I I I I I I I I I I I I agree.

With that in mind, we would ask you to please summarize your opening statement in five minutes.

One more. Thank you, for their good work. Uh, the opinion. Chairman Joyce, We have a few more. Ranking Member Hoyer, But the opinion is the best. and members of the subcommittee, thank you for the opportunity to testify before you today. Thank you. Thank you. Thank you. As a former small business owner and Financial Services Executive, Thank you. And then. Comments. I committed to leading the US Small Business Administration with the discipline of a top-tier financial institution. Thank you. grounded in data integrity, for helping to draw efficiency, accountability, transparency, back and measurable results. the Senate. There's no fun in talking. The fiscal twenty twenty seven budget reflects our commitment Yeah. The bill, Mr. Lucas, to restoring trust in an agency that rivals the White House, White House, the largest banks in America for small business lending. American Bank of America, uh, both the bank and the That's why President Trump often calls it " the biggest bank in America". bank, the bank. He knows that small business is big business. Under a hundred and fifty Under the Biden administration, the SBA fell far short of that standard. Core financial systems were unreliable. And we had to follow the rules. But didn't we? Risk management processes were fragmented. Condensed? Fraud flourished. For the yesterday's auditors, And auditors repeatedly found that the agency lacked how do you find that out? The first three were high levels and second levels and past three were low levels. basic internal financial controls. Customer service suffered and oversight and accountability were non-existent, even as spending and headcount reached record levels. And the seventh? And the eighth? And the eighth? Program integrity was absent from our lending programs, Oh, no. where underwriting standards were dismantled. And the ninth? Thirteen? Permanent. contributing to an estimated two point two billion dollars in losses that taxpayers will bear. Well, yes, there was a huge amount of money to consider, but they didn't. sba's grant programs lacked accountability, So, uh managing hundreds of millions of dollars of funds through emails and spreadsheets,

Mm-hmm.

So, one purpose was to get the general public to look at these budget conditions. instead of through our financial budgeting system. Fraud went unchecked, Uh, so, with the inspector general estimating that sba dispersed over two hundred billion dollars is it So, is it Of course, it's a capital of the country. in potentially fraudulent covid era loans. Maybe we can get rid of the fact that we have a lot of technology. These were growing systemic failures. Technology and cyber security were not improved Maybe we can make a little bit more expensive. despite spending hundreds of millions of dollars. We can make it cheaper. The agency leased offices with virtually no staff, while retaining thousands of employees, tied to temporary covid era programs long after those programs ended. What's the rule? We had a lot of problems, you know. No credible financial institution could function this way. The troll. And certainly, no small business would survive such wasteful spending. Simply put, this agency, Madam Chair, Madam Chair, had it operated in the private sector, Madam Chair, Madam Chair, Madam Chair, Madam Chair, it would have failed. Madam Chair, material on the Therefore, we moved quickly to impose fiscal order and accountability. After all these decisions, the right to have a budget also was We implemented internal controls, not implemented. a fraud risk framework, The bigger idea is that and restored compliance with the law. Madam Chair, We ended misguided policies and addressed underwriting weaknesses to ensure this is the problem, this is the problem, this is the problem, this is the problem, this is the problem, this is the problem, that our loan programs would again operate at no cost to taxpayers. this is the problem, this is the problem, this is the problem, this is the problem, this is the problem, this is the problem, this is the problem. We began modernizing failing technology systems. We reduced excessive staffing, Yeah. Yeah. reorganized around centers of excellence, Also, and eliminated billions in wasteful of duplicative contract spending. considering the virus, and business development, one way business is meaningless. We assembled a leadership team built to rival the very best of the private sector, Smaller, yeah, next to the, yeah, next to the bottom. drawing on decades of C-suite experience, One way, business development, technology, one way more than the export. and financial services experience. The culture has shifted. From unchecked expansion to disciplined execution for small businesses and taxpayers. Problems. Transfer. No, no, yes. That means we've reinstated prudent underwriting standards to stop the Biden error losses,

Mm.

We're proving a point. strengthened the disaster loan program after the last administration allowed it to run out of funds. Yes, we have. We've no more than one hundred million dollars. And we're clearing a backlog of roughly three hundred and forty million dollars in undispersed grants that by law should have already been awarded. We have more than one hundred million dollars. Understood. We restored the mission of the agency to support small businesses and economic growth. Eight hundred and one hundred six percent. We've demonstrated that discipline delivers results. In the way In fiscal twenty twenty five, The SBA approved the SBA approved forty five billion dollars in seven O A and five O four lending, forty five billion dollars in seven O A and five O four lending, which was a record, which was a record, and supported another fifty three billion in total portfolio and supported another fifty three billion in total portfolio value through the small business investment company program. value through the small business investment company program. But unlike the prior administration, We are not chasing headline numbers. We are not trading. We're targeting capital where it strengthens the economy while maintaining a cost-neutral standard. We are trading with a different capital. That same discipline drives our fiscal twenty twenty-seven budget

Mm.

This legislation is and a well-managed agency that should cost less and deliver more. is regulated. To report the cost. We have cut non-essential contracts, We have recruited more people. returned staffing to pre-pandemic levels, and generated significant cost savings while improving performance. It also means asking harder questions about programs where outcomes cannot be measured.

But any record company that wants to invest in a record company is not going to be for free.

No serious institution continues funding efforts without measurable accountability.

That means that the conditions of these programs are made in the best of their ability.

These reforms are restoring SBA's capability and relevance. With record business formation, record exports, accelerated job creation and renewed domestic manufacturing, We need to apply. we can now deploy capital effectively to help the nation's And we of course need to apply. Thirty-six million small businesses seized the growing opportunity under President Trump's America First economy. Our responsibility is to deliver what any stakeholder would expect from a credible financial institution, efficiency, transparency, and results.

Gentlemen.

That is today's SBA. Disciplined,

You're right.

accountable,

Gentlemen.

and firmly focused on our mission on behalf of taxpayers. Speaker, I can go. Thank you, and I look forward to your questions. Gentlemen, this is Robert Leffler.

Thank you, Administrator Leffler, and I'll recognize myself for questions. I'm in support of each of these documents, Administrator, the failing spending of the capital, I appreciate SBA's continued support for capital access the loss of capital, and the loss of money. in rural and underserved underserved communities. We should be looking forward to five. I'd like to understand your view on the health of the seven A loan portfolio's subsidy rate. We need to think, we need to mark a solid basis and we need to look at how they're affecting our economy. Given the loan volume projected in SBA's FY twenty-seven budget, We need to look at how they're affecting our economy. are there any signs of stress in the portfolio we should be watching, And we need to look at how they're affecting our economy. and how is SBA balancing growth and lending with prudent risk management? Specifically, we need to look at the failure of the bank.

Chairman, thank you for the question, Thank you. and I I fully agree the importance of rural lending is not lost on me as someone

No.

that was raised on a now a five generation farm in a small business, No, that's not true. uh, No. that my that my father started the year I was born. No, that's not true. No, that's not true. I understand the need for access to capital is difficult locally No, it's exactly as though in the eighties and nineties, there was a lot of people buying when you're depending on small community banks and that was bank bills. particularly a pro- a problem during the Biden administration, And then, yeah, where we lost almost five hundred lenders all of them were losing dollars. from participating in the SBA program because they lost confidence in the lending guardrails around the seven a program.

Yes.

And Yes. Uh, under a framework known as do what you do, But process. the Biden administration lowered the underwriting standards to a level that began almost immediately causing uh early problems in the portfolio from delinquencies all the way to defaults in some cases our smallest loan programs now are suffering from a quadrupled

Mm-hmm.

default ratio of five point one one percent, One hundred percent. up from one point three two. One hundred percent. Now, One hundred percent. what does it do when banks lose confidence in the SBA's underwriting standards? As how? They pull back from lending. That means rural communities do not have the access to needed capital. As how? How did they do that? How did they do that? Uh, we were able to right that ship as soon as we came in,

Well,

Yes, the most dangerous thing. uh, make no mistake, the most dangerous thing that the Biden administration did to the SBA was weaken our lending standards and endanger those loans to small businesses. Uh, we were able to correct that uh lending uh paradigm

also the point of the tax cut is we're on a personal level

shift it back to conservative underwriting was still able to put out record lending uh uh forty five billion in total

we're on a personal level definitely

and a record seven billion to rural America so uh you have my commitment that we'll continue to focus on it and we've just established uh the office of rural affairs uh to to focus

we're on our personal level our office is in washington which is

more closely on delivering that much needed capital

we're on that person's

Ohio has a significant base of small manufacturers rely on the s b a s five O four

exact exact

loan program for equipment and facility financing. for a family and a government option. Would you tell the committee how loan volume in that program compares to the demand That's the end of the question. we're seeing from the manufacturers trying to re-shore or expand domestic production? On the order of the government. Rather than

Chairman, thank you for that question. This is a really important question.

