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71–787 2011

FIELD HEARING IN CALIFORNIA: LAND OF OPPORTUNITY—PURSUING THE ENTREPRENEURIAL 

AMERICAN DREAM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

WORKFORCE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

OCTOBER 17, 2011 

Small Business Committee Document Number 112–040 

Available via the GPO Website: www.fdsys.gov/house 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

ROBERT SCHILLING, Illinois 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

JANICE HAHN, California 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

Page 

OPENING STATEMENTS

Mulvaney, Hon. Mick .............................................................................................. 1 

Chu, Hon. Judy ........................................................................................................ 3 

WITNESSES

Mr. Manuel Martinez, President Elect, Score LA, Los Angeles, CA ................... 7 

Ms. America Tang, CEO, Ace Fence Company, La Puente, CA .......................... 8 

Mr. Jesse Torres, President, Pan American Bank, Los Angeles, CA .................. 11 

Ms. Yusa Chang, Vice President and Chief Operating Officer, Pacific Asian 

Consortium in Employment (PACE), Los Angeles, CA ..................................... 13 

APPENDIX

Prepared Statements: 

Mr. Manuel Martinez, President Elect, Score LA, Los Angeles, CA ............ 33 

Ms. America Tang, CEO, Ace Fence Company, La Puente, CA ................... 35 

Mr Jesse Torres, President, Pan American Bank, Los Angeles, CA ............ 38 

Ms. Yusa Chang, Vice President and Chief Operating Officer, Pacific 

Asian Consortium in Employment (PACE), Los Angeles, CA ................... 41 

Questions for the Record: None 

Answers for the Record: None 

Additional Materials for the Record: 

Statement of Craig Furniss ............................................................................. 45 

APAC CHSRP Civil Rights Position Paper .................................................... 46 

Lawyers’ Committee for Civil Rights Letter .................................................. 59 

California High Speed Rail Speaking Points ................................................. 103 

U.S. Department of Transportation, Federal Railroad Administration Letter to California High Speed Rail Authority .............................................. 108 

Asian Pacific Islander Small Business Program Letter ................................ 120 


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LAND OF OPPORTUNITY: PURSUING THE 

ENTREPRENEURIAL AMERICAN DREAM 

MONDAY, OCTOBER 17, 2011 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON CONTRACTING AND WORKFORCE, COMMITTEE ON SMALL BUSINESS, Washington, DC. 

The Subcommittee met, pursuant to call, at 2:41 p.m., in Richard 

H. Chambers Courthouse, 125 South Grand Avenue, Hon. Mick 

Mulvaney (chairman of the Subcommittee) presiding. 

Present: Representatives Mulvaney and Chu. 

Also Present: Representative Napolitano. 

Chairman MULVANEY. I’m going to call this meeting of the Small 

Business Committee Contracting and Workforce Subcommittee to 

order. And before we begin today, we have been gracious enough 

to be joined by Mayor Bill Bogaard from Pasadena, who is going 

to welcome everybody to the meeting. 

Mayor. 

Mayor BOGAARD. Mr. Chairman, Congress member Chu, on behalf of the great city and community of Pasadena, I want to extend 

a cordial welcome to you. 

Pasadena is a city that recognizes important business. We are 

anxious to cooperate with the workings of government at the state 

level and the Federal level at all times, and so it is a special privilege to have this opportunity to come to this hearing. We don’t 

have hearings conducted by Congressional members in Pasadena 

every day, so we are proud of that and I am happy to be here and 

welcome you both and wish you the very, very best. 

I am here today in the—I am with Dr. Sandra Thomas, who is 

the chair of the Altadina Town Council, and from our Pasadena 

City staff a deputy and director of business development, Ruth 

Martinez is here. She is here to observe and, of course, if questions 

came up about the specifics of City Hall in this regard and in regard to business development, she would be available while she is 

here to answer questions. 

