>> this in the banking housing committee the virtual format printed the reminders as you began once you start speaking, there will be a slight delay before you are displayed on the screen. to minimize the background noise, please click the mute button. you should all have one box on your screens labeled and it will show how much time is remaining for witnesses you will have five minutes. opening statements. and all senators a five minute still applies to all of your questions printed 30 seconds remaining, you will hear belt rank to remind you that the time is almost expired. and it will ring when your time has expired. this technology issue will move to the next witness or senator until it is resolved. and the speaking order, as we do this remote. the senator and i have agreed to go by seniority for this hearing. one of the most part of things that we can do in this committee is to give a voice to all people who have not had enough of a voice in their government. last week we began by hearing from ohioans and witnesses from around the country printed who don't have corporate lobbyists to understand their communities and understand their communities it and of the challenges regular people are facing right now. and today we will continue the work hearing from small business owners. in small interest from columbus ohio. in baltimore maryland and from pennsylvania and just like american workers, these businesses often left behind are steamrolled and the largest corporations in the biggest banks and their allies in washington. and it wall street, too often excludes small and minority owned businesses and only measure success by the stock market. and now it does not tell us about how restaurant in columbus early learning center in baltimore is doing and how their work with their customers and how they are doing in these entrepreneurs are important measure of the real state of our economy. small businesses create jobs and generating economic growth in our communities and our heartland in black and brown communities facing often don't get a lot of outside investment. stakeholders in these businesses are faceless shareholders there are neighbors and family members and the see in school printed at the grocery store and at church. you will not have a strong recovery unless we reach these businesses in the letters and organizations that support them. these businesses are important to have local lenders and institutions that understand small business needs and serve the communities. it is a community development financial institutions the cdf eyes and minority depository institutions in the help to fight them same for the businesses with the big banks turned them away or were never an option in the first place. people in ohio and across the country remember how after the last economic crisis in 2008 in 2009, the big corporations recovered while large parts of the country including in my state one of behind. and same communities for decades in the factories closed and investments kind of varied rough in places that have never had the investment they should because of the doomed discrimination because the redlining and because of decades of policy the final resources and jobs away from entire neighborhoods and towns and regions of our country. all of these places so any markets know what it is like to wake up one day and realize the only job to be had or big-box chains and rock-bottom wages with no healthcare and okay see sick labor power over your schedule. we cannot allow that to be our future. we need to invest in places that have seen investments dry up in places that were over welder discriminated against and they were outright prayed upon to begin with. we now know that wall street first recovery when the big ice get taken care of, while small businesses fight over the scraps. filling up with a more hollowed out towns and neighborhoods and more workers trapped in a broken corporate business model. president biden understands that is rescue plan will help these businesses in the communities they support of the country. in the number one thing we must do to support small businesses to get every american vaccinated as quickly as possible. that's how we protect workers and that's how we ensure customers feel safe and going shopping and going to restaurants, going to the movies and the concerts and the barbershops. and the other places. rescue plan will find mobilization that we need to make that happen and get more financial support to these small and minority owned businesses in the community lenders who support them. in condition to continuing to improve the ppe vinyl programs, were going to restart successful treasury program that will get for small businesses access to capitol. will make sure the commission based lenders have what they need to serve their communities. our design and with his emergency bill. need to invest and these rough character neighbors represented today for long-term and we need to rethink our economy and how we value the people in the places is made up of. when we put communities, not big corporations at the center for policy policy, we will get more businesses that actually value their workers and measure success the same way families do. not in quarterly earnings reports predict will give mantra producers building something for the long-term and something with roots in our communities. people are proud of where they come from and they want to see main street that they love thriving again. our witnesses today know that in the new vibrancy in the diversity of working-class towns and neighborhoods. it all of this country and they need to get to work to invest in them and ensure those places america's main streams, not wall street, they are the center of our recovery in the building blocks in a better economy. >> thank you chairman brown and thanks to our witnesses for testifying today you know that covid-19 is been unprecedented crisis in congress' response has been unprecedented as well. congress has passed five bills in response to the pandemic and they provided almost $4 trillion in relief, the most recent 900 billion-dollar bill, signed into law less than two months ago and all five of those sales received overwhelming bipartisan support designed to prevent the economy from spiraling into a crisis and to facilitate economic recovery that we needed. let's be clear, the economy is in recovery mode. they include the rate that was 15 percent in april is 6.3 percent in january. as of december, 19 states and unemployment rates below 5 percent. and we have seen strong economic growth these last two quarters and the consensus forecast for the year we are in now, is likely to exceed 5 percent real economic growth and unfortunately despite all of this, president biden and our democratic colleagues were pushing the $1.9 trillion bill and is completely detached from any kind of economic reality. villas are designed to find common ground in fact it was procedure being used to pass it, virtually from other common grounds and unlike previous bills, is not an economic relief bill. the content appears no correlation between economic services wherein predict for example, they would spend billions, tens of billions when billions have already been spent and are still available. democratic plan includes spending another $15 billion for economic disaster loans printed tenderly dollars to restart the obama era state small business credit initiative. another seven have billion for paycheck protection program known as pp e. at the congress is provided over a trillion dollars in relief for small businesses. just a month ago, congress gave 240 billion for the hardest hit businesses for a second round ppe bones and another 20 billion for others and 12 for institutions in the community development financial institutions to invest in low moderate income communities. it they won't even be able to push these monies out the door, the $12 billion that we already gave is 50 times the annual amount of the cdf i funds. in billions of these dollars are still available. as of earlier this week, more than $940 billion of ppe loan money is available. untapped. as of yesterday, none of the $20 billion has been disbursed. and much if any of the 12 billion for the others have been put to use. and yet, they still want more money. there's no need for the $10 million to restart the program that was tried and found. that program was operationally early in 2010 and the results were disappointing. and often the case with government programs. yes will launch, inefficient and loans and investments often take months or years to reach small businesses and we know they will be able to get money to small businesses quickly now predict results have all kinds of problems. the audits by the inspector general in the gao went to a program that was wasteful inefficient, poorly managed and more fundamentally, the programs are going on his face unlike ppe, this program is not about providing covid-19 releases and makes funding available for years after the expected duration of the pandemic. in fact they estimate that only 8 percent of the $10 billion meant for fan will be spent in 2021. and unlike ppe, it is not about keeping employees on payrolls, it contains no such requirements. the program is used to means for the government to allocate credit. in addition to misusing taxpayer resources things like them, the democrat managed provisions will actually harm the small businesses and the workers printed their employees and their recovery and it is underway. for example, $15 an hour minimum wage that is an increase that will not only harm small