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Washington DC – Today, Chairman Roger Williams (R-Texas) led the full Committee with the title “Small Business Committee Hearing.”Unlocking Main Street’s Potential: Examining Pathways to Capital Access. ” Chairman Williams issued the following statement after today’s hearing.
“Today’s hearing was very important because, as our committee has heard repeatedly in our hearings, access to capital is the number one concern facing entrepreneurs.” said Chairman Williams. “I have been in business for over 50 years and have borrowed money from banks every day. Capital is needed not only to start a business but also to grow an existing business. We must continue to work to ensure adequate access to capital so that we can more easily compete in the marketplace and have a better chance of success.”
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Watch the full hearing here.
Below are key excerpts from today’s hearing.
Chairman Williams: “You stated in your testimony that you were unable to receive your first business loan until 2016, when you used the building you had purchased the previous year as collateral. , your capital needs have changed. So my question is to other entrepreneurs who may be listening to this hearing, how have your capital needs changed over the lifecycle of your business? Can you tell me about it?” Mr. Bomarito: “Thank you, Chairman Williams. Yes, they have. When we started the business, we basically needed money to increase our inventory and cover our accounts receivable. As you grow, it’s an exponential It’s increasing functionally and it’s going to continue. And along with that, it’s also considered high risk because it’s growing, and anything above 10% is considered risky. I’ve heard that companies often grow more than 10% a year. It’s the big companies that are satisfied with 2% or 5% profit increases. So growth has changed over time and will continue to change. To grow your business, you need access at the local level from community banks.”
Congressman Luetkemeyer: “As a former banker and former regulator, when I say this only affects the top group of banks, things go downhill. They’ll roll their eyes and nod and say, “This is a really good idea. We need to implement this. What are your thoughts on this rule and its impact on small business access to capital?” Mr. Holtz-Eakin: “So financial markets are, by definition, interconnected. And you’re going to impose these capital requirements. As you say, operational risk, as well as the operational risk that I have for the proposed rule. What I’m frustrated about is that it doesn’t quantify how big the operational risk is. You can’t quantify the benefit of holding a certain amount of capital against the operational risk. I’ll put this on hold. and allocate it to operational risk. I think they could do a better job in defending this proposal. A cost is a cost, and it’s not limited to operations. To cover those costs, increase revenue. This means that all credit will be more expensive. This will be baked into the entire pricing structure of these banks, and smaller banks will no longer rely on large banks for their funding needs of various maturities. And that will trickle down to smaller banks.”
Senator Elsey: “When they put these regulations in place, they hurt people like Mr. Bomarito in his family’s business, and then they send them to people like Mr. O’Leary, who has done a great business. I’m so glad you’re here and telling the truth like you are. Very enlightening, Mr. O’Leary. But Mr. Bomarito, you’re giving away your business to someone like Mr. O’Leary. You don’t want to sell a part of your heart and soul because you’re giving it away, and you want to find a better way to access that capital. You don’t have access to that leg in your business anymore, and he might make it disappear… Mr. O’Leary, why do we do things like this to ourselves? Do you do that? Mr. O’Leary: “Today, there is competition for capital in the world, and there is no nationality. We look for the path of least resistance and go to the safest place. The unique situation in America is that we have a lot of competition for capital, like the data center that I mentioned earlier. Hey, if you have a project that’s going to make 11 to 15 percent over 20 years, where are you going to put it in Ukraine? No, you’re going to keep it in a safe place in the United States. If you have a good regulatory environment and competitive state taxes, you can get customers like Amazon, Microsoft, the IRS, government agencies. These are huge projects. And normally you could go to a national money center bank and get customers like Amazon, Microsoft, the IRS, government agencies. , would say, “We won 1.2 billion projects.” From 11 o’clock he is supposed to pay by 15 o’clock. I’m very interested in it, but I need a banking partner. What if I paste this Basel one here? I’m not going to speak in New York. We will talk to Abu Dhabi. ”
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