Rural Business Creation and Expansion

[Guest SBA]

Agriculture Secretary Tom Vilsack and U.S. Small Business (SBA) Administrator Karen G. Mills today announced that the two agencies have signed an agreement to encourage sustainable growth and development of rural small businesses. The announcement was made during the National Summit of Rural America, which gathered agricultural leaders, farmers, ranchers, community leaders, and residents of rural communities to share their vision and ideas that can help rebuild and revitalize rural America.

 

"The Obama Administration strongly supports efforts to develop new and existing businesses and this new partnership will help increase access to capital in rural communities which can spur business growth and job creation," Vilsack said. "USDA has many business programs designed to promote small business development, including direct and guaranteed loans and grant assistance and we look forward to partnering with the SBA in our business development and support efforts."

 

The agreement between the SBA and USDA is designed to reach out to people and places in rural areas and small communities with underserved financial needs. Prospective small businesses owned by minorities, women and veterans also are expected to benefit from this joint effort to encourage sustainable growth and development. USDA Rural Development's Rural Business Service will provide loan guarantees, loans and grants; the Small Business Administration will provide loan guarantees.

 

The MOU will remain in effect for three years. Under the agreement, USDA Rural Development and SBA will use their respective resources to provide small businesses in rural areas with loan guarantees and technical assistance to help build diverse and sustainable economies, reverse population decline, create and sustain jobs, and improve quality of life. The agreement is expected to:

 

• Improve opportunities for small businesses to start and grow;

• Improve coordination in the delivery and development of programs; and

• Increase the number of small business loans guaranteed by USDA and SBA.

 

"Small businesses and entrepreneurs are a key source of job creation and the foundation of local economies in rural communities across the country. Both SBA and USDA are committed to bring our collective expertise, financial resources and experience to help start, grow and sustain rural businesses and promote entrepreneurship," Mills said. "This partnership represents

the Obama Administration's ongoing commitment to working across our various agencies to increase economic opportunity for rural citizens."

 

Key goals of this partnership include strengthening marketing and outreach by enabling each Agency's field offices to advise potential small business borrowers of the other Agency's credit programs that may support all or a portion of the small business' financing needs. USDA Rural Development and SBA field offices will exchange promotional and reference materials, including brochures and training schedules, and will distribute the other Agency's information to its field network and its potential applicants when appropriate.

 

USDA and SBA will also encourage their networks of resource partners to refer rural businesses to the other Agency's resources, where appropriate. Rural Development's network includes National and State Rural Partnership Councils, State and sub-State Offices, and Appropriate Technology Transfer to Rural Areas. SBA's network includes Small Business Development Centers, SCORE Chapters, U.S. Export Assistance Centers, Veteran Business Outreach Centers and Women's Business Centers. By mutual agreement, USDA and SBA may identify pairings of State and district offices to explore mutual best practices available to serve clients.

 

The Small Business Administration works to assist and protect the interests of small business. SBA guarantees loans and provides business development assistance to small businesses. It administers its programs through district offices throughout the United States and provides additional services through its network of resource partners: the Small Business Development Centers (SBDC), SCORE, U.S. Export Assistance Centers (USEAC), Women's Business Centers (WBC), and Veterans Business Outreach Centers (VBOC).

 

USDA, through its Rural Development mission area, administers and manages more than 40 housing, business and community infrastructure and facility programs through a national network of 6,100 employees located in the nation's capital and in 500 national, state and local offices. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. Rural Development has an existing portfolio of more than $134 billion in loans and loan guarantees.

 

USDA, Weldon Freeman, (202) 690-1384 SBA, Hayley Matz (202) 205-6948

[Guest LAW]

Ms. KLOBUCHAR. We have been working and focused very much in the last few weeks on the economy with our tax extender bill as well as the jobs bill we passed, and I, for one, am glad. My State is glad, because that is what I have been hearing all around my State, especially from small businesspeople who have been troubled, are having trouble getting credit. Mr. President, as someone who has worked so much on this issue, you know how important that is to the strength of our economy, as 65 percent of our jobs have come from small businesses.

 

Today, I would like to take a few minutes to discuss two bipartisan bills I recently introduced that I hope will do more to add to the creation of jobs, to innovation, to exports. The first one is called the Export Promotion Act of 2010, and the second is the Travel Restriction Reform and Export Enhancement Act of 2010.

 

Export promotion is a topic of special interest to me. I chair the Subcommittee on Competitiveness, Innovation, and Export Promotion. The Export Promotion Act is cosponsored with my good friend on the subcommittee, the Republican ranking member, George LeMieux, and also by Senators Shaheen and Wyden, who have taken an active interest in export promotion.

 

We have an important national interest in promoting exports. Access to new markets can make the difference between expansion and stagnation of a new and developing business. The President recognizes this, and that is why I am pleased he called for a doubling of exports in his State of the Union speech, a doubling in the next 5 years.

 

One way to do this, to take this opportunity to open new markets, is going to be Cuba. A bipartisan bill I introduced with Senator Enzi, a second bill, would do just that. The bill makes it easier for American farmers to export agricultural products to Cuba--currently a closed market--by relaxing the restrictions on financial transactions between the two countries and by making it easier for American farmers to travel there to promote their products. The sponsor of the bill in the House is Minnesota Congressman and chair of the Agriculture Committee, Colin Peterson.

