(Baltimore, Md.) – U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) was interviewed yesterday during The Hill’s Virtual Small Business Summit by Editor-at-Large Steve Clemons.

“COVID-19 has had a major impact on American small businesses. Make no mistake about it, small businesses may be creative, they create jobs, and they are flexible in trying to stay afloat, but they don’t have the deep pockets and resiliency of larger companies and therefore when you hit an economic downturn they usually do not fare as well as larger companies…” Cardin said during the interview. “…What we did with the COVID-19 relief package was a unprecedented of federal government help for America’s small businesses through the PPP programs, through the EIDL loans and now through the separate programs we have for restaurants and for shuttered venues. We have a menu of help for America’s small businesses and we’re not finished yet …There is real economic opportunity for American small businesses in both the bipartisan infrastructure bill as well as the Build Back Better budget.”

Click here to watch the interview

On September 9, the House Small Business Committee approved the small business provisions of the Build Back Better Act—a $3.5 trillion budget that will invest $25 billion in American small businesses in the next 10 years. The Infrastructure Investment and Jobs Act passed the Senate last month.

The pandemic has shined a bright light on the systemic inequities in capital access, government contracting, and access to mentorship and training that prevent underserved individuals from starting and growing businesses. The Build Back Better Act will invest in American small businesses and give them the tools and resources they need to participate in the projects created by the bipartisan Infrastructure Investment and Jobs Act.

The proposal would invest in U.S. Small Business Administration (SBA) programs that increase access to capital, foster entrepreneurial development, expand federal procurement opportunities, and drive innovation.

The following are some of the investments included in the Build Back Better Act:

  • $4.465 billion to fund a direct loan product under the current 7(a) lending program administered by the SBA;
  • $9.5 billion to establish a subprogram within the Small Business Investment Company program to provide patient capital to underserved markets and small manufacturers;
  • $2.746 billion to establish a direct lending subprogram under the 504/CDC lending program to allow CDCs to make loans to small contractors, small manufacturers, and small businesses in underrepresented markets;
  • $1.75 billion in funding for an uplift accelerator program and business development academy at Historically Black Colleges and Universities (HBCUs), Minority Serving Institutions (MSIs), and community colleges for underrepresented small businesses seeking to contract with the government;
  • $1 billion to establish a national network of business incubators;
  • $600 million to enhance, improve, and expand the 7(a) Community Advantage program;
  • $500 million to fund a pilot program for eligible cooperatives and employee-owned businesses to receive SBA loan products without the requirement of a personal or entity guarantee;
  • over $100 million to invest in entrepreneurial training initiatives for the formerly incarcerated;
  • $35 million for veteran federal procurement entrepreneurship training; and
  • $20 million each to enhance the SBA’s Office of Native American Affairs, Office of Rural Affairs, and create an Office of Emerging Markets.

Click here for a section-by-section.

The full transcript of Cardin’s interview is below.

Steve Clemons: My next guest as I just mentioned is Senator Ben Cardin from Maryland. He serves as the chair of the small business and entrepreneurship committee. Senator, great to see you again, we’ve had similar discussions. Look, if I were to basically be honest and step back and say let’s take the state of small business in America today; door number one a lot of victims didn’t make it through this time, they really dented where small business failures spiked up so high. Another door is our companies like we just heard about: they’re resilient, they’re holding up with some Band-Aids, some Popsicle sticks trying to figure out what to do. Door number three are firms that have really thrived and boomed at this time. I am interested in as you look at this you look at the policy dimensions of what we have to get right. How are you seeing small business in America, and what is it we now have to do given where we are?

Senator Cardin: Well Steve first of all it’s good to be with you. Second of all listening to your previous guest I’m very hungry for some Dallas barbecue.

SC: Good barbecue in Baltimore too.

