From Startup to Scale: SBA Investment and Innovation for Small Businesses

Also, before we get started with our business, uh, I'd like to take a point of, uh, personal privilege. Uh, as many of you know, this week is our Chief Counsel Nicole Vaux's last week here with the committee. Where is she? Hiding in the corner. Hiding in the corner. She's gonna have to give a speech here in a minute. But Nicole, who's often been my, I call her my co-pilot up here, uh, during hearings or on the floor, is leaving the house after six years. I want to take this opportunity to thank her for her service to the committee, this institution, and the small businesses across our country that depend on what you do. So, Nicole, you'll be missed. We love you. Good morning to everybody. I now call the committee on small business to order. Without objection, the chair is authorized to declare a recess of the committee at any time. I now recognize myself for my opening statement. Uh, welcome, uh, to today's hearing titled "From Start-up to Scale, the Role of the SBA's Office of Investment Innovation in Powering America's Small Businesses." I want to thank our witnesses f- or witness for appearing today. and for sharing the important work done in the SBA's Office of Investment and Innovation. As we look back on two hundred and fifty years of American history, we see a country built on innovative ambition and a drive to build what comes next. America's economic strength has retested on a simple promise that if you are willing to take a risk, back an idea worth believing in and contribute to something greater than yourself, this country will give you a fair shot. It's simply called risk and reward. And in fact, America has always grown stronger when people who take risk and innovate are given uh room to try, and more importantly, the chance to succeed. The Office of Investment and Innovation exists to support that work and ensure that the risk-takers have the tools the capital and the pathways they need, to turn ambition into tangible impact. OII connects America's uh small businesses to capital, uh research funding and ecosystem support they need to launch a scale and scale and compete. Through the Small Business Investment Company program, OII licenses privately managed funds that channel billions of dollars in equity and long-term financing to qualify small businesses. Through the Small Business Am- uh, Innovative Research and Small Business Technology Transform Transfer programs, OII coordinates federal research awards that translate laboratory ideas into technologies our war fighters uh depend on. Thanks to the work of this committee, we successfully reauthorized programs through September thirtieth, twenty thirty-one. For more than twenty years, the SBIC program has operated at a zero subsidy cost to the taxpayers, and over the past five years it has run with a near zero default rule, rate. And under Administrator Loeffler's leadership, this office has delivered historic results. In fiscal year twenty twenty-five, the SBIC program closed with a record fifty-three billion dollars in combined private capital and SBA leverage. In addition, the SBA has approved forty-eight new SBIC licenses and issued a record eighty-eight green light letters building a pipeline projected to drive approximately twenty-seven billion dollars in new private sector investment, concentrated in manufacturing, critical technologies, and the industries our country needs most. On the research side, more than six one thousand six hundred SBI are funded small businesses, reported nearly twenty-nine billion dollars in commercialization, activity delivering real products, jobs and returns on federal investment. And today's hearing will examine how OII has been restored to its core mission, how its programs are delivering measurable results from America's small businesses, and how Congress can continue to support this work in the years ahead. I thank you again for joining us today. I look forward to the conversation ahead. And uh I now recognize uh uh the ranking member and my friend from California, Mister Tran.

Thank you, Mr. Chairman, and welcome, Mr. Carter. Uh, innovation is the engine of long-term economic growth. It is through innovation that we raise living standards, improve the efficiency of business, and maintain American economic competitiveness. Small businesses pull more than their own weight in bringing that innovation to market. According to a twenty twenty-two SBA report, small businesses with between five to nine employees receive more patents per employee than any other category. Entrepreneurs are essential catalysts for technology transfer, moving research innovations from the laboratory into the marketplace and doing the hard work of raising capital, conducting market research, and bringing those discoveries to the public. Importantly, these small businesses are everywhere, not just in Boston and San Francisco. The promise of the America of america's innovation economy is that great ideas can come from anywhere and that even a startup in rural missouri can have the same opportunities as a well-connected founder in silicon valley private capital markets remain extremely concentrated and our federal programs at the s. b. a. exist to correct that market failure the s. b. a.'s office of investment and innovation is the home of that mission and it houses three sets of programs that i want to briefly highlight first is a small business investment company program established in nineteen fifty eight to give small business high growth firms access to pay patient capital in fiscal year twenty four sbic's deployed over seven billion to more than one thousand one hundred companies supporting over uh one hundred and thirteen thousand jobs since its founding the program has backed some of the names that have come uh become most central to american economic life apple costco fedex intel second is a small business innovation and technology transfer or sbir sbtr programs for over four decades these programs have been the federal government's primary vehicle for directing research and development funding to small innovative businesses just last year they directed roughly four billion in early stage technology funding to four thousand businesses. These programs are enormously successful in bolstering American innovation and generating economic activity, which makes it all the more concerning that last year they were allowed, these were programs were allowed to lapse. The impact was devastating for thousands of small firms struggling to continue life-changing research. Thankfully, the Small Business In- Innovation and Economic Security Act was recently enacted. It reauthorizes the SBIR and STTR program for the next five years. It contained genuine improvement supported by members of both sides, including my bill on extending due diligence requirement to protect American intellectual property. However, I would be remiss to ignore that it is much harder to negotiate a reauthorization package without up-to-date information which is supposed to be provided by the SBA. It is twenty twenty six and we have not received an annual report on these vital programs since fiscal year twenty twenty two. I look forward to learning more about the actions the office is taking to provide this information. The third and final program sits in the Office of Investment and Innovation. They support entrepreneurship through their regional innovation clusters, the Growth Accelerator Fund, and the Federal and State Technology Partnership Program. These are not just peripheral grant programs. They play an integral part and role of realizing the pro- promise of the office to ensure that OII reaches firms that lack traditional pathways, capital, or live in hot spots of VC funding. I look forward to your testimony and the ways you are diligently implementing these programs to ensure that there is equitable access to funding and resources for small business owners no matter where they are located or who owns them. Thank you, Mr. Chairman. I yield back.

Uh, gentlemen, yield's back, and I will now introduce our witness. Uh, our witness today is Mr. Joshua Carter. Mr. Carter serves as Associate Administrator for the U S Small Business Administration's Office of Investment and Innovation. Uh, prior to assuming this role, Mr. Carter co-founded, uh, and served as Coach Chief Investment Officer of CPO Capital, a multifamily office, an institutional investment firm based in Salt Lake City. Uh, he also, uh, previously held positions at the Bank of America, Merrill Lynch and Goldman Sachs. He graduated graduated from Harvard University with a degree in social studies and has an MBA from the Wharton School of Business. I want to thank you again for being here and I look forward to, uh, our discussion.

Mm-hmm.

Now, before recognizing the witness, I'd like to remind that, uh, you, uh, your oral testimony is is restricted to five minutes in length. You know that. And if you see the light turn red in front of you, it means your five minutes have been uh concluded, and you should wrap up the uh testimony. And with that in mind, uh and uh his knowledge of that, I now recognize Mister Carter for his five minute opening remarks.

Chairman Williams, Ranking Member Tran, and distinguished members of the House Committee on Small Business, thank you for the opportunity to testify today on behalf of the US Small Business Administration. My name is Josh Carter and I serve as the Associate Administrator for the Office of Investment and Innovation. It is an honor to discuss how the SBA's investment and innovation programs are helping America's entrepreneurs access capital, commercialize breakthrough technologies, and create jobs in local communities across the country. Under the leadership of President Donald J. Trump and Administrator Kelly Loeffler, the SBA has renewed its focus on supercharging access to capital for small businesses. Commercializing new innovative technology and creating good-paying jobs through strong public-private partnerships. Fiscal year twenty-five marked a record year for capital formation and innovation at the SBA. At the center of that success is the small business investment company, or SBIC program. Last year, the SBIC program reached a record fifty-three billion in total assets, the largest in its history, and a reflection of unprecedented levels of private capital being mobilized through public-private partnerships. For more than six decades, the SBIC program has served as one of the federal government's less well-known, but most successful investment programs. In addition to providing capital, providing capital, fund managers bring industry expertise, strategic guidance, and business relationships that help entrepreneurs grow and succeed. Today, approximately three hundred and sixty active funds manage more than fifty-five billion in total capital. And since the program's inception, SBICs have deployed more than a hundred and forty-seven billion dollars through over two hundred thousand investments in American small businesses. These investments supported the creation of more than ten point six million new jobs since nineteen ninety-five. Congress has also taken an important step to ensure the continued growth of the SBIC program through the passage of the Investing in All America Act, one of the most significant enhancements to the SBIC program in years. The legislation increases SBA leverage limits, allowing significantly more private capital to flow into American small businesses. For many funds, these higher limits can translate into nearly two hundred million in additional investment capacity available to support growing businesses. The law also provides up to a hundred and twenty-five million in additional leverage for funds investing in administration priorities such as critical technologies, rural tech- rural communities, and small manufacturers, which is essential to America's long-term economic competitiveness. and industrial strength in an increasingly competitive global environment. During the past year, the SBA has removed regulatory barriers to facilitate SBIC investments in critical mineral extraction and processing, and designated critical technologies, while eliminating restrictive eligibility requirements for fund applicants and improving efficiency for experienced fund managers. Additionally, the SBIC program aligned its investment strategies with SBA strategic priorities, to create additional flexibilities around pre-licensing investments to ensure US small businesses receive the capital they need when they need it. These reforms strengthen the SBIC program and position it to mobilize capital at greater scale for the next generation of American small businesses. And while capital is essential, innovation is also remains equally important to America's future. The small business innovation research and small business technology transfer or SBER-SIDER programs continue to demonstrate the power of investing in American ingenuity. In two thousand twenty-five, more than sixteen hundred CyberSitter funded small businesses reported nearly twenty-nine billion in commercialization activity, including follow-on private investment, government contracts, and private sector sales. These outcomes demonstrate the CyberSitter program's effectiveness in translating federally funded research into deployable technologies with real-world economic and national security impact. The recent reauthorization of the CyberSitter program provides critical certainty for innovators, investors, federal agencies, and entrepreneurs. All these accomplishments tell a powerful story. The SBIC program reached a record portfolio size, providing unprecedented access to capital for small businesses. The SBA approved new investment funds, expected to generate tens of billions of dollars in private sector investment. And the Sibbersitter supported companies continued to generate significant commercialization activity, with economic and national super- national security impacts. These results demonstrate that when government creates the conditions for private sector investment and innovation, America's small businesses generate economic growth across the nation. The SBA remains committed to expanding access to capital, supporting innovation, strengthening domestic manufacturing, and helping America's entrepreneurs continue to lead the world in economic and technological advancement. Thank you for your time today. I look forward to hearing from members of this committee and answering your questions.

