[House Hearing, 117 Congress] [From the U.S. Government Publishing Office] BUILDING OPPORTUNITY: ADDRESSING THE FINANCIAL BARRIERS TO MINORITY- AND WOMEN-OWNED BUSINESSES' INVOLVEMENT IN INFRASTRUCTURE PROJECTS ======================================================================= VIRTUAL HEARING BEFORE THE SUBCOMMITTEE ON DIVERSITY AND INCLUSION OF THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTEENTH CONGRESS SECOND SESSION __________ FEBRUARY 3, 2022 __________ Printed for the use of the Committee on Financial Services Serial No. 117-67 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] __________ U.S. GOVERNMENT PUBLISHING OFFICE 47-105 PDF WASHINGTON : 2022 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON FINANCIAL SERVICES MAXINE WATERS, California, Chairwoman CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina, NYDIA M. VELAZQUEZ, New York Ranking Member BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma GREGORY W. MEEKS, New York BILL POSEY, Florida DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri AL GREEN, Texas BILL HUIZENGA, Michigan EMANUEL CLEAVER, Missouri ANN WAGNER, Missouri ED PERLMUTTER, Colorado ANDY BARR, Kentucky JIM A. HIMES, Connecticut ROGER WILLIAMS, Texas BILL FOSTER, Illinois FRENCH HILL, Arkansas JOYCE BEATTY, Ohio TOM EMMER, Minnesota JUAN VARGAS, California LEE M. ZELDIN, New York JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia AL LAWSON, Florida WARREN DAVIDSON, Ohio MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina CINDY AXNE, Iowa DAVID KUSTOFF, Tennessee SEAN CASTEN, Illinois TREY HOLLINGSWORTH, Indiana AYANNA PRESSLEY, Massachusetts ANTHONY GONZALEZ, Ohio RITCHIE TORRES, New York JOHN ROSE, Tennessee STEPHEN F. LYNCH, Massachusetts BRYAN STEIL, Wisconsin ALMA ADAMS, North Carolina LANCE GOODEN, Texas RASHIDA TLAIB, Michigan WILLIAM TIMMONS, South Carolina MADELEINE DEAN, Pennsylvania VAN TAYLOR, Texas ALEXANDRIA OCASIO-CORTEZ, New York PETE SESSIONS, Texas JESUS ``CHUY'' GARCIA, Illinois SYLVIA GARCIA, Texas NIKEMA WILLIAMS, Georgia JAKE AUCHINCLOSS, Massachusetts Charla Ouertatani, Staff Director Subcommittee on Diversity and Inclusion JOYCE BEATTY, Ohio, Chairwoman AYANNA PRESSLEY, Massachusetts ANN WAGNER, Missouri, Ranking STEPHEN F. LYNCH, Massachusetts Member RASHIDA TLAIB, Michigan FRANK D. LUCAS, Oklahoma MADELEINE DEAN, Pennsylvania TED BUDD, North Carolina SYLVIA GARCIA, Texas, Vice Chair ANTHONY GONZALEZ, Ohio, Vice NIKEMA WILLIAMS, Georgia Ranking Member JAKE AUCHINCLOSS, Massachusetts JOHN ROSE, Tennessee LANCE GOODEN, Texas WILLIAM TIMMONS, South Carolina C O N T E N T S ---------- Page Hearing held on: February 3, 2022............................................. 1 Appendix: February 3, 2022............................................. 33 WITNESSES Thursday, February 3, 2022 Ali, Farad, President and CEO, Asociar LLC....................... 4 Black, Tawanna, Founder and CEO, Center for Economic Inclusion... 6 Gaskin, Philip, Vice President, Entrepreneurship, Ewing Marion Kauffman Foundation............................................ 7 McGuire, Ying, President and CEO, National Minority Supplier Development Council (NMSDC).................................... 9 Quick, Jeanette, Head, Compliance and Public Policy, Gusto....... 10 APPENDIX Prepared statements: Ali, Farad................................................... 34 Black, Tawanna............................................... 38 Gaskin, Philip............................................... 40 McGuire, Ying................................................ 55 Quick, Jeanette.............................................. 58 Additional Material Submitted for the Record Beatty, Hon. Joyce: Written statement of the Credit Union National Association... 64 Written statement of the Innovative Lending Platform Association................................................ 66 Written statement of Women Impacting Public Policy........... 68 Garcia, Hon. Sylvia: 2020 Research Report--State of Latino Entrepreneurship--by the Stanford Graduate School of Business in Collaboration with the Latino Business Action Network.................... 71 Williams, Hon. Nikema: Written responses to questions for the record submitted to Farad Ali.................................................. 105 BUILDING OPPORTUNITY: ADDRESSING THE FINANCIAL BARRIERS TO MINORITY- AND WOMEN-OWNED BUSINESSES' INVOLVEMENT IN INFRASTRUCTURE PROJECTS ---------- Thursday, February 3, 2022 U.S. House of Representatives, Subcommittee on Diversity and Inclusion, Committee on Financial Services, Washington, DC The subcommittee met, pursuant to notice, at 10 a.m., via Webex, Hon. Joyce Beatty [chairwoman of the subcommittee] presiding. Members present: Representatives Beatty, Pressley, Lynch, Tlaib, Dean, Garcia of Texas, Auchincloss; Wagner, Budd, Gonzalez of Ohio, Rose, and Timmons. Ex officio present: Representative Waters. Chairwoman Beatty. The Subcommittee on Diversity and Inclusion will come to order. Without objection, the Chair is authorized to declare a recess of the subcommittee at any time. Also, without objection, members of the full Financial Services Committee who are not members of this subcommittee are authorized to participate in today's hearing. Members are reminded to keep their video function on at all times, even when they are not being recognized by the Chair. Members are also reminded that they are responsible for muting and unmuting themselves, and to mute themselves after they finish speaking. The staff has been instructed to only mute Members and witnesses as appropriate, when not being recognized by the Chair, to avoid inadvertent background noise. Members are reminded that all House rules relating to order and decorum apply to this remote hearing. Today's hearing is entitled, ``Building Opportunity: Addressing the Financial Barriers to Minority- and Women-Owned Businesses' Involvement in Infrastructure Projects.'' I now recognize myself for 4 minutes to give an opening statement. Today's hearing will highlight the key challenges and barriers faced by minority- and women-owned businesses of all sizes, including obtaining the capital and opportunity necessary to participate in large-scale Federal infrastructure projects, and what is needed to ensure that the mistakes of the past are not repeated and do not become the missed opportunities of the future. After several years of celebrating fruitless Infrastructure Weeks during the previous Administration, I am now proud to say that the Biden Administration and Congress, led by Democrats in the House and Senate, passed historic investments in our nation's infrastructure last November. The bipartisan Infrastructure Investment and Jobs Act includes an additional $550 billion to rebuild our roads, bridges, and ports, and to ensure clean drinking water, expand access to high-speed Internet, improve our public transit systems, and address the climate crisis. And, yes, that is a lot that we have done. According to the Economic Policy Institute, this law will create roughly--I want you to hear this--772,000 jobs per year, in addition to strengthening our supply chains, improving productivity, and reducing long-term inflation. We do say long- term inflation. That is why infrastructure spending has typically been a bipartisan issue, with widespread support from both sides of the aisle. But for whatever reasons, that was not necessarily the case this time around. We are already witnessing announcements of infrastructure projects across this country as a direct result of passing this bill, even announcements by Members of Congress claiming credit for investments that they voted against. The benefit of this historic law will be felt for generations to come, and numerous studies have shown that infrastructure yields up to 17 percent return on investment, on average, which is why we need to ensure that all Americans have the opportunity to share in this economic activity. While Federal infrastructure projects of the past have increased economic growth, historically, they have come to cost Black and Brown communities their wealth. Fortunately, under the leadership of Chairwoman Waters, the Financial Services Committee Democrats worked to include several provisions in the infrastructure bill and the American Rescue Plan that will undeniably assist minority- and women-owned businesses' access to the capital necessary to complete these projects, including investments in State Small Business Credit Initiatives (SSBCIs) and the Minority Business Development Agency (MBDA), amongst others. Even with these investments, the challenges associated with minority- and women-owned businesses accessing the capital required to be in on these infrastructure projects will not be solved overnight. Thus, the reason for this hearing, so we can hear from our experts. Lastly, according to the Small Business Administration, just 1.7 percent of Federal contracts went to Black-owned small businesses, and 1.8 percent to Hispanic-owned small businesses. Historic lack of access to capital, delayed payments from contractors, and the lack of credit and insurance are all contributing factors to these dismal numbers. Thus, thank you, Chairwoman Waters, for your leadership, and for also establishing the first-ever Diversity and Inclusion Subcommittee. With that said, I am excited to hear from our experts in this hearing. The Chair now recognizes the ranking member of the subcommittee, my friend from Missouri, Congresswoman Ann Wagner, for 5 minutes. Mrs. Wagner. Thank you, Madam Chairwoman, for holding this hearing today, and I want to welcome and thank our witnesses for testifying about the obstacles that women- and minority- owned businesses face when it comes to accessing capital and financial services. Small businesses make up 99 percent of all employers in the United States, employing some 61 million Americans, or almost half of our workforce. As our economy continues to recover from the pandemic, it is critical that Congress focus on policies that enable all businesses, regardless of race or gender, to open, grow, and thrive. While not every business goes public, all businesses need access to capital, and private market exemptions provide a useful option for raising capital for many companies. Fintech is also proving to be a new avenue to accessing capital that can be more efficient and less costly. This includes access to microfinance, which can be especially beneficial to small business owners and entrepreneurs who might have difficulty obtaining the funding from more traditional financial institutions to start or scale up their business. Fintechs have filled this gap, and according to Opportunity International, a nonprofit that offers microloans, microfinance offers the chance to, ``focus more on marginalized people, people who are left behind, and we ensure that the excluded have access to responsible financial services.'' Congress should continue to focus on finding ways to reduce the regulatory burdens to starting and growing a business, highlighting innovative solutions like those offered by fintech and microfinance, and encouraging startups that are working toward understanding the needs of underserved communities. While this hearing is about access to capital and financial services, this subcommittee must also focus on permanent regulatory reforms to lift and strengthen minority- and women- owned businesses. These businesses benefit when we cut unnecessary costs and expand opportunities for investors to put their money to work. Thank you, Madam Chairwoman, and I yield back the remainder of my time. Chairwoman Beatty. Thank you. The Chair now recognizes the Chair of the full Financial Services Committee, the gentlewoman from California, Chairwoman Maxine Waters, for 1 minute. Chairwoman Waters. Thank you so very much, Chairwoman Beatty. I am so pleased that you are holding this hearing. It is so timely, it is so important, and I thank you for your leadership. President Biden's $1.2-trillion Infrastructure Investment and Jobs Act not only will repair our nation's crumbling roads and bridges but also presents an opportunity for minority- and women-owned