Could be different.

In light of President Trump's agenda to re-shore, re-industrialize this nation after fifty years of sending our manufacturing overseas and and telling Americans that their jobs had gone to China or Mexico, uh, I've walked factory floors in Ohio. i was at republic wire uh a great example of a small business that is benefiting from our five O four program wow republic wire is an interesting thing yeah uh it's growing and we've prioritized growth in that program because of the need for more manufacturing in america my name is so a lot of people uh republic wire is one of the leading uh copper wire manufacturers sure ok uh they're an incredible source of uh creating a a skilled workforce ok growing they've benefited tremendously not just from the five O four program

wow

but from the working family tax cuts that i'm grateful to congressional republicans for passing because he emphasized to me that every dollar that he has saved in taxes, he plows back into his manufacturing facilities, that he is growing thanks to the five O four program. We are gonna make sure that that is not the best kept secret uh in the SBA's portfolio and we continue to refine that program and evaluate ways to improve it.

On June sixth, the SBA staff informed the committee of plans for an agency-wide reorganization. This is a a significant undertaking, impacts the fy twenty six funding. it was enacted earlier this year since six away which was enacted as part of the fy twenty-six appropriation bills requires agencies consult with the committee on significant reprogramming and reorganization requests s. v. a.'s reorganization is pretty significant why didn't s. v. a. work with the committee on this reorganization plan

chairman thank you for that question and please allow me to clarify we did notify congress of our intent to reorganize and and it represented the culmination of a year and a half of work of evaluating the agency's staffing needs when i came in uh on day one the agency had doubled in size in workforce from the prior administration mmm and so uh the other alarming trend was ninety percent of the staff was working from home uh in addition to we had failing loan programs failing grant programs technology was falling over there was a clear need to reorganize and put centers of excellence together yeah now all of the technology employees are in one group the technology budget oh great uh group so that all the budgetary items flow through to the cfo all of the economists are with the cfo uh we're able to strengthen our internal great

mmm

wow

mmm

control controls by putting centers of excellence together and making sure everything flows through a common budget and it's this reorganization uh before and after resulted in in the same number of employees because we'd already managed uh the return of the agency to the pre-pandemic headcount levels that it needed. So this reorganization is going to generate efficiencies for our agency and better performance for small businesses in our program delivery and program integrity.

Thank you. The chair now recognize ranking member Hoyer for any questions he may have.

Thank you very much. Madam um Administrator, the Congress appropriated funding for SBA's entrepreneurial development program, some of which you've talked about, SBDC's, Women uh Business Center,

uh ranking member hoyer no in fact we are facilitating the release of those funds that under the biden administration as far back as twenty twenty one were never provided which were required statutorily to be sent out we're managing three hundred and

ok

uh What the forty million dollars when we came in on day one that had never been dispersed. Uh There was absolutely no And we had to entirely fix the uh technology that supported it There was absolutely no one. and the the grants management program. No one. Uh we've rebuilt that, we rebuilt it ahead of schedule, The last administration's schedule. and now we've already got uh already a hundred and six point five million of that That's the one million dollars. backlog from the last administration out while getting most of uh what we've I believe that. But that means that if we have enough money to feed people, uh committed to getting out and we will I commit to you that we will follow the law and get the funding out uh as uh deemed appropriate by this body is what the national usage of the gold is let's ask you what it is the gold the old banks

uh have you received any directions from omb at any time

overseas

uh during the course of your uh administration

the gold the old smaller gold came up with other technical stores

at the sba to not disburse funding that has been appropriated

the old banks and and we've been working with better strong well we're working closely uh both internally and externally so we work with omb we work with our internal political and career colleagues to ensure that the funds are going out as directed as intended win five uh by congress and uh that they that they meet the law and that they meet the executive orders and so we have million for the work that they do they uh continued to look at uh meeting all those objectives and making sure that the programs

for

i think small businesses would be interested to know that some of the programs that were lined up for funding were things like funders the the binational institute for human development which right thanks uh supports illegal aliens uh in guatemala and mexico and the chinese mutual aid society people the the the

excuse me madam minister i have limited time and my question was pretty simple

brings down

which i don't think you've answered

the services that have been required

and that is have you been directed at any point in time since you have been the the administrator of the s.

uh for a long uh yeah suffering

b. a. by o. m. b. and mister vote not necessarily him personally but o.

and take advantage of the

m. b.

effect of of this

uh to not

uh transaction

expend money that had been appropriated by carter

of trillion dollars

i have been directed to follow the law and in doing so i'm following

yeah

uh the white the white house executive orders i'm working internally i'm i'm i'm and we're making sure that everything that is that you have directed to get out gets out i'm i'm i'm but we are not gonna blindly write blank checks like the last administration did to you know it's hard ok the chinese mutual aid society they got four million dollars for ok

uh i know uh let me claim my time

then proving to the government that our bank's competitors

because my time is short uh you didn't answer the question

are

i didn't ask you whether you have done things that are prudent to do i heard i asked you have you been directed by you have to go back to the meeting either missed a vote directly i'm a or omb not to expend funds that were appropriated by the congress of the united states now you're avoiding i'm a i'm a i'm a i'm a i'm a that's an either yes or no question i'm a i'm a question is what

i think i've been very clear that we are following all requirements to get

the team is five percent

that the funds out and i i do not work directly on grant disbursements and i'll be happy to have my team follow up with you

no that's not very clear

to clarify, but the all of the funding that we've committed to getting out,

Yep.

we are getting out. Let me be clear, the Biden administration did not get their money out, three hundred and forty million dollars. We are cleaning that up by applying not just the technology but the framework to make sure that the grant funding to the nonprofits that we fund are not blank checks

I understand. I understand.

I'm talking about.

Please, Madam Administrator, my time is very limited and you are filibustering. Now, with all due respect, you're closing up a cities around the country is that is in terms of your reorganization to which the chairman referred is that accurate

uh that's inaccurate

ok what is accurate

when i came in we had a hundred and thirty-two offices i think people would be shocked to know that we had a hundred and thirty-two offices twenty-nine of which had zero or one employee and that

ok are you closing offices

yes we absolutely are

can you name me an office that you are closing that is in a blue city or blue district

mmm

The chair lays before the house of the

One.

We don't classify them by Mm. blue cities we

Can you name one?

We we are making several changes across the country.

President said he did consider

Yeah. Section zero two one for the National Maritime

uh the politics.

No, we're we're changing areas. National Maritime Council.

Can you name one, Madam Administrator?

Uh, I can name several. National Maritime Council and the National Maritime Lab. Yeah. I I can I can tell you we have had to move out of Los Angeles,

And What are they?

The presidential election is in New York, Chicago, and Atlanta. Portland, New York, Chicago, Atlanta.

No, they were closed.

The emergency is significant.

We're sh- we're moving those offices. Can you name me one that is scheduled to be closed,

Oh, should we move them up?

Oh. that is not in a blue district? Yeah, I'm sure I can.

Yeah, I'm sure I can. I'll be I'll be happy to get that district.

I'll be able to get them. What

Uh, or city. We don't target them by blue or red. We target them by " is there anyone working in that office?" Let me give you an idea.

No, I understand, but it would be No, I understand, but it would be

We had an office for four years that had no employees working in it. We didn't even have access. We couldn't open it with the key.

You wanna close it. Matter of fact,

We're close.

it was closed if you had no people working in it,

We were paying the taxpayers were paying for it.

apparently.

the taxpayers are now saving thirty two million dollars thanks to rationalizing our portfolio

madam administrator with all due respect i've asked you two

i'm here to advocate for small businesses and saving them money

direct questions you have not answered either one of them that's regrettable i will send you some questions in writing i would hope you would answer them thank you very much

i would welcome any questions

chair now recognizes chairman cole for getting questions he may have in five minutes

thank you thank you very much mr. chairman uh minister as i stated in my opening statement tribal participation in eight a program is different from all other participants uh changes or pauses in eight eight programs

mmm

well you know there was a um have a lasting domino effect that impacts some of our most rural constituents significantly yes uh to that point understand that there is a number of uh applicants applications that have been at the spa spa for over a a year or some longer than that it's a high power it's a high power yeah

mmm

given that can you explain why the spa is not aggressively uh processing that is a bad transparency applications for tribal and other native entities and as a second follow-up where is the sba at in resuming timely right right right ok processing consistent with the statutory ninety day requirement

bert

committee i want to chairman thank you for the question and the uh the ability to clarify the changes we're making in the eight a program uh you're you're right this is an important federal contracting program uh for our tribal communities and when we came in on day one that program we realized had been being used by the biden administration so that's so that's

mmm

so that's to expand political influence so they had added so that's eleven to what was about a two thousand firm program they added two thousand one hundred firms to it great poor poor we have another four thousand people in paychecks uh crowding out the ability of eighty one uh the tribal communities the a. and c. for network the native hawaiian organizations for recording to be able to get access to that program the sound of the action so we have had to undertake uh a thorough audit this program is fifty years old mmm by the law from general marketing it had never been audited in its fifty year history.