Uh, gentlemen, yield's back. We will now move to the member questions under the five minute rule. Uh, I recognize myself for five minutes. Mister Carter, since Administrator Loeffler was sworn into office, OII has seen record record SBIC performance and modernized regulatory framework and two pieces of bipartisan legislation signed into law. Now that uh record is difficult to match. In your in your view, uh how have the Trump administration's Thank you, Chairman.

Thank you, Chairman. I've been uh so uh honored to work with Administrator Loeffler and under President Trump and Administrator's uh L- Loeffler's leadership. She's focused us intensely on the key themes that matter for our country at this time. Uh, number one, re-industrialization of America. Number two, strengthening of our supply chain. uh increasing the resilience of those. Number three, continue to advance technology, uh the adoption of technology, advanced technology, the commercialization of it. Uh and it's been incredible to see already the impacts that that's had. Um just this last year, uh for two thousand twenty five, uh about forty four percent of our SBIC portfolio was in the industrials category which is made up principally of manufacturing. Uh we've seen incredible support from the funds as we've focused on this. Um and we've seen three billion last year just in that sector in the SBIC program and and what's so powerful is when you actually look at the individual company impact, right, it's all about the small businesses and the and the entrepreneurs and we've we I I I saw a found an example that was in in your home state of Texas, Cleburne Cleburne, Texas. There's a cement wall manufacturer that's there that received SBIC funding and you look at those individual situations and that's what that's what this program is all about.

Thank you and uh SBIC's program has operated for nearly seven decades and its ability to deliver private capital to small businesses without using taxpayer dollars remains one of the most efficient models in the federal government. Now, under Administrator Loeffler's leadership, again, the SBIC portfolio closed, uh, fiscal year twenty twenty five at fifty three billion in combined private capital and SBA leverage uh the largest in the program's history. So my question is, how has the Trump administration's focus on mission, dis- discipline, and regulatory modernization driven that record performance. And what does that signal about the direction of the OII as we move forward?

Yeah, from the beginning of her time, uh, a- a- as the administrator of the SBA, administrative leftlers focused on efficiency and on aligning all of us at the SBA uh with the mission of the president. And it was incredible to see an OII and - and - and frankly, the team that we have there in my professional experience, twenty-five years as an investor, is uh as good as any institutional investor out there and watching how they came together last year to process a record number of funds about a hundred and seventy funds that were processed we mentioned the statistics eighty eight funds that were uh approved for green lights which is a conditional approval forty six licenses um and watching them uh come together find efficiencies um focus on uh processing and helping funds through so we can get capital to american companies has been really inspiring

In the time we got remaining, access to capital still remains one of the most persistent barriers for small businesses looking to grow in scale. Uh, how has the landscape for small business investment changed over the past few years? And where do you see the private market falling short in ways that the OII programs are designed to fill?

There's a few trends that, in my mind, make this program even more essential and more meaningful to American small businesses. We've all seen how, um, funds have become larger and larger, they're mega VC funds now, uh roughly seventy six percent of first quarter volume in venture capital this year was with was with six venture capital investments so the investments themselves are bigger the funds are bigger similar trend is happening in private equity where the funds are getting larger and uh funds over five billion dollars are representing thirty five percent of the volume, that's up from like twenty six percent five years ago so our small funds smaller funds, that thankfully

In the short time that i have remaining. Um. I wanna just, well, let me go then back here, uh, my time, uh, my time is up and i'll go to uh Thank you. Who's next?

Ranking member.

Ranking member.

Thank you, Mister Chairman. Mister Carter, one of the main ways to do oversight is through reporting requirements from the administration in congressionally authorized programs. The SBA has not published data on the SBIC program, typically done through the SBIC program overview report since September two thousand and twenty four. SBA not published this data since fiscal year twenty four.

Thank you for the question, uh, Congressman. Um, the opportunity for us, and I, I've been in this seat since August of last year, and one of the first things that I did was to analyze our data, analyze our technology and the resources we had, because as someone who's managing the division, uh, the office, you need to see the data to be able to understand it. And what I would say is that we've got a huge opportunity at the SBA that our CIO is focused on. he talks all the time about how there are fifteen different data centers right throughout the SBA that he's trying to rationalize and reconcile. Um, and I've been focused on this uh with with industry colleagues since I've been there. I'm pleased to say actually um we're gonna be producing uh an SBC annual report in the next two weeks. I've got uh my draft of it, it's not quite ready to be published yet, um but we're very, very focused on data and we're also similarly focused on it for the SBAR. Um uh and and you know our first focus was to help work with Congress to get that reauthorized and that was what I spent most of my time in that uh part of my office on, for the first six months, but it's a high priority for us and I appreciate you flagging it for us.

Yeah, thanks. So you answered my next question, so we can expect it in the next couple weeks?

Um,

The report?

that that is that is uh that is my hope, yes, uh barring unforeseen circumstances, but I I I've uh my team and I have been working late hours to get this done as as soon as possible. And and the reason uh for SBR uh for private equity performance data, as you may appreciate, you have to benchmark it versus the industry. And we just now got our two thousand twenty-five industry benchmark data is in the middle of May and so we've been waiting for that data and we're we'll have an annual performance report to you as soon as possible.

Great. And and with that, would you be able to provide a timeline uh to us, to this committee, on uh when you expect the SBIR report to be uh sent in?

You know, I don't have a timeline for that yet. What we're focused on first and foremost is uh updating our our policy directive given the the great legislation that uh that this body helped to pass uh and there's a significant amount of work involved in that and as you can imagine there's eleven major agencies but there's probably forty sub-agencies that we all work with and interact with for all our policy directives and my team's working diligently on that but as an administration we're incredibly focused on getting that report out as soon as possible

uh and i'm sure as you can understand you mentioned that you need to see all the data in order to manage So do we. We need to see all the data and for us to be able to conduct oversight and manage as well.

Absolutely.

You know, uh, GAO recently did a review of potential use cases for artificial intelligence systems at the SBA and specifically noted the potential for using AI to fulfill reporting requirements. Is that something your office is actively considering?

Absolutely. We have an AI czar, uh, and an appointee in each office. And, uh, we've, uh, and, and it's As you may know, I I am a late adopter. Um, some of the young folks in our office are unbelievable with it. And actually, I I literally have a list here of all these incredible companies that are in your districts that we were able to do by using AI to analyze our form uh four sixty eight data for the SPSC program as well as the SPR data so um I think there's a great opportunity and use case for it.

That's great. I'm gonna shift gears a little bit, Mr. Carter. Uh, Congress awarded nine million in each of the past three fiscal years for their growth accelerator competition program. To date, the SBA has only awarded five point seven million, uh, with the fiscal twenty-four funds. What is the, what is the remaining twenty-one million being used for?

Thank you for the question, Congressman. Um, uh, one of my first jobs, again, in the office of OII was to focus on all of our programs. The administrator asked me to evaluate them all and make sure that they align with the priorities of our country and with the priorities of the administration and so we're doing that and I'm, um, I'm, I'm excited that we're in process right now of getting our new uh GAPSI program out. Um, and again, uh, without committing to specific dates, it's in process and - and hopefully - I mean, certainly before September thirtieth and before the end of the fiscal year, uh, that program will be out and you'll be able to - to - to look at it.

So, I - I feel word as you sit here that you're gonna obligate those remaining funds?

Uh, uh, I - I - I'm doing everything I possibly can in the administration is to obligate those funds, yes.

Thank you. Mister Carter, uh, regional innovation. innovation clusters RIC are an important uh part of the entrepreneurial ecosystem, helping small businesses launch and scale their businesses, why did Doge cancel seventeen RIC programs grants?

Thank you thank you for that question. Um, similar, uh it's a similar approach. Uh, the administrator asked everyone at the SBA to focus on all the programs and to evaluate them based on uh their alignment with the mission of our country, their efficacy, their ability to to serve small businesses in our country, And uh and that's what we're doing with uh the RIC program as well.

Thank you so much. Uh, Mister Chairman, before I yield back, I'd like to enter into the record this June tenth article from uh Fed's group, innovation on ICE, how Doge derailed an SBA tech program.

So good.

Thank you so much and I yield back.

Uh, gentlemen, Nils back, and now recognize Mister Muser from the great state of Pennsylvania for five minutes.

Thank you Mister Chairman. Uh, thank you Mister Cotter. Appreciate you being here. Thanks for your work at the uh SBA. You and Administrator Loeffler have created some and revitalized much of the office and created some uh some important reforms. My understanding, before I get to some of my questions regarding uh the All of the America Act and the SBIC program um so when you folks entered a year and a half ago uh my understanding is SBA had somewhere in the neighborhood of fifty-f- three hundred, fifty-four hundred employees that was up from about twenty-six, twenty-seven hundred. So basically double. Um, when we went and visited the SBA, there was nobody there. I think they told us that maybe fifteen percent of the employees were, were showing up for work. Everybody else was remote, who knows, throughout the, throughout the country. My understanding now is, not only have you right-sized it, it's a little higher than it used to be, about three thousand employees, but loans to small businesses have actually doubled during that time. So you have half the people and double the loans. I'd say that's pretty pretty serious improvement in operation. Could you expand on that?

No, absolutely. I mean, it it's it's all it's all the same theme that uh the Administrator and the President have focused this administration on on uh being effective, and on streamlining, and it's incredible to see what they've done. And in fact, I I just this week had one of our team members who's moving from the Portfolio Management group into exams within the SBC business. She threw a party for her bosses. Normally the bosses would throw the party for her. And in this meeting she was thanking them for all that they do for her, and how they came together last year with so much opportunity, they streamlined things, and they worked as a team and got so much done. Uh, and, and another important thing to, to, to contextualize this is, is the COVID era, right? I mean, this committee, this office, um, put one point two trillion dollars out in a very short period of time to help save our country at a at a valiant time. And this office had to staff up materially for that. And it, it's very rational that as that winds down, that we can staff back down again to to pre-COVID levels and and do more with less.

Well, good work and it and it does sound rational. So, onto the SBIC program's um fifty-three billion dollars in combined private capital. Um, largest amount in the program, sixty-seven year history, so congratulations to you there. Uh, your flagship program is the SBIC program, which by the way is run tremendously well, uh, by some some people in this room, so we appreciate that. And um, so w- w- with the All of America Plan and the increases in the Inve- Investing in All of America Act, focused on rural areas, tech, um, manufacturers, uh, tell us how that legislation has allowed you to serve more of where it was intended to serve and and support loans.