small businesses. As we celebrate Black History Month, we must keep in mind that diversity and inclusion require intentionality. We saw with the initial rollout of the Paycheck Protection Program (PPP) that the big banks provided concierge access to their larger, majority-owned clients instead of providing fair access to all small businesses, and it required the members of this committee to end that practice. I am interested in hearing from our witnesses on what needs to be done to ensure the Federal Government and the financial sector make available the resources necessary for minority- and women-owned firms to access the many Federal contracts in the infrastructure legislation. I thank the witnesses for their testimony, and I yield back. Chairwoman Beatty. Thank you so much, Madam Chairwoman. Today, we welcome the testimony of our distinguished witnesses: Mr. Farad Ali, President and CEO of Asociar; Ms. Tawanna Black, Founder and CEO of the Center for Economic Inclusion; Mr. Philip Gaskin, Vice President of Entrepreneurship at the Ewing Marion Kauffman Foundation; Ms. Ying McGuire, President and CEO of the National Minority Supplier Development Council; and Ms. Jeanette Quick, Head of Compliance and Public Policy at Gusto. Witnesses are reminded that their oral testimony will be limited to 5 minutes. You should be able to see a timer on your screen that will indicate how much time you have left, and a chime will go off at the end of your time. I would ask that you be mindful of the timer, and quickly wrap up your testimony if you hear the chime, so that we can be respectful of both the witnesses' and the subcommittee members' time. And without objection, your written statements will be made a part of the record. Mr. Ali, you are now recognized for 5 minutes to give an oral presentation of your testimony. STATEMENT OF FARAD ALI, PRESIDENT AND CEO, ASOCIAR LLC Mr. Ali. Good morning, Chairwoman Beatty, Ranking Member Wagner, and members of the Diversity and Inclusion Subcommittee. My name is Farad Ali, and I am the President and CEO of Asociar. Additionally, I represent the U.S. Black Chambers President's Circle and the Airport Minority Advisory Council on behalf of my group. On behalf of Asociar and all of the Black businesses everywhere, I am honored to share my testimony with members of the subcommittee today on the myriad of issues that Black-, women-, and minority-owned businesses face when accessing capital contracts in infrastructure projects. Thank you for giving me the opportunity to participate in the hearing today. Asociar was founded in 2012 and established as a valued partner working to provide technology solutions for various companies in IT services. For the past 10 years, we have been able to implement growth strategies for service delivery and supply chain solutions as a value-added supplier. As a certified minority-owned business by the National Minority Supplier Development Council, and a certified Black- owned business by the U.S. Black Chambers, and a certified Historically Underutilized Business in Texas and North Carolina, we still face challenges in accessing opportunities for growth in the public and private marketplace. Federal procurement has provided many Americans with opportunities to grow a business, hire employees, build wealth, and strengthen the economy in the communities where we live and work and serve. The Infrastructure Investment and Jobs Act is a once-in-a-generation opportunity to invest in critical projects throughout the nation. However, if we are to realize the long- term return on those investments, we must also understand that we must hire to do these projects in a way that is very intentional. This will require coordination and making sure that we are able to be transparent from Congress to address two key factors: access to capital; and access to contracts. First, whether it is pouring concrete, replacing outdated pipes, or installing next-gen broadband and electric charging stations, many minority-owned firms will be blocked from bidding on these contracts because of a lack of capital, not a lack of capability. To address the barrier of capital access, financial institutions should be incentivized to create lending products that align with Federal procurement contract terms. This will improve cash flow management and alleviate credit risk. Additionally, Congress should expand and increase funding to the Emergency Capital Investment Program through the U.S. Department of the Treasury. That is to help the Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) to invest in these underserved communities, helping to build and investing in the funding and the programs which will be direct and create the effectiveness for these financial institutions that participate. Second, to ensure that the Federal and State agencies awarding the contracts are able to identify qualified, capable firms of various sizes, there needs to be a formal alignment between agencies that serve minority- and woman-owned businesses, like the U.S Black Chambers, the National Minority Supplier Development Council, the Airport Minority Advisory Council, and the Conference of Minority Transportation Officials. As you know, much of this infrastructure bill is going towards DOT and FAA, and those are the organizations that can support their work. For decades, these organizations have facilitated increasing the capacity of thousands of diverse firms. They provide support for shovel-ready projects at the Federal, State, and municipal levels. Third, to build marketplace capacity, Congress must strengthen policies that facilitate, measure, and report mentoring partnerships between larger government contractors and minority and women contractors. Historically, underutilized businesses risk falling into a cycle of underutilization. For example, to get contracts, you must show past performance. But if you have a chance as a buyer to choose between a vendor who has less performance or more performance, you are going to choose the one that has more performance. So, I think it is going to be critically important that we begin to work on strengthening mentor-protegee partnerships. You have my written testimony before you, and in the interest of time, I would just like to follow up with the last three points. Making racial disparity and racial wealth gap reductions is an economic imperative which benefits everyone, not just a social benefit directed at a select population. It is critical that we highlight business solutions that ensure utilization of women- and minority-owned firms, and I think there are three ways we can do this: promote lending products in line with Federal procurement contracts; incentivize coordination between agencies and minority-serving institutions; and incentivize measurement and subcontracting mentorship and lending with financial institutions. Businesses build communities, and policies set the foundation for the growth and sustainability of business and community prosperity for everyone. If executed correctly, the Infrastructure Investment and Jobs Act can help transform minority businesses and communities and accelerate the nation towards long-term success. Thank you for the opportunity to testify, and I look forward to answering any questions you may have. Thank you, Madam Chairwoman, and Madam Ranking Member. [The prepared statement of Mr. Ali can be found on page 34 of the appendix.] Chairwoman Beatty. Thank you so much, Mr. Ali, for your testimony. Ms. Black, you are now recognized for 5 minutes to give an oral presentation of your testimony. STATEMENT OF TAWANNA BLACK, FOUNDER AND CEO, CENTER FOR ECONOMIC INCLUSION Ms. Black. Thank you, Chairwoman Beatty, Chairwoman Waters, and members of the subcommittee. I appreciate and am honored for this opportunity to provide testimony today. I am Tawanna Black, the founder and CEO of the Center for Economic Inclusion. The Center is committed to closing racial employment, income, and wealth gaps by building racially inclusive and equitable regional economies. Founded in 2017, the Center is the nation's first organization dedicated exclusively to closing racial wealth gaps by partnering with employers and regional government agencies in order to build civic infrastructure and build the capacity of employers, both in the public and private sectors, in order to close racial wealth gaps and build racially equitable and inclusive workplaces. In addition to working with the public sector and the private sector, the Center supports the work of employers throughout the Minneapolis-St. Paul region and the seven-county metropolitan area, as well as regions across the State of Minnesota and across the country. Our economy right now requires diverse talent in high- demand, resilient industries with family-sustaining jobs. The economy of the future needs businesses that are resilient, businesses that can meet the growing supply chain needs, which will require that Black, Indigenous, Latinx, and Asian businesses and communities have improved access to capital, land, and homeownership opportunities. Our organization is deeply committed to growing Black- and Brown-owned businesses, and I want to lift up both the challenges that our businesses face and the opportunities that our businesses provide toward creating jobs and wealth in our economy. The Center imagines an economic shift that can occur as we continue to invest in generational opportunities to address our country's infrastructure needs. However, this can only be accomplished if we address systemic barriers in contracting and the undercapitalization of minority- and women- owned businesses, particularly those faced by our Black- and Latina-owned businesses. Black, Indigenous, Latinx, and Asian-owned businesses and communities carry the historical burdens of structural inequities that have been combined and added to throughout the COVID-19 pandemic to create powerful obstacles facing our businesses. Nationally, more than 41 percent of Black-owned businesses, totaling 440,000 enterprises, have closed, compared to just 17 percent of White-owned businesses. Minority-owned businesses grow at 3.5 times the rate of all Minnesota businesses, yet our inequitable access to capital is keeping our businesses from continuing to grow. More than 8 in 10 Black employees and 7 in 10 Indigenous employees have filed for unemployment in our State; and we see that between 2000 and 2020, the wage gap between Black and White workers has continued to increase at a rate that our economy can no longer afford. In Minnesota, we have a saying that we all do better when we all do better. This comes from former and late United States Senator Paul Wellstone. Today, we are not all doing better. At the Center, we believe that now is the time for us to invest in creating an inclusive economy that benefits all people. We project that achieving racial equity and inclusive growth leads to better economic participation and would generate close to $6,000 to $8,500 in annual per capita income. This economic activity would lead to greater opportunities for intergenerational wealth that benefits our entire economy and demonstrates the need and opportunity for both assessing and prioritizing inclusive policies and investments that accelerate economic growth and competitiveness. I thank you, Chairwoman Beatty, Chairwoman Waters, and members of the subcommittee, for both your leadership and your time today. Together, we believe we can write a new story in our country's history, developing processes and investments for informing our infrastructure policies and investments possible to fuel our country's economic growth through the power of inclusion, equity, and belonging. Thank you, and I yield back. [The prepared statement of Ms. Black can be found on page 38 of the appendix.] Chairwoman Beatty. Thank you so much, Ms. Black, for your testimony. Mr. Gaskin, you are now recognized for 5 minutes to give an oral presentation of your testimony. STATEMENT OF PHILIP GASKIN, VICE PRESIDENT OF ENTREPRENEURSHIP, EWING MARION KAUFFMAN FOUNDATION Mr. Gaskin. Thank you, Chairwoman Beatty, Ranking Member Wagner, and members of the