Research on this.

Uh, so we've undertaken that audit and then required that all four Bring the experiment to the table. thousand three hundred firms participating in it now uh supply three years of financials. We had a fine. We had a fine. And the bill only Almost one thousand firms declined to provide that is a draft. We had a fine. information and several just exited the program recognizing that they didn't We had a normal the content of the program was short. qualify to be in it uh about seven hundred and thirty-six left the program Minority zero. Yes, financial service was lower. But they had gotten contracts for five point five billion dollars. We signed a contract with the U. S. of Australia. And the general And so what we're doing is uh making the program work for the deserving California, I missed the word, California, Germany, Germany, Germany, share in the budget, entities and small businesses that compete for these federal contracts. yeah. We have a lot of work in the South. We did, yeah, we did. Um, we continue to award the contracts. Yeah, we have a lot of contracts, and then they're removing them, Uh, that is active. they're removing the real ones. We do about forty five billion a year through that program, Sure, I yield my seven dollars. uh, which is, as you point out, an important program. and we will continue to uh reform the program so that it's no longer based on race uh the last administration had done so that was the four hundred percent robbing yeah robbing and raping a race-based admissions to the program and penalizing white business owners raping and raping um those days are behind us and we've also restored the statutory five percent raping yeah it's a perfect time for it it's a perfect time for it uh which had previously been up to fifteen percent

where are we in getting back to number one i love

yes

the effort to try and clean up the program there's certainly problems and and you're to be commended for

mmm

looking at them but there's awful lot of legitimate businesses in here too that have been

that

mmm

mmm

mmm

that's a lot of horrible business delayed and the applications have been a long time uh so where we at in trying to to

these people

get through that backlog

are chairman we're we're very close uh i ok failed to mention that we're we just ended the uh comment period yesterday a term of that was a term of yesterday by for for uh reform of this fifty year old program that has never been touched oh it's a uh this reform uh you know now that we're through the comment period will be replying to the comments and we will get the program um you know give the new applications

uh if you could give us uh an estimate of where we're at in terms of uh again application has been waiting unusually long time

we we have a we have about a hundred and eighty letters to respond to and i'm hopeful within the next couple of months we can um get back to the

thank you uh i'm i was pleased to hear at a recent conference s. b. a. officials confirmed that tribal and native into their own participation in an eight a. program should not be impacted by the administration's e. e. i. policies or recent regulatory proposals. Again, given that position, are there plans for future rulemaking that would impact tribal and native owned uh small businesses?

Chairman, what we're looking at right now is just restoring that program to level the playing field for all qualified small businesses and as you mentioned, uh we have issued assurances that the tribal community is one of the qualified applicants in that um separately so we should cover of course we this is our we have long had for the last year and a half been pursuing any examples of fraud yeah and we will continue to make sure fraudulent actors are not coming into the eight a federal contracting program uh we have uh shown examples from usaid bribery schemes um so we will continue to pursue fraud in that program they can be fined um and make sure that uh everyone is uh exactly yeah that's you know legitimately operating that program yeah

uh i appreciate it i'm just about out of time but just if i

mmm

uh just two quick points or questions uh in december of twenty uh twenty five s. b. a. ordered uh all eight eight participants to provide financial records part of a program wide audit while i certainly support ridding the program of bad actors it's important to note and i i hope you do thank you tribal eight a entities are not subject to the same size or net worth of course caps of course it's uh as individual applicants i think there's been some confusion maybe about that

mmm

of course it's of course it's uh do you have specific safeguards built into your audit methodology that would ensure tribal eight a entities are not of course it's of course it's of course it's being swept into determinations designed to catch of course it's of course but that's frankly other problems that are not really related to them given they're they're again it's a different

mmm

uh-huh category if you will of entities compared to normal small businesses

yes chairman we understand that distinction and i thank you for the opportunity to clarify that

well i appreciate that and i'm we'll have some other uh questions for the record that we can get to you and again thank you very much appreciate your responsibility

thank you

go back mr. chairman

thank you mr. chair

chair now recognizes ranking member de la ural for any questions she may have in five minutes

thank you very much mr. chairman um Uh, ma'am, D- Director, according to the website of the Small Business Administration, the SBA quote "works to ignite change and spark action so small businesses can confidently start, grow, expand and recover", end quote. Administrator Loeffler, would you agree that recovering money lawfully owed to small businesses is an important part of this mission? Yes or no?

Uh, yes, Chairman, Chairman.

Okay.

ranking member

a ranking member that's fine according to recent court filings us customs and border protection or cbp has approved tens of billions of dollars in tariff refunds as you know this comes as a result of the supreme court rule striking down president trump's iep uh tariffs however a us court of international trade um uh judge eaton has noted that it appears much of the processed refunds have gone to large importers while many small businesses continue to face obstacles in obtaining refunds and are now being encouraged to sue uh administrator are you aware of these concerns

ranking member delora this is not a concern we hear on a daily basis quite to the contrary we see small businesses thriving thanks to president trump fighting to put american industry and the american worker first and that's why we have record business formation right now because american sea

well well let me i i i i appreciate that and i'm i'm sure that's the case but the issue is uh the court of international trade has noted that it appears much of the the processed refunds from the tariff money have gone to large importers small businesses continue to face obstacles in obtaining refunds uh as a matter of fact they've outlined some of the the companies that the refunds are going to the walmarts the large corporations the small businesses are are uh at the at the end of the line are you aware of the concerns of these small businesses

ranking member i talk to small businesses every single day their chief concern their access to capital and skill

and and they don't care about the refunds

that's that is that's not an issue that that

you don't hear about the the the they're having difficulty

they're interested in mmm

with refunds well that's interesting uh in and of itself because it's one of the biggest issues that's that's out there the consolidated that's not not a good it's not a good that's not administration and processing of entries or cape um uh the program through cbp has become notoriously known as difficult that's not a good idea uh so stop to navigate uh uh uh am i to assume that you you have not heard anything about that as well stop uh no but you know that it's really people start to

remember when i talk to small businesses and we talk about their chief concerns

overestimate

they're focused on hiring skilled workers, they're focused on growing, getting access to capital so they can expand.

Yeah. OK.

They're focused on ensuring that regulation gets rolled back. They are glad that taxes uh have been cut,

But but they don't,

that the

they're not concerned uh any of those who were uh really in a in a chaotic trade policy caught up uh in the net here and they're having difficulty uh being able to uh uh and get the refunds that they've been told that they are eligible for you have heard i hear nothing about that

small businesses are thriving thanks to president trump's fair trade agenda

ok ok fine i i i just see the the process does seem to favor and these are not my words i can quote you judge judge eaton i mean that's what i i i wish to say this to you if you could get to us a rundown of well the refunds who was getting those refunds the amount of the refunds and their category is a large business small business or whatever it is who are the companies getting the trade refunds so that you can dispel what is public knowledge about these efforts which you don't seem to know about yeah so the process seems to favor large companies with in-house customs experts outside trade council while smaller business often lack the resources uh i wanna ask you does sba share that concern i'm afraid i'm gonna get the same answer about the thriving small businesses. Have SBA conducted any assessment of whether small businesses are disproportionately struggling to access tariff refunds compared to larger firms? Are you doing an assessment of that? It's yes or no?

No, ma'am.

You're not doing an assessment of what's happening to small businesses.

No, ma'am, what I see every day is reassuring all industries.

