Small Things Come In Big Packages

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May 2016 WIPP Works In Washington

Small Things Come In Big Packages

By Ann Sullivan, WIPP Government Relations Team

 

In an epic week fueled by bipartisanship, the Senate Small Business Committee and the House Armed Services Committee put small business issues front and center in a way that was nothing short of amazing. This just goes to show that the “do-nothing Congress” does in fact do plenty when it comes to small business.

Let’s first talk about the Senate Small Business Committee. Members of the Committee introduced and are expected to pass three bills important to WIPP. One bill would extend the Small Business and Innovative Research program (SBIR) and a related program the Small Business Technology Transfer program (STTR) and included a mandate to do better outreach to women and minorities (thanks to Michigan’s Senator Gary Peters). The government funds innovative products and services through federal grants to bring the products to commercialization. Don’t know about it—look into it at: SBIR.gov. By the way, this is part of WIPP’s access to capital platform – so another accomplishment for our advocacy.

Are you a contractor? Then you might be interested in the introduction of The Small Business Transforming America’s Regions Act of 2016. If you aren’t aware of the HUBZone program, you should look into it. The government gives a bid preference to companies who invest in low-income areas. It could supplement the WOSB program you already belong to. At least check it out at SBA’s HUBZone Page.

Need capital? The Committee is expected to modernize the Microloan Program administered by the SBA. The program lends $50,000 and below to companies who need capital. In case you didn’t know it, there is a whole nationwide network of lenders who stand ready to lend, backed by the government’s guarantee against failure.

Now onto the House Armed Services Committee. This Committee and its counterpart, the Senate Armed Services Committee, prepare a bill each year, the National Defense Authorization Act (NDAA) that funds all military operations. It is a must-pass bill because the military requires certainty in funding. In order for the US to keep its competitiveness, it must have a strong and diverse industrial base. That’s where small businesses come in.

To that end, a whole section of the bill is devoted to small business contracting changes and strengthening resources for women entrepreneurs including women’s business centers. The bill:

 

  • Requires an annual report on the share of contract dollars awarded to small businesses without any exclusions
  • Establishes a pilot program that enables contractors to receive a past performance rating by submitting a request to the contracting officer and/or prime contractor
  • Requires the SBA to develop a list of no-cost programs that assist small businesses in compliance with Federal regulations.
  • Strengthens agency small business offices to recommend which small business set-aside programs should be used for each contract at their agency.
  • Requires commercial market representatives (CMRs) to assist prime contractors in identifying small business subcontractors and assess the prime’s compliance with their subcontracting plans
  • Adds HUBZone and SDVOSB to small business office oversight (previously not listed in statute but already happening in practice)

 

In case you do not remember, the Women’s Business Center reforms would raise the funding authorization level by 50% from $14.5M to $21.75M and increase grants to individual centers as well as streamline the program. Better program, better training for women.

How did all of this happen? Champions. The leadership of the House Small Business Committee, which passed the provisions now part of the NDAA, worked together hand-in-glove to assist our businesses. Chair Steve Chabot (R-OH) and Ranking Member Nydia Velazquez (D-NY) set the gold standard of getting things done without a partisan fuss. Similarly, the Senate Small Business Committee, under the guidance of Chair David Vitter (R-LA) and Ranking Member Jeanne Shaheen (D-NH) worked together to introduce reforms good for small businesses.

The real story behind all of this activity is the power of small businesses uniting to ask for changes in contracting and better resources to succeed. Organizations, such as WIPP are the champions, walking the halls of Congress to press for better programs and fairness in contracting.

While I would agree that Congress is more partisan than ever before, there are bright spots. This past week was certainly one—all made possible by elected officials crossing party lines for the good of women-owned companies. If you ever wondered what your WIPP membership is paying for or if you need a reason to join WIPP, look no further. The advocacy WIPP provides on your behalf is the best return on investment you may ever find. It requires almost none of your time, requires a minimal monetary investment (dues) and you get a whole team dedicated to advancing your agenda to the Congress on a daily basis.

I call that value.

 

WIPP’s Next Battle

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For the better part of two decades, WIPP championed the effort to help bring women into the lucrative federal market. As many of you know, we accomplished much of what we set out to do with the addition of sole source authority. Since then, however, WIPP’s team in Washington has focused on a statistic that kept repeating in our brains: women receive only $1 out of every $23 that is being loaned to small businesses. How was that possible?

For months WIPP devoted time to researching the landscape of business finance, capital access, and small business lending. What we found was that there are many policy ideas about how to stimulate lending to women – ultimately growing the economy because we all know the economic impact of women-owned businesses.

But we have a long way to go. In 2013, more than two in three loan applications for women-owned firms were denied. WIPP’s annual membership survey regularly finds that women must make multiple attempts to secure bank loans or lines of credit – with a full 40% never succeeding. All this despite women making up one-third of business owners, generating more than $1 trillion annually in receipts, and growing at 1.5 times the rate of average businesses.

The platform WIPP released today, Breaking the Bank: Women Entrepreneurs & the Need for Capital, will hopefully change that. The solutions span three main themes: changing the capital infrastructure, supporting small lending institutions, and strengthening government investment. The platform has four solutions that will change the capital infrastructure. For example, WIPP wants the government lending programs to consider FICO’s alternative credit scoring system. This system modernizes the way credit is calculated to provide new opportunities for women entrepreneurs trying to obtain loans. WIPP also wants to support small lending institutions by pushing for an end to a “one-size-fits-all” approach to regulation. Removing these burdens on small banks will allow them to return their focus to lending.

Changes to government policies are an important part of the platform. WIPP believes a small business seat at the Securities & Exchange Commission will ensure that smaller women-owned firms have an advocate as the next generation of alternative lending, like CrowdFunding, is eventually put into place. Modernizing the Microloan Program, where women are the majority of loan recipients will also make a difference. Women owned small businesses are growing at 1.5 times the rate of average businesses, but they will never get off the ground if they cannot obtain early stage capital.

WIPP does not have a monopoly on good ideas but we have an important voice in public policy. Over time, we may add to this platform to ensure that all policy solutions improving access to funding for women entrepreneurs can become part of the debate in Washington. We ask you today to look through WIPP’s access to capital platform and share it with one other woman you know. If our successes in Washington in the 15 years WIPP has been an organization are any example, we will need a lot of women behind us to make this platform a reality.