businesses that permit low skilled workers from getting their first jobs. pdo projects 1.4 million jobs and maybe 3.7 million. today we have two witnesses and tell us more about the damage they believe will occur if we have a 15 million-dollar been among wage. and i'm looking forward to hearing from jolt griffith from the heritage foundation and danny ritchie from my home state of pennsylvania printed and other important thing to take this bill is not targeted to provide the temporary aid that s resulted by the pandemic. according to the estimates, only a fraction of the $1.9 trillion will be spent this year. among the spinning items under banking committee jurisdictions, they estimate that in 2021, only about half of the $19 billion for rental assistance will be spent. only a percent and $10 million will be spent 2021 and only 5 percent of the $5 billion for emergency housing vouchers will be spent in 2021. and this is incredible. they estimate that 0 percent of the $5 billion for homeless assistance will be spent in 2021. do they think this pandemic is on for decades. this makes no sense. and there's a provision that has nothing to do with covid-19 under any circumstances, like a $6 million to be off pensions and assembly in silicon valley buried under 30 family dollars for the national endowment for the arts. $50 million from environmental justice grants, whatever that is. small businesses and workers do not need a $1.9 trillion bill that is wasteful and nodded all targeted and largely unrelated to covid-19. and and certainly don't need to lose job opportunities in virtue of $15 minimum wage. so rather than going through partisan bloated and unnecessary spending bill, we have the focusing on lifting the government shutdown orders reopening our schools and the one thing that i think of you agree on is distributing vaccines as quickly as we possibly can so the businesses can reopen in reversing about work and people can go back to normal life. thank you mr. chairman. toomey: i'll now introduce today's witnesses. in the owner in which they will testify pretty the president ceo of baltimore community lending, she has more than 30 years and experience in making finance and economic development and affordable housing. welcome. and the founder and ceo taking over a popular restaurant that started it is a pop-up window in neighborhood and syllabus and expanded to westerville, westlake in northeast ohio. he will expand in other places as well. it and both of my daughter elisabeth and young men in my office by the name of andy, and jessica a small business majority in senior advisory pretty she fears today their personal capacity. she previously served as a deputy assistant secretary for small business community development housing policy department of treasury. and as a senior advisor to the administration of u.s. small business administration. mr. joe griffith the research fellow and an institute of the heritage foundation and previously worked as a director for state fiscal reform at the american exchange center as deputy research director the national association of counties. ms. dana ritchie is the i'm sorry, the owner and solace in studio and army, pennsylvania. the firm estate predict my state of ohio and is a look much different from that part of the state. so welcome to all five of you predict you have about five minutes to begin. thank you. >> distinguished members of the committee, thank you for the opportunity to appear before you today printed i will serve as the president of baltimore community lending. it's a community development and institution in the heart of baltimore and we have support. [inaudible]. and target through innovative and flexible financial resources. we will talk about construction loans printed and small business lending and not require collateral pretty but that covid-19 any of our businesses and trouble to accessing things printed due to business race and gender and the inability to get the collateral party nick. [inaudible]. they any businesses have returned to other resources including high interest rates, credit cards and online things. any of whom are predators. there are concerning prior to the pandemic. and now they have worsened these lack of affordable conditions in our communities. that said, in my testimony today, i would like to address the major issues and concerns facing my area baltimore and one cycling around the country. it is african-american, their member of the african-american alliance of cdf i ceos for meeting the alliance is a nonprofit coalition comprised of any covering several states with the process of strengthening operational and fiscal capacities of its members. in the nature of closing the black wealth gap. is playing a significant role. in been an effective tool in generating economic development in lower income and african-american communities. however, african-american areas have had significant underfunded and the ability to stimulate economy for the black and brown pretty. [inaudible]. and under investments for centuries pretty and according to a research data conducted by nystatin, covering the june 2014, - 2017, the snf's white men in the cdf i, 2 billion and accessing minority led cfi's approved by just 600 and $3m printed. [inaudible]. and directly impacts our ability economic development project in the community be served printed. [inaudible]. in a recent covid-19 relief package by congress, this body and toward a necessity if i will see additional appropriations which a big step in the right direction. however, the economic capitol investment programs, the programs that we provides 9 billion investment capitals targeting minority cfi and low income communities and persistent property. they excluded them. leaving women of our provisions with avoid of needed investment capitol. we believe in what the original intent was that they not be excluded. we ask that you consider opening additional targets and appropriations printed it does not target minority led non- cfi's party nick that said, i will also add most of the new market tax credit programs is another mechanism for directive distribution to the minority led areas pretty unconcerned with the smaller cfi cd may be excluded from these awards. and lack of experience or ability but because of programs preferred a larger. and possible solution for the committee to consider is whether to fund it. [inaudible]. and to preserve allocations for emerging cdf i and cde. thank you very much for the opportunity to provide my testimony in sharing my views on these very important issues. we look forward to our continued work together in developing solutions smart businesses and affordable housing and job creations. i think you predict. brown: thank you. >> thank you chairman brown and ranking member of the invitation to testify on the founder and ceo and a small restaurant chain based in columbus, ohio. and throughout the midwestern now. services has an absolutely ridiculous name. it was built with a serious transformative mission. i started hot chicken takeover to provide to those who have experienced significant adversity in their lives printed ranging from incarceration homelessness to addiction and in any things in between. if our team is a diverse passive players always together to be a best in class restaurant chain. we currently have five open and six under construction. tutor people before the end it and will employed. so this introduction especially mention of our employees path often garners sympathetic responses. and with that in mind, is reporting for me to distinguish the hot chicken takeover far from a charity or some late-night tv commercial without music. our business is strong because our people are strong. they been overlooked by the greater employment market. our team has led hot chicken takeover to national media exposure and private investments from some of the greatest innovators in our industry. our business is very for-profit business devastating a positive economic they can have it from deeply caring for and investing in us. when covid-19 hit in the u.s., our leaders immediately concern themselves with the stability of our team and our community. with fear that the restaurant sales may dry up completely, we made a choice to temporarily close our restaurants read and move our team onto the emergency assistance and unemployment benefits the any engineered. this transition was far from smooth. the remaining team essentially became case management department. ensuring our team members need to be met their own discretionary resource while the government unburied itself from such unmet service demands printed in their major cause was for business when the pandemic was here, we lost nearly $2 billion in committed private capitol. in such a close last week of march of 2020. so operating in the tremendous deficit, our meeting strategy team remained and trent jumped into action. this included everything from safety and sanitation initiatives to figuring out our menu and apply benefits and integrating multiple technologies. along the way we were able to go through the first round of ppe funding is a vital dollars and received investments from partners. without the support the takeover would've been another catalina i am sure of it. thankfully, our concept is well positioned serve both covid-19 consumers and we began reopening innovations in may of 2020 read with dining rooms closed to ensure the safety of her 200, we double down on carry out delivery business as per unit were still doing her best to avoid a lot of the predatory thieves and service models of any of the third-party