Will you commit, will you commit to working with CBP to provide this committee with a report identifying how many small businesses have successfully received refunds and what are the barriers that remain

i will commit to continuing to advancing the interest of small businesses

no no i i this is cbp to provide this committee with a report can you get us a report

yeah

uh we're frequently asked to deliver reports these reports are not what my staff will be happy to meet with your staff

i want this committee needs a report of what's happening they should

i can tell you what's happening on the ground with small businesses there are factory floors that would not be open today if it were a presidential statutory agenda

oh god no you no you can't small businesses do not have access to the same legal resources as four hundred and five hundred companies Let me be clear, this isn't a question of whether or not someone supports or opposes tariffs, it's about ensuring that the small businesses that you represent and the manufacturers in Connecticut are treated fairly. Federal government owes them money, they shouldn't have to jump through hoops to get it back, No, no, no, no, no, no, no, no, no. it is that simple. Mister Chairman, I requested a report, No, no, no, no, no, no, no, I hope the committee believes that we should get a report and understand what is happening no, no, no, no, no, no, no, no, no, no, no, no, no, no, with the tariff refunds for large businesses and small businesses. no, no, no, no, no, no, no, no, no, no, no, no, no, no, I yield back.

i stand by your giving that report

mmm

uh the chair now recognize mister edwards

today by a fire alarm building started to burn to the ground

thank you mister chair uh thank thank you for being with us as you know uh western north carolina

the building's damage was enormous

was devastated by hurricane helene in uh two thousand and twenty four

the building was destroyed in a fire a devastating damage gunshot the building was dead

uh as a

preemptive

result of that uh

we will stand up and give the attorney general

Authority to take aim at the same products that the company requires a separate loan Businesses that took out SBA disaster loans to stay afloat to federal court. found themselves locked out of CDBGDR grant funding For too long, the bank's been attached to these underpinnings by not having left. because of the Stafford's Acts duplication of benefits rule. Building actions simply. No good prejudice. Uh, from the SBA's perspective, how many small businesses in our region might have been affected by that conflict? It's a very, it is very long-term problem. It is a very, And does the uh, s. b. a. track how often that will prevent businesses from accessing aid

nineteen ninety nineteen ninety

that they might otherwise be qualified for.

for hitting up from destroying congressman thank you for the question and for the air force your advocacy of of western north carolina, how come obviously it's been from day one for this administration uh a priority area you're not oh it's a problem for us it's a problem for the s. a. s. s. s. s. uh the s. uh the s. b. b. a. delivered over two hundred and thirty five a. delivered over two hundred and thirty five million in relief um we are working closely across the administration million in relief to create a surface that um we are working closely with the federal government to fire our own uh through our office of disaster recovery and resilience through uh administrator don three years previous managers and managers have had a really bad uh chris stallings who was former gma head uh in the state of georgia has strong relationships across the country attitude towards the state of georgia uh we wanna make sure and we'd be happy to work with you on technical mmm i've been uh details uh making sure that practical the present is the age where the road is counted we can get those roadblocks out of the way we have heard of that stand by um i don't have an estimate of the number of business potentially impacted the stand up the old category or or homeowners for that matter impacted um at this point we'd be happy to try to get that information to you

um

american government

yeah

american and to um you know work together to to address that right

i'd i'd very much look forward to that and i'll uh thank you for that opportunity uh i introduced the helene small business recovery act which would clarify that sba loans and federal grants such as those offered through the cdb gdr program

mmm

mmm on seven hundred of mandatory codes of five hundred three thousand per country are not duplicative Has the SBA to this point taken a position on the Helene Small Business Recovery Act?

Our senior director, Michael Helene, has talked about the issue. But if all the agencies,

And would the agency support legislative clarification

the state, have taken a position, then

that loans and grants aren't automatically duplicitous?

our all our agents, and due to our currently mandated fire-on-the-hooks,

Certainly, Congressman, we'd be happy to provide technical assistance in that regard to uh,

we have a We need to make sure that

insure that we're navigating the uh

some of the top-tier states have a better structure.

aspects of the loan programs that made it prohibitive previously.

Didn't the government allow the state?

We have already seen five million people who have left their homes, But you've not taken any position or maybe even looked at it. institutions,

Uh, we have looked at it and we would like to work with you on that.

and were able to get help from their customers. They've been floating database,

Thank you.

they're gonna own more, I I commend that uh and they're falling into the hands of a group of million dollars. you've gotten three hundred and forty million dollars in backlogged grants out the, You cannot or or funding and loans out out out the door.

Yes.

You're gonna do something. I know that many of my constituents, many of the small businesses that I represent have uh been able to take advantage of that one of the things that you mentioned to us in your represent a lot of selected people opening comments that really gets my attention is uh jeremy ilman in the process of and i was thinking of the name of the office the one i've never heard of your and i can't remember the exact name of it but the rural assistance office that yeah beauregard you opened can you tell us a little bit more about your vision and how that might yeah yeah yeah help small businesses in a rural area mountain area like mine will be proud to be a site that we cannot allow in a leader's way to be more

yeah absolutely so when we came in the office of rural development was uh

we're a shopper so we're a shopper

embedded under an existing you know west coast we don't ask for missions up there you know uh you know funnel and we wanted to have a stand alone we know americans should have west coast we don't ask for missions up there you know uh operation for our rural advocacy so that we know americans should have power over the power over the west coast we don't ask for missions up there you know uh we had an office with clear uh uh line of we want to you know hand uh sight into rural communities to work across the country we have a network of regional administrators we want to find a public area where there's thank you thank you thank you back and regional advocates so drawing together the advocacy effort which is our deregulatory arm to our concern and then the rural administ the the regional administrators who often uh encounter rural issues so we have one office that consolidates those concerns

yeah thank you

and every it's everything from deregulation to access to capital to other sba resources that we offer and uh that that office uh was just staffed last week

thank you looks like i'm gonna run out of time before i ask my next question so mr. carell you

Very kind, sir. Uh, the chair now recognizes mister Pocan for his five minutes.

Thank you, mister chairman, thank you, minister Loeffler, for being with us. Um, has the SBA created any new loan programs specifically for small businesses that have been negatively impacted by tariffs?

Uh, congressman, no, we've created new loan programs,

No? OK, that's a there's no specific program for small businesses who've been hurt by tariffs?

well, our We've created programs.

You say yes or no is all I really need.

No, sir, but even better, we've created main factories.

No. So, it, I, there's data that the average small business, just like last September, for example, average small business lost forty-two thousand six hundred dollars because of tariffs. That's why I was asking if we had something in place, because clearly I spent thirty-seven years of my life, since I had hair, literally, uh, owning a small business. A year ago I sold it. Um, but a small business, the handful of employees, I know you're used to big businesses, because you're, you know, much wealthier person, I understand, but for the average small business, um those are the ones that were really impacted the most i'm looking at something right now first half of this year small business bankruptcy filings surged up to fifty percent compared to the same time last year joint economic committee uh found data that said two hundred and ninety-two thousand jobs at small businesses were lost in twenty twenty five larger than any other year since quick book started reporting these numbers that's four and a half times larger and the number of jobs lost we need to make sure nobody reaps in twenty twenty during the pandemic donald trump has been worse than the pandemic you know like four minutes in for people jobs and for small businesses so as one of those small business owners and i dealt everyday it was a business to business business right so i talked to those people they're right they're right all the time literally um for thirty seven years well i've been thinking they've been negatively impacted by tariffs so yeah i'm just wondering you know what we're doing specifically for those small businesses hurt by the president's well what what what what do you think

hmm

erratic use of tariffs

uh congressman thank you for that question i cannot validate any of the numbers well you know you're sharing here they're completely counter to what we see in this country in fact today it was well you know

yeah i'd be glad to submit for the record some names of small businesses that have gone bankrupt so that you'll have that maybe you could reach out or someone at s.