Chairman MULVANEY. Mayor, thank you very much. As a member of Congress from a very, very rural, small area in South Carolina who has only, I think, been to California twice in my life for 

a combined 15 hours, this has been a really neat experience to be 

here in this wonderful town that I have seen for so long on television and to drive by all the things today that I grew up with 

watching on TV, to actually be here, and especially in this fabulous 

building. What a wonderful facility this is. It is really an honor, 

really and truly an honor to be here, and I cannot thank Ranking 


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Member Chu enough for suggesting that we do this, because it was 

her suggestion that we come here. 

I am looking forward to a wonderful hearing today. Thank you 

both for being gracious hosts on your own part, but also on the part 

of your entire city. Thank you for being here. 

Mayor BOGAARD. Thank you, sir. Good luck today. 

Chairman MULVANEY. All right. We can go ahead and begin the 

hearing. As Chairman of this Subcommittee, one of our key responsibilities is to look at the current state of small business ownership 

in the United States of America. Ms. Chu and I have been conducting a series of hearings on this Subcommittee in Washington 

during the course of the year, focusing almost entirely on trying to 

figure out ways to allow the government in general, and specifically 

the Small Business Administration, to help encourage small business growth. 

I am pleased to be here for this opportunity to learn about the 

challenges that small businesses in this community face. While I 

represent the Fifth District of South Carolina, which is some 2,400 

miles away and, if you leave it to United Airlines, about six different flights and four rental cars, there are certainly common 

themes that I think unite us. 

One of the founding principles that allows our country to be successful is the spirit of entrepreneurship. Each year, thousands of 

people come to the United States seeking a better life for themselves and their families. The reason they do that is because of the 

economic opportunity provided here and the knowledge that no 

matter what your background, you can start a business. I started 

four myself. My father started several. I come from a family of 

small business people. 

While the path to success is not always easy, it remains achievable to all who are willing to put in the hard work to build a business. We are all familiar with the many anecdotes of people pulling 

themselves up literally by their bootstraps and turning a simple 

idea into a successful business. In fact, these stories are the very 

fabric of our nation. 

Just a few weeks ago we were reminded of this possibility of success when we mourned the passing of Steve Jobs at Apple, an entrepreneur who took an idea that started literally in a garage and 

turned it into one of the most well-known businesses and brands 

the world has ever known. This story reinforces the true greatness 

of this country, that no matter what your background or hurdles 

are, if you have an idea and a drive for success, you have the opportunity to succeed. 

While it takes a lot of hard work and, I can assure you, often 

some luck on the part of business owners for a business to be successful, as policymakers we need to make sure that the path for 

success is not more difficult than it needs to be. A vital part of this 

success is working to remove obstacles that stand in the way of 

business ownership. In my view, prospective business owners 

should be encouraged to start a business and should not be scared 

away by the vast sea of regulations that do nothing but add more 

costs and burdens to business owners. Rather, we need a system 

that encourages entrepreneurs to take risks, to encourage individVerDate Mar 15 2010 04:44 Jan 20, 2012 Jkt 071787 PO 00000 Frm 00006 Fmt 6633 Sfmt 6602 E:\HR\OC\B787.XXX B787

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uals to do what the Lord made them do or put them on this earth 

for, which is to be productive. 

I am pleased that we are joined here by witnesses who are working every day to provide their communities with a leg-up when it 

comes to starting a business and turning a dream into reality. 

Many of the folks here are going beyond merely running their own 

business, because they want to make sure their communities 

thrive. 

With that, I will thank our witnesses in advance for being here 

and I will turn now to Ranking Member Judy Chu for her opening 

comments. 

Ms. CHU. Thank you so much, Chairman Mulvaney. 

I would like to welcome everyone here, and also I hope that you 

can join us later where we are going to have a little reception with 

coffee and cookies. 

And I really want to thank Chairman Mulvaney for flying all the 

way here from South Carolina. He has moved mountains to be 

here. Yes, he had an airplane flight. That was cancelled, and they 

forced him to drive four hours to the next available airport in order 

to be here on time. He got here, and then they lost his luggage. 

So I really have to thank Chairman Mulvaney for—— 

Chairman MULVANEY. I apologize for not having time. [Laughter.] 

Ms. CHU. He has tolerated a lot, and yet he is still in such a good 

mood. So it is really amazing. 