subcommittee, for the opportunity to testify today. Kauffman is a private, nonpartisan foundation based in Kansas City, Missouri, where I lead our work on entrepreneurship. While most of our work happens outside the Beltway, we are engaging Washington to bring half of our nation's potential entrepreneurs off the sidelines. This work is deeply personal. My family lived one block away from a ZIP Code with a better reputation. My dad would pick me up after school, and we would regularly go to a bank. One day I asked dad, ``Why do we go to so many banks?'' It turns out he was trying to get that first loan to open a chain of convenience stores. My dad's barrier to entry was simple: He didn't live in the right ZIP Code. He had good credit, but he didn't have credit experience. Four years later, a Black-owned bank gave him that loan which he used to open a successful convenience store in South Central Los Angeles. His success led to another loan and a second store. But even with that success, my dad continued to face barriers because of the color of his skin. His experience resembles the reality that many Americans still face. Today, Black-owned businesses are twice as likely to be rejected for loans, start with 3 times less in overall capital, and 4 in 10 entrepreneurs of color are too discouraged to even try for a loan for fear that they won't get it. Even more alarming, of the $69 trillion in global assets under the 4 major asset classes, less than 1.3 percent is invested in firms owned by women, Black Americans, and other people of color. America cannot afford to waste the energy and ideas of even one entrepreneur. Women and minorities represent the last great untapped asset class in America today, and we have no better opportunity to bring these entrepreneurs out of hiding than ensuring equal participation in rebuilding our infrastructure. Untapping this great American resource, our people, is something for which I see strong bipartisan support, but it will require that we address the capital access gap for underserved businesses who stand ready to meet the moment. At Kauffman, we know the four keys to success: equitable access to opportunity; funding; knowledge; and support. These are the pillars of our America's New Business Plan, a research- vetted policy platform this committee should consider. If our plan is the, ``what,'' we must not forget the, ``who.'' We all must champion the help of the locally trusted organizations, smaller, non-traditional lending partners, and institutions grounded in the historical and cultural implications of a community, including Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs). In our own work, innovative capital solutions like AltCap and the Kansas City COVID-19 Relief and Recovery Loan Fund, and our Capital Access Lab, are proven models the committee should examine for replication for the entrepreneurs ready, willing, and able to rebuild America. But capital alone is not enough. The knowledge gap needs to be addressed as well, ensuring that all can find these lending solutions or even the contracting opportunities rolling out across the country. In the who-do-you-know world of contracts, our research shows that new business owners simply do not know as many people. These challenges are also discussed in America's New Business Plan. The role of the Federal Government is critical in assisting these entrepreneurs. A thriving entrepreneurial landscape will require a robust public-private commitment towards change. In closing, the Kauffman Foundation is not only an incubator or grantor, but we also conduct real-world research into what succeeds and what fails in entrepreneurship and capital access. Because of this, we would like to remain a resource to policymakers and members of the committee as a go- to partner for premier research, policy recommendations through America's New Business Plan, industry knowledge, and case studies on successful models of expanding opportunity to America's greatest untapped asset class. Thank you, and I yield back. [The prepared statement of Mr. Gaskin can be found on page 40 of the appendix.] Chairwoman Beatty. Thank you so much, Mr. Gaskin. And let me also thank you for sharing your family's story. It is very much appreciated. Ms. McGuire, you are now recognized for 5 minutes to give an oral presentation of your testimony. STATEMENT OF YING MCGUIRE, PRESIDENT AND CEO, NATIONAL MINORITY SUPPLIER DEVELOPMENT COUNCIL (NMSDC) Ms. McGuire. Thank you, Chairwoman Beatty, Ranking Member Wagner, Chairwoman Waters, and distinguished members of the Subcommittee on Diversity and Inclusion. Thank you so much for the opportunity to testify today. My name is Ying McGuire, and I am the President and CEO of the National Minority Supplier Development Council (NMSDC). We believe every business deserves an unbiased chance. Our organization serves as a growth engine for minority-owned businesses, while enabling our 1,500 corporate members to advance economic equity. NMSDC-certified, minority-owned businesses have created $400 billion in economic output annually while generating $48 billion in tax revenue and 2.2 million jobs across the country. Today's hearing comes as America is experiencing a widespread and long-overdue reckoning with systemic racial and gender injustices and inequalities. Since taking office last year, the Biden-Harris Administration has made several important commitments to minorities to decrease the racial wealth gap. These include requiring 15 percent of all Federal contracts to go to small and disadvantaged businesses by 2025, releasing the SBA disaggregated racial and ethnic data on small business contractors, and making improvements to the category management system. These efforts are welcome, especially as we learn that the racial wealth gap continues to be a driver for change and a policy priority among business owners. While there have been significant efforts made to address the racial wealth gap, more opportunities exist within contracting and procurement through the Federal Government. The bipartisan Infrastructure Investment and Jobs Act serves as a catalyst to meet this moment. With the passage of the infrastructure bill, Congress and the Biden Administration pledged that minority-owned businesses would be prioritized for Federal contracting opportunities and would not be left behind as infrastructure projects unfold across the country. At a time when many minority-owned businesses find themselves in a long recovery period from the pandemic, it is absolutely critical that they are in the pipeline for procurement. Not only do Federal contracts help businesses, but they also create jobs and contribute to the recovery and stability of our communities. In order to meet the moment, besides access to contracts, there are two other areas in which I believe this committee and the Administration can take action towards ensuring equitable recovery: one, continued emphasis and action towards ensuring that minorities have access to important financial and increased capital to start and grow their businesses; and two, the creation of a Minority Business Enterprise designation to equalize access to contract opportunities. As members of this committee are well aware, access to capital remains one of the most significant issues for minority business owners. Small Business Administration (SBA) loans have been great instruments to assist small businesses with fiscal challenges during these difficult economic times. However, as a business owner, one never wants to take on more debt. A shift towards new access-to-capital models that do not add additional debt burden is needed in order for Minority Business Enterprises (MBEs) to be economic growth engines in underserved communities. My recommendation for the creation of a Federal designation for Minority Business Enterprises is based on evidence that while there are existing designations for small and disadvantaged businesses, it is our experience that these historical designations have not addressed the wide institutional disparity of Federal contracts awarded to MBEs. I have 28 seconds left. I applaud the work of the subcommittee, and I am committed, and our communities are committed to working with you on these issues. A friend once said, ``Access to capital is a bridge; access to contracts is sustainability.'' Thank you, and I look forward to answering your questions. [The prepared statement of Ms. McGuire can be found on page 55 of the appendix.] Chairwoman Beatty. Thank you so much for your testimony, Ms. McGuire, and you used your last 48 seconds well, so thank you so much. And let me also say, thank you for what you are doing. Your predecessor, Adrian Crumble, also sat in that seat several years ago. So, thank you so much. And now, Ms. Quick, you are recognized for 5 minutes to give an oral presentation of your testimony. STATEMENT OF JEANETTE QUICK, HEAD OF COMPLIANCE AND PUBLIC POLICY, GUSTO Ms. Quick. Thank you. First, I would like to thank Chairwoman Beatty, Ranking Member Wagner, and the distinguished members of the subcommittee, for holding this important hearing. We have the shared goal of ensuring that women- and minority-owned businesses have equal access to capital and opportunities for growth. My name is Jeanette Quick, and I am Head of Compliance and Public Policy at Gusto, a people platform that empowers small businesses nationwide. On a personal note, small businesses are near and dear to my heart. My mother is a Vietnamese immigrant who owned an ice cream shop when I was growing up. I know firsthand how hard the work is of small business owners and how important capital can be to their success. And as a former staffer, I am thrilled to be on this side of the dais to be able to speak for the more than 200,000 small businesses and the millions of their employees that Gusto serves. Gusto provides payroll, human resources, health benefits, and financial tools to small businesses across the country. Our work uniquely positions us to understand the needs of small businesses and how best to serve them during this challenging time. Throughout the pandemic, Gusto has focused on ensuring that small businesses have access to capital. Gusto facilitated billions of dollars in Paycheck Protection Program (PPP) loans for our small businesses, and we are connected to more than 80 financial institutions, including CDFIs, to ensure that our customers have access to fair and responsible capital. Gusto is also the Founder and Chair of the Small Business Relief Council, a cross-industry coalition of over 80 companies representing millions of small businesses. We are well- positioned to provide insight into small business financing challenges. Gusto believes that a healthy small business ecosystem is one that is fair and inclusive for all businesses, including those owned by women and people of color. We support proposals that ensure equal access to the financial system and include access to Federal procurement and infrastructure projects. My written remarks today include a longer discussion on obstacles that women- and minority-owned businesses face in starting and expanding their businesses, and policies that can help address these disparities. According to Gusto data, action is needed now to help small businesses. Our data show that small business payroll reserves in hard-hit industries are tighter now than they were during the height of the early pandemic. Since the start of 2022, 26 percent of businesses, primarily in the personal services sector, have less than one month of payroll in reserves. That is up from 10 percent, when PPP funds first started to impact small businesses in 2020. Without any new Federal aid, small businesses have fewer resources and capacity to absorb future shocks. Minority-owned businesses have historically experienced unequal access to capital. For example, White-owned startups began with more than 3 times the capital of Black-owned startups. Women- and minority-owned businesses persistently report having lower levels of access to financial institutions and, as was demonstrated during the pandemic, lack of relationships with traditional lenders led