yeah

b. a. could reach out cause if the you know cause i think the problem is you're talking to really really rich people and really really rich people are doing really really well under donald trump but most small businesses aren't those really really really rich people they're people bluntly who run auto repair businesses have sign shops have ice cream shops and those are the folks that are being impacted let me maybe this will help a little in how i look at it and maybe for you to think about it who pays tariffs

uh congressman according to harvard and the richmond fed eighty percent of the paris tariffs are paid by uh the foreign countries where they originate that's why the united states was on its heels for fifty years when it's you know that's true it's

ok that would be like me saying if you said what color is

that's true

my hair i'd say i've long flowing red hair right cause it's complete bs right that ok that's not true who pays tariffs ok from our are these small businesses who've been impacted our yeah forty two thousand six hundred on average last september so and then they pass the costs on to consumers so we need to before i sold my business when donald trump started his tariffs last year so i started getting increases on aluminum sheets i did engravings one of the parts that i did a specialty printing

uh-huh

and but i also got increases by the way on american made walnut plaques because they decided they could also make money while they're doing the increased costs and tariffs they could pass on some other costs so this that's part of ok the fun of being a small business not a really really really rich big business but when you're a small business that's the kind of stuff you have to juggle ok ok so i did see the impact one in invoices ok what my first thought every single day i i would see those coming in and we paid those extra costs yard sign wires for politicians we made uh political signs for folks was yeah

yeah

we saw the steal cost increase because of the tariffs so i'm just saying uh for the average small business there's been a big impact and the fact that you're talking to businesses and not hearing this i'll tell you i just bluntly now as even a member of congress as a guy who's a small business who ran a business to business uh in venture i heard it all the time and i still hear it all the time and i sit down and meet with my small businesses in my community so what can i say to them when i say the s. b. a. administrator says foreign countries are paying tariffs you just are imagining it or you're lying because they're not imagining it and they're not lying

well congressman with all due respect i'm gonna set aside the reductive comments you made about small business success because every small business is a job for the year

so so you're saying uh you take my time back you're saying a small bit the real small venture

yeah

but let me let me yeah a collision repair a collision repair company

doesn't matter if the bankruptcies are fifty percent you only care about big business is that the new policy of the s.

a collision a a collision repair

b. a unless donald trump and his son

a collision repair company you voted against the working family tax cut where that repairman where that auto mechanic is not gonna get taxed over that time

oh please if you wanna go there i need five more minutes cause that's you

they're not gonna get expensive on their

you have no clue give me five more minutes and i'll ask you questions about that

live live cars yeah well this administration is fighting for the american worker we're not

i yield back mr. chairman think about small businesses i know that's in the title of your administration it needs to be in your heart ok cause that's what i did for thirty seven years

i'm still thinking about your red hair But see, if you keep on floating, Why don't we, you're not gonna get any more people. I don't think we have to do so much of a surveilance of the Flowing. The chair now recognizes Mister Alford for his five minutes. of the problem.

Thank you, chair. Mister Pokan, that black walnut came from my district.

My turn.

And, yes, very good.

Yeah, I think that's great.

Hey, uh, Administrator Loeffler, thank you so much for being here. You recently visited uh small businesses in Kansas City. Thank you. Generally. How many small businesses have you visited uh since your time as Administrator?

congressman alfred it was incredible to be in your district and uh to tour several small businesses uh i have oh i recommend two minutes probably this year since starting in january as a speaker i follow the protection of the land exactly been to more than a hundred small businesses on official i mean as still protecting the projects owned by its owners uh visits uh last year i'm sure it was two or three times that uh given we had i really last year was hilarious two traffickers in a profit of one hundred uh a full year already under the belt so um that is really where i am able to connect with small businesses and hear them and it's

mmm

actual concerns that they have.

Right.

Exactly.

You must be.

Uh, they're may not be talking about tariffs, but they are talking about the benefits of the one big beautiful bill. And I know that my colleagues on the other side of the aisle uh don't like to hear that,

You're talking about violence.

but there are some some things in there that are supporting small businesses,

Like what what don't we need to do?

not just millionaires and billionaires. Correct?

Eight months.

Well, Congressman, the good news is the working family tax cuts,

Yeah.

the results are in.

What is the car car

Uh, Americans uh were saved from a five trillion dollar tax hike. that every congressional democrat voted for and now thanks to the congressional republicans i appreciate you voting for

ok

well we have to make sure that we're holding a good design we have to make sure that the working family tax cuts that saved americans eighty two billion dollars it saved twenty nine million workers so we have to make sure that we're holding a good design so we have to make sure that we're holding a good design from paying tax on overtime eight million tipped workers from paying taxes on tips we have to make sure that we're holding a good design for the whole morning of our meeting uh thirty million plus americans from taxes on social security and the small business we have to make sure that we're holding a good design for the whole of the session of course it has to be uh deductibility of equipment of r and d and the twenty percent pass through for this averted losses of millions of jobs in this country. We're talking about a long promotion to recommit this loan.

As part of the White House's supplemental request transmitted last month, the SBA would receive authorization to increase the seven A and five O four loan programs. Uh, I strongly support the idea. I'm also the sponsor of the Strong Act. I'm the only member of the Appropriations Committee, also sitting on the Authorizing Committee, uh, just across the hall there. Can you speak about why these loan limits are outdated and how small manufacturers uh could benefit from the increased limits.

Uh Congressman, thank you for the ability to uh the chance to uh talk about this important issue. Our loan limits in the SBA have not been raised since two thousand and ten.

Wow. Great.

So sixteen years ago it was set at five million dollars. Today, as I walk factory floor after factory floor Uh second minute. uh in fact the SBA's largest category of lending is manufacturing. Uh last year we did about five thousand loans. totaling three and a half billion four and a half billion dollars um but about two hundred uh right

mmm

oh it's about it's about in the last couple of years have hit the loan cap so if we had a ten million dollar limit ten million or something ten um we've done the modeling to insure that this would be zero subsidy to taxpayers still nine eight forty the underwriting standards would be maintained um we can continue what president trump has started through the fair trade agenda forty-eight that is reshoring industries whether it's coosa steel in georgia agate steel in arizona twenty-eight

mmm

marlin steel in maryland we see them adding shifts adding workers we're working that's what we're working on because we are a nation of builders again thanks to president trump and this ten million dollar loan limit

mmm

one hundred percent mmm right first station will unleash what the working family tax cuts the fair trade agenda the energy dominance and the deregulation agenda that's what they've done has done for the american people to put the american people first after four years of a biden administration that is what the the tax cuts have done that looked the other way when it came to main street and manufacturing and american jobs

Speaking of looking the other way, you mentioned in your opening statement there was two

Mm-hmm.

hundred billion dollars in fraudulent covid era loans. I consider that a conservative number.

Mm-hmm.

Why was this money not uh, recovered under Administrator Guzman's?

Uh, It's a lot. Congressman, I I can't speak for the prior administration, but I can tell you during the prior the prior administration, the Office of Inspector General identified two hundred billion in fraudulent loans the administration then attempted to forgive those loans.

Right. Right.

The loans were taken off the balance sheet of the SBA, but then required to come back and not be forgiven because they were tagged as fraudulent. Yeah, I think that's a good one. And I'm gonna The third tranche of PPP that the Biden administration put out was four to five times as potentially fraudulent as the first two tranches. And I also think both are four times And so we have to make sure that tax- there is accountability on behalf of taxpayers. and four times. We've already submitted twenty-two billion in loans totaling five hundred and sixty two thousand borrowers almost one hundred one hundred one hundred to treasury for collections and to the doj for prosecution and thanks to president trump and vice president vance yeah

mmm

one oh one uh forming this working uh this effective fraud task force at the white house one one uh we are gonna continue to ensure that people are held accountable and that is uh our focus every single day one yeah one one one two and one

Thank you again. I yield back.

Thank you, Kyle.

Thank you, Mr. Offert. Chair, and I recognize the gentlelady from Washington, Mrs. Clusencam-Perez.

Thank you, Mister Chairman, and thank you, Administrator, for being here today. Um, it's my understanding that there's been some delay in actually getting the funds that have been appropriated by Congress, um, to your agency from OMB. Due to these challenges, significant unobligated funds remain in need to be spent before the end of FY twenty-six. Um, specifically on the lat- latest documents from May for the money directed to the entrepreneurial development programs, expiring in two thousand uh twenty twenty six SBA had obligated um thirty one million out of two hundred and forty eight appropriated by congress leaving a hundred and fifty nine million

right

um more than half unobligated given these obligated funds um what are the agency's plan to insure that all the unobligated funds expiring in twenty six will be awarded and obligated by september thirtieth

congresswoman thank you for the opportunity to talk about the grants uh program and when we came in as i had mentioned earlier two hundred and forty three hundred and forty million dollars

mmm and uh moving forward do you have a i'm sorry time is so limited but

yeah yeah we so we are getting that money out the door and we understand that three hundred and thirty million uh that we are gonna move and obligate by the end of the fiscal year mmm and we continue to work through the uh the backlog which was over one thousand five hundred grants that had not been paid when we came in

So, um, given these balances, does the SBA intend to make awards using funds from both fiscal years, or will you do separate years, uh, for each?

Well, we're making sure that we fit, uh, congressional intent, uh, what was allocated in that, uh, Excellent. year of obligation. But we are going back to twenty twenty-one to get funds from that far back out. So, um, we are working closely with our CFO now that The grant solutions system has been integrated integrated

What

What

into our budget program to allocate it to the proper year.

They can be.