I, again, uh, I, I just wanna thank this body. Thank you for sponsoring and, and, uh, Congresswoman Cholton for sponsoring. Uh, it's an it's an incredible bill. I know it's been worked on for years and and, you know, many folks in this room have been very focused on it. Um, I I think it's brilliant. Um, you look at what's happened to you can look at CPI, but you can also look at like the Russell two thousand for those, you know, investment nerds. Um, it's gone up ninety percent since two thousand fifteen. So if you just think about it in like purchasing power that our funds have, like it's ninety percent lower. How do you not done this, right? So it was huge, and to me the brilliance is the, i- is the bonus leverage, that it's a way that, that, you know, we're providing capital but, but our country has such a need right now to re-industrialize. You know, we're, we're in a geo-economic competition against very strong adversaries that think in decades and have been doing this for thirty years and hollowing out our manufacturing base you've created an incentive for them to invest in manufacturing, critical technologies, rural, et cetera, and, and it's, and it's economic, right? It's it's economic, it's rational, and it's scaling the investors that are professional investors, as opposed to us picking all the companies ourselves. It's brilliant.

Well, I will tell you, and on behalf of the chairman, myself and many others, we're former, we, well, some of us continue to have small businesses and all or even larger businesses. And, uh, you're you're talking like someone who's very much focused on advocating expanding and and, uh, um, helping, uh, small business. So that's what this committee is all about. So it's great to hear what you have to say. You also mentioned in your testimony um in um how you're removing regulatory barriers to facilitate SBIC SBIC investment in critical minerals. So maybe you can talk about that a little bit.

Yeah, uh, we our our SBIC co- thank you for the question, uh, Congressman. Our SBIC companies were not allowed to do project finance and we enabled through our regs through our re- re-regulations for them to do uh project finance uh for critical minerals and mining companies. which is allows them to invest in specific deals, specific like assets and investments. And it's it's a great it's a great change and we're hoping that uh it will be taken advantage of and it will expand. Uh, is it?

Thank you. My time has expired, I yield back, Mister Chairman. Thank you.

Uh, gentlemen, yield back and now recognize Mister McGarvey, one of the great catchers of all time, uh, from the great state of Kentucky for five minutes.

Thank you, Mister Chairman, we we still came up short in the game though, so uh

That's why I brought it up.

I was cheering for you all and I was scared to death.

walking. Yeah, yeah.

Just being a fifty year old man, I wou- I can't believe you guys could do that, so congratulations.

Well, I I broke my foot two years ago in the game, but it was uh, it's it's gonna be back. Um, so, no, thank you for being here, Mister Carter, appreciate this, and and look, I I think this is a really important hearing. Um, uh, especially now as as we're all looking at the two hundred and fiftieth anniversary of our country, the legacy in this country of being able to build a business, of entrepreneurship, of innovation, uh, and and importantly, You know, I have sort of an overarching theory of government, right, which is if you want more people to do something, make it easier. If you want fewer people to do something, make it harder. We've made it easy to innovate in this country. And one of the ways we've done that is by having the governor as a, uh, government as a partner in the innovation for small businesses. And just look at what that has been able to produce. GPS, the internet, semiconductors, MRNA vaccines, look back even further at precision manufacturing in the Civil War, telegraph lines. cutting edge lighthouse lenses, all of these world changing innovations and inventions began actually with investment from our government into small businesses. And I think when the government works as a partner with the people who are willing to innovate in our small businesses when they provide seed funding right so we're talking about this SBIR small business innovation research often referred to as America's seed uh program, right? Of America's seed research. Then it makes this type of thing possible. Since the second world war, US research and development has been the envy of the world over. Uh, so have our universities, so have our federal labs. And so, you know, one thing I do wanna point out, it was troubling for a lot of us on this committee to watch the very top levels of this administration attack and tear that down. When you had the president, when you had Elon Musk, when you had a kid who referred to himself literally as big balls going in and tearing down the system that made this legacy possible. That is something that is alarming because of what it has stood for for so long, what it has produced, and I think what everybody in this room wants it to continue to do as we move into the future. Um, I th- I think you believe in that legacy, Administrator Carter, and - and I am - am glad you are here, so I hope you'll continue to fight for it and for those small businesses that count on our country to be the incubator, right? To be the engine that has produced this, to work as a partner, enable our small businesses to do what they have always done. Now that I've said it, I wanna uh move on to a few specific questions. For many of the SBIR recipients, federal support ends once technology has been proven effective. And this is the period where we see, and you've probably heard this term, quote, " the valley of death" for small businesses. Uh, not something we wanna have happen, it's where these companies struggle to transition from development to commercialization. And so, are there existing federal programs that can help SBR-funded firms survive that valley of death and how is SBA connecting b i r recipients with those programs and resources

thank you for the question uh congressman uh uh absolutely uh one of the things that i'm so excited about in the siber reauthorization is that there's an emphasis on commercialization and as we update our policy directives we're gonna be very focused on that there's training for contracting officers within the government agencies um and and we're orienting all of our programs within o i i on this notion of commercialization and so couldn't couldn't agree more with the sentiment uh we're incredibly focused on that. It's not an easy problem as we all understand, like acquisitions within Department of War, which is as you know is fifty-six percent of the SIBER program.

Mm-hmm.

You know, it's a massive challenge and opportunity for our country, but we're gonna do everything we can within our programs to support that. And we've got a tremendous dialogue with our partners at all the agencies, in particular Department of War, which is our largest partner for SIBER.

Yeah, and and you mentioned a bill earlier introduced by my colleagues. Are there additional tools or resources or things we can do to be helpful that would help more companies successfully make that transition to commercial scale production.

Well, we appreciate absolutely the support of this committee for all of our OIA programs. The Administrator really views these as point of spear for for all that we're talking about and has been in her leadership team has been incredibly supportive of what we're trying to do our resources and all that we need um and we thank you for, for your support. I'm sure we have a lot of ideas that we could talk about and our Legislative Affairs team would love to connect with yours and and I'd be thrilled to to engage with you on ideas.

Be be happy to, I look forward to that, seriously. Um, Last question and then quick time I have remaining. We often see these companies, they're fighting to survive, they're spending all their time trying to win these federal contracts, then they lose the edge that made them the innovators in the first place. What can we do to make sure that businesses remain innovative once they graduate from SBIR?

Uh, thank you for that question. You know, it's it's a great I I I wrote a thesis in college on disruptive versus sustaining innovation, right? The idea that as you get bigger and bigger, it's harder to be an innovator, right? And you almost have to have companies spit, uh, What's so interesting about the SIBR program, we call it America's Seed Fund, but i- if you read the statute, which which I I'm sure you're much more expert at it than I am, um, it's really about small business R and D. And and some of these companies are R and D companies themselves, not necessarily companies that are trying to become the next Anderil or the next, uh, QualComm. And so I I I do think there's a huge opportunity for that, and I think a lot of the work we're doing with our programs that support, uh, the innovation ecosystem as well as SIBR, uh, and our our our regulations and our our engagement with each of the agencies are gonna be very important for that. So thank you for the question.

Thank you, Mr. Chairman. I yield back.

The gentleman yields back. I now recognize Miss King-High from uh the great Northern Mariana Islands for five minutes.

Thank you, Mister Chairman, first of all I I wanna say um on behalf of the people of the Northern Mariana's, I wanna convey our appreciation to Secretary or Administrator Loeffler. Uh, SBA's presence on the ground with regards to the disaster recovery has been um incredible there's a woman who is i think the um information specialist who has been very good about going out in the community her name is renata mason i just wanna give her a shout out she's done an incredible work in terms of you know just the disaster recovery program so i wanna say first of all thank you um so i represent uh the northern mariana islands and we are as remote as it it can get. Right? And uh there's never been a SBI SIBER or a SCTR grant awarded to a CNMI small business and I think in large part because of our remoteness, right? And then we also don't have the financial ecosystems uh that every, you know, that that is available here on the mainland, which basically serving as a barrier to um folks on the ground to have access to some of the programs that, you know, is currently available under the, under the SBA and so I kinda just, you know, want you to talk me through how we get over some of these barriers so that our very hungry young entrepreneurs can be, you know, involved or participate in these opportunities.

Thank you for the question. I was studying your economy last night, think of you and invite me to visit you and then i and and that would be that would be a great

oh you're invited let's go

if i could if you could get administrator leffler to bless a a visit to you on on what looks like a beautiful place that i guess tourism is your main industry um

yeah

uh wonderful question certainly something we're wrestling with with all our states i mean i've got lists of all of all of your states and your districts even and you know with all the awards that we have and it and it's it's it's it's just disheartening to see that there aren't any several awards or s. b. i. c. s. in you know in in in your territory um and what i what i love about what we're doing and and the advances in technology and entrepreneurs uh is that you don't have to be on physical location to make things happen so our SIBR uh we did our our annual innovation summit just after the reauthorization which was important to us in in may for two days and it was virtual and so we had three days of incredible virtual um seminars lessons engagements with each of the program managers so someone you know in in your in your territory could actually be there and an entrepreneur could learn how they can engage with the CIPRA program. Uh and so I think that's an opportunity um not an easy thing to to solve for sure, but certainly something that we're focused on for for all the states uh you know in this great union.

So, thank you for that and uh and I'm I and I am looking forward to welcoming you and Secretary Loeffler hopefully as well to the Northern Moronis. I know that the chairman has been trying to do a cold dell out there, but just the schedule's having aligned and I think it's very um you know for folks to actually set sight to the ground and kinda see what the conditions are right you know um we just got as i stated uh we just got hit by a super typhoon which has damaged our utilities grid and so there's a lot of conversation as to uh how we can bring you know new innovation so that we're not wholly reliant on fuel that we get from southeast asia right and uh right now our utilities uh has gone up from twenty two cents to about forty six cents per kilowatt. And, you know, that's just cost prohibitive for for many people on the island. And so, uh, what I'm very curious is how do we incentivize researching, testing and commercial deployment of innovative technologies like that in the CNMI? How do we open up these opportunities, especially given the fact that everybody talks about our location being strategic to national security, right? But it that's not coming with the investment, supports the economy. And so how do we have these conversations and and look towards opportunities like that?