vendors in our industry. we successfully recovered 90 percent of our employs upon reopening. this was a huge testimony to our team and their commitment. ashley began hiring others displaced by the pandemic to accommodate increased demand. and since reopening, we have been able to stabilize financially and more cautiously approaching growth again intent on creating more transformative and meaningful jobs. all said, it covid-19 crisis is far from over for our company. but we are finally sing the path forward for hot chicken takeover and for our team. we do see glimmers of hope on the horizon, we represent a very small segment of a completely decimated industry. further assistance for the business and for the employees is critical for employees to move forward. thank you again for this opportunity to share my testimony per unit and think you offering the leadership of the former to your russians in our discussion. >> thank you. >> thank you chairman groundbreaking members and all of the numbers to the community. today would like to discuss ways that we can be on small business relief to focus on how we can support the sustainable longer-term solutions for rebuilding main street. any of the communities hardest hit by the pandemic have been communities of color pretty i study from new york said that black-owned businesses are more likely to be located in counties with higher incidences of covid-19. and concentrated retail restaurants and other service industries more impacted by shutdowns are needed to make matters worse, these businesses often have weaker tax positions and bank relationships before the pandemic. leaving them particular bondable to the economic shock. researchers shown that there were under and had trouble accessing really for ppe and very small businesses and self employed in small business owners of color are much likely to have a business relationship to the pandemic. roughly 13 applied for ppe eight months of only 22 percent of black on the business isn't to a of latino on businesses received the full amount requested party this data isn't not a criticism of ppe. the highlights and challenges policymakers face in helping capitol reach businesses and communities historically underserved and interbank by additional lenders. the investment this week of an two-week window for businesses here the 20 employees who applied for it is an acknowledgment of this in a positive step to provide relief to these businesses. the rebuilding main street will be required support beyond the spring. ppe also business for new businesses, the silver lining of the pandemic has been the number of new business starts. according to recent data in 2020, there were nearly 4.5 million new business applications. choi 4 percent increase from 2019. it's hard to tell how any businesses will survive. the data is encouraging because a reverse is a decade decline in new businesses. nish is out entrepreneurship can hardly the out of the crisis printed as the proposals to rebuild main street, i would like to recommend the reauthorization of the state initiative printed this is a compliment to ppe and more durable form of term support. it there were 20 allowing states to support these small programs and in total flooded 13034 programs nationwide. it indicated 1 billion programs in over 400 million venture-capital programs targeting investments in early-stage businesses in the program succeeded in providing capitol the very small businesses. 80 percent) distance with ten or fewer employees. nearly half were less than five years old. and 42 percent of these loans or investments were made to businesses and low income communities. she because the program partnered with smaller lenders. exists to meet the unique needs of historically interbank communities targeted and last year some states i thought to replicate these models. in may, new york launched an air forward loan funded. they work with other new york-based cfi's to provide low-cost working capitol loans to businesses. in november, california launched the california rebuilding fund. public-private partnership the drives capitol to so they can extend loans and small businesses. today these programs have reach over 1000 of the hardest to reach businesses across the state. 77 percent loans to businesses in the illinois. for historically underpaid populations predict these businesses are the smallest of the small. 36 percent have five or fewer employees. it would help make these programs available in our state. mr small businesses access affordable loans beyond march 31st when it sent to expire. also by providing working capitol and other forms of small business credit and investments, they would address the gap presented by ppe and help more small businesses keep their doors open. when the restrictions are open, they're welcome to walk about the customers predict think you again for inviting me to testify today. look forward to the discussion that follows. statement thank you. mr. griffith, welcome. >> good morning. thank you for the opportunity to testify today. i'm research fellow at the heritage foundation for unit beginning in march of last year, historic plunger nation of economics. this the first of the nation's our nation witnessed an historic plunge in economic output. this is the first time in our nation's history that the government intentionally suppressed the supply of goods and services and suppressed consumer activity by artificially suppressing demand. it's not for wont of government spending that the economy has not recovered. the federal government has borrowed, printed and spent trillions of dollars in an effort to cushion the economic downturn. congress has already approved more than $1 trillion of aid intended for small businesses including 800 billion to the paycheck protection program. much of this aid is actually still available. in fact, of the additional 284 billion provided for ppp in the december stimulus package, only 36% had actually been obligated through february 7th. another 15 billion in this current legislation is proposed for the targeted economic injury disaster loan program, but as of february 12th, none of the $20 billion that's already been appropriated has been obligated either. on top of all of this prior spending and all of the spending that's already been approved but not allocated this current legislation provides $10 billion to restart the state's small business credit initiative. the ssbci funds state programs that provide government loan guarantees to politically favored businesses. numerous problems have plagued this program in the past. it has been well documented. the office of inspector general found only four states to be in full compliance with the program. these funds for ssbci do not actually fill a need of small businesses that have not already been met by the market. instead, this serves to operate as a slush fund for state and local government politicians across the nation, a purpose which is most certainly detached for combatting the economic fallout from the shutdowns. it's a misnomer that credit markets not providing funds to small businesses. most small businesses are now saying they are generally not looking for more credit, only 3% of respondents to a recent nfid survey reported that their borrowing needs are not satisfied. small business credit conditions in december based on the percentage of businesses reporting easier lending conditions were identical to conditions one year prior and that was months before covid-19 began. obtaining financing is the reported top concern of just 1% of small business owners. our credit markets serve an important function. usually businesses and projects must compete with each other to obtain limited amounts of capital in order to secure the resources to function. when the government provides capital at sub market interest rates or in the form of outright grants, business, which otherwise may not secure funding in a competitive environment find it possible to continue consuming the limited resources which would have been more productively deployed elsewhere. this places control over the allocation of resources into the hands of government officials rather than the free market. another troubling component of this legislation is a $15 federal minimum wage. this would price those who earn less than $36,000 per year, which is the payroll cost of employing somebody. this would price them out of the marketplace and destroy jobs and opportunities for those who most need it, including the 26 million americans who have not graduated from high school. young adults seeking first jobs, people with living disability, people reentering society after incarceration will be amongst the first to be priced out of the job market with a $15 minimum wage. this would also result in child care prices increasing by 20, even 30% across the country, a 5 to $6,000 burden across middle class families. a full economic recovery does not stem from stimulus checks or bailouts from washington d.c. rather, it's the result of individuals and businesses safely and legally interacting with others. the pace of this recovery varies across the nation, but in states that have ended their lockdowns, you see economic growth far exceeding that of the national average. we have eight states now in this country that have a larger economy now than they did pre-pandemic. this contrasts sharply with places like new york city, l.a. and chicago mired in the midst of an economic recession, which refused to allow people to reenter society. thank you for the opportunity to testify this morning. >> thank you very