S. HRG. 115–566 STRENGTHENING ACCESS TO CAPITAL FOR MINORITY-OWNED SMALL BUSINESSES FIELD HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP UNITED STATES SENATE ONE HUNDRED FIFTEENTH CONGRESS SECOND SESSION SEPTEMBER 14, 2018 Printed for the Committee on Small Business and Entrepreneurship ( Available via the World Wide Web: http://www.govinfo.gov U.S. GOVERNMENT PUBLISHING OFFICE 32–693 PDF WASHINGTON : 2019 VerDate Sep 11 2014 12:56 Apr 02, 2019 Jkt 032694 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 C:\DOCS\32693.TXT SHAUN LAP51NQ082 with DISTILLER COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP ONE HUNDRED FIFTEENTH CONGRESS JAMES E. RISCH, Idaho, Chairman BENJAMIN L. CARDIN, Maryland, Ranking Member MARCO RUBIO, Florida MARIA CANTWELL, Washington RAND PAUL, Kentucky JEANNE SHAHEEN, New Hampshire TIM SCOTT, South Carolina HEIDI HEITKAMP, North Dakota JONI ERNST, Iowa EDWARD J. MARKEY, Massachusetts JAMES M. INHOFE, Oklahoma CORY A. BOOKER, New Jersey TODD YOUNG, Indiana CHRISTOPHER A. COONS, Delaware MICHAEL B. ENZI, Wyoming MAZIE K. HIRONO, Hawaii MIKE ROUNDS, South Dakota TAMMY DUCKWORTH, Illinois JOHN KENNEDY, Louisiana SKIFFINGTON E. HOLDERNESS, Republican Staff Director SEAN MOORE, Democratic Staff Director (II) VerDate Sep 11 2014 12:56 Apr 02, 2019 Jkt 032694 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 C:\DOCS\32693.TXT SHAUN LAP51NQ082 with DISTILLER CONTENTS OPENING STATEMENTS Page Cardin, Hon. Benjamin L., Ranking Member, a U.S. Senator From Maryland . 1 WITNESSES Panel 1 Manger, Mr. Bill, Associate Administrator, Office of Capital Access, U.S. Small Business Administration, Washington, DC ............................................. 6 Medley, Ms. Dawn R., Vice President of Business Finance Programs, FSC First, Largo, MD .................................................................................................. 12 Lewis, Mr. John, Executive Vice President–Chief Administrative Officer, The Harbor Bank of Maryland, Baltimore, MD ........................................................ 18 Bilonick, Ms. Marla, Executive Director, Latino Economic Development Cen- ter, Washington, DC ............................................................................................ 26 Wilson, Dr. David, President, Morgan State University ...................................... 31 Panel 2 Clark, Mr. Kenneth E., Business Consultant, MBDA Business Center—Cap- ital Region, Capital Region Minority Supplier Development Council, Silver Spring, MD ........................................................................................................... 40 Smoot, Sr. Mr. Tim, Vice President, Chief Financial Officer, Co-Founder, Meridian Management Group, Inc., Baltimore, MD ......................................... 46 Miller, Ms. Mary, Senior Fellow, 21st Century Cities Initiative, Johns Hop- kins University, Baltimore, MD .......................................................................... 51 Holmes, Mr. Will, Director of Outreach, Goldman Sachs 10,000 Small Busi- nesses, Morgan State University, Baltimore, MD ............................................. 57 ALPHABETICAL LISTING Bilonick, Ms. Marla Testimony .......................................................................................................... 26 Prepared statement .......................................................................................... 29 Cardin, Hon. Benjamin L. Testimony .......................................................................................................... 1 Prepared statement .......................................................................................... 72 Clark, Mr. Kenneth E. Testimony .......................................................................................................... 40 Prepared statement .......................................................................................... 43 Supplemental Testimony ................................................................................. 95 Addendum 1: Minority Business Development Agency Link: NMSDC By the Numbers .................................................................................................. 184 Holmes, Mr. Will Testimony .......................................................................................................... 57 Prepared statement .......................................................................................... 59 Lewis, Mr. John Testimony .......................................................................................................... 18 Prepared statement .......................................................................................... 21 Addendum 1: Milken Institute Phase I Summary ......................................... 