Thank you for the question. Um, you know, I I really think this, while it it seems that it impacts and it's so it's so tangible with what's occurred there and I and I'm I'm sorry for that and and it was very kind of you to give the shout-out to a a member of our team uh you know Chris Stallings and Administrator Loeffler are on the road all the time incredibly focused on disasters and it's, it's, it's uh inspiring uh what they do and and Um, but what I would say is, this is a challenge for our entire country. We have allowed China to hollow out our industrial base. Like, we, like, I was at a critical minerals conference in New York a, a month or two ago, talking to people about, OK, well, if we have mining, that's great, we need mining, right? Well, we actually can't refine anything. Like, we have, we can do our mining and we still have to send it to China to actually be refined. And so, these are major problems that, that our program, SIBER SITR, and, you know, in particular, and all the national research labs, et cetera, are focused on. But our our SPSC programs and other programs can be focused on it as well. And so it's an urgent priority for our entire country. And I I appreciate you flagging it for us.

All right. Thank you. I'm out of time. I yield back.

Gentlelady yields back. I now recognize Miss Skuldin from the great state of Michigan for five minutes.

Thank you so much, uh, Mister Chairman, and thank you, Mister Carter, uh, for being here. Really appreciate your your knowledge on these programs and your enthusiasm. Appreciate the love, uh, for investing in all of America. Uh, it is such a common sense bill. I don't know if Dan remembers the the first time we passed this uh out of the house. We were walking down the house steps together after, you know, after we passed and there were throngs of reporters and it was like, they must be so excited to talk to us about this common sense bill that is going to put more uh capital in the hands of small business owners no they were there for uh another member uh of our our congress who was you know stating the latest sort of uh Um, and I often refer to that just as like when people ask is Congress actually getting anything done? Yes, it is. And I'm, I'm so proud and I will give credit where credit is due. I'm grateful to President Trump for signing this into law, and, and it's gonna really make a, a big difference. There are very few bills like this that have actually been signed into law, the, this Congress, and we're, we're really, really grateful. So, um, to that end we're gonna stick with investing in all of America just a little bit. Can you tell us when the SBA plans to undertake the rule making and and what you anticipate that looking like in terms of the the timeline and actually getting this getting this going.

Yes, and you know it's interesting what I've learned in this role is that, uh thank you for the question, um is that it's very important for me to dig in personally, um you know we have amazing people, we have an amazing staff, we have forty year veterans that are just patriots beyond all patriots um that are the leaders of the OII that are career staff, um but what's important for me is to dig in personally and I do bring an outside perspective and i have sort of a perspective of what l p s might experience through our programs and we're trying to make it easier for them that you know the investors in the funds the g p s who are the actual managers of the funds

mmm.

and um you know we so we did a a simplification and and a re-regulation if you would of our program uh earlier last year that i wasn't personally part of now with this invest uh invest in all america act we are doing it again and i've uh i've literally spent fifteen hours my team so far i have a list of a hundred and forty questions that i'm about three quarters of the way through and we're doing it again as quickly as we can and we've

ok

got very able staff that are focused on it um our our most urgent priority recently has been to get the the annual report out and the next is is updating the regulations for the act but we're very very excited and we did put out a letter to the industry giving them instructions on how they can access the leverage uh now

ok and again thank you for that context timeline

of course thank you

Do you do you have a timeline for yes, yeah, yeah, yeah.

Oh, timeline. Oh. I thought you were just thinking me. I thought you were very happy with it.

I am I am also very grateful for the context,

Yeah, very,

but the question was was about the timeline.

yeah, yeah. No, so so it's very easy for us to uh for the for the increase in leverage from one seventy-five to two fifty it's very easy for us to just say that's done and submit your request before August fifteenth so we're getting requests for those,

OK.

we're processing them on a case-by-case basis we don't want we just want to make sure that people aren't just taking more money to have more money to charge more fees we want to make sure it's not gonna change their investment strategy

K.

and then it's gonna fulfill the the intent with which you with with which you authorize that. We have to do re-regulation for the bonus leverage. That's obviously new and creative and ingenious. And so that's taking a little bit more time, but I've got a draft um that they told me as soon as I'm done with my hearing, uh should be in my inbox and I can focus on it, my team,

OK.

tomorrow.

All right, great. Uh

So so as soon as as soon as we possibly can. We're working with with utter urgency.

Uh, Heard, Heard, we would love to follow up with your team just to to stay engaged on that because I,

Perfect. Absolutely.

I think, you know, the devil is in the details on those kinds of

Yeah, no, thank you. You know, it's it's interesting, um,

Yeah.

you know professionally as as a professional investor my whole career i've kind of thought of myself and and you know as almost like a laissez-faire capitalist like free market kind of guy as i've been in this job and and studied what we're facing as a country, and understanding what's really happened um i i think that i i'm an industrialist now i it's like i think that these are important programs but there's a different ways to do it you know uh office of strategic capital is doing it one way and do e is doing i'm like they have direct dollars that they're putting to work in in in direct loans this program has an incredible uh ability to scale and and again the ingenious part of it is that you're incentivizing them but we're not telling them exactly what to do and uh exactly what to invest and we're letting the professionals do that, but we're giving them themes to invest in, I think it's brilliant.

Yep.

Um we meet with companies all the time each week, uh my team is meeting with companies today that are trying to get into our program and they're constantly telling us that the banks aren't lending to these companies and so they're able to get in and lend to them and it it it's proving this, the the the virtue of this program, that it's it's providing capital to companies in places that they're not getting it otherwise. And so again, brilliant program. I think it should double, triple, quadruple. I think it's an amazing program,

Agreed.

especially given what we're facing in our country right now.

Thank you. Let's work together to make it happen. We we would love to do that.

Thank you.

Thank you.

Gen- gentle lady, he was back, and I now recognize Mister Fuller from the great state of Georgia for five minutes.

Thank you, Mister Jayman, and thank you for having this hearing. Uh, Mr. Carter, thank you for being here. I I I think this will probably be the the toughest question that you'll get today. Uh, I saw in your background that you went to Harvard and to Penn. I was just wondering if you couldn't get into Cornell.

I wanted to play football at another school and they told me I wasn't good enough, and so, uh, it was disappointing.

Yeah.

I I I wouldn't I didn't get into Cornell, actually. Correct.

Well, well, I I appreciate the honesty here. So, yeah. Uh. Now to the the uh topic of the day, one thing that I I tried to to share. I'm from Northwest Georgia and there's a an industry that was essentially started by a young entrepreneur, Catherine Evans. She saw this quilt in the eighteen nineties and wanted to uh um do um how how that quilt was made, figure out how it was done. It was an art form that was basically lost. And this young teenager in our community, because people started to invest in what she was doing, created one of the largest industries in in my district, the carpet and and flooring industry in Dalton, Georgia, and it all started with one teenage entrepreneur in Northwest Georgia.

Mm-hmm.

One of the things that I want to celebrate with President Trump and Administrator Loeffler and with the work that you're doing, uh, for far too long investment capital has stayed on the East and West Coast. It didn't go into Appalachian communities, uh, like mine and what I represent. So if you can kinda expound on how your leadership and the work you've been doing been um getting capital into underserved communities like in Appalachia.

Thank you for that great question and and for the story. Uh it's again it's been really fun, I I went through all of your districts and had my team help me come up with uh with companies in your districts that have been benefited by our programs, and when you said Dalton Georgia I'm like oh I think that's one of them, like there's a plant-based compounds uh uh company that is that is manufacturing compounds for type two diabetes um and and and that is really, again, like American made critical raw materials, like we know the pharmaceutical like base um ingredients are are have been totally like we invented them and now they're over there.

Yeah.

And so it's brilliant what's happening in Dalton, Georgia. Um, again, these programs are incredible because they're accessible by a kid in a garage, or they're accessible eh they're accessible by, you know, the Torrance, California firms that I meet with that are like R and D companies that are that use the Ciber program to generate incredible um innovations. that that VC is not gonna invest in right like VC is not gonna invest in a repaired an old part for the F thirty five that this team can update and do using the SIBER program and so um and and again SBICs we've got them spread across the country um we're we're working urgently to expand that we don't lower our standards we have very I mean we haven't we haven't it's been zero subsidies since nineteen ninety nine our team's phenomenal the people the process the way they do due diligence, the way they monitor, the way they exam, um, we're not lowering our standards. That's not what this is. But we're working aggressively to double, triple, quadruple this program so that we can get more capital out to the small businesses across our country that need it not just in the coast.

No, and thank you for that work, too. And one of the things that I've seen you become most animated about, besides our conversation on universities, was when you started talking about the Communist Party of China and what we're facing there.

Yep.

Um. I think this is an issue that I I I came to Congress uh to to work on. Uh, I think far too many Americans don't understand what we're facing when we come, uh,

Yeah.

when we talk about the threat that the Communist Party of China, um, uh, poses to our country and our national security. I think what you're talking about with critical min- minerals and rare earth, uh, uh, metals is that race is just as important as the space ra- race was to this country. And Americans just don't understand

Yeah.

how important this is. If you could just tell Americans, um, what is that race, how do we compete, and how i- important is it for us to to win that race?

Thank you for the question. Um, obviously it's something I've become passionate in about, uh, you know, in particular since being here serving in the government. Um, I, it's, it's mind boggling. I mean, you can go back and read their doctrine for that's thirty years old that essentially says that, we're in an economic war and we don't follow the rules of the rest of society like their their war their doctrine is to steal from from their enemies their economic enemies you know it's estimated low-end five hundred billion dollars a year that is being stolen in in economic intellectual property probably more like two or three trillion right and so like the foci work that you've done on the SIBR uh reauthorization is huge we're gonna we're gonna bolster that and it's it's ironic that you know, the small businesses are leading out on foci. But it's, you know, it's there's all sorts of different standards. There's all sorts of different challenges and threats, even within DOD who, you know, are are are expert at this. So it's a it's a huge urgent need for our country. Uh, we saw that in COVID when we had supply chain choke points and we had inflation and all these other challenges. And so we're we're doing everything we can working with our partners at USG to address that problem with NOII and with our programs and at the SBA under, under administrative uh Loeffler's leadership. She's incredibly focused on it.

Thank you, sir. Mr. Chairman, uh, you'll be you'll be back.

Uh, gentlemen, you'll be back, I now recognize Miss McKay from the great state of New Jersey for five minutes.