to lower access to PPP loans for these groups. Our data show that the government can and should do a better job of outreach to these communities to ensure they have access to financial products and services that can meet the needs of their businesses. Gusto is encouraged that the subcommittee is considering legislation focused on providing equity funding to minority business owners through the Minority Business Development Agency (MBDA). These targeted funds, coupled with technical assistance and training from MBDA, will have an amplified impact on businesses and the communities they serve. Gusto supports reforming the Small Business Administration (SBA) to better serve women- and minority-owned businesses. We urge the subcommittee to consider mechanisms to incentivize private lenders to enter the small business lending market, including by reducing barriers for SBA lender eligibility and reevaluating whether the SBA's lending programs are fair and inclusive, including whether the SBA or other lenders should continue to use criteria such as background checks, personal credit scores, collateral, or other information that has historically disfavored women and minority business owners. This is an incredibly challenging time for our country and we can't lose sight of the fact that small businesses are the job creators and economic engine of our country. Despite the massive upheaval caused by the pandemic, we are seeing an increase in new business starts since 2020. Women, and particularly women of color, are jump-starting the recovery. Nearly half of businesses started by women in the past year are minority-owned. Our goal at Gusto is to create a world where work empowers better lives, and we owe it to all entrepreneurs to ensure that policies are in place to allow them not just to survive but also to thrive. I thank you again for the opportunity to testify, and I welcome any questions you may have. [The prepared statement of Ms. Quick can be found on page 58 of the appendix.] Chairwoman Beatty. Thank you so much, Ms. Quick, for your testimony. And let me also thank you for sharing your family's story, as well. I now recognize myself for 5 minutes for questions. I am going to try to get through several questions, so if you could use brevity in your answers, I would appreciate it. The first question is for you, Mr. Gaskin. I stress the importance of ensuring geographical diversity of venture capital investments in an effort to attract more investment and talented diverse opportunities across the country. In my first hearing, someone on the other side asked me if I would look at rural areas, and the answer is yes. Can you speak to the impact of venture capital investment in places where it is not typical, as it is in Silicon Valley? Mr. Gaskin. Thank you, yes. If we look at research showing that over 75 percent of all venture capital goes to fortified geographic areas, highly populated, what happens if you are an entrepreneur and you are in the middle of a State or you are in the middle of the country? Too many entrepreneurs are on the sidelines. And I would say, of that funding, only just over 2 percent goes to African-American women-led firms, and just over 1 percent to African Americans, and it is lower for all of the others, which is unacceptable. The role of CDFIs and MDIs is really important here, because they understand community and they understand the businesses that are in those communities and how to better support them and get money to them. So, I highly recommend that the role of CDFIs and MDIs is something that the committee can consider as they move forward. Thank you. Chairwoman Beatty. Thank you. Mr. Ali, last Congress in the House, we passed bipartisan legislation that I introduced to codify a mentor/protege program at the Treasury Department, a new voluntary program that seeks to partner large financial institutions with small community and minority-owned banks. In your testimony, you actually mentioned such a program. My question is, would you, as an expert, be willing to write a letter and to work with the Department of Transportation, since we know these dollars go through the U.S. Department of Transportation, and also work with the Department of Commerce? Because when you look at their Minority Business Development Agency (MBDA), which is there, they are responsible for a large number of dollars and programs. Tell us what you think about that and what impact it could have? Mr. Ali. Yes, thank you so much. I like to think it is very important to understanding the capital, and the capacity building is important. So, having the capital be there with the Emergency Capital Improvement Plan is critical. As you had banks, for example, with the MDIs--JPMorgan partnering with Mechanics and Farmers Bank to build--and because, as we have heard from testimony from Mr. Gaskin, that provides some community awareness, allowing the capital to be deployed quicker. MBDA having these centers where we are building capacity is also critically important. It allows for there to be connectivity between capital and capacity. I would love to work with that. I appreciate the MBDA. I have worked with them for 20 years, understanding their ability to build the capacity of minority businesses. But aligning those businesses with capital so they can get access to contracts is critical, because the contracts have requirements, and without capital you can't access those. So, I would be honored to be a part of that. Thank you very much. I appreciate it. Chairwoman Beatty. Thank you. And lastly, as we know, prior to the passage of the Infrastructure Investment and Jobs Act, Congress passed the American Rescue Plan, which authorized some $500 million for technical assistance and outreach to minority-owned small businesses through the State Small Business Credit Initiative. Ms. Black, and Mr. Gaskin, do you believe it would be wise for States to leverage the State Small Business Credit Initiative to enable minority-, women-, and even rural-owned small businesses to compete with this flood of dollars that we have? And I am going to give you 20 seconds each. Ms. Black. It is a simple answer: absolutely. It is critical that we leverage those networks and leverage those businesses in order to stimulate economic growth in the communities. Chairwoman Beatty. Well, we heard that from an expert. Okay. Mr. Gaskin? Mr. Gaskin. Absolutely. When you have 83 percent of entrepreneurs who can't get a bank loan or venture capital at the time of starting a business, we have to get money to them and find them in communities, especially in rural America. Chairwoman Beatty. Ms. McGuire? Ms. McGuire. Absolutely. The government agencies like MBDA need to partner with private sector and community partners. Chairwoman Beatty. I have 1 second, for the last witness. I'm sorry, my time is up, so I yield back. And I now recognize the gentlewoman from Missouri, our ranking member, Mrs. Wagner, for 5 minutes. Mrs. Wagner. I thank my friend, the chairwoman of this subcommittee. Small businesses are responsible for employing almost half of the workforce in America today. Ms. Quick, could you please provide insight on why companies like Gusto and other fintechs offer crucial resources to companies that lack the capital to hire in-house legal or finance or HR services that most large businesses can afford? Ms. Quick? Ms. Quick. Thank you for the question. Gusto helps small business owners bridge the gap to transition to a comprehensive company. Our comprehensive services, which span payroll, human resources, health benefits, and financial health benefits, help small businesses scale and manage their growing business. Gusto offers a suite of financial products called Gusto Wallet, which is available to employees and employers who use Gusto Payroll. These products include cash accounts where employees can put savings, and another product called Gusto Cashout. These products help promote financial health and wellness by putting the user in control of their paycheck and avoiding high-cost, often predatory small-dollar lending products. We believe that fintechs and other non-bank lenders have the ability to expand access to credit for small businesses in underserved communities. Businesses disproportionately obtained PPP loans from business lenders who often use automated underwriting systems to approve loans. These automated underwriting systems improved approval rates for Black borrowers who sought loans at both fintechs and traditional banks. Through our platform and products, Gusto has deep expertise in understanding the financial help of small businesses and the challenges they face in accessing capital and financial services. This understanding became stronger as we assisted our small business customers through PPP and other COVID assistance programs. Fintechs are able to respond faster and enter underserved markets more efficiently than some traditional financial institutions. We view fintechs as a value-added in the financial ecosystem. Both fintechs and traditional players are important, but we know fintechs are a great addition, based on our customer experience. Mrs. Wagner. Okay. Ms. Quick, do you believe that the services you provide to these small and micro businesses have helped new firms, for instance, survive? Ms. Quick. Yes, we do. Mrs. Wagner. Ms. Quick, the Consumer Price Index increased 7 percent over the last 12 months, a record increase that is hurting both businesses and consumers alike. Could you please expand on the importance of artificial intelligence (AI) and other fintech software that can quickly respond to market conditions and provide capital to small businesses and startups? Ms. Quick. Great question. As I mentioned, fintech software providers are able to respond quickly and more efficiently to changes in the marketplace, often through automated underwriting and taking into account market conditions in real time. Mrs. Wagner. Also, Ms. Quick, Gusto advertises their ability to help small companies and businesses with everything from payroll runs to filing your taxes at the local and State and Federal levels, as well as day-to-day employee management. Have you seen the positive impact of crowdfunding on small businesses? Ms. Quick. We support equal and fair access to capital for small businesses, whether it is needed for start-up funds or growth. Gusto doesn't have specific data on whether our customers use crowdfunding as a source of financing. We have focused on lending partnerships, but we certainly support any means of accessing capital and growing businesses. Mrs. Wagner. Do you believe crowdfunding is a reliable and essential part of raising capital at all stages of small businesses or startups? Ms. Quick. Yes. We believe crowdfunding can be helpful to starting businesses. Mrs. Wagner. Great, thank you. I will yield back my time, Madam Chairwoman. Chairwoman Beatty. Thank you so much, Ranking Member Wagner. I now recognize the Chair of the full Financial Services Committee, the gentlewoman from California, Chairwoman Maxine Waters, for 5 minutes. Chairwoman Waters. Thank you so much again, Chairwoman Beatty. I would like to direct my first question to Mr. Gaskin. I did not know that you were in California and the Los Angeles area. But I want to know whether or not you are aware of the $12 billion that Senator Warner and I put together for CDFIs and MDIs, and that $1.25 billion has been allocated already. Mr. Gaskin, are you aware of that? Mr. Gaskin. Yes, we are aware of that, and also doing our CDFI work here in Kansas City, so I appreciate greatly what you are doing. Thank you. Chairwoman Waters. Okay. Thank you very much, because one of the things that I believe in is that we have to do more to help our small businesses know about CDFIs, MDIs, and the resources that we are allocating to them so that they can have access to these funds. Mr. Gaskin. Yes. Chairwoman Waters. Also, I would like to know whether or not you understand the work that Chairwoman Beatty and all of us did on this Financial Services Committee with PPP? When the big banks basically took care of their concierge clients, we quickly put another $60 billion in and gave a timeframe to get it out. And, of course, MDIs did very well, and CDFIs, in getting that money out. So, it is a new day in this committee. This committee understands the value of CDFIs and MDIs and access to capital, and we work very hard. Now, I would like to know more about incubators. I believe that we need a lot of incubators. Chairwoman Beatty and I would like to work on funding incubators so that we can have the resources for small businesses to learn a lot that they need to know in order to be successful, the insurance and paying the taxes and the projections and all of that. What do you think about an effort to multiply incubators in this country? Mr. Gaskin. Thank you, and I agree. As I mentioned in our testimony, in our America's New Business Plan, we lay out the pillars of funding: knowledge; support; and opportunity. And in those are opportunities and suggestions that relate to those types of supports. A lot of our grant-making has been to what we call entrepreneurial support organizations, which have included incubators that help entrepreneurs overcome these barriers of startup, ranging from knowledge to connections to tools to-- Chairwoman Waters. Do you think that Chairwoman Beatty and I should try and put together direct funding of some kind to develop more incubators? Mr. Gaskin. Yes. In communities, especially in rural communities where entrepreneurs may not have access to a larger city, I think that would be helpful. Chairwoman Waters. Okay. Now, what Chairwoman Beatty is focused on today with infrastructure, we know that the money is going out to the cities and the counties and the States and all of that, and what I have discovered is we don't have enough-- many of our small businesses that are involved in pre-bid conferences to understand what the opportunities are for contracting. What can we do about getting that information out? You have to be in the pre-bid conference. Mr. Gaskin. Exactly. Contracts, as I mentioned in my comments, are very, very important. One of the things, whether it is incubators or accelerators, can do is communicate those out. Starting in the communities and asking the questions and looking at, what do the communities need, what do the people need, and getting an understanding of the ecosystem of communities and really listening block by block to what the entrepreneurs and business owners need will help in that area. Chairwoman Waters. I want to thank you very much. I have taken up most of your time. But I do want you to talk with Chairwoman Beatty further, and all of you, about what we can do to empower our small businesses and get them in the pre-bid conferences, get the incubators spread out so that they can help these small businesses, and we are working on the big banks, and we are seeing some progress there. Thank you, Chairwoman Beatty, for allowing me this time. Thank you. Chairwoman Beatty. Thank you so much, Madam Chairwoman, and thank you for directing us in our future direction. The gentleman from the great State of Ohio, Mr. Gonzalez, is now recognized for 5 minutes. Mr. Gonzalez of Ohio. It's a great State, indeed. Thank you, Madam Chairwoman. Chairwoman Beatty. I just have to add, ``Go Bengals,'' to that. Mr. Gonzalez of Ohio. I struggle with that as a Clevelander, but I am going to pull for them for Joe Burrow's sake. But in any event, this is a great hearing. As many of you know, for the last 3 years I have been focused on, how do we extend more affordable credit and capital to all Americans, but knowing in particular that it is oftentimes our minority- and women-owned businesses that struggle the most with this. So, I think this is timely, especially in the context of the broader contracting issues that we are talking about. Ms. Quick, I want to start with you. You have, obviously, the payroll product and a wallet product that is for employees, and I am curious why, from what I can tell, you don't have an actual loan product? I wonder why, because it strikes me that with payroll data and wallet-level data, your company is uniquely positioned to extend credit, or maybe go in that direction. I would love to just hear your thoughts as to why that is not a place where you all have gone to this point. Ms. Quick. Thank you for your question. We do have Gusto Cashout, which is a lending product that is based on estimated earned wages. It enables consumers who are on the platform to be able to access credit for no or low cost and-- Mr. Gonzalez of Ohio. Can I interrupt you quickly on that? Does that product help them build credit or their credit scores? Does that data ultimately filter back to the rating agencies, or is that just siloed inside of Gusto? Ms. Quick. We are currently not reporting it to the credit system, but we are thinking about ways to continue to expand our product mix to help individuals build credit. Mr. Gonzalez of Ohio. Anything beyond the earned wage access products, like personal loans or anything like that? Or have you all just specifically avoided that, for any particular reason? Ms. Quick. Yes. We have partnered with institutions that offer small business loans. As I mentioned in my testimony, we are connected to more than 80 financial institutions that offer small business financing products, including a number of CDFIs. We have partnered with Opportunity Fund and Pacific Community Ventures in our home State of California, and we are continuing to look at other ways to partner with CDFIs as well. Mr. Gonzalez of Ohio. Thank you. It is my understanding of these products--I don't have the specific data around yours, but I believe it is a pretty strong way to help folks build credit who maybe are outside of the credit system today. I would encourage you to continue looking at that, because obviously, we want as many people to have access to affordable credit as humanly possible. Mr. Ali, I am going to shift to you for a second. I think your suggestion around mentorship programs and subcontracting to give MWBEs more opportunities and then to help them navigate the sometimes difficult bidding process makes a ton of sense. When I talk to some of these firms back home, they feel like they, for one reason or another, cannot or are excluded from being able to bid appropriately. You mentioned providing incentives for larger, more experienced firms to offer these mentorships. What sort of incentives did you have in mind? Maybe just drill down, if you could be very specific about what you are thinking? I think that would be helpful. Mr. Ali. Thank you for the question, Representative Gonzalez. I think it is important to understand that the connectedness is really how people get business done. People do business with people they know, people they like, and people they trust. And to have the ability to do that in an environment where we face difficulties has not been easy. I think specifically to have the larger businesses recognize connectedness through some of these minority business organizations, like the U.S. Black Chamber or the NMSDC or AMAT, to say we are looking for clients that we can help mentor and grow and develop, because we understand that would also build community. And by providing incentives in the scoring as they are gaining contracts to make sure they are utilizing these diverse businesses, and then measuring the impact of those minority businesses on what they are doing in their community by hiring and giving back. Mr. Gonzalez of Ohio. I only have 30 seconds, but I really think this is an area that we should explore because your point around connectedness is absolutely right. For those people who come from either a connected family or have the right pedigree and background, accessing capital, accessing opportunities, and getting bids, is easy. It is one of the easiest things they can do. It is one of the best advantages they have. For those who are outside of that system, it can be an enormous challenge, and it feels impossible in many respects. So, I think that is a great idea, and I look forward to exploring it more with you. Chairwoman Beatty. Thank you. The gentleman from Massachusetts, Mr. Lynch, is now recognized for 5 minutes. Mr. Lynch. Thank you, Madam Chairwoman. Thanks for holding this hearing. I have a background in construction management; that is what my Bachelor's degree is in. I spent 20 years as an ironworker, and I am the former president of the Ironworkers Union in Boston. And I have to tell you that in a lot of this work, the contracting process and the bidding process is really--it comes down to a secret handshake. Oftentimes, there is a preferred bid list and there is a process that is very difficult for a small firm or a new firm to break through. We did have some success on the Defense bill a few years ago. We ran into the same problem that we are talking about with the infrastructure bill, which is that firms that were known, that were reliable, that had good safety records, and that had been through the process were readily recognized and successful in the bidding process, but newer firms and smaller firms were shut out of the process. What Raytheon did--that is the big firm in my area on the Defense side--is they did a workshop. They brought in all of these small, women- and minority-owned businesses and did a workshop on how to bid in this process, and I think that would be enormously helpful. Because of the size, the dollar numbers on some of these big contracts coming out on infrastructure, you really have to try at the subcontractor level and bring people into the process. It really is complicated, it is difficult, and unless we make affirmative steps to educate people and help them become part of the process, they are going to stay on the outside, and we are just going to have this small number of contractors enjoying the benefits of this progress, and it is going to be less competitive. Those smaller firms--we saw this on the Defense side. The smaller firms bring the innovation and they bring the price down. Mr. Gaskin, or Mr. Ali, are we doing any of that, doing any workshops for women- and minority-owned businesses to educate them on how this process works? Mr. Gaskin. Thank you, and I support your comments. This goes back to the connection and the understanding of community and the entrepreneurs and business owners in communities and local institutions like CDFIs, MDIs or others. They have access. They have the pulse of the community. They have been doing loans or microloans or other transactions with folks in the community. So, convening is very important because this is about equal access to opportunity and support and knowledge that we mention in America's New Business Plan, absolutely. You start at the community level and hold forums or have local folks invite local folks and come in. Because otherwise, as I said in my comments, people are hiding in plain sight. Mr. Ali. And I would just edify those comments. If you are not intentionally inclusive, you become intentionally exclusive. The work needs to be clear. And also, it is not only around providing education; it is that connectedness of really not being a mentor but a sponsor. So, when you have a corporation or a company that is bigger than a minority-owned business that says, I am going to sponsor you, that means they are investing in you, they want you to be successful. So, they become not just mentors but coaches, and coaches want to win. If they win with the right team members, they continue to provide them the success that they need, which means that they give them their connectedness, they help them with their capital, and they help them with their capacity- building. I think you can't just be teaching, because that becomes really apathetic because you are doing it out of whatever galvanized guilt you have. But when you say, I am going to take you in and build you, that is a different kind of conversation. Thank you. Mr. Lynch. I appreciate that, and it is building that relationship and that familiarity with the process that will lead to our success. There are examples of that happening, but unfortunately they are more rare than we would like. I am just trying to figure out