What Does the Senate Committee on Small Business and Entrepreneurship Do?

The Committee on Small Business and Entrepreneurship isn’t a large one, with 20 members and no staff or sub-committees. Even so, it has some lofty goals when it comes to ensuring the effectiveness of the Small Business Administration (SBA). 

The primary purpose of this committee is to oversee the SBA. It also reports to the Senate on any legislation related to the SBA, as well as legislation reported by other committees that are related to the SBA. In a nutshell, the committee advocates for legislation that would reduce regulatory and tax burdens, as well as provide financing and training for small businesses and socioeconomic set-asides such as WOSB, SDVOSB, HUBZone, and 8(a) businesses. As part of this effort, the committee also conducts research on the issues facing small businesses in the US, and periodically reports their findings to the Senate.

Which issues are prioritized by the Committee on Small Business and Entrepreneurship?

From access to broadband internet to opportunities to bid on federal contracts, the Committee on Small Business and Entrepreneurship is focused on a wide range of issues that affect small businesses in America.

Facilitating trade

Although 95% of potential customers live outside the US, only 1% of small- and medium-sized businesses are actually exporting to them. This represents a lot of underutilized potential, which the State Trade Expansion Program (STEP) helps these businesses take advantage of. The program does this by assisting small businesses to attend trade missions, access export financing, and prepare for new markets. So far, STEP has supported over $1.1 billion in US exports from small businesses, resulting in a 19-to-1 ROI for taxpayers.

Reforming tax codes

The current tax code urgently needs to be reformed, as its complexity represents a significant burden on small businesses. According to data from the National Taxpayer Advocate Service, around 2.5 billion hours are spent by small businesses each year as they comply with IRS regulations. And since time is one of a small business’ most precious resources, this means that overly complicated tax codes are directly interfering with their ability to succeed.

Regulatory reform

The same goes for federal regulations. The last two decades have seen a rapid increase in complex federal regulations, many of which have a disproportionate impact on small businesses compared to larger ones. The committee consistently works to reduce this burden, in order to free up time and other resources that can be used for more profitable pursuits.

Supporting businesses owned by women, minorities, and veterans

These businesses face unique challenges, and the Committee on Small Business and Entrepreneurship is focused on finding unique solutions. For example, its Veterans Entrepreneurship Act waives SBA loan fees for veterans, and efforts are being made to close gaps in funding for women- and minority-owned businesses as well.

Supporting innovation, research, and development

Economic growth is spurred in part by job creation, which in turn is driven by innovation. Without the creative drive that comes from small businesses, economic growth would slow dramatically. These businesses employ close to 40% of engineers and scientists in the US, and produce 16 times more patents than universities and large businesses. In order to meet government development and research goals, small businesses are able to partner with federal agencies thanks to the Small Business Technology Transfer (STTR) and Small Business Innovation Research (SBIR) programs. Between these two programs, over $2 billion gets awarded to small businesses annually.

Healthcare for small businesses

Attracting and developing workforces is an especially formidable challenge for small businesses who aren’t able to provide competitive healthcare for their employees. Even though the passage of the Affordable Care Act (ACA) represented a step towards this goal, there’s still plenty of work to be done before it can be achieved. That being said, the ACA has brought a number of measurable benefits to small businesses. 20% of individuals who obtained a healthcare plan on an ACA marketplace were self-employed, owned a small business, or both. The ACA also made it easier for individuals to seriously consider entrepreneurship, when before they felt obligated to keep their jobs simply for the health insurance benefits.

Disaster assistance programs

The standard process of getting a bank loan or other financing is simply too slow for anyone who’s trying to rebuild their small business in the wake of a natural disaster. This would also affect consumers, who depend on these businesses for key goods and services that would help them get back to normal. The SBA’s Disaster Assistance program supports long-term recovery for businesses of all sizes, non-profit organizations, renters, and homeowners who’ve been affected by a natural disaster. The SBA’s Disaster Loan program underwent an overhaul after Hurricanes Katrina, Rita, and Wilma exposed a number of inefficiencies, which was spearheaded by the Committee on Small Business and Entrepreneurship.

Entrepreneurial development programs

The SBA has a number of entrepreneurial development programs, which provide access to resources, counseling, and training for small businesses. A large part of this crucial technical assistance is delivered through a network of SBA resource partners, who work with small businesses across the US.

Government contracting opportunities

As the largest buyer of goods and services in the world, the US government spends about $500 billion each year. Unfortunately for small businesses, federal contracts are often inaccessible to them for various reasons. In some cases, they simply can’t compete with larger companies. In other cases, they don’t have the organizational capabilities to meet contract requirements. However, the committee and the SBA work together to improve access to federal contracts for small businesses, especially those owned by women, minorities, or veterans. The SBA 8(a) Business Development program and the SBA Mentor-Protégé program, for example, are both designed to make small businesses more successful when bidding on federal contracts.

Access to broadband

A surprisingly large portion of the US doesn’t have access to high-speed broadband internet, which means that businesses in those areas may have a harder time competing in their industries. The committee has supported legislation that would make reliable broadband more accessible, enabling more small businesses to fully participate in the global market.

Access to capital

For a number of small businesses, one of the biggest obstacles to growth is a lack of capital. The SBA’s lending programs are designed to provide a variety of financing options to small businesses, whether they’re just starting out, or they need financial assistance in order to maintain growth.

Recent legislation influenced by the Committee on Small Business and Entrepreneurship

It’s clear that the committee has many goals when it comes to providing federal assistance to small businesses. The question is, how do these goals translate to actual legislation? These are several examples of bills that were unanimously passed by the US Senate in 2022, in which the Committee on Small Business and Entrepreneurship played a key role.

S. 2521, the SBIC Advisory Committee Act of 2022 was introduced with the purpose of establishing an advisory committee. This committee would provide recommendations for improving geographic and demographic diversity among participants in the SBA’s Small Business Investment Company (SBIC) program. Out of the 1,063 small-business investments made by this program in 2021, only 20% of the businesses were based in low- or moderate-income areas, and just 5% of them were owned by women, minorities, or veterans. The SBIC should be more effective in providing assistance to the businesses who need it most, and this advisory committee is meant to find out how.

H.R. 3462, the SBA Cyber Awareness Act requires the SBA to perform an assessment of its current cybersecurity procedures. The SBA will also have to write an annual report for Congress on its cybersecurity strategy, and develop a notification system that would alert affected parties (including Congress) if a cyber-breach took place.

H.R. 4877, the One Stop Shop for Small Business Compliance Act will require the SBA to publish and maintain a website that would provide hyperlinks to each federal agency’s small business compliance guides, making this crucial information much more accessible to small businesses. This website will also include relevant points of contact for each guide.

S. 3906, the Small Business Broadband and Emerging Technology Enhancement Act will enable the SBA (through necessary resources and leadership) to improve access to broadband internet for small businesses.

S. 1687, the Small Business Cyber Training Act of 2021 mandates the creation of a training program for counselors at small business development centers (SBDCs), who would assist small business owners with cybersecurity guidance. 

S. 1617, the Disaster Assistance for Rural Communities Act amends the SBA threshold for declaring a disaster. It now applies to rural communities in which at least one homeowner, non-profit, or small business had significant damage, and that are included in a Presidential public assistance-only disaster declaration (provided the state’s governor requested the disaster declaration). This makes disaster assistance more accessible to rural communities, which aren’t consistently prioritized in disaster assistance efforts.

The Committee on Small Business and Entrepreneurship has its work cut out for it

The committee focuses on a wide range of issues, and even though the wheels of government are slow to turn, it’s clear that the committee is dedicated to effecting lasting change for small businesses in the US.