darlene was the sba 2006 minnesota state winner. she was also the 2008 national chamber of commerce business person for the entire u.s. and currently she has been appointed to sit on the president's council for jobs and competitiveness. darlene? [ applause ] thank you and good morning. i'm really excited to be here today. my real job is owning a small business. i have 38 employees. and we are in the very high-tech precision machining. we do a lot of things in aerospace, defense, and have made some great connections through the sba and with nasa. so we make a lot of tiny components from metals and plastics. so that's my real job i do every

day, but i'm really excited to serve on the president's council for jobs and competitiveness and be a voice for small business. and i really truly believe that the president and all of the staff have really listened to a lot of our recommendations and made a lot of the changes, as administrator mills alluded to earlier in the small business jobs act, and many other areas such as regulatory that we're also working on. so i'm really excited to be here today and answer any questions that people might have. >> okay. thank you. i think you hear a lot about the opportunities, a lot of the things the sba are doing, and that's really important. that's critical to the success for small business. but now we have an opportunity kind of in a smaller group, a town hall forum, to have some dialogue, some interchange amongst the panel to hear your

questions and to be able to participate in this interactive. i think this is an opportunity not everybody is a billion-dollar company. some of us are much smaller. some of us are starting up. some of us have been in business for years and still in the growth stage. so what are the problems? what are the kinds of issues that impact you? things that you'd like to ask, things that we could talk about. there are certainly a few, and i'll just toss out as i look at some of the issues that are out there. we always talk about the importance of capital, and i think you have heard some wise counsel on that. but there's a practicality of capit capital. how many businesses start off, you know, with too much capital in their banks? probably not many of us. we're struggling, we're trying to find the way to piece things together, we're trying to boot strap it along the way, and yet

i think that's the message. i think that's the heart of america. we do what it takes, whatever it takes, however long it takes, we are persistent and we get the job done. i think we have proven that over and over again as a country. but i would like to say from my perspective, wub one of the things i know we have done is when i initially started the company, i went out to 70 physicians, individuals with whom i had been working. i was setting up surgery centers around the country. and out of those 70 doctors, i said, okay, let's see if i could find some folks who might be willing to invest. so i wrote a letter and put a plan together, and out of 70 physicians, 35 came back with a positive response. if you're doing any kind of marketing, 50% in anything is a good number. so i took the feedback and a few

of them said, let's get a few of us together. so there was three surgeons, a retired cpa and myself who started the company initially. then along the way, we did some leasing. we leased a unit, we sold a unit and kind of that boot strapping as we call it. to bring cash in for today, trying to spin the opportunity to the next sale. you've all been there. you've felt it and understood it. but those are areas and ways and me means we can do things. i was interviewed on an msnbc maybe six months ago and they talked about -- they thought i had a unique story because in part, we had a period of time when people were not paid for some of their time with a company. this is when we were a little smaller. and they said how do you get away with that? how do you get people to literally work for free? and so the way they do the

interview is they interviewed me and then they had a panel discussion afterwards, but i had no chance to respond. one of the comments was that two of the panelists were very impressed and flattered by the fact that i was able to keep the company alive and thriving by getting creative solutions. the third panelist said that's taking advantage of those people. what i didn't get to share was that we didn't ignore the value of what those participants put into the company. we offered them additional bonuses when we had the funds and we covered more than whatever their shortfall was. we offered stock in addition. so we did things that made a difference to them. thoughts, darlene, on that? starting off and how to kind of launch forward maybe with and without all the capital? >> i obviously didn't have the capital when i first started -- or went into business. i wanted it to buy 45% of it,

and i went to the bank. a bank president that i had met once and said, i desperately need money. how can i get an sba loan? really as, again, administrative mentioned, having a mentor and friend, and he became that and actually helped me get that first sba loan, walked me through the whole process and helped me with my business plan. it if it weren't for that loan and for him, he wouldn't be here today. then in 2008 when we decided to double or space again, and we started from the very small 8,000 square foot and we're about 34,000 square feet. the sba came forth, and i was able it to get another business loan. reaching out, finding that mentor and that friend and then utilizing the services that are out there and asking a lot of questions is really key.

