09/11/08 Business Start-up Hurdles in Underserved Communities: Access to Venture Capital and Entrepreneurship Training Hearing
09/09/08 Opportunities and Challenges for Women Entrepreneurs on the 20th Anniversary of the Women's Business Ownership Act Roundtable
07/30/08 S.3362, A bill to reauthorize and improve the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs Markup
06/25/08 Examining Solutions to Cope with the Rise in Home Heating Oil Prices Hearing
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Press Room: Statements
March 28, 2007
Kerry Statement on the Military Reservist and Veteran Small Business Reauthorization Act of 2007
Mr. President, I rise today with my colleague Senator Hagel, the Senator from Nebraska, to introduce the Military Reservist and Veteran Small Business Reauthorization Act of 2007. There are currently 25 million veterans in America, including over one million who have left military service since September 11, 2001. As the conflicts in Iraq and Afghanistan continue, the number of veterans, including service disabled veterans, will increase and reservists will continue to carry more of the burden than ever before. As veterans and reservists reenter civilian life, the economic benefits and opportunities provided by the Federal Government will become even more critical, particularly in the field of entrepreneurship and business ownership. As the Chairman of the Senate Committee on Small Business and Entrepreneurship, I am serious about addressing the problems affecting veterans and reservists who wish or are already engaged in small business and this bill is another step forward in doing so.
As veterans, Senator Hagel and I believe that the government has an obligation to help deployed reservists avoid economic hardship because of their service and to help veterans, particularly the service-disabled, return to civilian life when they retire. There are more veterans returning each day because of the war on terror—800,000 veterans were discharged between 2002 and 2005—and ensuring that these individuals have a secure financial future is not just a matter of fairness but of national security. The treatment of our troops affects the Nation’s ability to recruit and retain the best and brightest. Veterans have told me that they feel that they are being forgotten and that the government is simply not living up to its past promises of helping veteran entrepreneurs succeed. This bill is one step in ensuring that the government is doing all it can to help those who have served and sacrificed on our behalf.
The Military Reservist and Veteran Small Business Reauthorization Act of 2007 reauthorizes the veteran programs in the Small Business Administration. Specifically, this legislation increases the funding authorization for the Office of Veteran Business Development from $2 million today to $2.5 million in three years. In light of the large numbers of veterans returning from Iraq and Afghanistan and increased responsibilities placed on this office by Executive Order 13360, it is high time that the Office of Veteran Business Development receive the funding levels that it needs.
In addition, this bill permanently extends the SBA Advisory Committee on Veterans Business Affairs. The committee was created to serve as an independent source of advice and policy recommendations to the SBA, the Congress, and the President. The veteran small business owners who serve on this committee provide a unique perspective which is sorely needed at this challenging time. Unfortunately, continuing uncertainty about the Committee’s future has, at times, distracted the committee from focusing on its core function. Therefore, I have called for its permanent extension. It is clear to me that more needs to be done to address the issues facing veterans and reservists, and the role this committee plays will continue to be important.
Additionally, I have taken a number of steps to better serve the reservists who are serving their country abroad while their businesses are suffering at home. Over the past decade, the Department of Defense has increased its reliance on the National Guard and reserves. This has intensified since September 11 and increased deployments are expected to continue. The effect of this increase on reservists and small businesses continues to remain of concern. A 2003 GAO report indicated that 41 percent of reservists lost income when mobilized. This had a higher effect on self-employed reservists, 55 percent of whom lost income.
In 1999, I created the Military Reservist Economic Injury Disaster Loan (MREIDL) program to provide loans to small businesses that incur economic injury as a result of an essential employee being called to active duty. However, since 2002, fewer than 300 of these loans have been approved by the SBA, despite record numbers of reservists being called to active duty. It is clear that changes need to be made, so that reservists are informed about the availability of the MREIDL program and that the program better meets their needs.
At a hearing of the Committee on Small Business and Entrepreneurship on January 31st, the first hearing we held in this Congress, we heard suggestions for a number of changes which would improve the Military Reservist Economic Injury Disaster Loan program, and I have included those changes in this bill. They include increasing the application deadline for such a loan from 90 days to one year following the date of discharge; creating a pre-deployment loan approval process; and improved outreach and technical assistance.
This bill also creates a non-collaterized loan program. Reservist families have already sacrificed enough when a family member goes away to serve their country and when their business is harmed as a result. This loan program would allow reservist dependent businesses to access the capital they need to stay afloat without having to sacrifice beyond the service of the key employees. In order to give reservists time to repay the loans, the non-collaterized loan created in this bill would not accumulate interest or require payments for one year or until after the deployment ends, whichever is longer.
In addition, because loans aren’t the answer for every business—additional debt could permanently cripple some businesses—I have also included a grant program for reservists. This program would allow up to $25,000 in grants for small businesses that can show economic injury because of deployment and prove that they have a viable business plan for the next three years. A grant program would help small businesses that cannot afford to take on a military reservist economic injury disaster loan or that were denied such a loan, but still are viable businesses and need assistance.
While addressing the funding needs of reservists is essential, I also want to make sure that reservists receive the technical and management assistance they need to succeed. For that reason, this bill also includes the establishment of the Reservists Enterprise Transition and Sustainability Task Force. This grant program would allow Small Business Development Centers, Women’s Business Centers and veteran centers to compete for grants to create programs that help small businesses prepare for and cope with the mobilization of reservist-employees and owners.
Veterans possess great technical skills and valuable leadership experience, but they require financial resources to turn that potential into a viable enterprise. A recent report by the Small Business Administration stated that 22 percent of veterans plan to start or are starting a business when they leave the military. For service-disabled veterans, this number rises to 28 percent. So the legislation I introduce today will create a new program, administered by the Small Business Administration, to provide very-low-interest loans, up to $100,000, to help veterans start new small businesses.
Lastly, this bill calls for two reports from the Government Accountability Office. One report will look at the needs of service-disabled veterans who are interested in becoming entrepreneurs. As a result of the war on terror and improved medicine, we are seeing more service-disabled veterans than we have seen in decades. For some service-disabled veterans, entrepreneurship is the best or only way of achieving economic independence. Therefore, it is essential that we understand and take steps to address the needs of the service-disabled veteran entrepreneur or small business owner.
I am also calling for a study to investigate allegations that the changes the Department of Defense has made in regard to the use of reservists is harming the ability of reservists to find jobs and the ability of small business owners to continue hiring reservists. At the Committee’s hearing on veteran small business issues, witnesses testified about reservists being turned down or not considered for jobs because they are reservists. I have heard reservists talk about being pressured to leave the reserves if they would like to continue to advance at work. I have also heard the concerns of small business owners who want to support service members; however, they cannot do so if it means the survival of their business. Understanding more about this issue is important and essential to making sure that policymakers can continue to support citizen soldiers and the small businesses that employ them across the Nation.
One of the issues I am not addressing in my legislation today is Federal procurement. I heard clearly the concerns from veterans that they are not being treated fairly when it comes to selling goods and services to the Federal Government, and I am committed to making changes. However, to make real changes, changes that can pass the Senate and the House and become law, these changes must be part of a bigger package. Legislation that addresses not just the concerns of service-disabled veteran small business owners, but the concerns of all small business owners who want their fair share of Federal contracts. I am committed to taking the difficult steps necessary to address these issues and will do so.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.