Thank you, uh, so much, Chairman, and thank you to our ranking member for convening today's hearing. And thank you to the Associate Administrator, Carter, for appearing before this committee today. I can say it's been a little refreshing having you here today, and I don't usually say that a lot about members who come before from this cabinet here, but thank you for being here. Uh, small businesses are extremely anxious and with good reason. Across the country, entrepreneurs are being squeezed by the affordability crisis, rising costs, and increasing uncertainty about whether they can keep their doors open. The system is failing them, and the consequences are extremely real. Recent polling shows that sixty-seven percent of small businesses have seen their expenses increase in just the last three months, while half have watched their revenue fall. These are real people being forced to raise prices, delay hiring, and lay off workers. In my district, New Jersey's tenth, I regularly hear from small business owners struggling with rising operating costs, inflation, and uncertainty about the future. This is the reality facing startups and small businesses trying to survive and grow. Instead of easing the pressure, we've seen in some sorts that this administration has chosen to pile on more uncertainty, imposing. broad tariffs, shuffling agencies, and pushing policies that make it harder for businesses to truly plan. The people need SBA to step up and defend them more now than ever, even with some of the progress we've seen happen in just this Congress with bills that we've passed with with you know support and partnership from both sides of the aisle still small businesses need more small businesses are telling us that they do not know if they can make it week after week month after month. Their costs are just rising and rising. Associate Administrator Carter, do you believe small businesses are better off economically today than they were a year ago, in your opinion?

Thank you for the question, Congresswoman. Um, the the challenge that we've been talking about is so important and so real, and our focus at at OII and at the SBA is to support the small businesses across America and we understand um, we understand that the all the challenges that we face um and and i i think you know you mentioned tariffs um i i am again like you read the economic text books that that you know that we that we studied when we were young and it talks about comparative advantage and how rational it is but we're not operating in a rational world we're operating in a world where our main competitor globally doesn't obey the laws of economics they're not you know this sort of like perfectly rational utility seeking economic actor they are operating uh they're subsidizing industries to basically make it so that we can't compete and so that we don't have those supply chains. And I'm I'm so thrilled that President Trump had the courage to stand up and demand fair trade, right?

But with all that being said, I'm still looking for the answer. Do you believe they're doing better now than they were a year ago, small businesses?

I think, yes, there's indicators that small businesses are doing better and importantly, like, what's the time frame on which we measure? if we can actually have fair trade for our companies while there will be a transition period for sure and we're incredibly focused on that we're you know uh the administrator launched the on-shoring portal that came out of a meeting where someone said oh i can't i have no choices but to but to go to china uh because my textile is only made there someone at the table said oh i actually do that and that started the manufacturing portal

so let me just um interject so despite the fact that half of small businesses report declining revenue and

So the, thank you for the the follow-up, the the changes that are being made in our country right now, that are long tailed changes, they're not all gonna happen overnight, right? It's, we're not gonna transition from fifty years of of export, allowing our um industry to leave our country. That's not gonna change overnight, but the changes that we're making are making us all better off. And we're focused on small businesses and on serving them, um,

So basically,

in the programs we have.

so basically in what you're saying is that you acknowledge that they are struggling, like small businesses are struggling and they're not better off because you're saying that things are not gonna happen overnight with the policies and the plans that you guys have you know implemented they're still struggling despite all of what you said and how proud you are of Donald Trump the of the president. still small businesses are struggling

well uh uh absolutely

i think we can i think it's ok to agree to that like there are small businesses who are watching this who are struggling and i invite you to come to new jersey's tenth congressional district

uh there

at any given time i know kings hines has the great sun over there in her district but you're more than welcome to come to new jersey's tenth congressional district

i i i wanna come i i lived in new york i lived in new york city and my sister in law lived in new jersey i love it it's beautiful there you've got two great you've got amazing and s. p. s. c. companies there that i'm looking at yeah especially packaging manufacturer had a twelve million dollar investment you've got defense communications for off grid connectivity with siber would love to to come there uh no i mean of course at any time i mean we're i mean i'm a small business owner i started a small business with my partners in two thousand seventeen nine of us we're all wearing five different hats and struggling anyone that is a small business owner that's the definition of being a small business owner you struggle uh and there's macroeconomic factors all the time that cause us to

thank you

struggle

i'm gonna have to um cut you because our uh chairman is banging on his gavel. Um, but thank you so much for your questions. And with that, uh, Mister Chairman, I apologize and I yield back.

Thank you.

It's just a habit. Uh, gentle lady yields back, and I recognize Mister Weed from the great state of Wisconsin for five minutes.

Thank you, Mister Chairman, thank you, Mister Carter, for being here. It's so refreshing to see somebody that, um, like you said, started and founded and worked in a small business and struggled, and you know exactly what it takes, uh, to run a business, and, and of course, drives our economy is small businesses. So it's so great to have you here working in an agency, uh, along with Administrator Loeffler, who too, who also was in in business for herself. And I see you have your loving and supporting beautiful family behind you. So welcome to all of you as well. Uh, since the beginning of the Trump administration, we've seen a new emphasis on supporting American manufacturing. Because of this, many manufacturers are looking to increase

Thank you for the question and and for the the kind comments. Um, the CiberBorgen is incredible, I mean if you look back at the history of public-private partnerships for R and D and for innovation, um, you know it's not an easy thing to do, right, we have the national labs, we have all these different approaches to it, uh, and, and pointed out earlier our country's been a leader in innovation and it's what one of the things that makes America so amazing in our capital mobility um the CIPR program which is a huge focus of ours as well as the the programs that support it the FAST program and and our other programs that we spoke about earlier today are are focused on helping innovators get the access and get the training and get the support they need so like our our innovation conferences we introduce them to the program managers for each of the different agencies and as as everyone i'm sure understands that the agencies themselves are the ones that create the topics, and you apply directly to the agency, and so that's how you get the access. So our job is to, is to, is to train them, to support them, to help them be more successful in that. And then importantly, as they're trying to commercialize, which is just as hard as the innovation at times, um, how we can support them in doing that.

Thank you. I was very pleased to see the President sign the, uh, the bipartisan Investing in All of America Act and the Small Business Innovation and Economic Security Act earlier. this year. How how do these laws strengthen OII's programs?

Oh they're huge, they're huge. I mean the the the sort of six major changes that came about from SIBER, I could talk you know for for minutes about each one of them, they're all they're all very impactful. We talked about FOCI and due diligence earlier, that that's an important one. Um you know and commercialization, like we're gonna continue to focus on commercialization and making sure that we both track and hold ourselves accountable hold the hold the the company's accountable, the the innovator's accountable to commercializing. Um, and so that that that that program, that reauthorization is is vitally important. And again, we've spoken about it already with Invest in All America, but I I think it's a a brilliant way to incentivize the type of investment that we need, um, in a in a way that's different than just making the investment. Like we've all seen the challenges of the government making every investment decision. It's it doesn't always go well. Um, this program allows the professional investors who are the experts, and it highly incentivizes them, through the structure of a fund, to have those companies succeed, unlike loans where they get securitized and there's not that accountability in that same time. These managers get paid more money if their companies succeed, and that's that's using economic principles to incent what we want. I think it's a phenomenal partnership. So, again, thank you, uh, for, uh, for, for the increased the leverage caps, for the bonus leverage, for the SIBA reauthorization, and for the support of the OII programs, which, which we feel are our point of spirit for what's important in our country right now.

Um, I wanna thank you and of course Administrator Leffler for really making a priority to reduce the regulatory burden. Um, here um, you know, in this country and with the SBA, my bill, the Dump Red Tape Act, which passed the House last year, it, what it does is codifies the SBA's um, red tape hotline which allows small businesses, you know, the owners, to report burdensome federal regulations uh, that, that they encounter. What regulatory burdens have you uh, in your office help to eliminate have have you gotten feedback through through that hotline

um i'm not aware of getting thank you for the question i'm not aware of getting feedback from the hotline that is is very probable but uh you know ours is a little more esoteric and a little more niche in terms of our programs um but we're constantly seeking feedback from everyone where you know i'm a i'm a i'm a former l p and a former g p and so i can understand the world from both the investor and the invest the the invest the investment fund perspective and so when i go through the regulations we've already done some incredible changes where we made it easier for subsequent funds to get to the program so we're already seeing subsequent funds coming through more quickly than they had in the past because we made it easier and there were some burdensome regulations that were in our regs for those but as we're going through it now again not just to update it for the invest in all america but uh we're literally asking why why why why why for every single thing that's there to make sure that it's not unnecessarily burdensome we're not gonna lower our standards we're not gonna lose money in this program uh we're gonna do everything we can to not right uh but it's it's in a it's a it's very much a focus of ours it's a huge focus of the administrator and she has that sort of a client focused perspective that comes from the private sector that she is instilling in all of us

well keep up the great work you're doing a wonderful job and with that i yield back

my gentleman gentleman yields back i now recognize mr. Cisneros from the great state of california for five minutes

thank you mister chairman and i wanna thank you and the uh ranking member for having this important hearing today and thank you mister carter uh for being here we don't often get somebody from the However, I'm a I'm a bit surprised we're only now hearing from you, given the SBIR and the STTR programs under your purview have recently paused for six months Given your stated commitment to small businesses and the effectiveness of the programs you mentioned in your testimony, I would have expected more urgency and engagement with Congress to get these programs reauthorized. I'm glad we are there for the sake of America's small business innovations now. I do hope we can count on working with you and your office more proactively going forward. I also have concerns regarding the regional innovation clusters under your office that previously had been bipartisan had bipartisan support. The clusters help match small businesses with technical assistance, providers development and financing opportunities and mentoring, among other things. They touched on a lot of important topics such as advanced manufacturing, biosciences and health, unmanned aerial systems, critical minerals, cyber security and defense. In two thousand twenty-four, the SBA awarded fourteen new awards to innovative small businesses as part of the Regio- Regional Innovative Cluster Network. It is my understanding that the Trump administration canceled some of these grants because of Doge. I agree with the ranking members' quote from a recent article that read, " If we are serious about making the US m- the most innovative country in the world, it makes no sense to walk away from these programs." Unsurprisingly, like the Like with the SBIR and the STTR, we didn't hear from you or the SBA. We found out about these cancellations as they happened. The small businesses you were committed to, according to your testimony, were just hung out to dry with these cancellations. There was an announcement last year from you, from New Clusters that went nowhere. Millions have been appropriated for regional innovative clusters over the last few years and Congress has no idea how much has been awarded or how much remains unobligated. So, Mister Carter, of the money Congress appropriated for regional innovative clusters, how much has been awarded and how much remains unobligated?