much, mr. griffith. ms. richey please proceed. thank you for joining us. >> thank you, chairman brown, ranking member toomey, members of the committee thank you for the invitation to testify today and allowing me to share my story. i am a hair salon owner and part-time service worker from new castle, pennsylvania, and my salon is located in harmony, pennsylvania. i opened my business in 2016 only a year after graduating cosmetology school. in addition to working as a hair stylist, i work part-time as a server and bartender and working in the restaurant industry while attending college, i could pick up extra shifts when i was low on cash and my flexible schedule allowed me to go to school while still making an economy. i've worked in the restaurant for 18 years now and ten of them in slippery rock pennsylvania where i am still currently employed part-time. being a server and bartender is what allowed me to pursue my passion to become a cosmetologist and open my salon. the flexible hours allowed me to attend school and helped me to save and open my salon without having to get a loan. when pennsylvania first imposed business shut downs i had to close the door for my salon for three months while still having to pay rent and utilities. i was also unable to work at the brewery at that time because it was temporarily shut down. when the brewery was permitted to open back up on a limited basis, i was able to pick up work there. the owners of north country brewing company are incredible people who have worked hard to provide three unique sustainable businesses in slippery rock and harmony. all three places have provided secure employment for 306 people. during the first round of shutdowns, they could only keep 23 active employees on payroll and during the second round shutdowns there were only 39 active employees on payroll. it's heartbreaking to see the astronomical number of restaurants and other small businesses that have suffered financially and had to close permanently. given these challenging circumstances i am deeply concerned by the proposal to raise the national minimum wage to $15 an hour. this proposal would be financially devastating to restaurants and other small businesses and many of their workers. servers at the brewery are paid $3 an hour plus tips. our tips provide us an income that surpasses $15, asking is asking to give a 400 % raise to most of their employees. that will be especially difficult given that covid shutdowns restrictions have caused an enormous hit to sales. jobs will be lost and prices will skyrocket, which will undoubtedly deter customers from wanting to go to any restaurant. the small businesses that have been lucky to keep their doors open are going to feel an incredibly hard time surviving if they're forced to pay these wages. that's not to meant the hit to the service industry. we take jobs at restaurants knowing that we're signing up to make $3 an hour and we work hard to provide great service to our customers. we're not asking for a flat rate of $15 an hour, which will be a major cut to our income. the restaurant industry has been running on this model for over 80 years now, and it isn't broken. the majority of people fighting for this one fair wage have never worked at a restaurant a day in their lives and don't understand that we make a good living with our tips. we aren't asking for their help, and they're doing us way more harm than good. but restaurants, other small businesses and their workers need is for the economy to fully reopen. many government imposed business restrictions such as the 25 to 50% capacity are unnecessarily harmful and need to be lifted as soon as possible. these capacity restrictions do not make sense for many businesses including my hair salon. with what we know and are continuing to find out about the virus, i believe we can safely accommodate 100% capacity with modifications that allow for proper social distancing and mask wearing. it should be up to an individual to decide if they want to go to an establishment or stay home because after all, we are supposed to have freedom of choice here in america. thank you for your time and for listening to my story as a small business owner for five years and a tip service worker for 18 years. please hear my words as someone who has been blessed to earn a more than fair income in a restaurant industry with the minimum wage model set in place as is and also as a small business owner negatively affected by government restrictions imposed as a response to this pandemic. piling on more requirements for businesses will only hurt business owners and employees who have already been through enough and we need to mauve forward from this before it completely crashes our economy and crumbles small locally owned businesses. >> thank you, ms. richey, i will give the five minutes of questions. takeovers known for giving its employees a second chance and treating them well. describe if you would, how investing in your employees has benefitted your business. >> thank you, senator brown. yeah -- employment model is something i've worked on at this point for about 15 years between this business and others. we take a strategy of offering our employees kind of myriad benefits and know there are conventional benefits like health care, 401(k)s, other things that opportunistically move people forward. we also meet our employees where they're at with relevant benefits surrounding matched savings accounts, deeper investment in financial literacy and support. we do all of -- it pays a return. so what we've seen from our orientation to our team is that we're producing two to three times better retention than most in our industry. so when you're looking at statistics of a turnover of an employee costing you upwards of $5,000 in hard costs, i think cornell just put that out, what we're seeing is we're seeing our turnover at sub 40% versus 150% a year, and so we can kind of -- the hard math of an roi of what the investments we do in our team make for our business and we're grateful to continue them and advocate to other people to do them as well. >> thank you. ms. bruce, we heard from federal reserve board chair jerome powell this week that when it comes to our recovery, the job is not done. wall street might be doing fine, but i hear from small businesses in ohio and across the country that they still struggle to stay afloat during the pandemic, which, as you've pointed out, hit black and brown businesses and communities disproportionately hard. how do the products and services you offer help your clients keep their doors open and help your clients address the racial wealth gap. >> thank you, chairman brown. the products and services we offer are very important to creating wealth and helping them sustain themselves. our products are flexible and they are three below market. our products are catering to people who ordinarily will not qualify for traditional banks. because we are -- we are mission based but our products help businesses access the capital because of its flexibility and also long-terms. for example, none of the distances we are working with are micro businesses and so most commercial banks do not do loans, micro loans or even small business loans below 250,000. so most of our products are below that. but without our products, a lot of them would not have access to the capital needed to expand or grow the businesses. and this helps them to create wealth for themselves and their employees and so that's why we need more flexible long-term capital to do more to help our businesses sustain themselves and generate the type of cash flows they need for their businesses. >> thank you, ms. bruce. ms. milano, president biden's american rescue plan called for an additional $50 billion in small business assistance, part of this committee approved a measure that would approve $10 billion for the state's small business credit initiative to help small businesses recover from the pandemic. how would the ssbci funding help businesses in underserved areas like butler county, pennsylvania, and black and brown communities rebuild or expand their operations and recover from the pandemic? ms. milano. >> yes, thank you, so ssbci, i think, helps because it's very different from other federal small business support programs because it's not a one size fits all approach like sba loan programs. it really is a flexible form of support that works with states to design their own small business support programs to address market gaps like funding to cdfis, to smaller community lenders and importantly it's the only program of its kind that supports venture capital financing to help drive investments to communities that are outside sort of the venture capital financing hubs in america, new york, boston, and san fran. it really works to attract funding in other areas of the country. so i think that's a very important difference, and i think that that's a longer term form of support that's really focused on helping rebuild coming out of the pandemic as opposed to the sort of current programs which are focused on relief. >> thank you, senator toomey. >> thank you, mr. chairman. ms. richey, thanks very much for joining us today. you have an extraordinary story and i want to ask you about this. i want to make sure i understand some of the facts. in pennsylvania, i believe the minimum wage is $7.25 an hour. >> correct. >> and i think the minimum tip wage is $2.83 an hour. >> mm-hmm. >> and your story, if i've got it right, is that while working in an industry where the minimum wage was $2.83 an hour, you managed to support yourself, put yourself through cosmetology