Well, I am so glad to have this hearing here today because our 

area certainly is a unique area, and it is one that has been shaped 

by immigrants. Since our nation’s founding, generation after generation of immigrants have arrived on our shores. They have built 

our nation, created economic opportunities and enriched our communities. 

Over the course of our history, entrepreneurship and immigration have been inextricably linked with newly-arrived immigrants 

launching small enterprises that form the backbone of our economy. 

In recent years the trend has grown more pronounced, not less. 

During the last 14 years, the percentage of immigrant-owned businesses has doubled and now makes up about 29 percent of all U.S. 

firms. Immigrants as a whole are 30 percent more likely to go into 

business for themselves than non-immigrants. Here in California, 

one-quarter of all business income is generated by immigrant businesses. 

It is clear from these facts that even in the current economic climate, America remains the land for those hoping to pursue a better 

life through entrepreneurship. Starting a new business is not a getrich-quick scheme for many. In fact, it means no vacations, long 

work days, and some lean years in the beginning. Our nation’s entrepreneurs and small business owners are some of the hardest 

working people in America. 

I know this firsthand because my grandfather came to this country with nothing, but he decided to make something of his life anyway. He opened up a small Chinese restaurant in Watts and 

worked day and night and night and day, and he used that very 

expensive labor, his sons, and finally he was able to make ends 


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meet. And now, two generations later, his granddaughter can become a member of Congress. 

I am so proud to represent a district that has many immigrant 

entrepreneurs who are pursuing the American dream, just like my 

grandfather. We visited two of them today before this hearing, 

Glomar Professional Baseball Bats, and Huy Fong Foods. Glomar 

is an Hispanic business cornering the market with the professional 

grade bats that are sold locally to the L.A. Dodgers. Huy Fong 

Foods is an Asian business spicing up everyday foods with their 

Asian chili sauce across the country. In fact, it is in the cafeteria 

of the House of Representatives. 

In order to continually foster entrepreneurship and build upon 

the economic benefits of new businesses, several initiatives were 

established as Small Business Administration offices. The Office of 

Entrepreneurial Development Overseas is aimed at meeting the 

needs of our country’s entrepreneurs, and there are three main programs within it: first, the Small Business Development Centers; 

secondly, the Women Business Centers; and third, the Entrepreneurship Education. 

SBDCs are one of the main sources for small business entrepreneurs. They provide individual assistance to small businesses 

based on their needs. Women Business Centers do similar work but 

cater to the unique needs of women business owners. Finally, we 

also have Entrepreneurship Education, whose leading resource is 

the SCORE Program that matches seasoned business owners with 

new business owners for counseling and advice. 

While these programs are very successful at helping small business owners, there are many small business owners from my district that tell me they don’t know about these great resources. But 

even if they do know what SBA can offer, there may be cultural 

barriers preventing them from seeking help. In many Asian Pacific 

American cultures, for example, seeking assistance from the government can carry a stigma that may be hard to overcome. On top 

of that, some business owners might have limited English proficiency and may not understand all the forms they are being asked 

to fill out. 

Entrepreneurship steadily rose from 2006 through 2009, but flattened dramatically during the recession. This poses a problem for 

the long-term health of our economy, and that is why we should 

be doing all that we can to leverage the new ideas and drive of the 

immigrant community to improve the economy. In fact, according 

to the Coffin Index of Entrepreneurial Activity, Latinos and Asians 

have the two highest rates of entrepreneurship from 1996 to 2010. 

Businesses started by immigrants are also a growing segment of 

our small businesses, growing from 14 percent in 1996 to 29 percent in 2010. 

We need the spirit of entrepreneurship and self-reliance now 

more than ever. If our economy is to grow again, we will need 

small businesses and their job-creating power to be operating at 

maximum capacity. Immigrant-owned start-ups can be particularly 

beneficial. These entrepreneurs bring their operations to more economically distressed areas where real estate can be more affordable. 


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Bringing new businesses, be they storefronts or small manufacturers, to traditionally disadvantaged neighborhoods not only creates local jobs but also generates additional commerce and economic activity. 