Thank you for the question. Um, and, uh, we just want to state that the, as I mentioned before, um, Administrator Loeffler has been, and, and, and let's make no mistake, like, the, the

Uh, it, it's a simple question, how much has been obligated and how much remains unobligated?

So let me get the data, the the numbers for you, but the essence is, other than what we talked about before, that went oblig unobligated last year for RICs, uh, we are planning to obligate all of those, all of the money appropriated to us by September thirtieth.

You don't know, you don't have that information with you right now, how much remains.

I have it with me, I just don't have it all memorized, but

Well, then you don't have it,

I'll

if you have it written down somewhere you could, you would have it with you, but uh, Get back to me on that, can I?

Yeah, super. Well, yeah, absolutely.

All right. Um, so there are four RICs listed on the SBA website, but under uh the Office of Investment and Innovation page under the RIC programs, it mentions twenty-five RICs across the country. Why the discrepancy? Was the uh the the uh website administrator, was that one of the doge cuts that got cut there when they came through? Um, why the discrepancy on the websites?

Thank you, thank you for the question. Um, the accurate information is for RICs that are existing, to their focus on defense industrial base, to their focus on critical minerals. Um, and they're doing a great job and we're engaging with them very regularly. And I mentioned before that we have some technology challenges. I'm not exactly specifically aware. I can't verify, um, that. But I, I trust that that's the case, and so we'll work on fixing that. So, so, thank you for bringing it to our attention.

All right. Well, let's get that fixed. Uh, the SBA canceled clusters throughout the nation, including in California, that had hundreds of small businesses depending on them. What did your office do to ensure that these small businesses could stay afloat without the resources they were relying on?

I'm sorry, could you repeat the question?

So the you canceled all these clusters throughout the nation. So we said there was like seventeen that were canceled, including some in California that had hundreds of small businesses depending on these clusters. What did your office do to ensure that the small businesses could stay afloat without these resources?

Got it. Thank you for that. Um, uh, appreciate that. So, um, all of our programs were focused on, uh, aligning with the priorities of this administration and making sure that there's accountability for these programs and that they're effective in what they do, and that's what the administrator tasked us to do and that's what we've done. Um, you know, while it's our intent to support small businesses, uh, it, you know, th- this is a, this is a capitalist economy, right? It is not the government's job to support uh, to to make sure that a small business doesn't fail. That's the risk that we all take as entrepreneurs.

Well, uh, the fact is these these these companies were left out to dry because the ro- carpet was pulled out from under them and that's unfortunate that it was done by this administration. And with that, Mister Chairman, I yield back.

Thank you.

Uh, gentlemen, Neil's back, and now I recognize Mister Schmidt, great state of Kansas, for five minutes.

Thank you Mister Chairman, I appreciate your convening this hearing and uh, Mister Carter, thank you for being here with us today. it's such an important area that uh you operate in and your team operates in uh as has been discussed both for the country's top line and also for many of our districts and our communities uh getting things from concept to market and and the role you all play in that uh that chain uh i know it's been discussed uh a bit uh sort of the intersection in in the work you all do with respect to the research universities i wanna focus on a slightly different aspect of the same issue um and just to frame it uh uh to make the point i mean the the the mostly division one the major research university is critically important to this country's uh future to innovation um but so too are smaller colleges and universities at least to the extent they choose to fill a role there so for example in kansas uh we're very proud of our three major research universities none of which are in my second congressional district though we love them all um but we are particularly interested in our three regional public universities pittsburgh state and poria state uh uh washburn university and topeka and in the half dozen much smaller private colleges and universities that I represent, some of which are performing similar types of activities. They may not be doing, you know, front-edge research on on uh uh the the chemistry of polymers, but they're, Pittsburgh State for example is very much in the uh graphene commercialization stage and and how you do the research to get from the scientific discovery to something that uh an entrepreneur could pick up and run with. Um, can you talk a little bit about the role of those smaller uh universities, may not be major research universities, but how how you all interact with them, so that they get the type of assistance you're able to provide, or or the folks who want to invest uh based on ideas that they're helping develop uh get the assistance you provide.

Th- thank you, that's uh, I really appreciate the question Congressman. Um, the the focus that we have right now, especially with reauthorization and with all the work we have to do, that that we've been talking about and that we're very focused on, Um, just to the the individual agencies that, you know, forty-four or so sub-agencies, the eleven major agencies, they create the topics, they um are the ones that are that are engaging with the research institutions, um with respect to CIBR, um but we do have our federal and state technology partnership, the FAST partnerships, and we have all the other SBA uh partnerships within each state that that are there, um but I I certainly think that um, you know, a- as we focus on administration, as we focus on policy, uh there's opportunities for us to engage more with the universities and frankly, if I I haven't personally engaged much with the universities yet on on SIBR SITR, um but it's, I appreciate you flagging it for me and it's something that we'll that we'll follow up on.

Well I know your schedule's full, but uh we would love to be some of the early engagement and I'd invite you out to Kansas. We've got some folks doing some really sort of forward thinking work and and again, they're they're not they're not so much in the laboratory they're taking the laboratory ideas, they're looking at entrepreneurs, they're looking at uh business needs and they're trying to do the next step of research to connect those. I think there'd be a very very natural fit. Sort of on the related space uh, do you all have any sort of collaboration uh interaction with uh the DIU, the Defense Innovation Unit, to the extent that you might be working with businesses, entrepreneurs that are are working on products or or ideas that that that are in their space as well as uh general business development?

Absolutely. Uh, thank you for the question. Uh, we have an incredible partnership within the SBIC program with the Department of War. It's called the SBICCT program. You're probably familiar with the critical technologies where funds commit to invest over sixty percent of their portfolio into the critical technology areas that the Department of War have have established are their priorities. There used to be fourteen of them, now there are six of them. Um, it is and and and so we've engage we engage regularly. Uh, in fact, the my investment committee is meeting as as we're meeting today and we have often uh OSC representatives there to engage with our SB SBA CCT funds uh and we've personally been developing relationships with department of war for for all of our programs with the SBA and in particular in OII. And with DIU uh we've got contacts there, we're having conversations. One of the things that I meant to focus on with with uh Rick's uh and and with these other programs is that we did an RFI where we went out to the whole marketplace and said, hey tell us what are your biggest pressing issues, tell us what are your supply chain choke points, uh let us talk to you. And and we're and we're hearing back in order to uh focus our programs on those supply chain choke points. And um and and and the engagement we've had with the small business groups at at at DOW, within ANS, within RNE, um i- it's it's been incredible. The there's a spirit of collaboration that, you know, I'm new to government but it's been it's been surprising to me. And uh DIU um and and and the other agencies, there there's so many that are all doing similar things, trying to solve similar problems. But it's great to see more collaboration and frankly the SBA can help can help with that, because a lot of times they don't talk to each other. There's like twenty-five different groups within DOW that are doing supply chain mapping, and none of them like talk to each other. So, it's a huge opportunity for us across government to come together and to get leadership from Congress from the administration to really make a difference in these areas.

Well, thanks for your work in that space. The relationships and the information flow matter. We might have some folks we might perhaps bring to you if you're open to it and do some introductions and Mr. Chairman, I yield back.

Gentleman yields back. I now recognize Miss Goodlander from the great state of New Hampshire, for five minutes.

Thank you, Mister Chairman, thank you, Mister Carter, for being here today. I wanna start in a place that I think we can all agree on. The programs that your office runs are good for America and they work. And to me, that's because every public dollar that's going towards these programs is pulling in private capital that turns American ideas into American companies into American jobs. So, I come to this as someone who really wants to see the programs that you administer succeed and to grow. And and that's exactly why I am very concerned by many of the choices that the Trump administration has made, some of them very, very quietly, quietly pulling the rug from under small businesses in my state of New Hampshire. And I wanna come back to the discussion we were having about regional innovation clusters. uh or RICs. These it was a good idea to start these clusters to support small businesses, including in the life science center se sector. Uh New Hampshire was awarded in twenty twenty four um with the lead being an incredible life science company based in Lebanon New Hampshire, Seldara. They were awarded and named to be the head of the RIC for New Hampshire. Um the rug has been quietly pulled from underneath them, because right now this innovation cluster is no longer listed on your website. So, Mister Carter, I want to ask you, can you confirm yes or no whether the Soldara Regional Innovation Cluster was terminated?

They're not currently one of our four RICs that I mentioned.

So you terminated.

Uh, they were they were discontinued, yes.

The award. So, how did you make that decision?

Uh, just to be clear, I was not, I was an advisor to the administrator, uh, until August of last year, so I personally didn't make that decision, just to, just to clarify. Uh, but as I mentioned before, the process, uh, for all of our programs that the administrator encouraged us to do, is to go through and evaluate their efficacy, their accountability, and, eh, how they were serving the mission of our country in the administration. And so those decisions were made based on that criteria.

Well, I will be seeking from you a full written explanation for how this completely, arbitrary, capricious, and costly decision was made. What's your timeline or expectation on reinstating the cluster in New Hampshire?

Uh, we're uh pursuing a solicitation for regional cus- uh innovation clusters as I mentioned, based on uh the priorities of the administration, and that we'll we'll have those out by uh September thirtieth. by the end of the fiscal year in terms of uh uh obligated

Mister Carter, you mentioned the FAST program, which is, you know, I come from a law enforcement background, whenever we can partner between the federal government and the state government, um, on technology partnerships, it's a good thing for the country. What I'm concerned about, you've spoken highly of this program, but your budget request for the the coming fiscal year zeros out the FAST program. Why?

Uh, thank you for the question. So, uh, the, uh, budget requests reflect, uh, the, uh, administration, uh, the president's and the administration's priorities, and we support those a hundred percent. My job is to execute the law and what is given to me as the head of OII. And so as there's programs authorized and appropriated, I will do my best to make them effective and make them serve the mission of our country.

Well, they won't be effective if they're zeroed out in the budget. And you know, I hope we can count on you to continue to provide the testimony that is true to how it's operating on the ground. This is a good program for the country. How much of the money that was appropriated by Congress in fiscal year twenty twenty four, twenty twenty five, twenty twenty six for FAST and for the regional innovation clusters remains unobligated today? Mister Carter.

Yeah, sorry, I was just taking notes to make sure I had the data correctly. You asked for twenty-four, twenty-five, twenty-six for FAST and RIC.

And for GAFC.

And for Growth Accelerators Fun Competition, super. Um, I have that data in my binder, but I think it would be best for me to get back to you, uh, through our legislative person with you.