Um, so - so will you be, um,

My colleague, the

will you be, uh,

The vote.

issuing no-fos?

The vote. I'm just

Uh, we have begun to do that.

I'm just

And - and given that there's a fairly short period,

Yes, we have.

um, about a m- um,

I'm gonna go back and then sort of darken some of the numbers.

a month, um, how, uh, I'm gonna - I'm gonna move on here really quickly, cuz we're running out of time. Um, I was I was very glad to see at the bottom of your last press release that uh you're announcing the,

Thank you.

as as has been mentioned, You know, of course, we have to be here over and over again. the um reorganization of the agency that was formerly establishing the Office of Rural Affairs. Um, as you know, Congress has consistently identified the need for more resources directed towards rural communities like mine and this body has consistently asked for more information about the office's strategic plan. Can you give us a overview of what the Office of Rural Affairs is doing and how is it delivering uh to rural constituents in districts like mine does this office have its own employees

and so we we started thinking what's we gonna foster to essentially be legal to frat to local

and how many

congresswoman yes it does have its own office it has its own employees right now there are two people in it the office was

first the argument is not

uh we recruited for that role for several months to insure

uh this is a process

uh we had the right fit i have um been remiss in talking about

i'm sorry let's hear it

our leadership team but we are we have an excellent leadership team and we were very careful in selecting someone that could what's your what's your point uh work closely with our regional administrators and our advocates to consolidate the rural ok help us uh challenges that we know exist as i mentioned i was raised on a family farm i understand that

mmm

here we go access to capital access to skilled workers uh access to resources that they need is is very scarce um and ensuring that we're addressing their highest level needs in rural communities

and i'm sorry you said you have two employees

uh in the Rural Affairs Office.

But we're gonna work on the

OK. And are they where are they located in the country?

Because it's a

Are they in DC or are they in rural communities?

I mean,

Uh

we do not have the long list,

one is in a rural community

so simply

and and one is in Washington.

we choose to have like

OK. And which community is that, can I ask?

New Hampshire.

New Hampshire.

OK.

Mm.

Um and what what is needed from Congress to make it more effective and efficient?

And then how do we look at it? We may acquire our own.

Well, we have everything we need because the Rural Affairs uh Department works very closely with our Office of Field um it's a serious cause for a lot of development but other regions don't have it works closely with our regional advocates so it's really networked across the country through a strong field and advocacy organization and this uh effort very good organization right it's a very strong organization through consolidating rural issues through that office was meant to amplify it and and isolate it's a great organization it's a great organization of a great organization uh the rural issues so that they didn't get it's the it's the reality um tracking of all the pertinent time firms that came in overlooked so i wanted to really put a spotlight on rural affairs and i think it's a great organization i think we'll see the results we've already through our policies we did seven billion dollars in lending to rural america last year uh we've worked very closely to uh with usda and epa to deregulate so diesel exhaust fluid we were able to have a very successful

uh-huh which which we agree with um and i you know but i when i'm talking to my log truck operators they're not saying they're getting any kind of

yes

um support on the on the def um so

we would love to we we have continued to raise that issue and just last week the epa put out a clarifying notice and we continue to track it and we would welcome them to contact our office of advocacy to work on that issue

ok thank you yield back

thank you very much the chair now recognizes the gentleman from texas mr. clown

thank you mr. chairman and thank you administrator for being here uh i'm always constantly amazed at how we uh in d. c. somehow equate our worth as how much dollars gets sent out the door whether or not we use them effectively or uh whether they're going to accomplish what they're they were sent to accomplish uh i i really appreciate the fact that you came in and just kind of um uh yeah got to the nuts and bolts of cleaning house some of the things you mentioned today is just

yeah

um hundreds of millions of dollars that went to the ccp uh i think dollars i don't know that you mentioned this but when taxpayer dollars went through sba went to foreign identity theft rings exactly exactly um i mean just to think that taxpayers are i agree with that basically paying for their identity to be stolen grant programs um had unacceptable vetting standards uh accountability standards you know and here we see where uh-huh mmm the prices are getting higher uh-huh uh-huh yeah the low standards actually meant

mmm

uh to say a less capital was available in the markets uh the temporary programs that uh you know the power army had shut down the most permanent programs were attempting to be turned into permanent programs you know reagan once said that you know you know the the most closest thing we have to eternal life on earth is a temporary government program uh-huh the black offices that were closed that had no employees in them uh much like the the leering centers that we've seen in some you know states and and the like um mmm yeah um

mmm

and and the list goes on and on and on

mmm

right uh on top of that we had the biden backlog of three hundred forty million dollars that wasn't mmm yes it's uh sent out the door uh when it should have been mmm it's a good question um i'm curious to know why you think that would have happened uh and if you could speak to to some of the protections you've put in place uh it's a good question oh it's a good question i'm i'm really i'm with grants and with loans to to make sure that the vetting process is good so excited about those these

absolutely congressman cloud thank you for the opportunity to talk about ok thank you uh what we saw when we came in and how we've changed it um when we came in ninety percent of the staff so when you yeah that they they were on board with the fact that they were yeah uh which had doubled to over eighty five hundred employees uh during the biden administration were working from home so i think that that would be a good opportunity to so uh it would be hard to manage a program well when you're not in the office for four years so that would be a good opportunity you're right yeah of course um so we brought everyone back to the office um we so we made a lot of progress realign the organization around centers of excellence we reduce the staff so we have to we have to we have to we have to more than fifty by fifty four percent uh uh we rationalize our technology systems many of which were falling over yeah we have to

yes

and insufficient to the task when you think about uh budget forty six million putting out three hundred and forty million a year into grant programs uh uh uh

goes back

via email and spreadsheets that are not connected to a budget system fifty six million

five percent

yeah that's a recipe for disaster in any business especially a financial services business that is meant to have what yeah well the board has uh high levels of integrity it's why this agency has not passed an audit in five years yeah yeah oh yeah yeah exactly and we have we have uh we are making sure to get uh our material weaknesses and our internal controls repaired actually we have a we have a technical engineer and we've strengthened our technology we brought in a fortune five hundred we have a technical engineer uh chief technology officer who has rapidly stood up for the modern technology taking us from the stone age to the information age oh yeah and we are making sure our employees no longer have to operate on windows two thousand eight making sure that we so more people on seven year old laptops on loan management and grant management systems that are falling over make our home machines we're doing and that we actually have fraud detection controls that are proactive before the money gets out the door mmm before before not after um so this is you know i could talk for an hour about this but this is just the start we've been here a year and a half every time yeah no we have as we do i think by the end we're gonna have what would be one of the most sophisticated of course um digitally advanced agencies uh that will be able to be more responsive and accountable to small businesses and taxpayers

The agency. And rise. Tax number having risen, the agency has risen.

It would seem like this is happened with negligence over time, but the lack of will to do something about it seems very troubling, uh from from uh year after year after year. Uh recently uh Senator Joni Ernst received documents from the Biden SBA that during their time that they substituted the word Planned Parenthood for Benghazi. Uh, are you - you - you familiar with that? And - and any idea why they would do that?

Um, my understanding - I - I - Um. Look, this is, um - Planned Parenthood should have never gotten PPP money. And when I was in the Senate, I was one of the first senators to sign on to letters or draft letters. demanding that, Planned Parenthood, give the money back and the administration agreed they did not qualify. They were not a small business. They were not shut down. They had tens of thousands employees. Uh, and they were a big business. Um, but yet they took eighty thousand dollars, eighty million dollars from taxpayers. Um, so, uh.

Then it would seem like the Biden administration tried cover up by using a code word, Benghazi, to avoid FOIA?

And, and my understanding is.

Is that would be the reason, I guess?

Yes, I'm sorry. Um, my my understanding is that this is with uh potentially with federal law enforcement.

Okay. So we can't speak to it. Gotcha. Thank you.

Thank you, mister.

I'll yield back.

Thank you, mister. Cloud, the chair now recognizes mister Ivey for his five minutes.