school, and then launch your own small business. how is that even possible on $2.83 an hour? >> what a lot of people don't understand is though the minimum wage is set at $2.83 an hour, we are covered by the tip credits, and what a lot of people don't understand is what the tip credit actually is, so say like in my case i make $3 an hour at the brewery, if i go to the brewery and say it was a fluke day, nobody comes in, i don't make any tips, then it's up to bob as the restaurant owner to make the difference in my paycheck hourly to ensure that i make at least minimum wage. >> and in fact, when business is pretty good, you can make much more than minimum wage, right? >> much more, thankfully. >> and you often do? >> mm-hmm. >> right. >> let me ask you this, now you have your own small business, what do you think would be more valuable for your employees, a $15 minimum wage or to be able to fully open and accommodate safely the customers that you can accommodate? >> we definitely need to reopen. this isn't doing anything good for the economy. as i sai whenever i gave my testimony, the 50% capacity just doesn't make sense, especially because in a hair salon i have to be so incredibly sanitized and sterilized anyway, and the distance between our stations is much more than six feet, so i believe we can absolutely safely accommodate 100% capacity. >> and you and your customers have ever incentive to be careful to take the proper precautions and is that what you do now when you're -- with respect to the customers, you are able to serve? >> yes, absolutely, and we actually at the salon, we do have masks to provide to customers that don't -- that show up without their own and we have hand sanitizer everywhere. we sanitize our stations and our tools after every client whenever we're finished with them before anybody else even enters. >> well, congratulations on an amazing and terrific story. >> thank you. >> mr. griffith, you know, we see the cbo estimate that if the minimum wage goes up to 15, it could destroy 1.4 million jobs, maybe considerably more than that. it seems pretty clear that what this amounts to is the government picking winners and losers. some people would get raises, but a lot of people would lose their job. thomas sowell widely observed the government can set any minimum wage it wants but there's also a minimum wage of zero. so let me ask you this, if we double the minimum wage, why couldn't businesses just raise their prices to cover the added costs so that they wouldn't have to lay anyone off? >> that's a good question, and if you look at the sectors in which the minimum wage is most prevalent, a lot of those are sectors of very low profit margins, so think of a restaurant, for instance, that has a 5% profit margin and labor costs that eat up half of their expenses. well, if you double or triple -- let's just go with doubling the minimum wage to 15, well, suddenly their entire profit margin is eaten away. they become either insolvent or they have to raise the prices to accommodate that. well, in many of these restaurant s, they would have to raise prices by close to 40%. many choose not to frequent the restaurant, they'll go somewhere else or that restaurant will be forced to prematurely automation. automation is a positive thing. in this case this would be the government nudging these places to automate early and many of these individuals that work there, they don't work in those jobs for long. they get the on the job training. they move on. i worked at a minimum wage job for several years in college, getting that experience. but when you double this, it just denies people that opportunity to even get that first shot at getting that on the job training. >> and just very quickly, you indicated in your testimony that all of this government funding and grants and loans is having the effect of crowding out private capital and misallocating resources. can you explain to us what's the net effect of that? what's the problem with the government being a institute for the private allocation of capital? >> well, sure. when the government becomes a substitute for that private allocation, it means businesses that otherwise would have been able to obtain capital, they won't have access to that. usually you have businesses, those businesses that can produce the most, they're able to go ahead and obtain that loan or that investment. in this instance, you end up having the government allocating capital to a business based on other factors beyond credit worthiness or beyond whether or not that company is likely to be able to produce, and they're able to curry political favor, but it doesn't result in net economic growth. and we've seen ssci riddled with this over the years, and we have many studies available to look at how those loans have gone to businesses that actually didn't produce the economic output we hope for. >> thank you, mr. chairman. >> senator menendez of new jersey. >> thank you, mr. chairman, and thank you to all of our panelists. it's clear that our small businesses have been hit hard by the pandemic. according to the federal reserve, 78% of small businesses experience revenue loss in 2020, and overall revenue growth and employment decreased substantially. as small businesses continue to struggle with sharp revenue losses, businesses are desperately seeking financial lifelines to make it through these uncertain months ahead. stepping up to fill these financing needs are alternative financing companies promising easy approvals with little to no documentation requirements and funding in under 24 hours. however, some of these financing companies are not transparent in their loan terms, and small businesses can end up taking on debt they do not understand and cannot afford. without cost transparency, businesses cannot distinguish financial lifelines from land mines. so let many ask, ms. milano, do current small business finance provide small business owners with the information they need to understand the costs of the credit product and make an informed decision about whether it fits their needs or not? >> well, while some states have taken steps to set disclosure requirements for small business loans, at the federal level, there is no standardized disclosure requirements. as you know, truth in lending act disclosures do not apply to small business credit products. this makes it very difficult for a small business owner to know what they're getting into, and second it makes it impossible to comparison shop for the best terms. some providers disclose rates that are not aprs but business owners assume they're aprs leading them to take out financing that's far costlier than anticipated and possibly unaffordable. >> well, i appreciate that and completely agree. i mean, the current lack of any disclosure requirements leaves small businesses exposed to deceptive practices. according to the federal reserve, current small business loan disclosures often leave business owners unable to make informed comparisons about the price of financing. and additionally, according to the fed study of online lenders, small business owners found the descriptions difficult to understand or lacking detail about costs and features. so what type of financing terms would small business owners find helpful to bring transparency and uniform disclosures to better understand a credit product? >> sure, so first, i think it's important to apply disclosures not just to loans but all small business credit products so that includes merchant cash advance and other products similar to loans. then i think apr is essential for borrowers to compare products and making informed decisions. borrowers need to know the finance amount, the payment amount, the frequency of payments, if it's more frequent than monthly, and the term. they should also know upfront or scheduled changes or prepayment costs. >> apr disclosure, the small business credit is essential to make comparisons from apple to apple, cost comparisons. truth in lending act would tailor to small business financing with apr calculation guardrails for event manipulation by bad actors provide enough transparency and uniform term disclosures to allow small business owners to make informed financial decisions? >> yes, i think apr is the only established metric that we have that enables informed comparisons of the cost of capital over time, and between products of different dollar amounts and term lengths. that's why apr is the long-standing price metric that people are familiar with. it's been vetted for over 50 years through the truth in lending act, and an estimated apr can be used and has been used by participants when providing variable term financing such as merchant cash advances so consumers can actually compare those products to loans with fixed apr. >> thank you. it seems to me that transparent price disclosures, the foundation of a free market without which competition effectively fails and requires transparent disclosures for consumer loans but not for small businesses and to ensure truly transparent and competitive market, disclosure requirements should apply equally, i think, to small business financing products. congresswoman velazquez and i are working on a bill to extend tila to small business loans. it's time to bring some sunlight to the small business credit. finally, the administration has taken the important step of setting aside a two-week window where only small businesses with fewer than 20 employees can apply for the ppp forgivable loans. ms. milano and mrs. bruce are there any similar actions along those lines that you would recommend to ensure that