Mister Carter, we don't often have the opportunity to have you here in person, so I I'm willing to wait.

Oh, perfect, OK. I'll I'll work, I'll look for my data right here.

OK, this shouldn't be a hard question. When is, when are the funds that, so obviously there is a sizable chunk of unobligated funds. When are they going to go out the door?

Uh, by September thirtieth.

All right. Well, with that, Mister Chairman, I I'm out of time, but I appreciate you being here, Mister Carter. These are pretty basic questions. We have an obligation to our constituents and to the American taxpayer to have visibility into how funding decisions are being made. So, I expect a full accounting of these reckless and extremely costly decisions that were made quietly without any transparency and that have hurt my home state. Thank you.

Thank you.

Channel ADL's back. I now recognize Miss Mejia from the great state of New Jersey for five minutes.

Thank you, Mister Carter. Thank you, Chairman. Um, Mister Carter, you spoke earlier about doing more with less, although however, I think sometimes less is just less. Um, you also spoke at length about the need to re-industrialize. And while most of us on this day is support rebuilding American manufacturing, uh, it seems like your stated efforts are undermined by this administration. I wanna return a little bit uh to what my colleague started to ask you about. Your office has invested millions of taxpayer dollars to help small manufacturers commercialize new technology expand production, build in America, all laudable, but simultaneously this administration has imposed these sweeping tariffs that are driving up costs for these same businesses, driving up cost of machinery, electronics, industrial, equipment, raw materials, and countless other manufacturing inputs. It almost seems like your efforts are actively undermined by the policies of this administration.

Mm-hmm.

In my district this matters a lot. We have a diverse and innovative manufacturing base from medical technology to food products, advanced manuf- uh pharmaceutical manufacturing. I also welcome you to New Jersey's eleventh congressional district, right next to the tenth. if you're visiting. Um, but I'm curious, how are you helping small businesses navigate this volatility? My first question is whether or not, first and foremost, whether or not you believe, uh, specifically President Trump's tariffs are hurting American small businesses. I'll ask you all three of my questions at once. Uh, second, has the SBA analyzed the impact, the rising cost of these tariffs for different small business, uh, small businesses and sectors, and are you sharing that information, that rising cost and impact, for both, to both the small businesses that you are hoping to, to support as well as investors, so that they, they can navigate the volatility created by this administration.

Thank you. So, can I just repeat the I think you had two questions?

Three.

Oh, I'm sorry.

First is,

We give you the first.

are the tariffs, uh, from your assessment are tariffs harming small businesses?

Yes. Yep. Yes.

Second, are y- have you created, are you analyzing the impact, the percentage of of impact or rising costs? And third, are you sharing that information with small businesses and investors alike?

Got it. Thank you very much for the questions, um, Congresswoman. Um, so we talked about tariffs earlier, right? I talked about my, um, appreciation that the administration has been strong enough to demand fair trade from our trading partners. And I think that has been a challenge.

Yes, but are they hurting? Have you made an analysis or shared information on how much these tariffs have actually increased production or or cost for small businesses?

But it's, it's, it's a great question. It's not an easy question. um, that I'm sure many economists and both in the government and with outside are analyzing and have many very different opinions upon,

Well, whether or not you've created a report or,

but we analyze.

or created some kind of analysis and then shared it is kind of simple.

Yeah, no, no, I, no, I, I appreciate it. I think I mentioned earlier that my priority right now is to get our data in order. Um, I'm publishing our first SBIC, uh, annual performance report shortly.

Okay, so.

Um, every conversation we have with our SBICs, I'm sorry.

No. Got it. I understand. I'm sorry, I'm short on time.

Okay.

I don't mean to be rude.

Okay. No, I, I. I understand.

So, um, with this analysis, if since you're saying that, um, you've created it, uh, you're going to issue your report and it will include the, the percentage of rising costs in different sectors and industries? Will, will we expect that in your report? Specifically,

And what?

uh, the rising costs that tariffs, that President Trump's tariffs have created, is your report going to include both an analysis and perhaps the percentage of of rising costs.

Oh, thank you, I understand. So my report is focused on my programs and my areas of expertise.

Got it.

Um, the those are the those are economic questions that are very important, for sure, and we discuss them in every meeting we have with our fund managers, how are you dealing with all the macroeconomic and micro-challenges you have with your company?

Understood. I have twenty seconds, so I would say I'm walking away with a no. Um, I will say that not having eh data and information on on the volatility created by these tariffs, by by this administration's policies, in effect are are creating a condition in which both investors and small businesses are flying blind. They're there therefore investing, we're asking them to invest millions of dollars and yet not giving them critical information about the environment in which they're going to operate. Thank you. I yield.

Thank you.

General Adi Eil's back. I now recognize Mitchell Selsky. from the great state of Maryland for five minutes.

Thank you very much, uh, Mister Chairman. Thank you to our ranking member. Uh, thank you to Associate Administrator Carter for your time here today. We can all agree that supporting American innovation and helping small businesses grow remains a bipartisan priority I think you've heard some of that today the Office of Investment and Innovation plays a critical role in that mission and I appreciate the work your office does to expand access to capital and to foster entrepreneurship across the country. The small business innovation research and small business technology transfer programs are among the federal government's most effective tools, as we've discussed today, for su- supporting early stage innovation. Together, these programs provide more than four billion dollars annually to help small businesses develop new technologies, create jobs, and bring cutting edge products to market. In my home state of Maryland, small businesses received nearly a hundred and forty million dollars in cyber awards in twenty twenty four alone. We thank you for that. Across our district, technology, engineering, life sciences, and defense related firms have leveraged these programs to compete for federal research funding from agencies such as the Department of Defense and the National Institute of Health. These investments help level the playing field and allow innovative small businesses to compete and succeed. That's precisely why I'm so concerned about the recent lapse in cyber authorization and the uncertainty it's created for businesses that depend on these awards. Delays in funding have real consequences for small firms, limiting access to capital, slowing research and development, and making it harder for entrepreneurs to plan for growth. Now, I recognize that the challenges surrounding cyber reporting and data transparency span multiple administrations. I appreciate your willingness to work with Congress to improve oversight, as accurate and timely data are essential for evaluating program performance, ensuring taxpayer accountability, and demonstrating the value these programs deliver to innovators across the country. I look forward uh to continuing to learn more about what your office is hearing from small businesses regarding the importance of a stable and predictable cyber program and the ongoing implementation of the program following its recent slaps and the steps being taken to get back to annual reporting. Uh so with that, Mister Carter, just two two questions um fir- first of which is what feedback has OII received from small businesses regarding that recent lapse in authorization and what impact did those delays have on companies who were awaiting awards?

Thank you for the question, uh, and for the support of the, of the program. Um, e- e- absolutely. I mean, w- during that lapse, and we're so thrilled that Congress was able to do that and we worked diligently. That was one of my main areas of focus, uh, during the lapse and, and since being in this seat, to help Congress have the data and the analysis and the information that they needed to be able to, uh, to reauthorize the program. And um and and so we're thrilled that that was able to happen. And of course we had feedback, we had countless people telling us how how terrible it was and how difficult it was. There are companies that, as I mentioned earlier, that are set up as R and D companies, small businesses that are focused on R and D and with this without this program, their business models are completely uh blown up. And so i- it was a challenge. We're thrilled that Congress was able to make that happen and we tried to do everything we could to support it. And we will continue to do that, especially as we uh the policy directives and improve uh reporting and and efficiency of the program.

I I appreciate that and uh agree that it it does definitely makes things difficult for those companies so uh sort of as a a follow-on, can you talk to the committee a little bit about what steps OII has taken to ensure future reauthorization uncertainties don't have that disruption to the flow of funding um to innovative small businesses.

Yeah thank you, I thought a lot about that because it was a difficult six month period to to see something that seemed so obvious that should be uh reauthorized and wasn't and and so we really struggled and again worked hard to help um all sides to agree to get it reauthorized um what i feel and it goes back to the same question that that that you know we've hit on already which is that we i think o i i needs to have the resources the capabilities the the focus and that's what we're doing to produce reports and to be the owners and the master of the data there's all sorts of there's a whole cottage industry focus on reporting and opining and sharing their perspectives on SIBR and its effectiveness and and and how it should operate and how it shouldn't. Um, we need to own that and we need to control that, and and that's uh certainly within my my mandate uh to do that, uh in the time that I've given to be the uh AA of OII.

I appreciate that feedback. Um, I'm sure I speak for members of this committee on both sides of the aisle when we say we would welcome um any solutions including legislative that would help bridge the gap in the event we have uh a lack of reauthorization which should happen, but um clearly we should be talking about what happens in the event it doesn't. So thank you again for your testimony and with that, Mister Chairman, I yield back.

Thank you.

Uh, gen- gentlemen, yields back, I now recognize Mister Jack from the great state of Georgia for five minutes.

Thank you, Mister Chairman, and thank you, Mister Carter, for testifying. Um, Administrator Loeffler has made reducing regulatory burden and cutting red tape a priority of the SBA's approach to small business success, something I wholeheartedly support. And in January, twenty twenty six, SBA finalized the SBIC modernization rule, which streamlines licensing for follow-on funds, eliminates obsolete provisions, and aligns the program with President Trump's executive orders on critical minerals and industrial dominance. The rule also clarifies that certain long-duration investments in critical minerals and critical technology qualify for an exemption from the program's project financing restriction. What specific barriers has OII eliminated and how has that deregulatory approach translate it into more investment reaching main street

Thank you for the question. So I think you actually hit on some of those, um, and I mentioned them earlier in in in my remarks, um, that we we've gone through and we're going through all of the regulations with an eye towards how do we make this simpler and easier for our L P's our our investors in these funds and then the managers of these funds without lowering our underwriting and our diligence standards and so that's been a focus in terms of what's already happened Um, I talked about subsequent fund. One of the main things that we accomplished in that first round was making it easier for f- subsequent funds meaning funds that are already in the program to not have to go through another you know three month intense due diligence process and to not have to have burdensome constraints on the way they operate their business that were put in place by the last administration and we've removed those and we're making it simpler and we're already see the f- the seeing the flow through in the record numbers that we had last year and and and funds are very happy with the improvements that we've made and and and we look to make more uh, i- in the near future as well.

