Washington DC – Today, Congressman Dan Muser (R-PA), Chairman of the Small Business Subcommittee on Economic Growth, Taxes, and Capital Access, led a hearing titled “.Exploring SBA programs: A review of the impact of SBIC and SBIR programs on small businesses. ” Subcommittee Chairman Muser issued the following statement after today's hearing.
“The SBIC and SBIR programs are two successful public-private partnerships that must continue to improve to meet the needs of America's small businesses while ensuring taxpayer dollars are protected.” said Subcommittee Chairman Muser. “I would like to thank the witnesses who joined us today and shared their expertise on leveraging SBA programs to direct private capital and federal research funds to valuable small businesses. We look forward to advancing the many valuable suggestions provided during the hearing to improve the SBIC and SBIR programs, including HR 5333.”
—
Watch the full hearing here.
Below are key excerpts from today's hearing.
Chairman Muser: “Real-world examples of what SBIC means to the organization as a whole, what it means to SBIC, individual companies, and portfolio companies. And how bonus leverage can improve the situation and Will it benefit small businesses’ access to capital?” Mr. Palmer: “Indeed, as I said earlier, SBIC capital is the first institutional capital that goes into most companies. So a lot of it helps businesses specialize and scale. So, most In all cases the number of employees has increased significantly and I can't think of a case where it hasn't. This was helpful. Bonus leverage is now an incentive rather than a mandate, i.e. in non-invested countries. It's specifically designed to incentivize you to look at off-the-beaten-path areas. So if you have a fund, it has a lifespan of 10 years, 5 of which are invested, and 5 after that. The annual harvest in the first five years provides an incentive to look at industries in low-income areas, rural areas, and the national security sector, and businesses that might not otherwise have gone. If you find one there, you have more leverage and it doesn't prevent you from making another trade.”
Chairman Muser: “Mr. Valletta, SBIC, private investment to foster development and innovation for SME customers?” Mr. Valletta: “Yes. These American seed funds are paramount to small business innovation and growth. And for organizations like ours, venture capital development organizations, this is extremely important. Because our Because some of the funding comes from state governments, public agencies, public funds like bonds and federal programs like the Small Business Credit Initiative, which is a very important program.
Congressman Williams: “So, you said, and I agree, that the Department of Defense's SBIR program often lacks instructions for small businesses to follow. We're frustrated with more questions than answers about what it takes to follow up on requirements and contracts, when to apply for the SBIR program, and even which Department of Defense Innovation Initiatives to actually use. I hear from many small business owners who feel this way. . So this is causing a lot of small businesses to pull out of the defense market, as you talked about, because they don't have a clear idea of what their overall investment is going to be, and there's no justification for navigating through the complex regulations. I did not participate in the program. Simply, how can we address this concern and how widespread is the problem?” Mr. Bressler: “Thank you for your question. So the easiest way to assess this is to go through the process yourself, and to have as many people involved in the process design as possible go through it and take notes. I think. I think this is relatively simple compared to some of the complex technical challenges that the Department of Defense deals with on a daily basis, but the cultural part is important and just creating the right system policies can help. You need to use the right tools, but you also need to take new steps to track specific metrics. So even this concept of how many new companies are joining his SBIR program each year, the reason you hear different numbers is because there is no standard way to track it. ”
###