Cardin: Look, you’re exactly right. COVID-19 has had a major impact on American small businesses. Make no mistake about it, small businesses may be creative, they create jobs, and they are flexible in trying to stay afloat, but they don’t have the deep pockets and resiliency of larger companies and therefore when you hit an economic downturn they usually do not fare as well as larger companies. Now we saw that before COVID-19 there were three doors every year of businesses that were not making it, that were barely making it, and those that were doing well. What we did with the COVID-19 relief package was a unprecedented of federal government help for America’s small businesses through the PPP programs, through the EIDL loans and now through the separate programs we have for restaurants and for shuttered venues. We have a menu of help for America’s small businesses and we’re not finished yet. We still have to provide additional assistance and we will be talking about that. Our main focus has been on the underserved community. We know we have to do a better job especially with access to capital but also with opportunity for venture capital and innovation and creativity where it is difficult in minority communities and women in small businesses. And we have to deal with those businesses that have basically been ordered by government on COVID-19 to operate to operate much less than full capacity and in some cases completely close. You really have to concentrate on these businesses to make sure they get through this pandemic.

SC: Senator let me ask you a question I’m not sure I’ll get it out right, I may even be wrong. You helped coauthor and you were the lead on the paycheck protection program, PPP program, and you introduced the PPP extension act of 2021, but every measure I can find hugely popular even oversubscribed. There may have been different layers of businesses that came in. Compare that to the eviction moratorium and the funds put in there which has these vast amounts of funds that have not been used or access. I hear about that also like “don’t end the eviction moratorium”, but when you kind of look at the money and the use of it something went off the rails because it wasn’t used as much. What do you account for the disparity in terms of so much demand for what you authored with PPP, there is political demand for eviction moratorium, but you find so much money out there that has not been spent?

Cardin: Well Steve you’re exactly right. The demand is there we know that there are a lot of stressed tenants and we know a lot of landlords are in desperate need of getting rent checks in order to meet their obligations. The renters’ assistance program that we enacted allowed for payments to be made on behalf of the tenant that would benefit the landlord so it was a win-win situation. It was allocated to state and local governments. Most of the money went to local governments and they were the ones that were responsible for the creation of the programs and there were existing programs but they had to fill in the blanks. We had been told the challenge of implementing the program is they need the agreement of both the landlord and the tenant and in many cases that isn’t easy to acquire, but there is really no justification as to why those funds are not being spent when the need is so great. 

SC: You know we are on the verge on some sort of deal we will see how this comes out. I won’t even put a dollar price on it some sort of infrastructure program, some sort of tax and reconciliation where after its all, you know, the sausage is made, there is going to be a lot of money hitting this economy. To what degree do you think small businesses are going to be in a genuine way able to participate? Or are we going to see the oligarchy players, the big players in the system, who are well-wired who are in there with the contracts. I’m interested in whether small businesses are going to be welcomed at the door for a lot of that money that is going to hit the economy.

Cardin: I can tell you I’m fighting for our American small businesses. The small business allocation that are directly in the programs are $25 billion in the reconciliation budget. We have recommendations that will help but principally the underserved communities with partnerships of HBCUs and minority servicing institutions to create incubators and accelerator programs and an expansion in the SBIC program to help venture capitalists. We can look at different ways that we can get access to capital which could be direct loans from the SBA. So we are looking for direct programs that are going to help small business but make no mistake about it, if we get paid family medical leave but no additional cost burden to small businesses that is going to be very helpful on the workforce issue for small businesses. If we get affordable child care which is one of the major deterrents for individuals entering the workforce, that will also help us with getting those workers we need down in Dallas in regards to our barbecue friends. These are all issues that we believe will help on the workforce issues for small businesses and the bipartisan infrastructure package includes tremendous improvements in America’s infrastructure. A significant amount of that business is going to go to America’s small businesses that is under our set asides and our provisions that were included in that legislation. So we do think that there is real economic opportunity for American small businesses in both the bipartisan infrastructure bill as well as the Build Back Better budget.