minority owned and other underserved small businesses get equal access to covid relief? >> yes, senator, thank you, senator for the question. yes, i think it is very important action because our product in baltimore and similar city nationally, we target businesses under 50 employees, and i think this act is important because we provide a lot of technical assistance and capacity billing to help those businesses understand what they're applying for. we just talk about the truth in lending and disclosure. but it's important to provide comprehensive technical assistance, helping them to understand the credit, what they are going -- what they are applying for before they receive the loans and after they receive the loan. that's helped to mitigate the risk for default, but also just having resources to provide technical assistance like capital grants because that's not an income generating product. we provide that in house, and it would be great if there's products similar to what the housing industry is doing for pre and post counseling for home ownership. we need similar product like that on the small business side because education is important, especially if they understand the risks they are taking on, it helps to mitigate deep falls and help them improve the cash flow. so this is a great step, a first step in helping targeting small businesses with 20 or less employees. so thank you. >> thank you, mr. chairman. >> senator rounds from south dakota, if he is here. if not, senator haggerty from tennessee, you're next. please proceed. >> thank you, chairman brown, ranking member toomey, i appreciate your holding this hearing today as we look to rapidly recover from the effects of this pandemic and get the resources that we're providing most directly targeted to those in need. i'd also like to say that i'm very optimistic at the fact that operation warp speed has got vaccines going into arms, that we're seeing our economy recover. i'm very pleased with the projections that main street is on the road to recovery, and i want to acknowledge the important role that our community banks have played, that our credit unions have played, that our community development financial institutions, minority depository institutions have played in helping bring our economy back. and i want to acknowledge the role that the congress has played multiple times addressing this pandemic on a very bipartisan basis and hope that we can continue to do so as we move forward in a bipartisan way. first, i'd like to start with mr. de -- i am from tennessee, very interested in your hot chicken concept. i'm curious what inspired that? >> a trip to your fine state, in fact. we went -- >> i was thinking that might be the case. >> my wife and i took a trip to nashville on a bit of a baby moon before our first kid was born, and were inspired and had nothing like it in our market. >> well, i will have to say this, coming from tennessee, from the nashville area, nashville's going to remain the home of hot chicken, the capital of hot chicken, but i'm delighted to see it expand. i also want to commend you for your hiring practices. i think you're doing a great service. i think it's very -- with the criminal justice reform we saw in the past administration that was passed on an overwhelmingly bipartisan basis. i want to thank you for what you're doing and the leadership you're bringing to bear there, and i'm delighted to hear that the ppp has been a product that's helped you continue through this crisis. i'd like to turn next to ms. milano. i want to thank you for your dedication to america's small business. you have deep experience in this area, and you know, our small businesses really have been at the core, they've been the engine of our economic growth for so long. they're going to continue to be critical to our growth as we come out of this pandemic. i really want to understand the impact of what we've been talking about here on the pandemic, and specifically the timing of the programs that are involved. you've had a lot of experience running this program, and if you could take a look at the other programs that the biden administration is in the process of implementing since december of 2020 that came through our bipartisan relief packages including, for example, $12 billion for cdfis and mdis, $15 billion for shuttered venue operations. in your best estimate, how long will it take us to get those programs set up and beginning to get dollars, incremental dollars into the accounts of those small businesses that need them? >> sure, thank you. so i think that those programs and treasury's in the process of standing those up right now as i understand it. i think the 3 billion for the city of -- funds or loan funds and sorry, the 9 billion or 12 billion that was put for mdis and cdfis and the emergency capital investment program have enormous potential to recapitalize these institutions, and i think the treasury is getting ready to release rules and program guidelines for those and get those dollars out the door this year, and i think that helps recapitalize those institutions to help served underserved borrowers and their communities. and i think that what we're being requested today like ssbci sort of comes in after that and complements that by working with different types of financing entities in the small business ecosystem to support not just the lenders, which those two programs support, but also the businesses themselves and to provide different types of financing like venture capital financing which is not part of those programs that were passed at the end of the year. so i really do think it's complementary. >> i'm a business person for a long time, and resource allocation is absolutely critical. if you look at the ppp funding, which we've been able it to put billions of dollars into the economy on a very rapid basis, the package that was passed in december of $284 billion as of sunday, only half of that has been put to work. there's $144 billion that still there waiting to be put to work. in my sense, and i hope you'll agree, our resources should be most focused on addressing the pandemic, on those that have been impacted by the pandemic, and addressing that ppp lending program and getting those dollars into the economy before we look at other forms of long-term lending that could take, you know, months or longer to get in place. >> i mean, i think that those programs, ppp applications will expire march 31st, and there will be a need, we know, beyond the end of next month for funding and so i think it can work together. >> my hope is that we focus very heavily on targeting the ppp funds and getting this 144 billion out the door. thank you, mr. chairman. >> thank you, senator haggerty. i would add from mr. deloss's statement, my wife and i right before the shutdown took a trip to nashville. we'd never been there for her birthday. it was decidedly, fortunately not a baby moon for us, but nice touch, i appreciate that from both of you. senator tester from montana. >> yeah, thank you, mr. chairman and thank ranking member, toomey, too, for having this hearing and all the witnesses who have testified. and i would just tell you this, mr. deloss, montana is a long ways away from pennsylvania, but i tell you, we like good food there, too. come on down anytime you can expand this venture that you've got going, but cocongratulation. my question is for jessica milano. they really do dovetail into somewhat senator haggerty was asking you, and it deals with the state small business credit initiative. and following the last economic crisis, this was incredibly successful in montana. so successful that montana is often used as an example in how this program can benefit small businesses and the communities they reside. i've been pushing the last year to help use this program again to address the current crisis we're in. i've been hearing consistently from ly available vaccine to struggle. for some of the small businesses federal programs so far have met their needs. one of the great benefits of the program is the economic development organizations are able to address specific needs in their communities in a much more effective way. jessica, from your perspective, running the first generation of the program, you touched on some of this with senator haggerty but could you highlight for the folks on this committee, and anybody else highlight for the folks on this committee and anybody else who's watching what makes this program so useful? wh absolutely. diffk you, senator tester. so i think, again, it's a with complement what's been done to a date. it worked withgete statesd likeo montana to develop and design their own programs that were targeted to their unique needs.o if they needed to serve if t microbusinesses they could noloy establish a credit program to do that. if they wanted to commercialize reallygy around university ecosystem like pennsylvania did, they could do that. and i think that flexibility really helped create vibrant small business ecosystems aroun. the country that were best tailored to local market needs. and i think that's an important continuing need that we will l i have coming out of this pandemic. >> i couldn't agree with you more.is t tailoring it to local market needs is the key here, and i think it's really whattth makesl this program so really effective. but let's talk about if there's any area of improvement from the previous ssbci program that ausd could be made -- that could make this version even more impactful in addressing the challenges caused by this pandemic. >> absolutely.ings there are always ways that we can