Thank you, mister chairman. Uh, welcome. I I kinda wanted to pick up a little bit on where chairman Cole left off. Um, and go beyond that a bit. I've got a report here that talks about what's happened uh during the the trump administration at s. v. a. from the standpoint of the impact on businesses. Contract dollars for native american, alaska, native and native hawaiian owned small businesses are down nineteen percent. Contract dollars to hispanic small businesses are down seventeen percent. Termination of contracts is one that caught my attention here too. Uh, more than sixty five thousand contracts have been terminated. more than sixty percent of those were terminated uh were held by small businesses um two thousand eight hundred and seventy-four for uh eight a small businesses and these are terminated for convenience by the way so there is no indicate apparently no indication of fraudulent activity or anything like that three thousand two hundred and eight contracts for black owned small businesses uh which is a hundred and seven percent more than mmm. were canceled under the bide administration and then for um Service disabled veteran owned small businesses, six thousand four hundred and thirty-five, which is forty-one percent more than were canceled under the Biden administration. I've got a lot of these kinds of companies in my district, um, and they have been very unhappy to say the least with respect to the transition from the services they get now from the small business uh business administration compared to what they used to get or just the ability to contact them. Period. And I I wanted to know if your take on this, especially the termination of the contracts. I don't think it's fraud, but you know, what is behind that from your perspective?

Congressman, thank you for your question. Uh, the Trump administration has met and exceeded the small business contracting goal for fiscal twenty twenty five, and in fact exceeded it for veterans contracting and service disabled veterans contracting.

Okay, but but there were contracts that were awarded and then terminated. what's behind these high levels of contract terminations for convenience.

Congressman, these are awarded across dozens of agencies. I can't speak for each individual agency as to why they may uh terminate a contract, but you would expect a normal amount of of turnover as as an These are one thing that administration turns over and the administration exceeded its

No, you sh- you you you really should not have contracts turned over just because the administration changes. Especially if it's a multi-year contract. In fact, I would argue the exact opposite from that perspective.

Or even if it's a contract. In ranking,

If the,

we're gonna have to put a safety on there,

if the government enters into a contract and the contract's being performed,

right? Or the resumption. Gentlemen from Florida,

government can still terminate for convenience,

you know, you're the only one.

but terminating because there's a change in administration, IE for political reasons, I think it would be not only just wrong but probably illegal.

Thank you.

So,

Uh, I

you're you're not saying that, are you?

Uh, Congressman, we of course are gonna always follow the law, I can tell you that the s b a we terminated hundreds of contracts when we came in totaling a three point three billion dollars life of contract savings because they were wasteful contracts they were duplicitous they weren't being used

so so the six thousand four hundred and thirty four

gentlemen

uh veteran and service disabled veteran owned contracts

mmm

by held by small businesses those were wasteful contracts is that what you're saying

i would leave it up to the agencies themselves to deem why they come i can speak for my agency i can tell you that we had

so you don't know you you're just not sure

hundreds of contracts that weren't even being used, multiple contracts for

But then.

Uh, hundreds and hundreds and thousands are very different thing. And to the extent, you know, you mentioned earlier, you you there's a lot of fraudulent activity going on,

Mm-hmm.

I guess. But again, I think it would be good if we terminating for convenience is the wrong way to go if there's actual fraud. every every one of us And then with respect to fraud, I do wanna ask you Well, it could be a long, to turn over to us, long, long, long, long, long, um, quite a long, a list of cases that have been indicted based on referrals from the SBA to the long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, uh the main problem is Cuz you talked about a lot of those. the issue of the demand. I'd love to see, you know, how many there are and and what you know what they're about. Right. So it's so hard. Cuz it's I haven't heard that many, but maybe there maybe there are more than I've heard. So it's hard to decide. Um But I think it's important to understand that there's a difference between Very good. small businesses that are committing fraud or did it in the past and Especially termination for convenience for these people who have legitimate contracts. the small businesses. The small Um and apparently we're doing the work, otherwise you wouldn't have terminated it. Real quick um on this too. Excuse me.

Well,

Uh, with respect to the tariffs.

regents are made up of

I visit small businesses in my district too,

Mm-hmm.

and two things, one is the tariffs that were struck down by the Supreme Court for being illegal, took money out of their these small businesses' pockets, and they don't have a way to get it back. We talked to the secretary of commerce about this issue. I don't remember if he was sitting there across the hall. He committed to trying to make sure that they could get the money back. recognizing that they lost it and the trump administration had not set up a program to help them get it oh

everyone

s. b. a. ought to be doing that you ought to be part of helping him get the money back that they lost due to illegal tariffs cuz the big guys are getting it as you heard from the the ranking member help the small businesses get it too and uh without a yield back

chair now recognizes mrs. Hinson for any questions

thank you mr. chairman um good afternoon administrator loeffler thank you so much for coming before committee today and uh i had the opportunity i was reminiscing about our our wonderful visit through my congressional district back in iowa cedar rapids uh nice business round table main streets but i think we had some pretty good smoothies and um and visited uh a great farm uh agribusiness farm um in um in atkins bloomsbury farm so we had a great time on a very hot summer day in iowa so thank you for coming to help uh talk with our small businesses and more most importantly listen to them right they uh were tired of having all the uncertainty that existed so passing the working family's tax cuts giving those small businesses a certainty um and having a direct line to you it meant the world to my constituents so thank you for coming to iowa um i wanted to talk a little bit about um when disaster strikes cause when it does hit um it can be very very challenging for small businesses to navigate

yeah

um in february of last year i alongside um senator scott uh representative carvel Hall and ten other bipartisan cosponsors introduced a piece of legislation the s b a disaster transparency act which uh would require you to publicly report on the disaster loan account, just like FEMA has to. Uh so uh what I would ask is what are you doing to be more transparent, provide more clarity around the disaster loan account and other um similar accounts under SBA.

Congresswoman Henson, thank you and thank you for hosting me in your district. It was truly a memorable visit and I think uh it represents really the best of America the the heartland and um appreciate the insights I always get from walking main streets and hearing from job creators. Also, Um, we have to make sure that we're not I I wanna share the the progress we've made and hopefully all of you have seen our monthly disaster report that we provide to congress uh in the wake of the last administration uh running out of funding uh amid hurricane Helene, They, yeah. From the day of. tragically in in twenty twenty four uh this is a easy to read comprehensive report that includes a lot of modeling around potential scenarios of when uh disaster relief funds could be depleted

you know i don't

right now we're showing an account of about three point seven billion dollars in reserves that would take us through it's about six million in total to uh somewhere between october twenty twenty we have uh seven to do that

mmm

uh and and december at last look and that continues to change with the number of disasters that we're responding to a year today we've responded to about two hundred and thirty-seven disasters, uh currently acti- actively have thirty-nine that we're managing, and um it's been uh an- an opportunity for us to look at how we can provide you data better to give you the confidence that the funding will be there so i welcome any feedback that anyone has on this report.

Well certainly i would uh agree that it's malpractice to run out of money and and not let congress know because we need to be having those conversations about

Congressman, I think it,

Uh-huh.

Congresswoman, I think it's a great question, because if um future administrations do not provide you the transparency, Yeah, it's a good one. Right. we could have a repeat of what happened in twenty twenty four when the s. b. a. administrator testified in front of congress saying that there were plenty of reserves but the financial side was quite positive mmm in the disaster fund and then just mere days later uh the hurricane uh i don't think it's this is not being raised helene uh is it hit the coast ok uh went through seven or eight states and the money was gone so we should so mmm try to take every measure we can to ensure transparency there mmm

yeah well it could be a hurricane on the east coast or a major derecho coming through a state like mine we need to be able to have the resources to help our people

ok

Um, one quick question I wanna close with, um, and moving to a USDA partnership, a memorandum of understanding that you signed, um, to help make sure we're combating lawfare against our farmers, our ranchers and our small businesses. I'm grateful to see that you're prioritizing rural America, as we visited many of those, uh, said businesses. Um, can you talk a little bit about your, um, your goals for this initiative and partnership with USDA and, uh, what should our farmers and ranchers be on the lookout for?

Congresswoman, thank you for this question. So it was wonderful to partner with um secretary of agriculture brook rollins and really formalize what had been an an informal so so so so so so so so so so so uh arrangement where the usda is advocating so so so so so so so uh for our farmers and ranchers the hardest working americans so so what do you mean by that uh to stand up against whether it's big government uh right

is it

right or activist environmental groups right that are influencing government policy and so we've already been able to demonstrate wins uh whether it's the diesel exhaust fluid of course or right to repair or other issues uh we are gonna strategically be using our office of from from the the ombudsman to handle non-usda concerns uh that might be impacting farmers and ranchers from the from the from the forestry forestry forestry and then the usda will handle the usda facing whether it's the department of forestry or others so so our first amendment is from yeah more than ever probably um and this collaborative effort is uh organized through uh a white house ambassador for for ranchers john rich and

mmm

the ranchers and really has now the visibility that it needs to make uh sure that they know there's an advocate for them, and a place to go to file those concerns and complaints against the abuse of excessive regulatory constraints that really drive their businesses to the brink.

