On May 12, the House Small Business Committee examined the successes and challenges of women entrepreneurs. Chair Donald Manzullo (R-IL) opened the hearing saying, “There has never been a better time for women to be in business. Women own 40 percent of all small businesses…America’s 9.1 million women-owned businesses employ 27.5 million people and contribute $3.6 trillion to the economy.” Despite these successes, Rep. Manzullo noted, “Women-owned firms still face many challenges, including access to credit…Additionally, women have not enjoyed the same procurement opportunities as their counterparts enjoy, not even receiving close to the 5 percent of contracting opportunities mandated by law.”
Ranking Member Nydia Velazquez (D-NY) agreed with the successes of women entrepreneurs, but criticized the administration’s efforts to address the needs of women-owned businesses. “The failure of this administration to provide access to health care, capital, and the federal marketplace, strongly impacts women business owners since their firms tend to be smaller,” she said. “The women’s procurement program, which was actually signed into law in 2000, would have allowed federal agencies to lessen competition for contracts by restricting a portion for women-owned businesses. Sadly, it was never implemented by the SBA [Small Business Administration]. Therefore, in 2001, women-owned businesses lost more than $5.5 billion in federal contracting opportunities, and an additional $4.9 billion in 2002.”
Speaking on behalf of the SBA, Melanie Sabelhaus outlined their efforts to provide assistance to women entrepreneurs. “The number of SBA loans to women-owned businesses was up 37% in FY2003,” she said. “In fact, in FY2003, SBA guaranteed 14,300 7(a) loans to women, the highest in out history. This totaled more than $2 billion for women-owned businesses last year.” Ms. Sabelhaus continued, “So far in the current fiscal year, SBA has done 9,830 loans to women entrepreneurs, totaling close to $1 billion.”
In addressing the issue of access to capital for women-owned businesses, Ms. Sabelhaus said, “In the last 3 years, the percentage of Federal prime contract dollars awarded to women-owned small businesses has risen every year. FY2003 saw $9.7 billion in federal contracts go to women-owned small businesses—that’s $1.1 billion more than in the previous year.” Additionally, she said that SBA programs served over 515,000 women entrepreneurs in FY2003.
The committee heard testimony from a number of women entrepreneurs, who detailed their experiences. Norma Powell Byron of The Ashlawn Group, a munitions company, testified on behalf of Women Impacting Public Policy and the National Association of Women Business Owners. Noting that her company is the only women-owned business designing munitions for weapons in the United States, Ms. Byron said she faces several challenges in growing her company: approval of 8(a) status, contract bundling, federal acquisition regulations, timely payment, and access to capital. “The perception that ‘you can only get an SBA loan if you don’t need one’ is still the perception among women business owners and one that needs to change,” she said. “As women-owned businesses mature and move to the next level of growth, access to capital is a critical component. Thankfully, we no longer have to take our husbands with us to get a loan, but from my personal experience the amount of the loan offered to a woman-owned company from a financial institution can still differ significantly from one given to a male counterpart.”
Maria Welch of Respira Medical told the committee her success story, saying that three years ago she applied to an SBA-support program called Women Entrepreneurs of Baltimore, Inc. (WEB). “When I applied to the WEB program, I expected to learn how to write a business plan and open a business. At that time, I was dealing with a lot of issues which affected my self-confidence and my self-esteem. Not only did I learn how to write a great business plan and open my business, I also received immense support, encouragement, resources and tools to overcome my lack of self-confidence and to build my self-esteem,” she stated. “I am happy to report that just three years later, I employ 24 individuals and have cared for 4500 patients throughout a broad geographical area…We have grossed over $1.4 million this past year and have been honored with numerous awards.” Crediting the WEB program with much of her success, Ms. Welch urged the committee to consider S. 2267, the Women’s Sustainability Recovery Act, which was passed by the Senate on April 29 (see The Source, 4/30/04). “Fifty-three Centers are in jeopardy of losing their funding as of July 1, 2004, if this legislation is not passed.”
Terry Williams of the U.S. Women’s Chamber of Commerce shared some of the “realities” facing women entrepreneurs. “Between FY1998 and FY2003, there was a 7.5% decrease in the average value of loans made to women-owned businesses.” Further, “when the receipts of women-owned businesses are compared to the market whole, we gain a clearer perspective of the constraints women face,” she said, sharing data that showed “in the DC-MD-VA-WV Metro Statistical Area, women own 32.2% of all firms, but generate only 10% of the receipts.” Ms. William criticized the administration and Congress for not “addressing the clear competitive issues that our new pioneering women business owners are facing.” Specifically, she urged assistance with: access to quality, affordable health care; tax relief; access to the government marketplace; access to capital; and reductions in the regulatory compliance work required of small businesses.