improve things. evat's the purpose of evidence-based policy.e throu so having gone through this once, i think there are a couple of key ways. first, we could make it a little bit easier for multistate programs, for states to actually or lenders that have a regionali footprint to work acrossng stat. i think second, you know, givenp how muchpo funding has already been put towards ppp, we could try to further support cdfis and ensure that minority owned businesses are receiving the capital, by putting an emphasis or setting aside a portion of et the money tho competitively to awarded in a way that targets programs that meet those underserved populations. >> very good.. well, thank you, i'm going to yield back the rest of my time,e but i wantci to thank all the witnesses for being here. i appreciate your commitment to the economy of this country, and we'll move from there. thank you, mr. chairman. >> thank you. not clear who's in line, ths names on the screen, senator warner is -- senator warner here? know s senator -- i think senator lamas would be next if she's here. i know senator van hollen wants to ask a question of ms. bruce,y but he's stepped out for a moment. senator cortez masto, if you'rea ready from nevada. o >> thank you so much. this has been a great conversation and so appreciate the thought process going into this because in nevada -- and i think we all agree, small ng businesses are the backbone of our economy, and we want to make sure not only are they thriving tht for our workers that they're paid a livable wage, and so i appreciate this conversation, a andn this -- >> several people welcome back -- >> -- an individual that we are looking at that should only havo to work one job to have a a livable wage and not have to surk 40 hours a week and still notrv be able to survive or ntrn thrive. and i just thank you for your work ethic and entrepreneurship. this is an issue for us across the country because of this pandemic has just devastated our economy, and we all recognize ia that wese need to increase our wages, but at the same time we want to make sure our small businesses can thrive as well. that's why i so appreciate this i milano, aroundboth o thef ssbci. i think the goal here is to wor balance both of those, so our workers throughout our businesses thrive, and i think this is a great program for us to incorporate for our small n i businesses as we come out of this pandemic and help them , thrive. but i guess the first question i have, maybe ms. milano, during the pandemic monthly business applications have surged well s above their historic levels, and according to data, it's clear used this ans haveve time to transition are from wht traditional employment and be t become entrepreneurs, and i've seen that in my state as well. my question to you is what policies should we be thinking about topc help these new entrepreneurs? is it just addressing the ssbci? what other things can we be thinking about to make sure that soese new entrepreneurs thrive? >> well, thank you, and i think it is some of what's been done t tool date for sure, some of the programs that we have done to t put capital into cdfis and s. institutions help reach those businesses and then i think ssbci also helps reach those businesses. i think those businessesmuch. we very varied. some of them will need micro lly financing, you know, small dollar loans to get their business off the ground. some of them might actually be those rare high growth a businesses that become the real leading job creators in their state and could benefit from the type of early stage financing that ssbci could provide.e c >> thank you. i appreciate that.f is there anything that we should be also thinking about as we come out of this pandemic and we look to our labor work force, particularlyest unem as i say io from nevada, we have one of the highest unemployment rates in ke southern nevada. we're a service industry. what else can we be doing to support our work force? is there more that we should be doing for work force training and development? and i would open that up to the panel, if anybody has any ideas around that. >> not here. okay. so i think there's always more c that we can beal doing to suppo both work force training and then i think technical assistance for folks that are just filing business o wor applications to becomek an get entrepreneur to work with them,o to understand what itw means tot get credit ready, to have a business plan to grow their e t business, and then i hatducatio know, there's more that can be done to provide education and busining for both businesses and workers of those businesses to ensure that they can be matched with the employees they need to help that business grow. >> thank you. . >> i'mm sorry, did somebody els want to speak? w >> yeah, can i just add to that? i just want to second what jessica said. in essence, especially for thos, employees that's transferring or lost a job during the pandemic, they need the technical assistance to transition to employment. like our city work with a lot of startups, so we have a product that targets businesses that of have been around for less than a year. so but they need a lot of technical assistance or training to help them. so it will be great to have part of like equity, like the eq 2s or access to flexible investmens capital like what was just recently passed, the emergency capital investment program. it's almost like equity loan te like program, but it was not we given to city, non-bank cdfis like our cdfis so we hope to receive those type of flexible long-term equity like investments because we are providing a lot of technical assistance to help businesses sustain and stay in business afterudib theyle receive financ. >> thank you so much from the panel, i know my time is up. wyi so appreciate the conversation. >> thank you. senator lamas from wyoming, welcome. >> chairman, i want to, first of all, say to ms. bruce, mrs. rer bruce, you spoke about a subjeco earlier in your remarks that i find really important to wyoming and in the area of american indians, you spoke about the programs that you are working with and made some recommendations for e how to improve them. could you just start by explaining a little further what your programs provide in the minority community you serve? >> thanks for asking, senator. our program works with small to medium sized businesses and what we provide, we give them alternatives to predatory lenders because we build trust because we are local. e we build a relationship. we help to analyze the needs in terms of credit needs to expand or start a business, and then we provide -- we develop products based on market needs. it's not generic, but we createp those products to make sure we help startup businesses, emerging we businesses who -- l than two years. we give them capital and what we try to do is to help them with fixed rate loans to make sure they can plan in advance because in terms of budget planning, it's great for a startup to have a fixed interest rate, and long-term to help them manage ne the budget, but secondly, most importantly, we have a comprehensive technical assistance program before they access the loans we help them understand financial management, work with them on developing business plans. we access projections and help them with financial statement to understand the balance sheet, r the income statement. someone could be great at doing the business, but if they do not understand the growth plan and how they can maintain the businesses ongoing, but most importantly after that we follow them through the process so it reduces the risk of default. ta is not just doing the training. we call them and we interview if there's issues to get default. so it's labor-intensive, but it's needed to help those businesses transition from small non-bank cdfis like us to traditional banks.ave so our products -- we do loans as low as 5,000 up to 150,000, but it's to help with growth and also sustain with offering the kind of training and technical assistance needed, to survive, especially during this period. even with the docum ppp we are g lot of loan packaging as well as documentation gathering to help them access ppp in a timely basis. and we appreciate your question. thank you for asking. uest >> thank you. >> ion you,yes, you're welcome. my next question is for you, joel, and i'my. sorry, i'm usin first names today, i'm being a little personal here. the proposed state small business credit initiative amendments allow the secretary s of treasury for the first a tim in history to determine if a state's laws allow predatory git lending. lending in usury laws have historically been the product of state legislatures. my state of wyoming even has a usury cap. isn't this another example of washington taking away thank decision-making power that individual states already know how to use best?ing. >> yes, thank you for the question, senator, and i just ti had as wonderful visit to exoming, by the way. but yes, this is troubling. this is another example of the f federal government trying to gre determine what business o practices should be in individual states.ding, and of course all of us would likely agree on this idea of predatory lending. we wouldn't be in favor of, but the details are important. what is the definition and cov states have gone to great lengts to define for them what types o, lending practices are minist prohibited. so using this as a toolht to foe whatever definition the current presidential administration might decidedeadditi forcing th states would be problematic. a in addition to all the other concerns with