Mister Chairman, I'd like to next share a story about a constituent, and something I think you'll appreciate, Mister Carter. Um, this concerns a company called NACO, N A E C O, and its president, David Bergman, who is an outstanding example of what the SIBR and STTR programs can accomplish. In twenty fourteen, NACO was fourteen years old and had enjoyed steady growth and success. After acquiring a former competitor and seeing how they operated, my constituent, Mister Bergman, concluded that if NACO wanted to remain competitive over the long term, and needed to make research and development a much larger part of its business strategy. Unfortunately, the cost of pursuing a truly ambitious R and D program was more than he could commit at the time. So in twenty eighteen he attended an SBA event on Georgia Tech's campus, and there he was asked, have you ever heard of an SBIR grant. The following year, Mister Bergman applied for and received NACO's first phase one SIBER award seven years later. NACO has received three phase one SIBER awards and one phase two SIBER award, totaling approximately one point nine million dollars in funding. Approximately half of that funding went to the national laboratories with whom NACO collaborated, strengthening both the research and the partnerships behind this technology. The question I have for you is, uh, more broadly speaking, what opportunities do you see to build on the reforms of the SIBR, STTR programs and more innovative small businesses like NACO, uh, leveraging or seeking to successfully leverage commercial new technologies? And how is SPA working with agencies like the Department of Energy to ensure companies have a clear pathway from research and development to market?

Thank you for the question, great, great topic, and in terms of how I think about the various priorities that we have, obviously we've talked about getting the direct, the policy directive uh updated, uh getting our report out, uh improving our data um analysis, um commercialization is huge, you know it's like for decades uh it, you know the valley of death that's already been spoken about today is in focus, and I think there's a lot we can do working with the agencies, I mean they ultimately have to control it right, they, they're the ones that programs of records in the case of DOW uh that we need to get we need to have the demand signals coming out of DOW and the other agencies to be clear signals, and not noise, because if you have noise, these great innovators may respond to a topic, but there's nothing behind it, there's no outtake, and so that's gonna be the opportunity that we have in working across the SBA uh with our partners at DOW and other agencies to make sure that we can improve that, uh in the time that we have it's an urgent need um for our innovators.

Thank you, Mr. Carter. And lastly, with the minute we have left, would love for you to illuminate to this committee how helpful the One Big Beautiful Bill Act's enactment has been for small business and how you have benefited as a department serving small businesses through the authorities granted therein.

Thank you for that question. Uh, the Minister Loeffler is is phenomenal at at at, you know, at at talking about this. Um, she's she's constantly talking about the benefits of these small businesses, of of the specific actions, um, that that are that are making a difference, you know, the the no tax on tips, no tax on overtime, the the opportunities uh for for capital uh write-offs. And so um I think she's been amazing at talking and meeting with small businesses and and hearing directly from them on how impactful this has been, and um you know, we're we're thrilled that we have the um the tax relief for small businesses that it it is so important uh at this time and at and at all time.

Well, wonderful job today. I'm a big fan of the administrator, I represent

Thank you so much for being here today, SSCIA Secretary. I'm super excited to meet you because, uh, before I go into my comments, I'm gonna really ask you. Can you come to Alameda County, California's twelfth district? We really, really have so many great things going on and we could deeply use

Mm. Mm.

again the information that you have the expertise but more importantly the resources so that's the yes or no question will you come i'll host you on a

uh they told me not to say yes or no to anything but i but i but i i grew up in the east bay and i i worked with the boy scout troop in oakland

oh to me you did you did

and so i uh i would love to come to alamina thank you

ok you're not supposed to say yes or no but that was a yes

no i didn't say i don't know what i said i said i said i enjoy i enjoy uh i enjoy oakland

ok and well you know well you know the bay area particularly the east bay and i love that you know oakland um One, Oakland is the number one food city in this country, and that's all small businesses. But it's also, if you go, you know, s- three miles over the bridge, you're in Alameda, the city of Alameda, which hosts I think one of the most innovative uh innovation strolls in the country. You know, I have business owners there that are this close to ensuring that people who have retinal pigmentosa or macular degeneration can see again. They're in third stage clinical trials. I have a company that is so close, uh, to creating new molecule and opportunities to cure, uh, hormonal breast cancer that's killing tens of thousands of women every single year. We have folks, uh, who are doing, as you know, plant-based innovation to create more opportunities in our food ecosystem. And I can go on and on and on. It's one of the reasons why I'm so happy to be on this committee, because red or blue, we know this administration, the past administration, the administration before, that small businesses do deserve everything. They are competing in the market and yet our innovators oftentimes believe and feel like they're on their own to create new innovation and opportunity whether it be in medicine or materials or in manufacturing they're they're on their own and we know that that's not true. So I cannot wait to host you. We're gonna go to Alameda, we're gonna visit your old Boy Scout or Boys Club troop in Oakland um but I have just a a couple of of quick questions. The and you mentioned it, I'm not even gonna go by my script, you said that your wonderful staff created a list of uh small businesses in each of our districts. I would love to hear mine. That's California's fourth district.

Yeah, yeah. I'm gonna

You did all that homework, so.

No, we did, we did. And I uh I wrote them out so they would stick in my mind now and about I'm gonna pull them up so I can talk to you about it. No, it wasn't e- exhaustive, it was just it was um it was SIBER or SPIC investments um and or funds but

well you know what you can you can you can send them to me

no oh oh great oh great but no but they're great I mean there's the I'm not gonna say

you got unless you have them

all the names but there's a a SIBER success story and I've actually engaged with this company they offer AI risk driven intelligent solutions for detecting and mitigating financial crime so it's like a it's like a folk I do diligence company

we'd love that

um and you know and I met um funny enough here on the hill a company in I think it was either Emeryville or maybe Oakland that was recycling,

Uh-huh.

uh, critical minerals from old equipment and turning it into to precious,

Yep. Yep.

uh, metals. And they were a SIBR award recipient. And so, I mean, there it's - it's - it's - it's very exciting to see the innovation.

I know that, Chris.

But we will - but we'll be happy to circle back with you and give you an exhaustive

Yep.

list of all our investments in the SPSC and the SIBR program in your district.

I think that's great. And I have more questions to you, but I will send them to your office.

Yep.

I have a staff member here and we would love to connect. At the end of the day, um, our innovators on Main Street, they need the SBA. You talked about the competition element of what makes this country so great. But I can tell you in my district, there are innovators who will in fact cure cancer, who will in fact cure blindness, who will, uh, extend, uh, the opportunities of how folks breathe clean air and eat good food. And they need SBA's help, particularly, uh, small businesses that are led by women, people of color, uh, immigrants who have come to this country Thank you.

General Adio is back. I now recognize Doctor Morrison from the great state of Minnesota for five minutes.

Thank you, Chairman Williams and ranking member, for holding this hearing, and thank you to Associate Administrator carter for taking the time to be with us today i think i'm bringing us home mr. chair you're almost done sir the small business administration's recent budget request proposed eliminating the fast partnership program as representative goodlander mentioned um i was especially concerned to see this proposal since it's the only program within the s. b. a. specifically dedicated to helping firms in low participation areas compete for SIBA awards I have the honor of representing Minnesota's third congressional district, and one of the recipients of the FAST program funding is Minnesota Small Business Innovation Research an organization located in the third that has helped over a hundred small businesses across Minnesota secure over a hundred million in funding through the small business innovation research and technology transfer programs their work has helped advance technological innovation and scientific excellence bolstering Minnesota's economy. MN CIBR and fast partnership organizations like them assist small businesses and startups in applying for these federal research and development programs for the first time and help them navigate this complex process so how does SBA reconcile the need to support new entrance and rural participants with the proposal to eliminate the program that delivers that support

Thank you for your question um and and I think I maybe spoke about this a little bit earlier um we support the president's budget proposal and we support uh the administration priorities with respect to those. My job as the officer or as the administrator for the uh office of investment innovation is to execute uh the execute the law within the within the uh construct construct that I have. And so as we have authorization appropriation for these programs, my job is to make them as effective as possible and to have, you know, in particular for FAST, to have them effective at helping small businesses achieve success within the SIBER program and to drive innovation that's so important for our country.

Uh, thank you, Mister Carter. So it sounds like we're not really reconciling the need. Um, if FAST were eliminated, what mechanism would SBA use to sustain SIBER outreach and proposal assistance in states that currently send few applications?

So, uh, all of our programs within OII, as I mentioned, were orienting towards, um, three you know I'd call them like investment themes or three themes for uh the the administration is is laying out and that we're in we're we're implementing re-industrialization, supply chain choke points, uh and advanced technology. And so um both the SBSC, the SIBR, and our other uh programs uh growth accelerators, Rick uh FAST um will you know to the extent they're authorized will be focused on accomplishing those missions and those themes. And, uh, an important one of them, of course, is driving innovation within the CBER program and within our innovative small businesses.

Thank you. Um, just one more question, Mister Carter. As, as my colleagues have highlighted, the CBER program lapsed for over six months from October to April. And as a result, agencies could not make new awards or publish solicitations. During this time I heard from small business owners in my district about the impact of this funding lapse on the future and the stability of their businesses. What steps is SBA taking to understand the impact of this funding lapse on small businesses and communicate with them about changing program requirements?

Thank you for the question. I we we spoke a little bit about it earlier that obviously we heard from many, many small businesses and we were doing everything we could to help Congress uh reauthorize the CIPR program and we're thrilled that you did that. Um and we are we are focused on supporting them. Um as you know it's it's a joint effort with with each of the you know forty plus agencies. So, you know, the on the ground work that happens uh is is done, you know, at the agency level with the topics, but our role is to advertise, to educate, and to inform. So we had our, literally right after the um reauthorization, we had in May our annual innovation summit that was virtual, so the entire country could attend. We're having another one in July that will go through the whole month, it will partially virtual, partially in uh, you know, in in location. And what's so crucial to these entrepreneurs is that they need the connectivity to the program managers of each agency. Right, like we we're not the experts in the topics and what each agency wants, but we need to get the program managers and the and the the subject matter experts out to meet with the entrepreneurs so they can actually understand what are the demand signals and how can they be successful in in in meeting the needs that our US government federal government um has uh with regard to innovation.

OK, Mr. Carter, thank you. Mr. Chair, I yield back.

Uh, gentle lady yields back. Um, yeah, I'd like to thank uh Associate Administrator Carter again. uh for your testimony for uh appearing before us today. Without objection members have five legislative days to submit additional materials and written questions for the witnesses to the chair which will be forwarded to the witnesses, and I ask the witness to please respond promptly. If that happens, if there's no further business, without objection the committee is adjourned. Thank you.

Thank you, Jeremy. K, buddy.