99 Addendum 2: Milken Institute Phase II Summary ....................................... 156 Manger, Mr. Bill Testimony .......................................................................................................... 6 Prepared statement .......................................................................................... 9 (III) VerDate Sep 11 2014 12:56 Apr 02, 2019 Jkt 032694 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 C:\DOCS\32693.TXT SHAUN LAP51NQ082 with DISTILLER IV Page Medley, Ms. Dawn R. Testimony .......................................................................................................... 12 Prepared statement .......................................................................................... 15 Miller, Ms. Mary Testimony .......................................................................................................... 51 Prepared statement .......................................................................................... 53 Risch, Hon. James E. Prepared statement .......................................................................................... 92 Smoot, Sr. Mr. Tim Testimony .......................................................................................................... 46 Prepared statement .......................................................................................... 48 Addendum 1: 2016 Small Business Credit Survey Report on Minority Owned Firms ................................................................................................. 191 Wilson, Dr. David Testimony .......................................................................................................... 31 VerDate Sep 11 2014 12:56 Apr 02, 2019 Jkt 032694 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 C:\DOCS\32693.TXT SHAUN LAP51NQ082 with DISTILLER STRENGTHENING ACCESS TO CAPITAL FOR MINORITY-OWNED SMALL BUSINESSES FRIDAY, SEPTEMBER 14, 2018 UNITED STATES SENATE, COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP, Baltimore, MD. The Committee met, pursuant to notice, at 10:04 a.m., at Morgan State University Earl G. Graves School of Business and Manage- ment, Martin D. Jenkins Hall, Behavioral Science Center, Room 514, 1600 Havenwood Road, Baltimore, Maryland, Hon. Ben Cardin presiding. Present: Senator Cardin. OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, RANKING MEMBER, A U.S. SENATOR FROM MARYLAND Senator CARDIN. Good morning, everyone. Let me thank you all for being here. Let me call to order the meeting of the Senate Small Business and Entrepreneurship Committee in this field hearing at Morgan State University, here in Baltimore. This is part of our oversight function of the Small Business and Entrepreneurship Committee, and today we will be talking about the source of capital for minor- ity businesses. And I thank all the witnesses that are here. I want to start by first acknowledging and thanking the leader- ship of our Chairman, Senator Risch, who authorized this field hearing. I serve as the lead Democrat on the Small Business Com- mittee. Senator Risch is the Chairman. The two of us have worked very closely together through this Congress, and we are very proud that we have been able to produce several significant bills that have become law, and we have worked together on oversight of the SBA and small business. I particularly thank Senator Risch for his cooperation and for allowing this Committee field hearing to take place. I want to acknowledge the staff that is here. From Senator Risch’s office, we have Meredith West, Renee Bender, and J.R. Walker; and our Chief Clerk of the Committee, Kathryn Eden. I also want to acknowledge from the Democratic staff, we have Sean Moore, Kevin Wheeler, Beth Bell, Olivia Nutter, Ellen Har- rington, and Sean Bartlett. On my staff, I want to thank Jerome Stevens. Whenever we are at Morgan, Jerome is going to be here with me. He is an incredible asset to our field operations as my outreach director, and I thank (1) VerDate Sep 11 2014 12:56 Apr 02, 2019 Jkt 032694 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\32693.TXT SHAUN LAP51NQ082 with DISTILLER 2 you. And Carleton Atkinson, who is my Maryland director, is also with us today. So we have a full staff that is with us. Steve Umberger is here, who is the SBA director in the Baltimore office. He is also my neighbor. We are both in the Bank of America building together, and I thank Steve. He does a great job in reaching out, getting as much input as we can and providing services to businesses. He was on the ground immediately every time we have had a significant crisis in our business community, Ellicott City being one that stands out, the great work that the SBA office here did in helping those businesses in Ellicott City. Dr. Wilson will be with us shortly, and when he is here,