this program that we saw back about a decade ago. >> well, i want to thank you.pa. i'm actually out of time. this is such an impressive panel that i'd love to ask more questions, but thank you so much, mr. chairman, and thank you panelists. i yield back. >> senator from maryland, >> se senatorna van hollen. ha >> thank you, mr.nk y ouchairma ranking member toomey, and let t me thank all thehe panelists an just very quickly on that last point, one of the big issues we're seeing actually is some o these fin tech lenders using the last administration's rent a bank rules to actually evade some of the state caps that areb trying to designed to avoid predatory lending. so if we believe that states should be able to set these usury caps where they want, we should also make sure that we e don't allow work arounds through the national banks. but let me just ask a question of mrs. bruce, and mrs. bruce, i thank you for your leadership as president and ceo of the baltimore community lending kinc cdfi, and i know you've also worked in the commercial banking sector. i believe jpmorgan, bank of america, pnc. earlier mr. griffith indicated that there's only a small percentage of small businesses seeking capital and that loan. essentially the market can effectively decide who deserves a loan.al banki c df i and baltis it your experience you are making many loans that are sound loans that would never have been made from the commercial banks? >> thank you have never been made from the commercial banks? >> well, thank you, my senator. this is my senator from maryland. thank you, senator. i do not know how to even answer this question. e making an extreme difference. coming from a commercial bank i'm excited to work at a cdfi or because the banks, the rules that we are making are not commercial banks or, in essence, the credit criterias are very difficult for those small businesses to meet. our products are we have credit enhancement, we have new law reserves to mitigate risks and g our credit enhancement. if we were not doing that, we will not be able to give out loans. so, maybe it is different in other states, but in maryland and in the city of baltimore, ia is meeting market needs. we are doing exactly what be businesses need to access be capitol. these are excelle businesses tha not be able to have excellent ie credits or that a commercial bak is offering. we work with businesses to have minimum credit or not sufficient collateral, as well as providing ta. so, these are all nontraditional products. it cannot compare. in my days in a commercial bankv i could not have made these anty loans because it out of h the b. but you have to design products based on market needs. pre and we are making a huge difference and not onlyly talki about lending and loans and because the interest rate was so high they don't even know what they were getting in to. they were getting like 16% and we have reduced the interest rate way down 6 or 7% because we are disclosing our rates and we are hoping to understand the difference between cdfi product or mission-based lender. so, definitely, we are making a difference in our community in baltimore. >> well, thank you.t and as you've mentioned in yourc testimony you provide that important technical assistance, get it know your customer and you spend that time and invest , the effort there. back in your experience at a yu commercial bank, what would be e the? response from the bank if you said you had to spend all that time providing the e of technical assistance? >> of course, it was not, it was not allowed because of so many reasons. at the commercial bank you're there to make credit decisions and not provide technical assistance. that's another difference between cdfi and commercial ndsf bank. smaller loans under $250,000, il was all credit score and automatic credit.. to the small alk businesses, and they wouldn't even know the bankers. to go to a branch is more for retail. so, this is a big difference because small businesses really do not know what they need. you have to help them to structure the deals. so, with cdfi talk them to puta structure the deals on the laws based on the needs. so, we put a whole lot of and emphasis on technical assistance before they receive the loan ask. definitely not allowed in a commercial bank of conflict. we are doing at a a mitigat for the credit and they go in understandingg the types p loans and products that we are offering. it's a big difference and i'm happy with cdfi because i have e passion for doing that and working with people and not just numbers or telephone. so, the isis a big difference and we need capital.e m we need grand capital to helporl to provide more, the funding that's not available. so, definitely like doing pro bono services right now., so, not only doing the investment capital, we need grand capital to cover our overhead and operations to >> vide more preimpulse. so, thank you, senator, for asking me.. some >> thank you. the i'll talk to the chairman ranking member about seeing whether we can provide some of the capital toould b the nonbans that we're providing. >> that would be great.ema thank you very much, senator. >> thank you, senator. i believe senator. ona sma >> thank you to our witnesses for joining us today.onomy,, sml arizona small businesses are the back bone of our state's economy and before this pandemic hit, e small businesses in arizona nd employed 1.6 million workers. more than half of the state's workforce. and created $71.3 billion in ret annual wages and income for those employees. but today's a different story. the pandemic has left arizona small businesses struggling to keep their doors open.ing t among those hardest hit are nowi arizona's local and independent restaurants. now, arizonans know it which iso why so many of us have stepped s up to support them. i try to get carry out from my favorite restaurants a few times a week and we do this with the hope that they'll still be there on the other side of the pandemic when we can gather and enjoy food and drink and make memories with those that we tod love. arizonans expectla to do more to cross their fingers and hope. last june i teamed up with senator wicker to introduce the restaurant's act. our bill which earned the support of a majority of senators establishes a restaurant rescue plan to he pan provide localde restaurants the funding to rehire workers and stay afloat during the pandemice and i'm delighted at the grassroots momentum and strong bipartisan support we've seen e behind this important on legislation. a few weeks ago,urant r the fule took a vote on our restaurant rescue plan and supported it 90-10. support so, senator wicker and i are gooud to have earned that support and achieve that for significant milestone and we're going to keep working until it's signed into law.iberat now, mr. deloss i want to thank you for being here today. i heard your restaurants are providing opportunity to those who are homelessness, live in o poverty. child i experienced izes e homelessness and i want to thank you for everyone's dignity and z abilityon to contribute to society. arizonans know it is summar com trantransformative. mr. deloss can you summarize the business decisions you made at the start of the pandemic and how it affected your company financially? >> thank you, senator. i s shared in my a i opening statement, our priority was our team's stability. y as a ieldbusiness, we ultimatell know if we invest in the personal stability of our team, it will yield professional, professional growth and stability. and so when the pandemic hit, ls although we were getting caughtt and broadsided by kind of countless curveballs just associated with covid and the loss of private investment capital, we wanted to make surec our team had some place to come back to.ho d used and so we did choose to close down our restaurants and we usen the discretionary resources from the product that was still in our walk-in coolers too discretionary spending to ensure that we could cover our team's basic needs in advance of assistance kicking in. ma you all remember at that point,ny many, many people displaced by the pandemic f wer waiting four to six weeks to receive emergency assistance. because of the barrage of demand that hit federal resources and state resources. thatm and and so we made that choice to au close down and deeply invest in our team. and to see a 90% recall rate of upon reopening that was still oa alongside of emergency st the assistance. particularly for a group of people that have so many stereotypes and judgments against their work ethic against them. a huge testamentes toses our su and still believe that our business, you know, our team is has a competitive advantage and. strength. you.n thank you and your team have been scup through some difficultla p rec challenges. now, as you know, our restaurant rescue plan would provide grant funding to help you recoop some of the losses you experienced as a result of being closed. it would use 2019 revenues as a benchmark., how would it allow you to advance the values of your business? >> for us additional grant funding and support allows us to get back on the growth trajectory we were before. so, you know, i spent years in my early professional life as an investment banker analyst studying markets and understanding what this looked like. and the ors werreality of covid predators were abundant. we had multiple offers to bloo purchase our company atd about 20% of the value we had pre-c pre-covid. for us, we lost a complete -- >> we'll have to leave this here and take you live to a hearing with state health officials to give