During Wednesday’s Senate Small Businesses and Entrepreneurship Committee hearing, Sen. Todd Young (R-IN) questioned SBA Administrator Kelly Loeffler about cyber security risks.
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00:00And I now recognize Senator Young.
00:03Administrator Loeffler, it's really great to see you.
00:06It's good to see you in Indianapolis.
00:08Thanks so much for the visit recently.
00:10And I think it's appropriate, since we visited a manufacturing facility,
00:14that we're here to discuss the importance of our manufacturing leadership in this country.
00:20So thank you for your support, relatedly, for advancing the goals of my Small Business Technological Advancement Act.
00:31That will be important to many Hoosier businesses and manufacturing enterprises.
00:37I'm especially grateful that its intent has been incorporated into your updated standard operating procedures.
00:44In effective June 1st of this year, 7A loan recipients will now be able to use their proceeds for critical modernization efforts,
00:56digital tools, software, payroll, et cetera.
01:00This is a significant step forward for small businesses who are seeking to stay competitive in this rapidly evolving technological landscape.
01:10It touches directly on manufacturing, which is what we're here to discuss today.
01:17Let me pivot a bit, if I can, to SBIR mills.
01:23It's something you're familiar with.
01:27I am sure you are aware SBIR mills are companies that systematically secure numerous SBIR,
01:35or Small Business Innovation Research Awards, often focusing more on obtaining grants than on commercializing the resulting technologies.
01:47SBIR program is designed to support small businesses in developing innovative technologies,
01:53technologies that can make them more productive and allow them to pay their workers more,
01:58so that we can continue to have an ecosystem of good jobs in this country,
02:04which I know is President Trump's and this broader administration's objective.
02:10What impact do SBIR mills have on legitimate small businesses trying to enter the program?
02:17Administrator.
02:19Senator, thank you for the question.
02:20I also thank you for your leadership on the technology enhancements that you helped us make available in the 7A loan program,
02:28because I think we know that small business benefits when they can have workflow automation and efficiencies,
02:34and so I appreciate your leadership on that.
02:38Specifically, with regard to small business innovation research mills,
02:42more broadly, just thinking in the context of a year where we will be reauthorizing the SBIR program, hopefully,
02:50and this is an important program that provides the development of critical technologies,
02:55particularly in the areas of defense and health care and other areas,
03:00but what we want to make sure is that the program designs as intended and operates for the benefit of American taxpayers
03:07and the small business innovation that is occurring that is absolutely mission critical in many respects to our national security,
03:15our warfighters, health care, and other areas.
03:18So when SBIR programs are abused to access grants and funding without delivering the results,
03:26that's something that we have to look into.
03:28Our team's already evaluating the program effectiveness and the ability for us to audit and monitor the participants in the program and the results.
03:39Admittedly, that program seems to have been adrift in the last four years,
03:44and I think we need to put guardrails back on that in terms of being able to access information,
03:49and we will continue to share information with your office as we learn more about the program to protect it for the intended recipients and results.
03:59Well, I do hope that you stay in touch with our office in particular, but more broadly, the committee.
04:04I know there's a lot of support on this committee.
04:06The chair is certainly very supportive of making sure that our legitimate small businesses,
04:16those that create things of value for people, aren't just in operation to extract money from the taxpayer
04:23to ensure that they can be as innovative as possible.
04:27And so I intend to offer some concrete solutions, and if they're informed by your excellent team's work, that would be fantastic.
04:37Will you work with me on that?
04:39Senator, I look forward to working with you in this entire committee
04:42and appreciate the committee's leadership in thinking through that process.
04:47I guess the last thing I would ask as my time runs down here, Administrator, just pivoting to cybersecurity,
04:53something very important to me as a member now of the Intelligence Committee.
04:58How does the SBA assess and prioritize cybersecurity risks?
05:04Well, as someone that came out of small business, Senator, I know that for small businesses,
05:11it can be a disproportionate cost for them to address that.
05:15And through our work across the country and our small business development centers,
05:20we hope to bring expertise to bear to make it accessible for small businesses,
05:25for them to share that information with their employees so that they're not inadvertently putting their small businesses at risk
05:30and to understand the emerging threats that can be happening because that threat environment's always changing.
05:38And so we'll continue to work with small businesses on the innovation front,
05:42whether it's cybersecurity, artificial intelligence,
05:46and other innovations to keep them at the forefront because they're really having to do a lot more with less,
05:54and we are there to support them.
05:57Chairman?