>> anything to share with that? >> one point is that all of you in this room have been successful. you're the winners, but we want to make sure all throughout this country that entrepreneurs have access and opportunity. that's why this combination of loan guarantees, micro-loans and meant f mentorship counseling and assistance is critical. in the early days you don't know what you don't know. sometimes we have found -- i don't know what got us in the small business development centers. if you walk in, we have small business development centers that in the depths of the credit crunch we're able to take 70% of the people unable to get aa loan and sit down with them and we think their business plans and cash needs and do their presentations and get them

bankable. that was in north carolina. once again, use all the cs. >> thank you. kathy, i'm wondering from your perspective, and two, folks that would have interest in maybe wanting to reach out and get some information on your program, how do we do that? >> well, first is we should stop by our area outside here. we have a number of brochures that really are about applications that can help you run yoor business more effectively. we can do everything like a cell phone, which, of course, all of you have access to and use. we have found very successful in small businesses is technical support. many times you don't anticipate the growth of your business and don't do everything you need to do with technology. we provide technical support resources. another area of importance is hosting applications. we talked about the roefrs. that was the only site for the business and they have no backup and the data was not maintained.

we talk about hosting applications and making sure you have a redid you understand see plan to make sure it's not just in the hardware in the pc room. we talk a lot about small business customers with all of our technical discussions. people should have an account representative. we're happy to make that person available to you. there's several colleagues here today. we make sure we have account teams follow up with you depending where you're located. you can call us, and you can e-mail us. we have online communication. you can check out website and portal app and brochures available to you. we try to position ourselves as the trusted adviser to run your business, and we've learned a lot over the years. finance service customers are different than professional services, and we try to make sure our sales teams are focused to provide the best level of support to you to help make sure your business is growing. >> thank you. please, if there are questions from the audience, we're looking

to receive those. we have a list of things we can certainly share, happy it to share, but it's really your questions and comments that are important. yes. >> they need to pick it up. they have a live feed going to other folks. step up to the mike. if. >> thank you, sir. can you state your name. >> sure. i'm bob mchugh, consulting engineer. i bought a consulting engineering firm 15 years ago, and i've been running it since. but now i find that i've got less employees than five years ago and three years ago. i recently had to dumb down the health insurance plan because the plan i liked and the plan we've had for years just got too expensive. none of the tax credits apply to

us, because all our employees make more than $25,000 a year. my bank told me that they were under pressure from federal banking regulators writing down loans, and my loan was suspect, even though ipts been there for 15 years. it's just a credit one. the 401(k) plan is getting more expensive every day, and now we have personal liability as business owners. the question is is that worth keeping? my great fear is not that the government will come to some other program and help us, but one day soon my wife of 37 years is going to roll over in the morning and whisper in my ear, you know, honey, i'm not going to sign for that bank loan anymore because we need to keep something for our retirement. you're getting older. maybe we can't wait out this recession.

that's the reality that i see as a small business owner and br entrepreneur. maybe the panel could give me some advice on that front. >> this is a story that i've heard from small business owners all across the country, especially in the beginning of this recession when we really had a lot of bank lines and credit lines that were just pulled. and as you just described, we have done -- let me take a couple of pieces of the concerns you mentioned. they've been universal voices, and we've been able to bring some of these forward as concerns of small businesses. so, first of all, in this access to credit, are the regulators paying attention to making sure that guidance that's done at the top of the regulators is

transferred all the way down to the regional regulators so that small businesses, banks serving small businesses don't get -- the pendulum doesn't go too far the other way? i will tell you that we are having constant conversations with our colleagues in the regulatory bodies here to make sure that they are focused on the needs of small business. that they do not get caught in undue regulation or make sure that their banking regulation that comes down is properly -- the guidance is communicated, and fdic was very, very helpful in this, making sure that local and regional regulators understood what the guidance was to make sure small business loans didn't get classified that shouldn't. that's an ongoing process, and

plij to you. i pledge to lots smauf businesses we're going to continue to have those conversations making sure that small banks, community banks and everything is in the wrong with the regulators. that's something that across the administration we were very focused on. access to capital of critical. just quickly on health care for a second. i want to make sure that everybody knows some of the benefits that are available. you mentioned a tax credit you didn't qualify for, but everybody else should take a look and see if they qualify for the health care tax credit. the other piece is that with the health care legislation in 2014 there are going to come marketplaces where insurance companies are bidding on the business of small businesses creating more opportunity for you to find a plan and a desire that works for you, but running a small business as you just