While immigrant entrepreneurs play an enormous role in our 

communities and economy, they also face unique hurdles to entrepreneurship. A recently arrived immigrant in the United States is 

less likely to have the credit history or collateral necessary for obtaining financing from a bank. Similarly, they may not have the 

networks in place to quickly raise equity or venture capital. 

Often, immigrants looking to launch their own enterprise may be 

less experienced than a serial entrepreneur who has operated businesses in the past. Their lack of management experience, in addition to potential language barriers, can present difficulties. Any 

previous business experience can be negated by cultural differences 

in the regulatory processes, both local and Federal, which may differ substantially from those in the immigrant’s home country. 

And so that is why I have convened this field hearing with the 

help of Chairman Mulvaney, to hear from experts in the area and 

to get their feedback on these programs. We need to know what 

works, what doesn’t work, and what needs to be changed. With a 

sluggish economy, it is absolutely critical that programs like these 

succeed and are successful in meeting the needs of all of our country’s entrepreneurs. 

Thank you, and I yield back. 

Chairman MULVANEY. Thank you, Ms. Chu. 

We are going to go ahead and set the first panel now, please. If 

Mr. Martinez, Ms. Tang, Mr. Torres, and Ms. Chang would come 

to the front table? 

Folks, just a couple of housekeeping matters before I introduce 

you and take your testimony. Traditionally, how we will do this is 

that each of you will give your testimony at one time, and then we 

will save questions to the end. So it will not be Mr. Martinez and 

then question/answer, Ms. Tang, question/answer. All four of you 

speak and then we will run through our questions together at the 

end. Oftentimes, the testimony of one witness will lead to good 

questions from the testimony of another. So it does help. 

So Mr. Martinez is our first witness here today. He is a small 

business owner and a SCORE counselor working here in the Los 

Angeles area. Mr. Martinez became a SCORE counselor two years 

ago and has counseled hundreds of business owners and prospective business owners on how to start a small business. Most importantly, working with the SCORE Program, Mr. Martinez has done 

so on a volunteer basis, meaning he has taken time out of his 

schedule not only today but every day to help other folks experience what it is like to run a small business. 

Mr. Martinez, thank you for being here today. 

I will yield now to Ms. Chu to introduce our other three witnesses. 

Ms. CHU. Thank you, Mr. Chairman. 

I would like to start by introducing Ms. America Tang. She is the 

CEO of Ace Fence Company and has owned and managed Ace 

Fence Company, which is a small specialty construction company, 

for the past 23 years. She has actively participated in the running 


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of this firm on a daily basis. Ace Fence currently has 60 employees 

and is active in the building and design of chain link fence, ornamental iron fence, metal beam guard rails and handrails for public 

works projects in the Southern California area. Gross sales for Ace 

range from $10 million to $13 million per year. 

America Tang has also founded the Lending Hope Foundation, a 

California non-profit organization that aims to reduce poverty 

worldwide through education and capital. Free business workshops 

are provided in small cities, currently in Peru, with the assistance 

of the mayors of each city, and upon successful graduation from the 

program candidates are given a microloan to start their businesses. 

Our next witness is Jesse Torres, the President of Pan American 

Bank. Headquartered in East Los Angeles, California, Pan American Bank is California’s oldest Latino-owned bank. Pan American 

Bank’s mission is to transform and empower Latino communities 

through banking relationships built on trust, service, respect, communication, and guidance. Pan American Bank was founded in 

1964 by former U.S. Treasurer Romana Acosta Banuelos. 

Next is Yusa Chang, who is the Vice President and Chief Operating Officer at PACE, the Pacific Asian Consortium in Employment. Ms. Chang’s background spans more than two decades of diversified and practical experience in developing and administrating 

projects in community-based and non-profit settings. She has 

played a lead role in PACE’s growth into making it one of the largest local non-profits benefiting all the diverse communities of Los 

Angeles. PACE is one of the leading community development corporations in the L.A. area. They provide job training and employment services. They operate a Head Start center. They assist people with financial literacy. They have weatherization and energy 

conservation programs. 

