On Wednesday, July 25, the Joint Economic Committee (JEC) held a hearing on “The Innovation Economy, Entrepreneurship, and Barriers to Capital Access.” Chairman Erik Paulsen (R-MN-3) presided over the hearing which featured three witnesses: OFN President and CEO, Lisa Mensah, Phil Mackintosh, Senior Vice President Global Head of Economic Research Nasdaq, Inc., and Rachel King Chief Executive Officer, GlycoMimetics, Inc.
Senator Martin Heinrich (D-NM), in opening remarks, noted the important role small and new firms play in driving innovation and new jobs, saying, “A big challenge is getting access to capital to turn their idea into a business or take their business to the next level.”
During Mensah’s testimony, she spoke directly to the barriers Heinrich noted, and how CDFIs are working to fill market gaps to meet the economic needs of under-resourced communities, particularly in rural and Native communities. She said, “Small businesses turn to CDFIs when they can’t access capital from traditional lenders.” Mensah referenced OFN member CEI’s role in spurring the local economy in Maine. Tilson Technologies, a veteran-led small business, needed financing to expand, and CEI stepped in to help them grow from 3 employees in 2007 to 230 across eight locations today.
Mensah made three recommendations, "for Congress to sustain and enhance federal programs that help bring about the kind of innovation economy we need.”
- $250 million appropriation for the Department of Treasury’s CDFI Fund
- Make the Community Advantage program permanent at the Small Business Administration
- Full funding for Rural Development’s small business lending programs at the Department of Agriculture
You can read her full testimony here.
During the Q&A portion of the hearing, Mensah noted the bipartisan support enjoyed by the CDFI Fund, the SBA, and the USDA, and said, “I see no losers in doubling down just when the economy needs a push into the very areas that don’t rise easily.”
Later in the hearing, Representative Carolyn Malony (D-NY-12) asked Mensah how CDFIs leverage federal dollars to serve communities. Mensah explained, “a financial assistance award forms a kind of permanent capital which CDFIs use to attract debt capital from private sources. CDFIs leverage CDFI Fund Awards 12 to 1."
The role of women entrepreneurs in the economy was a key point for several members of the JEC. Representative Karen Handel (R-GA-6) specifically mentioned how ACE has financed 71 women-owned companies in Georgia. Handel asked, “What can we do to drive this type of innovation and thinking?” to which Mensah responded, “ACE in Georgia is a powerful CDFI that has led innovation throughout the state… but ACE wouldn’t have grown if it did not have the support from the CDFI Fund and the SBA Community Advantage Program.”
The full hearing was livestreamed, and you can view a recording here.
Mensah with Sen. Heinrich, ranking member of the JEC
Mensah with Representative Erik Paulsen, Chairman of the JEC (R-MN-3)
Rep. Maloney with Mensah