a way to plug these smaller, minority- and women-owned businesses into the process so that they build those relationships and they have that opportunity. But I thank you, and, Madam Chairwoman, I thank you for holding this hearing, and I yield back. Thank you. Chairwoman Beatty. Thank you so much, Mr. Lynch. The gentleman from Tennessee, Mr. Rose, is now recognized for 5 minutes. Mr. Rose. Thank you, Chairwoman Beatty, and thanks to Ranking Member Wagner for holding this hearing. I also wanted to thank our witnesses for being with us this morning. One of the successes of our pandemic response was no doubt the Paycheck Protection Program (PPP), which had significantly less fraud, as we have learned, or appears to have had significantly less fraud than the Economic Injury Disaster Loan (EIDL) program. According to the Small Business Administration's Office of Inspector General, the PPP had approximately $4.6 billion in potentially fraudulent activity, compared to $80-plus billion in the EIDL program, although the PPP distributed exponentially more money. The PPP sent funds through the banking system, as we all know, while the EIDL program relied on the SBA as a direct lender. To quote from a statement by the Tennessee Bankers Association, ``The highlight for the SBA has been the PPP, which would have been an abject failure without the banking industry successfully executing the program. SBA has tried direct lending before and failed time and time again.'' Ms. Quick, in your testimony you recommend streamlining the SBA loan application process to encourage more banks to participate in the SBA's lending programs. Could you also speak about the benefits of having SBA loans go through the banking system rather than relying on the SBA as a direct lender? Ms. Quick. Yes. Thank you for this question. As you mentioned, the banking system was successful in getting billions and billions of dollars out for PPP. We believe that the PPP loans were successful in helping thousands of small businesses to continue to pay their employees, and we are supportive of any kind of initiatives for both access to capital through the SBA or through additional private lenders in the system. As I mentioned, we believe that fintechs and other non-bank lenders do have the ability to extend access to credit for small businesses in underserved communities. We also believe that traditional financial institutions have the ability to help better serve small businesses, as well. Some of the feedback that we have gotten from our Small Business Relief Council that we run has mentioned to us that small business lending is currently very difficult, either through the SBA or as a private company, and there are a lot of barriers to providing services to small businesses. We recommend that both the private and public sectors consider looking at alternative data to underwrite small business lending and be able to open that credit box for all small businesses. Mr. Rose. Thinking about the experience we have just had with PPP and the financial institutions, what can we do now to ensure that financial institutions remain an essential part of providing loans and liquidity to support businesses and communities, and particularly in times of economic stress? Ms. Quick. I think we can encourage both lenders, the private lenders as well as the Small Business Administration, to look at alternative data, as I mentioned. I touched on the fact that many small businesses need to present personal credit scores, collateral, a track record of length of time in business, and that can be a challenge, particularly for women- and minority-owned businesses. We also think there is more we can do to provide financial education for small businesses. As we know, there are currently multiple avenues for small business resources through MBDA and SBA, but many businesses don't know about them. So, I think there is really an opportunity to make sure that these resources are more visible to small businesses and that education is increased to let businesses know what kinds of things they can access in the financial system. Mr. Rose. Thank you. In the few moments that I have left, you are no doubt aware of CFPB's Section 1071 proposed rulemaking, and I am wondering, without laying the predicate for that, could you talk about what the negative impacts are of increasing costs of credit for small businesses that would likely accompany that rule being implemented? Ms. Quick. Gusto is committed to transparency, and we support policies that can bring greater understanding of the small business credit market. We know from research that women- and minority-owned business credit applications are worse than White-owned businesses, resulting in lower access to capital for those groups. We do think it is essential to understand what is occurring in the market and to try to discern the reasons why underserved businesses face barriers when trying to obtain credit, and that the overall goal is to bring greater equity and fairness to small business lending and create a better ecosystem for small businesses. Mr. Rose. Thank you. I see my time has expired, Chairwoman Beatty, so I yield back. Chairwoman Beatty. Thank you so much. I now recognize the gentlewoman from Massachusetts, Ms. Pressley, for 5 minutes. Oh, and before you start, happy birthday to you. Ms. Pressley. Oh, thank you so much, Madam Chairwoman. This is a wonderful way to start my day off. Thank you so much for your leadership, and thank you to our State panelists for helping us tackle this critically important issue. As has been stated and we know, but it bears repeating, for too long, our traditional infrastructure investments and policies have really exacerbated inequities and disparities in our communities. In fact, the 1956 Interstate Highway Act, which created the cross-country system of freeways that we rely on every day, resulted in the displacement of more than 1 million people and more than 475,000 families in just 2 decades. These highways cut through our neighborhoods, they darkened pedestrian routes, they worsened air quality, and they massively diminished property values. Predominantly Black, Brown, Indigenous and low-income communities lost churches, we lost green space, and entire swaths of homes. Our communities lost access to jobs and other critical resources, divestment that to this very day contributes to the racial wealth gap in our nation. Ms. McGuire, what role does taking on debt play in serving as a barrier for minority-owned businesses in this space? Ms. McGuire. Thank you for the great question. As I shared earlier, as a business owner, we don't want to take on more loan debt. The critical key to success is to allow and give access to equity capital and government capital, enable them to grow. Ms. Pressley. Very good. And can you just expound upon that a little bit more as to what are some alternatives to loans that will help minority-owned businesses acquire the capital in order to be competitive for these contracts that we have been historically locked out of? Ms. McGuire. Absolutely. One thing is we can partner with some of the large financial institutions, and many of them are corporate members. Their vital critical stakeholders can really extend funding opportunities and really a lifeline to these minority-owned small businesses. All of them made a commitment to racial equity. We talk about the racial wealth gap, and all of them made a racial equity commitment to provide funding for infrastructure contracts, and this can be accomplished by using the racial equity commitment and associated funding to guarantee loans for MBE required to secure the contract. One example, a very actionable example, is to create a Letter of Intent or Memorandum of Understanding (MOU) which states that if an MBE wins a contract, we will guarantee a loan to cover 100 days of payroll. That is one example. The other thing is not just about access. It is the burden of getting the capital. The underwriting criteria should be evaluated, and many small MWBE just don't have the financial acumen to receive the loans, equity, and capital from different sources. So, helping MWBE understand the requirement and create a path to success would be ideal. The other thing that Mr. Ali and other people have talked about is the connection. People don't have a relationship or the knowledge to gain access to capital, so how do we, the government and a community organization like us, become a matchmaker to connect our underserved communities with sources of capital out there? One of the ways to do it is through technology enablement. Ms. Pressley. Thank you, Ms. McGuire. I will let you go on. Go on, please. Ms. McGuire. What if we have a pool that has all sources of capital out there and intelligently match with the small, minority- and woman-owned businesses who otherwise never had the access or relationship? That can be easily created with AI, with today's technology advancement. Thank you for the question. Ms. Pressley. No, absolutely. And I think it just goes to show that this is about intention, and the will, and the solutions are available to us. And on the technical assistance side, as you talk about the barriers in terms of relationships and access and acumen and why mentorship is so important and that we are intentional in our laws to support that, many of the folks that I hear from back in my district in Massachusetts, in my congressional district, just don't have extra revenue lying around to hire expensive consultants and accountants to prepare applications, so many are worried that they simply won't be ready. But again, thank you so much. At the end of the day, infrastructure, in its development and implementation, has the potential to divide or to bridge, to enforce oppression or to dismantle it, and we have to learn the lessons of the past and chart a better course. Thank you. Chairwoman Beatty. Thank you so very much. The Chair now recognizes the gentleman from South Carolina, Mr. Timmons, for 5 minutes. Mr. Timmons. Thank you, Madam Chairwoman. Ms. Quick, I want to follow up on Congresswoman Wagner's question about crowdfunding. I think there is a lot of potential in this space for women and minority startups to access capital. We have all seen the statistics about why these demographic groups have a harder time accessing institutional investors, be it pattern matching or whatever else. Crowdfunding seems to me to have a lot of potential in our efforts to create a more inclusive economy. In that same vein, I introduced legislation last year which would allow small businesses to more easily access venture capital. My bill, the Improving Capital Allocation for Newcomers (ICAN) Act, would codify the recommendations from the SEC's Small Business Capital Formation Advisory Committee by increasing the cap on the aggregate amount of capital contributions and uncalled commitment capital from $10 million to $150 million, and also by increasing the allowable number of investors or beneficial owners from 250 to 600 for qualifying venture capital funds. Chair Gensler has yet to act on these recommendations made to him, so we introduced this bill. He seems to be more interested in making life difficult for investors with more bureaucratic hurdles than anything else. He does not seem to have any capital formation agenda at all. I hope my colleagues will support this bill. I know it would certainly be a huge help to women- and minority-owned startups and small businesses. Ms. Quick, could you speak to this proposal and how it could help entrepreneurs access additional capital? Ms. Quick. Yes. We are supportive of proposals to help expand all options for small businesses to grow. We think capital is important. We don't have particular data on crowdfunding, per se, but we would love to work with your office to further understand the proposal and to help think about additional small business capital options. We also support education and mentorship programs to help inform business owners of different financing options and making sure that there are sufficient protections and risks and benefits considered in thinking about other forms