With all of this, PACE still manages to operate a woman’s business center, and they are an SBA certified micro lender. 

Thank you all for being here today, and I look forward to hearing 

your testimony. 

Chairman MULVANEY. Thank you. 

Before we begin, just a few rules as I discussed beforehand. 

Technically there is a five-minute rule. You see the timer in front 

of you. It will be green for the first four minutes, yellow for the last 

minute, and then it will become this annoying red after the five 

minutes runs. But I am from South Carolina, and we have been accused from time to time of talking slower than the rest of the country, although I think it is all relative, that they talk a lot faster 

than we do. So saying anything in five minutes is difficult. Please, 

do take your time. Do not feel the need to rush. Until you hear me 

lightly tapping the gavel, please feel free to continue. As long as 

you don’t go more than 10 minutes, we are not going to throw you 

out of the room. 

So, Mr. Martinez, please begin. 


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STATEMENTS OF MANUEL MARTINEZ, PRESIDENT ELECT, 

SCORE LA, LOS ANGELES, CALIFORNIA; AMERICA TANG, 

CEO, ACE FENCE COMPANY, LA PUENTE, CALIFORNIA; 

JESSE TORRES, PRESIDENT, PAN AMERICAN BANK, LOS ANGELES, CALIFORNIA; AND YUSA CHANG, VICE PRESIDENT 

AND CHIEF OPERATING OFFICER, PACIFIC ASIAN CONSORTIUM IN EMPLOYMENT (PACE), LOS ANGELES, CALIFORNIA 

STATEMENT OF MANUEL MARTINEZ 

Mr. MARTINEZ. Thank you. Good morning, Small Business Committee members. My name is Manuel Martinez. I am a lifelong entrepreneur and a small business mentor. I am also the President 

of the Greater Los Angeles SCORE chapter. SCORE is an SBAsponsored organization, and it offers business workshops as well as 

face-to-face, over the phone, and online mentoring sessions to striving entrepreneurs and current small business owners. Just in the 

past 12 months, we have mentored 6,288 small business owners 

and held 187 workshops with 4,677 attendees. According to the latest Census data, there is over a million small businesses here in 

the L.A. County or the County of Los Angeles. As you can see with 

the minimal amount of resources available to our organization, we 

were only able to reach about 1.09 percent of all small business operating in the Greater L.A. area. 

I am here today to ask you to continue to support the efforts of 

the Small Business Administration, SCORE, and all other technical 

resources available to small business owners today. 

Special attention should be given to the following programs, I believe. Number one is high school students graduating and not graduating from high school that need or have that spirit of wanting 

to become entrepreneurs. The second is I believe that we need to 

have entrepreneurship programs for people that are just getting 

laid off from work. As you know, there are hundreds, millions out 

there right now. And lastly, we need to support, take those assistance programs that are already available for struggling small business owners. 

Speaking as an advocate for all striving entrepreneurs who will 

be detrimentally affected by not having your support in Congress, 

I also have personal experience being an entrepreneur. You see, I 

am one of the most fortunate individuals in America because I 

made my business work and became very successful at it. However, 

it was not easy. I made a lot of mistakes along the way in my life 

as a business owner. 

As I remember the event that changed my future, I was 16 years 

old and I experienced my father being laid off from his job, over 

20-year-old job and how it affected our whole family for about two 

years. I remember when he was unemployed, he used to take me 

and my little brother over to pick up cardboard and recyclables just 

to put food on the table on a daily basis. That was the moment I 

promised to myself, that was a promise that I made to myself, that 

I would never, never, never, never, never let anyone or any company lay me off work. So if I had not experienced when that event 

happened to me back then, I probably would have quit being an entrepreneur and I would have settled for a job. 


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As of today I have started many, many businesses, created, built 

and sold a number of them too, and a lot of them failed too, not 

every one was successful, and I’m currently working on three new 

small projects. 

I’m telling this story not to say that anybody can be an entrepreneur, but rather to gain your support for all striving entrepreneurs in America today. Thank you. 