 

Another way to promote American exports is to make sure businesses know about the potential export opportunities available to them. Currently, the United States derives the smallest percentage of its GDP from exports compared to all other major countries. America has always been ``the world's customer,'' buying our way and in effect buying our way to huge trade deficits. But it is clear that exports will be increasingly important to our economy as people in China, India, and other developing countries gain more purchasing power and they become our potential customers. Right now, more than 95 percent of the world's customers are outside our borders. Think of it; with the growing economic power of customers in these new developing nations--I was just in India a few months ago, and you see that mass of humanity, the potential, as that country builds itself up, of people who can buy our products from all over our country. More exports will mean more business, more jobs, and more growth for the American economy.

 

Exports are also important for small businesses for several reasons. First and most obviously, exports allow a company to increase its sales and grow its business. Second, a diversified base of customers helps a business weather the economic ups and downs.

 

So there is a world of opportunity out there. I can tell you, I have seen it in my own State.

 

Mattracks, a company in Karlstad, MN--population 900, known as the Moose Capital of Minnesota--is a little company named after a little second-grade boy named Matt who came home and drew a picture of tank tracks on each wheel instead of going between the wheels. His dad, a mechanic, decided to build this product in his machine shop, and they now export to dozens and dozens of countries all over the world. They started with 5 employees and they are now up to 50. How did they do it? They went over to Fargo, ND, which covered this area of Minnesota, and talked to a woman named Heather at the Foreign Commercial Service Department. They went over there, and she matched them up, like a business match.com, with potential countries, from Kazakhstan to Turkey, that were interested in their product. That is how they grew their business in Karlstad, MN.

 

Akkerman, down by Austin, MN, really in the middle of cornfields, is a longstanding family business--different from Mattracks--where they actually do trenchless digging. They put major steel pipes underground, and they have the machinery to push those pipes underground. They can dig major trenches underground without actually digging up the landscape, without digging up the ground. They have done it in Los Angeles, but they are doing it in India. Why? Highly populated areas like digging this way; they do not have to dig up over ground to do it. Again, as you look at these countries with the kind of infrastructure they need, Akkerman is now up to 77 employees--again, in the middle of the farmland in southern Minnesota.

 

But for so many businesses, it is very difficult to do this because for them the world looks like one of those ancient maps that contain only the outlines of the continents and a few coastline features. But the rest of it is blank space, vast unknown and unexplored territory. They know there is something more, they know accessing these markets will help them expand their profits, open new facilities, and hire more people, but they do not really know how to find out about opportunities.

 

Fortunately, there is help available. There are a number of Federal programs through the Small Business Administration, the Commerce Department, and the Export-Import Bank that assist U.S. companies in promoting their products abroad. The idea here is to give that kind of help to small and medium-sized businesses so they can vet a potential customer, so they can find out what is available. They don't have a full-time trade department or full-time person looking at each continent like a company such as 3M or Cargill--very successful businesses in my home State--would have. So they need this help.

 

Another example: Epicurean in Duluth, a company that makes commercial and home-kitchen cutting surfaces. With 40 employees, it has customers in 45 countries. I invited Epicurean's owner, Dave Benson, to join me for this year's State of the Union Address, and he thinks we are right on track in focusing on the export market.

 

What does our bill do? Our bill focuses on expanding the Commerce Department programs that help these companies get the word out. It does three major things:

 

First, it expands the scope of existing Department of Commerce programs that help America's small and medium-sized businesses commercialize and manufacture new technologies that export abroad.

 

Second, it increases the people at the Department of Commerce who are responsible for identifying new export opportunities abroad and matching these markets with American companies. For the past 2 years, the program that specializes in matching small business with potential export markets has not replaced retiring officials, losing roughly 200 people since 2004 even as demand for their assistance continues to increase. This bill would restore staffing levels in this program to their 2004 levels. I talked to Secretary Locke this morning. I know he is focused on this. He is doing reshuffling of people in his own department. That is the key to this.

 

Finally, the legislation will expand the Commerce Department's Rural Export Initiative to ensure that small and medium-sized businesses located in rural areas know about all of the available export opportunities for them. Why is this cost-worthy? Well, look at this: a return of approximately $213 on each dollar--$213 on each dollar. That is what we are talking about here.

 

What we are trying to do here, Senator LeMieux and I, with this bill and also with our bill regarding Cuba is to open these markets and say: You know what, if we can give our small and medium-sized businesses and our farmers a little help, either getting in the door, knowing whether a customer is real, letting them know where their product is hot, what countries are interested, they are going to do the work. These are private sector jobs. Our idea here is not to create the jobs ourselves but to help them to get into these markets, to make them on an even playing field with the big businesses that already have the resources to do it.

 

The ability to envision creative new products and then develop them, commercialize them, and sell them has been part of the American dream as long as there has been an American dream. That spirit of innovation has gotten us everything in my State from the Post-it note to the pacemaker. Those companies--Medtronic started in a garage, and 3M started up in Two Harbors, MN, a tiny little town. Target started as a dry goods storefront on Nicollet Mall in Minneapolis, and they grew to what they were. But they can only do this now if they get that kind of help. It is no longer only America that is their market; it is India, it is Kazakhstan, it is Turkey, it is China.

 

So it is not as easy now to build to the point that they need to build to. That is why Senator LeMieux and I are introducing this bill, to assist the Commerce Department to assist these small and medium-size businesses. As we continue to fight through this economic crisis, it is important to keep the end game in mind, an end game where the United States is again the world leader in job creation by virtue of developing and selling the world's most innovative products. This bill will help us get there.

 

I yield the floor and suggest the absence of a quorum.

 

The ACTING PRESIDENT pro tempore. The clerk will call the roll.

 

The bill clerk proceeded to call the roll.

 

Mr. McCAIN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

 

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

 

Mr. McCAIN. Mr. President, I ask unanimous consent that I be allowed to engage in a colloquy with the Senator from Connecticut.

 

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.