of capital for small businesses. Mr. Timmons. Sure, thank you for that. One in six women have experienced domestic abuse, and 99 percent of women who have experienced domestic violence have also encountered financial abuse. This often includes the abuser taking out loans under the survivor's name to ruin their credit score. This was something I saw as a domestic violence prosecutor before I served in Congress. Ms. Quick, again, is there a way fintech could support these women and their desire to become entrepreneurs and overcome challenges with their credit scores? Ms. Quick. Yes. I believe that fintech has the possibility and opportunity to help these women who may be experiencing issues with credit scores. As I mentioned in my testimony, credit scores have been problematic for many different groups, including the women that you mentioned, as well as minorities, and we do think there are opportunities for fintechs to use alternative data in their underwriting to help provide better financial services to women and to all individuals. Mr. Timmons. Sure, thank you for that as well. Another problem facing employers and entrepreneurs of all shapes and sizes is the current labor shortage we are experiencing, but the problem is felt much more sharply for small businesses where the loss of even a single employee can truly handicap an operation. What type of resources can your company and other fintechs offer to folks who may not have the abilities or tools that come with a larger business? Ms. Quick. Gusto provides a number of services to the smallest businesses and to larger businesses. We help all of them manage their payroll, human resources, taxes, health insurance, and financial health benefits, and help them grow and scale their businesses. We really consider ourselves to be a partner to these businesses in their day-to-day business experience. We believe in creating a world where work empowers a better life, and we think that both ourselves and other fintechs and other companies have the ability to help small businesses scale and grow, and it is very important for the economy. Mr. Timmons. Sure, thank you for that. Just for your awareness, I own Swamp Rabbit CrossFit, and Soul Yoga, in Greenville, South Carolina, and we are actually a customer of yours, so I appreciate all the good work you are doing. Thank you. Madam Chairwoman, I yield back. Chairwoman Beatty. Thank you so much. The Chair recognizes the gentlewoman from Michigan, Ms. Tlaib, for 5 minutes. Ms. Tlaib. Thank you, Madam Chairwoman. I appreciate so much that we continue to be so laser-focused on making sure that we have a seat at the table and that implementation is really the heart of how to make sure that we all have access. Thank you so much. According to research conducted by our own Federal Reserve, business owners of color report having reduced access to traditional capital from banks and credit unions. In addition, their analysis also found that creditworthy Black-owned businesses experienced greater challenges raising capital than other counterparts. We know that this lack of access--we have heard it over and over again as Members of Congress--to traditional capital has made it incredibly difficult for women and minority entrepreneurs to stand up and grow their business, and the Federal Reserve has found that in almost every financing category, be it loans, credit cards, outside investors, or grants, people of color entrepreneurs were the least likely to receive full funding. So, I am incredibly concerned with how these barriers to capital are affecting the implementation of many of our Federal programs and the distribution of Federal dollars, whether it be the emergency Paycheck Protection Program funding or access to Federal contracting opportunities, and the bipartisan infrastructure law. Ms. Black, Mr. Ali, would public banking help the administration of programs like the Paycheck Protection Program be faster and more effective, as well as accessible, to minority-owned businesses? Ms. Black. Thank you so much for that question. I would echo the comments that you offered. I would also offer another statistic coming from the Federal Reserve Bank's Small Business Credit Survey, which noted that Black-owned business application rates for new funding are higher than that of their White counterparts, yet approval in terms of the amounts that are approved for them continues to be lower. And while I do think that public banking is a tool that we have, we also have the opportunity to continue to invest in community resources like key revenue-based financing, forgivable loans, to help address some of the opportunities that have been elevated by you and by your peers earlier in the questioning, and opportunities for equity investments. The more that we continue to see those dollars come directly into communities that are trusted sources by our Black and Brown business owners, the more we are going to accelerate regional inclusive economic job growth. Ms. Tlaib. Mr. Ali? Mr. Ali. Yes, thank you very much for the question. I think it is important to recognize the impact that we have seen that minority institutions have done because of their ability to understand what is going on, on each block, as Mr. Gaskin indicated. I think it is important to do both. If public financing is going to support, it should probably be more around the equity space of investing in businesses, much like we do with Small Business Innovation Research (SBIR) and other groups, to share in the prosperity of businesses, because ultimately, when businesses prosper, they end up paying taxes anyway. How do we make sure that we can invest in these businesses in a way that will help them to grow? First, understanding that minority- and women-owned firms are not all small businesses. We do have businesses that exceed $10 million, $50 million, $100 million, that are still suffering, not having the opportunity to access enough capital for them to grow and to make the impact that they are making. And remembering that a lot of these businesses also are hiring people who act and look more like them, or are gender-specific, so, we see that women- owned businesses hire more women employees, and we also see that diverse businesses, Black businesses hire more Black people, more Asian, more Hispanic. Ms. Tlaib. I have seen it in my own community. I do want you, Ms. Black, and Mr. Ali, to know that public banking for me is really going to be one of those things in the toolbox. I know we will combat some of the things that traditional banks are just not going to do. It is overwhelming how much we educate, tell people about various opportunities, but they continue to get denied. I know it is going to be effective in increasing access to Federal contracting opportunities for minority-owned businesses and expand access to credit for so many folks. I think everyone on the panel knows that the PPP was specifically designed to assist businesses that were hit the hardest. Yet, according to the National Bureau of Economic Research, minority businesses were less likely to receive those loans. Many of the members of the Congressional Black Caucus tried to address it in the second round, but I know that the Federal Reserve Bank of New York found that counties, including Wayne County, Michigan, which I represent, with a higher concentration of Black businesses, saw the lowest rates of PPP allocation. The inequities, as you all know, aren't new. I am worried that if we are not deliberate in empowering MWBEs in the implementation of the bipartisan infrastructure law, we risk making that racial wealth divide worse. Again, I want to reiterate a push to come up with an alternative to traditional banks. Thank you, Madam Chairwoman, and I yield back. Chairwoman Beatty. Thank you so much, Ms. Tlaib. The gentlewoman from Pennsylvania, Ms. Dean, is now recognized for 5 minutes. Ms. Dean. Thank you, Chairwoman Beatty, and thank you to all of our witnesses for your testimony today. As has been discussed at length here today, we cannot improve minority- and women-owned businesses' access to Federal contracts without addressing the fundamental issue of access to capital. When I talk to minority- and women-owned businesses in my own district, in suburban Philadelphia, one of the most common things I hear is how difficult it is to access capital, and as you all know, especially adequate startup capital. A sad statistic in Philadelphia, which is adjacent to my district--I am struck by an analysis that shows we have the lowest number of Black-owned businesses per capita compared to other big cities. We clearly have a lot of work to do to ensure that these businesses can access the capital that they need. Mr. Gaskin, in your testimony you speak about the Kauffman Capital Access Lab, an innovative pilot program to develop investment managers and provide new capital to underserved entrepreneurs. Can you tell us a little bit more about the lessons learned from this program? Do you think this model could or should be adopted at the Federal level? Mr. Gaskin. Thank you for the question. Absolutely, we do. We started with our research showing that 83 percent of entrepreneurs do not access a bank loan or venture capital at the time of startup. We looked at how could we test a new way, a new system of getting access, improving capital access to entrepreneurs. And through a mechanism, we invested in six funds, and those funds are doing innovative types of financing, revenue-based financing and other types of things that take the pressure off the entrepreneur at the beginning. With revenue- based financing, you are paying back the loan as you make revenue. And we are seeing that, of our initial $3 million investment through the Capital Access Initiative, those funds have now raised over $177 million in additional funding, funding 40 entrepreneur companies that are having returns. And it shows two things. It shows that alternative means of capital are very, very important, and that these entrepreneurs that may be perceived as being risky are not risky. Our work with CDFIs is showing that as well. But I highly recommend that alternative and innovative ways of financing are embraced more by traditional institutions. Ms. Dean. That is exciting, that innovation and that expansion by way of the innovation is really exciting. Thank you for that answer. Ms. Quick, and I apologize if you have spoken of this, but in your testimony you talked about the challenges of delayed payments for Federal contracts for businesses with the least access to capital, which unfortunately includes many minority- and women-owned businesses. Can you speak more about the consequences of delayed payments to cash flow and to the growth of a business? What can we in Congress do to address the issue? Ms. Quick. Yes, thank you for the question, Congresswoman. We have found that delayed payments have impacted small businesses. On average, small businesses are owed around $900 billion by both companies that they work with, as well as by State, Federal, and local government agencies. And we are advocating for government payments to be made more quickly to small businesses. When they are not able to access the capital that they are owed, this leads to a mismatch in capital access between when that small business incurs expenses and when they receive the payments back from the government. We support a return of the QuickPay Initiative, an initiative under the Obama Administration which guaranteed payment from the Federal Government within 15 days. That kind of requirement for States that are distributing infrastructure dollars will ensure that businesses are rightfully paid on time without needing to incur new debt. Ms. Dean. Thank you. That is powerful. Ms. Black, what actions can the private, public, and social sector organizations take so that the ecosystem of financial assistance and minority-owned businesses' access to capital is able to expand sustainably? Ms. Black. Thank you so much for that question. There is a real opportunity for us here to begin to marry solutions across sectors. The private sector has an opportunity to not only be investing