Well, look forward to working with you more on that, Mm-hmm. uh, specifically on the case work side, cuz obviously people will come to us if they've had a bad interaction and we wanna be able to uh direct them to the right place. So thank you uh uh Administrator Loeffler, appreciate you being here. Thank you, Mr. Chairman.

Thank you very much, Miss Henson. And chair now recognizes the gentleman from Georgia, Mister Bishop.

Thank you very much and uh welcome, Administrator Loeffler. Um, I'm gonna follow along the questioning uh you were just having from the gentlelady. Uh, given the recent news that USDA has ended its relationship with ten guaranteed lenders nationwide, as well as reporting last year about a draft executive order, it appears that the administration is preparing to it appears so

so

transition all of us da s rural development lending programs to s b a oh this is stopping uh it's concerning to me because uh of course we have a lot of rural uh uh i have to i have to i have to much need to uh development needs in georgia and because us da has a wealth of of course of course experience with its seasoned personnel that are handling those programs of course of course we have to and i don't know if s b a is prepared to take up this work that's really critical serve to rural america uh can you provide

thank you

further information on the administration's efforts to transition uh the usga programs to sba uh has sba conducted an analysis to assess the potential fraud risk expansion uh lender vetting requirements and program integrity controls that are needed if sba assumes responsibility uh for those rural credit programs what is the agency doing to strengthen relationships with small rural communities

well they have to they have to they have to bring in

to build an understanding of the unique challenges that these regions face

they have to bring in they have to bring in where they are everyone always has the same question every year because we are all equally

congressman thank you for the question i appreciate uh

different what definitely do you have a concept of

the uh concept i i

of bringing forward

could not validate that's

the fact even though it does not necessarily

actually happening

cause a lot of these regions have the same

uh what i would say is that s. b. a. has an active lending portfolio in rural america

same

uh to the tune of seven billion dollars last year um so we continue to uh really it's a problem with an average we are a seasonal and top-end coexist where usda da has a certain portfolio and competency so we don't we don't have the power to get the services we need um i wouldn't be able to comment on the the shift in lenders i think that's the problem it's a problem um what we're focused on is strengthening our own lender portfolio we work with over five thousand lenders across the country and then you see it's so it is a and we are ensuring mmm that um not only do uh our lenders have the the right loan portfolio to offer to our small businesses across the country but that the underwriting standards are

what what about the the ten uh lenders that were um and it's

what if we have no very full-time employees

were terminated um i think the usda um

so our company has we have more people in our work and our rent

well sba um has now uh is planning to assume uh

than our average

control of the business and industry loan guarantee program the rural micro-entrepreneur assistance program and the rural business investment program. um

congressman i wouldn't be able to uh elaborate on any of of what you've heard so

nice

uh i would just say the s. b. a. maintains its own lending programs for small businesses

nice work

um we do

i'm particularly talking about those that uh yeah i think that come through the rural development agency Florida. Florida.

Florida.

and those rural programs. Well, the Florida. Uh let me shift gears a little bit uh it was mentioned earlier but it's my understanding Oh, that you've been reshaping uh a SVA uh through a an aggressive auditing and that's what I've been thinking. dropping of hundreds of eight a minority on contractors and modifying the lending fees. Oh, what's the year? Uh the agency suspended more than one thousand contractors in January and moved to terminate more than six hundred twenty firms in March after they refused to provide financial data.

Mm-hmm.

was a factor very in the campaign for the development of SBA, I've also heard that SBA has not certified a single eight a company in nearly a year. which is a very good thing. But it was, it was a huge

Yeah.

impact on the development of SBA. And you explain what's going on here and it sounds to me like a lot of minority business owners are not getting a fair shake from SBA. But it's also a factor in the development of SBA, which is a huge impact on the development of SBA. Um, while SBA is statutorily required to provide But it's also a factor in the development of SBA. assistance to socially disadvantaged people, what safeguards uh has s. b. a. implemented to ensure due process or to prevent erroneous suspensions and to protect legitimate

on the judgment of the client's name i see

disadvantaged contractors from undue harm

it reduces disadvantage to congressman thank you for that question and the chance to clarify this uh program when we came in the eight a program one it's not the fee of the roadside uh was technically supposed to have a five percent statutory percent of contracting the biden administration moved it up to fifteen percent that is the problem one crowding out our veterans and and service disabled veterans contracting so we moved it back to five percent but as we got into the program we found that the biden administration had admitted three oh wow five percent so it's like two thousand one hundred firms nine based on hundred racially based admissions to the program that's a lot separate courts have to remarch on that and uh which the federal courts had found that oh we can't consider that uh race-based contracting was unconstitutional and we set about reforming that program to ensure that oh um

a reference socially disadvantaged

oh uh That's right. it would

That's not racial.

It have a disadvantage Socially disadvantaged would be verifiable disadvantage. in the risk of being disadvantaged. Um, the Biden administration had helped uh several small businesses craft their social disadvantage statement or or required a minimal statement

Thank you.

without verification what we wanna make sure is that it's a level playing field for every socially and economically disadvantaged business uh that it does not discriminate against white business owners and that small businesses have a chance to compete broadly for eight a so you know so i work for eight a along with the entity owned organizations that participate in the eight a program so yeah and this is a program that needed reform because as you pointed out yourself mmm yeah

i got

yeah we found a thousand firms so one hundred percent that did not reply to requests for financial documentation we've worked with about three hundred of those firms to keep them in the program come back no so to your point on due process you're exactly right we made sure that we were not arbitrarily exiting people from the program. But we also found a hundred and twenty DC-based firms that made five point five million in contracting deals when they did not fit the program they were big businesses. This was a fifty year old program that had never been audited and it clearly was past due time to audit the program for eligibility.

One final question if the chair will will engage me, will um uh indulge me. Uh, my district office staff has been hearing from constituents with complaints about the s. p. a. field offices and how they're not as helpful now as they had been in the past. For example, we've heard reports that s. p. a. is directing callers back to the web site rather than providing assistance, and the callers are describing the staff as rude or unhelpful. Uh, this is a very concerning trend. Uh, so I'd just like to ask you what resources, uh, do you feel are required uh from us in congress uh in sba s fy twenty seven appropriations bill uh to ensure timely delinquency notices respectful constituent services and adequate staffing at the field offices

congressman thank you for that question because our focus has been on restoring customer service that was lost over the last four years the average wait time calling in to the sba what used to be fifteen minutes Today it's about twenty two seconds before an individual at one eight six six SBA help will answer the phone, and it's dramatically changed from having three dozen different phone numbers to dial into and three thousand mailboxes. We have a coordinated, professionally managed customer support system, and so I would love to hear from your office where we can resolve any issues that your constituents may be having.

Are they being referred back to your website?

i i can't speak to individual callers but often we have information there but we have a service center that helps people individually walk through

uh

right their loan program so i their their individual information might be contained through a login where they might walk through someone one someone through their loan but um that that's not our standard practice

but you do have a decrease in the number of personnel that are now answering the phones as a result of the

uh we have an increase in quality in customer service it's it's not there's a perception in in government that having more people means more quality we have higher quality uh setting aside i don't know if we have the same number or or fewer what we have now is a cohesive customer support system that's no longer fragmented across dozens of numbers and disconnected databases we're building a a new customer interface that will have a lender portal that will have a customer service portal where you can log in. We're gonna have a lot of self-service, but we're gonna continue to increase the customer service levels in person because we're dealing with about a half a trillion dollar portfolio that we're servicing, whether it's disaster, COVID era, business loans or the like. So it's very important that we have that personal touch as well.

How many personnel did you lose as a result of those?

Zero.

And let me just tell you someone who's been in business for thirty years.

Thank you.

This is gigantic for a small business like this.

Thank you, Mister Bishop. With that, our time is concluded.

Uh.

I would like to thank Administrator uh Loeffler for being here today.

This is really lost to country. Uh.

There may be some members who would also like to submit questions for the records.

This is really business.

Please submit any questions for the record to the subcommittee staff within seven days.

Uh. Uh. Uh. Uh.

This subcommittee stands adjourned.

The chair.

The job.

Well you

It's really well, so it's it's

ju- ju- just If I can. The last question my uh answered. are you saying

mmm

unlike

that no personnel

my bill is

in the small business administration were removed as a result of Dozier's activity

we need to take into account the fact that uh although sunlight and the sun

you said no definitively is that accurate

are outside the

ranking member Hoyer yes it was my decision

it stimulates small business and as i said job creation

alright subcommittee stands adjourned

activism is providing more time for youth sports