described is an ongoing challenge and we want to be there whether it's for retirement planning. i think having a counselor look at your business, work with you maybe in the scoreboards, ken if you're here somebody who has face add he retirement situation in a business to help you navigate those things. i know you have a terrific business, and we need to make it successful. >> i'm neal kimball with the kimball companies, and we're an entrepreneurial success reward recipient in the southeast. yesterday i was at boston university. my daughter graduated, and my wife and i tandem drove after 9:00 after all the festivities to be here this morning. we're excited about being here. it's great that she graduated and we have two out of the nest now. eric smith, google's executive

chairman, i think he hit all students not only in the nose but all the business people and other practitioners in the audience of 20,000 people. he talked about technology as a tool and technology as a tool, you have to be brilliant and innoefb and he says these young people are going to teach us more than we would know as people that are not as digitally native. i wanted to throw this out assist a question and potentially a challenge and an opportunity for the sba. is there a way that we could get people that are doing amazing things -- i know we have a social media that will tweet up tomorrow, but i think it's going to be even more important that we get people that are passionate about getting on board with technology as it relates not only to generations but marketing, pr, all the different things that really transform not only our businesses but our society. is there a way that the sba can convene a group where we can

collaborate and talk and share best practices? i'm a serial entrepreneur in three ceo advisory groups. i think if we had something online with great, young thinkers and maybe old people to come up with great ideas could be very valuable. i'm throwing this out to the sba to do something creative like that. >> absolutely. it's a great idea. all of this, we're going to be talking about it today. we have our sba community and sba.gov which is a perfect forum. there is activities actually already in this area, but what i want to say is this is -- all of this social media is very, very good news for small business. right? levels the playing field, allows us access and opportunity to very big markets in very targeted ways, how they're cost-effective. you just need to find the way

that's right for you, and it's all exploding so fast that it's hard it to keep up. so we're going to take your recommendations on this forum, and we'll get people together in our community and see marine nodding on this. we put it together with some of the things later on already occurring and really try to focus on this, because it's so good for small business. >> i think years ago when i think back, this was health care specific when they were talking about technology and how they change the way health care is delivered using, for example, the smartphone and great activity between you and your provider. it was a fascinating lecture, and i was there as far as the mobile health side because the question was asked by the ceo of a large health care entity and said, what happens in ten years from now if 50% of all the work that we perform inside of a

hospital is done outside of the hospital? things like different ways of you communicating having your heart monitor with you at all times through the smartphone, through home dialysis and through the things like mobile technology, mobile health and surgery that suddenly the dynamics have shifted. how do you respond to that? that's the brentrepreneurial activity to look at the market segment. it's a major driver in all scenarios. >> i'm christie arselon. we launched a business this month gourmet popcorn company here. we received invaluable support from the washington, d.c. small business development center in helping us put our business plan together and launch our business. the counselor there worked with us for over a year in the process. it's a wonderful program that we support. i'd love to hear a little bit more.

one of the big issues we've been having is so much has been talked about access to capital, and we've seen the administration do a lot of things to help business owners, particularly find access to capital. one of the things not talked about is credit, and even though there's a lot of opportunity out there where you hear about a lot of money flowed through to banks or credit unions or even sba programs, one of the things not discuss soldier how your credit comes into play. so a lot of our members are finding they hear about all this money out there, but that can't access it because of all the credit requirements. i'd love to learn more about how someone's credit score or credit comes into play with an sba loan and maybe hear from the business owners about how they kind of manage the process in terms of their personal credit history and accessing a loan. >> i think this is a question that we get quite a bit. rather than take our time here,

because i know you want to get to the other two on a long credit strikes explanation. i'm going to success that or cap access team get together with you, and you can tweet it out for the organization as well. there's a lot of discussion about creating a morrow bust look at credit than just a credit score, and we're actively participating in that. >> i'm from interactive achievement out of roanoke, virginia. let me first say the sba has what was a blessing and help desk from that ten-employee to 20-employee, and just got that rolling. and my question kind of doesn't quite piggyback off of her question, but it kind of does. because of what happened and god bless us all for making it through the worst recession ever. let's start there. that alone.