in both the CDFIs and MDIs and other community-based solutions, but also to be leveraging their supply chain opportunities in the same way that government does here. It is not only about policies but also continuing to increase the purchasing that takes place from Black and Brown businesses, from women-owned businesses, in order to increase job growth in our communities, and they have to be married in those investments that are coming from the social sector in order to accelerate job growth and economic growth, recognizing again that there is not the risk that is inherently portrayed in our communities. Ms. Dean. Thank you very much for that answer, and so quickly delivered. Thank you, Madam Chairwoman. My times has expired, so I yield back. Chairwoman Beatty. Thank you so much for your questions. Madam Ranking Member, we are going to go to our next witness, who is a Democrat, unless you have any other witnesses. Mrs. Wagner. We're still waiting for Mr. Lucas, but I will see if he is able to join. Chairwoman Beatty. Okay. We will come back to you afterwards. Thank you. The gentlewoman from Texas, Ms. Garcia, who is also the Vice Chair of this subcommittee, is now recognized for 5 minutes. Ms. Garcia of Texas. Thank you so much for bringing these witnesses forward. It has been very enlightening. I was a founding member of the Houston Hispanic Chamber of Commerce a couple of decades ago, it seems like, and I am feeling like I am in a movie sequel of, ``Back to the Future,'' because we seem to be talking about some of the very same issues that we talked about back in the 1980s. While we have made some improvements, there is still so much more to do in this area to help our small businesses throughout the country. It is widely known that small businesses face greater barriers in accessing critical resources and new opportunities than bigger corporations. We saw that during the economic recovery that we have been going through. These barriers are compounded by factors such as race, ethnicity, gender, and language, making it more difficult for minority- and women- owned businesses to get ahead. Even if firms are not engaging in outwardly discriminatory behavior, subconscious bias and cultural distance have made it more difficult for lenders and entrepreneurs to connect, so we must do everything we can to get that connection. I want to start with Ms. Black. Ms. Black, first let me thank you for being, regrettably, the only member of the panel who mentioned Latinos and the impact of some of these programs on Latinos, so I thank you for that. I want to specifically ask you, can you describe some of the language and cultural barriers that you see small business owners face, and how does this impact their willingness to pursue new business opportunities that they can be competitive in? Ms. Black. Yes. Thank you so much for that, Representative Garcia. I think it is important to think about language barriers. We recognize that it is not only a barrier of translation which so often programs are designed in, but it is important for us to think about designing strategies from beginning to end in order to serve both consumers and also business owners in order to serve them in their own language. Our organization just today is announcing a new program, a set of both customized tools and solutions in order to grow programs and businesses specifically serving Black women and Latino women in Minnesota in order to grow businesses in growth sectors, in order to serve so many large corporations in our communities, and that means from the beginning to the end. So, having programs that represent those communities, making sure that they are able to serve their consumers, whether those are in growth sectors, restauranteurs being able to go the distance, and understanding those communities. But that means we have to have staff who come from those communities, inside government agencies like your own, making sure that we have those inside our corporations, and that we have them in every department and not simply concentrated on the front lines. Ms. Garcia of Texas. Thank you. As you know, the growth rate in the number of Latino-owned businesses was higher than the U.S. national average growth rate for all businesses in 41 States. This is one of the conclusions of a study that Stanford did in 2020. Madam Chairwoman, I ask unanimous consent to submit this for the record. Chairwoman Beatty. Without objection, it is so ordered. Ms. Garcia of Texas. Thank you. I think it is critical that we look at the whole picture when we talk about diversity and inclusion. I have a question for Ms. McGuire. I was struck that one of your recommendations for the Congress was establishing a designation of Minority Business Enterprise. What do you mean by that? I know we go through the MWBE certification, so is this something different, and how would this be different? Ms. McGuire. Thank you, Congresswoman Garcia, my fellow Texan. I actually live in Austin, Texas. Ms. Garcia of Texas. Well, Austin is not Houston. [laughter] Ms. McGuire. The Minority Business Enterprise (MBE) designation is different because today, MBE is buried under small disadvantaged business. So, if you look at the SBA designations in the Federal procurement system, you have, ``woman,'' you have, ``veteran, and disabled veteran,'' you actually have an, ``Alaskan,'' and a, ``Native American'' designation, but you do not have a designation for the minority-owned businesses. Ms. Garcia of Texas. Would it be a standalone designation? Ms. McGuire. Exactly, and that is the only way that we can clearly connect the 15 percent spend to that designation, because today there is not a Federal designation. The Federal procurement system says, ``minority-owned businesses.'' In the private sector, we certify Asian, Hispanic, Black, and Native American as MBE designation, and many State and local governments have MBE designation. The only place that doesn't have MBE designation is the Federal Government, and that is what I am suggesting. Ms. Garcia of Texas. Thank you for that clarification. And, Madam Chairwoman, I think that is something that certainly we can work on that shouldn't be insurmountable, and I would be willing to work with you and the rest of the committee on that. With that, I yield back. Thank you. Chairwoman Beatty. Thank you so much, Vice Chair Garcia. Now, I recognize the gentleman from Massachusetts, Mr. Auchincloss, for 5 minutes. Mr. Auchincloss. Thank you, Madam Chairwoman. Mr. Gaskin, in your written testimony you shared the story of your father's struggles to receive a small business loan to open a convenience store in his community, and after 4 years, he was finally able to receive a bank loan from a Black-owned bank. I introduced the Promoting New and Diverse Depository Institutions Act because banks and credit unions are a highly sought-after funding pool for small businesses, but bank closures and consolidations have limited the options for potential minority-owned small business owners who are constantly hearing, ``No.'' In short, the Promoting New and Diverse Depository Institutions Act would require that prudential regulators create a strategic plan to help de novo financial institutions, including MDIs and CDFIs, start and restore competition on a level playing field to small business lending. Mr. Gaskin, I will start with you, but I would welcome any of our witnesses to weigh in here. Can you share the importance of how sustaining a competitive financial services market will help entrepreneurs, and particularly entrepreneurs of color, with affordable capital options? Mr. Gaskin. Thank you for the question. Looking back, I wish my dad had had more access and more competition in the banking and CDFI market. I will share a story here from Kansas City and the importance of CDFIs that we have proven out. During PPP, there was the creation of the Kansas City COVID-19 Recovery Loan Fund, and we invested in AltCap. AltCap is a leading CDFI here in Kansas City. And we helped them raise a larger fund, and over 153 microloans were made, with a zero default rate. It proves that there are entrepreneurs and small business owners right here in communities, and CDFIs and MDIs know the communities, they know the entrepreneurs. A lot of entrepreneurs, especially in smaller businesses, are just starting out, so, of course, they don't have relationships with banks. So when the PPP program happened, some of them just couldn't connect with banks because there was not a longstanding relationship there. I believe that more community banking and access to the entrepreneurs and small business owners in those markets is highly important. Mr. Auchincloss. Another question for you, Mr. Gaskin, or any of our other witnesses. Could you elucidate how these smaller institutions and how organizations like yours and others that are working to provide access to entrepreneurs of color can work with the really big players in the financial services system? Bank of America, Goldman Sachs, and JPMorgan have all made quite tangible commitments to funding small business formation, and particularly for underserved communities. Where are the ligaments of connection there to make sure that capital is going to the highest and best use? Mr. Gaskin. Thank you. I believe there is a connection opportunity there because I think there can be complementary funding initiatives. In America's New Business Plan, we lay out some funding suggestions that we hope that the committee takes a look at and considers, because I think there is some public- private financial investment that institutions could really find ways to close some of these gaps and connect the dots so that the money flow to communities is much more fluent and reaches the end users, who sometimes don't know the programs are available. Mr. Auchincloss. Right, because it sort of combines the best of both worlds. You have the capital of some of these big institutions, but then the community knowledge and relationships of the smaller credit unions and banks. Mr. Gaskin. Yes, exactly. Mr. Auchincloss. Ms. Quick, I was struck in your written testimony, and I didn't hear you say it but you may have, about the problem with receivables with small businesses and the Federal Government's delayed payment of those receivables. I think you calculated more than $800 billion outstanding, and the challenges that poses to working capital for small businesses. I wanted to give you a chance to expound upon that in the hearing. Ms. Quick. Sure. In 2020, Gusto was part of the Equal Pay Today Coalition that brought awareness to this issue. We partnered with Fundbox on this and found that small businesses are owed around $900 billion and take, on average, 28 days to get paid. This includes payments from both governments and larger companies that they may be owed money from on receivables, and government payments can take even longer. Sometimes, it will take months at a time to get paid money that is rightfully owed to the small businesses. Mr. Auchincloss. Ms. Quick, I am going to apologize. My time has expired. I am going to give you 10 seconds. What is the most important thing Congress can do to help that problem? Ms. Quick. Congress can require the Federal Government to pay small businesses faster, within 15 days. Mr. Auchincloss. Thank you. Madam Chairwoman, I yield back. Chairwoman Beatty. Thank you so much. Mrs. Wagner, if we have no more witnesses from your side, we have exhausted the witnesses from our side as well. Mrs. Wagner. It was a great hearing. Thank you. Chairwoman Beatty. Thank you. The Chair would now like to thank our witnesses for their testimony today. The Chair notes that some Members may have additional questions for these witnesses, which they may wish to submit in writing. Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to these witnesses and to place their responses in the record. Also, without objection, Members will have 5 legislative days to submit extraneous materials to the Chair for inclusion in the record. This hearing is now adjourned. [Whereupon, at 11:44 a.m., the hearing was adjourned.] A P P E N D I X February 3, 2022 [all]