SC: Senator, I know a secret about you, which I will share to the audience. It is not actually such a secret and we will go to an audience question in a second. You know as much about foreign affairs and national security as you do about small business so that is out of the closet I wanted to share with our audience. So with that, one of the things we have been looking at is this challenge that we have where small businesses go online and if they make things they want to sell them in places like China, but we have a lot of geopolitical tension with China. The economies are joined at the hip but there is a kind of slow motion divorce going on at one level and at many of the other geopolitical dimensions. I just feel interested because you know both sides of that brain. How do we manage our business equities, how do you talk about economics and exports? I just mentioned one of the big Maryland exports to China are chicken feet. How do you do that when at the same time we are clearly going to have a geopolitical struggle with China?

Cardin: Well you’re right I serve not only on the senate foreign relations committee but the senate finance committee, both committees have jurisdiction over international trade. We met with the director of the world trade organization today. I raised the issues concerning China, so absolutely we believe that China is not playing by fair rules. They’re trying to steal off intellectual properties and it’s not just small business, our companies are having a challenging time at being on a level with the way that China is conducting its commerce so we passed legislation to take that on. We’re not going to tolerate that and I had a conversation with some of our European allies and they are in agreement with us on this. We are going to create an overall strategy with the competition coming in from China. We don’t mind fair competition but you cannot sell our intellectual property, you cannot subsidize industries, you cannot do what you’re doing intimidating other countries to do business with you under your rules. That’s not going to be allowed.

SC: Then one last thing before I bring in an audience question is people think of small businesses as 10, 100, 5 people. Sometimes it is one or two people in a household and what we know that digital connectivity is so vital today. Where is Maryland, where is America when it comes to actually getting a strategic leap in the number of households and people that are connected online?

Cardin: That is a great question. First of all getting connectivity, we have provided some substantial resources on broadband, as you also know it is in the bipartisan infrastructure package we believe every home has to have access to reliable high speed affordable internet. We saw during COVID-19 that students were totally left out when they didn’t have access to high speed internet, so we are providing connectivity through many programs. Through direct programs, through the department of agriculture, through the FCC, there are so many different agencies that are providing direct help to expand the broadband. I thought you were leading also to the digital economy, the CARES Act made it very clear that we had special provisions for the gig economy, for the “ma and pa” type businesses. We want to make sure that the individuals who work for these types of companies that do not have W-2 income that they also qualify for help. We did get those help and this is now a permanent change in our toolbox. We want to make sure that we are there with the digital innovative small businesses that are really advancing our capacity in this new tech world. 

SC: That’s cool. We have a question from the audience for you from Quentin Reed.

Quentin Reed: My name is Quentin Reed and I am the government affairs assistant With Small Business Majority, which is a national nonprofit organization engaging our network of more than 85,000 small business owners and more than 1,000 business and community organizations to help promote an equitable small business ecosystem. How can our organization become more effective in providing members of congress or congressional committees with our data and small business owner testimonies? Thank you.

Cardin: First off, Quentin, you are very effective. You have testified before our small business committee, we get your material all the time, our staff was very thankful for the information that you make available to us. I first want to compliment you for the way that you have interacted with the Senate and our committee and members of Congress to present unified front on behalf of America’s small businesses. Look I think most people in this country respect and understand the importance of small businesses. It is where innovation takes place at a much higher level than larger companies. It’s where we have more job growth than in larger companies, it is where we find creativity to deal with challenges as we saw during COVID-19, so this is the backbone of the American economy and I think the more you can make that point, the more you will see friendly policies. And friendly policies are not just these aid programs like during COVID-19, it is how we look at small businesses in our tax code, how we look at small business in our regulatory system, how we look at small business in relationship to how we do government contracting, and make sure we do more with prime contracts for small businesses than just subcontracting. All of that is the sensitivity that I think your organization could help us understand and develop the right policies to move forward.

SC: Well Senator Cardin thank you very much for your time. Chair of the committee of small business and entrepreneurship and so many of the cool committees. As you know I have this place out in Chestertown, Maryland you have a standing invitation to come hangout, we can do public education on small business policy. Thank you so much for joining us.

Cardin: Well my pleasure. It is a wonderful place, Chestertown, enjoy the eastern shore, enjoy our state, and I might stop by, keep the door open.