but what's happened -- i don't know p if everybody else is facing this. it's not just a credit score. it's you have to have assets, and i mean fully paid off assets bringing them to the bank before they're going it to talk to you. whether the sba is involved with that or not. what the sba has done is extend those loans beyond those assets to give you more capital, which was wonderful for us. i know in our region which we're involved and we have a wonderful region down in virginia. there are so many businesses that prove growth, they prove it over time hiring employees, revenues are growing. all those things that we want, and those don't mean anything anymore to a bank unless it's an asset. unless you have a asset to bring and put onto the table. my question is, is the sba looking toward or looking in the future of becoming that asset for those young businesses that

have proved growth over three years, four years, five years, and they're going to be the asset on top of what that small business has already created. >> i think the answer is yes, it's a very good point. in the case of intellectual property, we have a lot of discussions with the patent office about how we can get small companies in their earlier stages started when all they have is intellectual property. that intellectual property is very valuable. our role is to become the backstop when it is that the bank sees you as a young, growing, successful business, but just can't quite get there on the record that you have. we step in. we provide that kind of wind at your back so that you can get that first set of loans and then

hopefully as in my story of taylor, you grow to be marketable credit and we go on to the next small business entrepreneur. >> and i think part of that answer is there are other institutions and people that take greater risks in some of the sbic impact funds combined with some of the private funds. there's ways to be creative, and we can spend a day on the banking side and credit side for sure. one more question, and i think that's all we've got time for. >> hi. my name is donovan, and our company is avasor incorporated. i wanted to make a comment about the emphasis, it is issues that i think affect us as a small business sxing many others. i know that you're doing a tremendous amount with access to capital, and i want to share one more perspective about the health care issue. i view my ability to provide

health care to my employees as basically the most important issue after access to capital. once you get that access to capital issue and think you're past it and are operating a profitable business, you feel your growth is really tied to your ability to provide a really nice safety net for your staff. one of the things that we're finding over the last -- well, since we've been in business is the percentage increases that we see annually from the options we have to provide medical insurance to our employees, they're large, the percentage increases are large. it's not unusual to have the 15% increase sadly. one of the things that a lot of small businesses have to do, they try to make choices to provide both medical care and short and long-term disability issue and a 401(k) and look at

the package and you want to provide all of that. but when the medical plans go through these significant increases, it's challenging to do all that. i had an experience last year where a senior employee in our company had a stroke. it was unexpected. and it came out of nowhere. our long-term disability insurance was able to provide a solution for her, thank god. that was tremendous. but the year before we had had this dildy bait internally as to whether we're able to keep these things. so while she will actually probably never be aable to return to work, she has an ability to receive 60% of her salary until she's age 65. that's wonderful that we were able to provide that, but there's tremendous pressures every year to do that. one of the things that i wanted to mention to you is i feel that the sba needs to be radically more vocal on this issue as

to -- in some ways i feel that our government fails if they allow insurance companies to discriminate against us when one of our employees is the loser in the genetic roulette of their health. this whole issue of pre-existing conditions, but more importantly the ability for an insurance company to look individually at a company's claims and if they've had a few employees sick, hospitalized, had a stroke or something like that, they can find themselves facing in the coming year 100% increase or more. basically an insurance company getting them out of the plan. i'd like to see a lot more from the sba. if you have any comment, that would be great. >> from my side as an bree prenepr bree prenear and a small business, we know the pains you struggle there. health care is a major issue, and it's debated in the national levels and debated at state levels, but what can i do today in my business? what can i do to help my

marketing, to help my sales, do help my other areas? i know i can make a difference and those are where we put as much emphasis as we can. i know that may seem simplistic but that's a reality. while some of the other debate takes place, and i'm sure the sba will do everything they can to mitigate those kinds of challenges. >> i will say that your story, once again, is something we heard from small business owners all arounded country. small businesses pay 18% more for the same cover than big business they don't go in and they're very much a part of that of the base for the aaffordable care act. i will share with you that small business on owners very early on

in this, and one said the same thing you said. she said the day that i was able to provide health insurance for my employees is the day that i called my small business a success. so we're there to help make this happen for small businesses. i think maybe we have one other question, and i am aabliobliged keep us on time, right? >> i had a stroke. i only had a 100-word vocabulary and returned to run my business. obviously i suffered from short-term memory loss, couldn't drive, couldn't write, couldn't read. you know, fortunately we have such good medical care in this country and such good research, i was able it to put myself back together, and i'm -- i'm happy to share