[The prepared statement of Mr. Martinez follows:] 

Chairman MULVANEY. Ms. Tang. 

STATEMENT OF AMERICA TANG 

Ms. TANG. Chairman Mulvaney and Congresswoman Chu, thank 

you for inviting me today to participate in this great program that 

I believe is very much needed in the crisis times like right now. 

My name is America Tang. I am the CEO of a construction company called Ace Fence Company. We’re located right here in La 

Puente, California, and we’ve been around for 23 years. Our company does about 90 percent of public works construction. Throughout the years, we have had the honor and the privilege to participate in the construction of landmarks such as the 34 miles of median fencing alongside the 105 Freeway back in 1993, construction 

of the Metro Blue Line fencing in 2001, and many other prominent 

public projects in the Southern California area. 

I am of Chinese descent but born in Lima, Peru. Therefore, I can 

speak three languages—English, Spanish, Chinese/Cantonese. My 

family immigrated to Los Angeles in 1974, a move that turned out 

to be a blessing for myself and my entire family because the multicultural environment of this great City of Los Angeles allowed us 

the full usage of all of our diverse cultural backgrounds and enabled us to pursue the American dream. 

When I purchased the Ace Fence Company from the retiring 

owner back in 1988, one of the first moves I made was to start participating in the bidding on public works construction. I found out 

that the California Department of Transportation, Cal Trans, offered the certification program for minority- and women-owned 

companies. I applied, in fact, in 1989, and it did take a good nine 

months before obtaining approval, but this certification opened the 

doors for my company in areas that were completely shut down to 

us and pretty much forbidden before. 

In 1990 we were the low bidders of the yard fencing for the 

Metro Red Line in downtown Los Angeles. It would have been impossible for us to obtain the bond necessary to back up the project 

if not for the Transit Bond Guarantee Program, which I think was 

established at that time by the Metropolitan Transportation Authority, and it was opened to all the companies that were certified 

as a woman-owned company, SBE, MBE, and DBE. 

Ace Fence used this bonding program to help us bond four of our 

largest projects during the years of 1990 and ’93, bonds ranging 

from a quarter-million to $2.5 million. The last $2.5 million is the 

construction of the fencing that I mentioned above, the one for the 

105 Century Freeway. 

The Century Freeway project was a challenge as it represented 

a very large contract amount, and therefore Ace Fence not only 

needed to find a surety bond to issue the payment and performance 


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bonds, but we also needed financing to help us cash flow the 

project. Ace Fence obtained a half a million dollar loan from the 

Department of Transportation Office of Small and Disadvantaged 

Business Utilization. This project was the successful one that propelled our company to its next level, and since then we have participated in innumerable high-profile projects from Cal Trans, the 

MTA, L.A. Unified, Department of Airports, City of L.A., and many 

other cities in the Los Angeles and surrounding areas. 

There is no question that the SBA and its program designed to 

help small businesses, women and minorities, works. Ace Fence is 

an example of it. But the economic turnaround in the past few 

years has had its impact also on us. In 2009, we had 85 employees 

who worked an average of 2,000 man hours per week. This past 

week, just last week, October 14 of 2011, we are down to an average of 60 employees and clocking in about 1,200 man hours per 

week. 

The U.S. Government supposedly have poured in money into new 

projects in the construction industry to invigorate the infrastructure of our country, to provide new jobs, to help our depleted economy. But somehow we felt that the process for some reason is just 

too slow, and in practice the intended effect still has not trickled 

down to the small companies like myself. So we are expecting an 

increase in our sales but instead, while already keeping the same 

staff as far as the fixed overhead, we have the same amount of 

salespeople, we’re deriving only about 20 percent less from our 

gross sales right now. 

So for the first time in 20 years in my industry, we declared a 

net loss last year, and our year-to-date figures are still negative, 

and we’re already talking about October of this year. 

In my personal experience I believe that the SBA has created 

some real good programs to effectively help the small business community, who, after all, is the backbone of our country’s economy. 

But there is a failure to communicate to the general public existence of these programs. And I personally found out about the programs when I was already in the business, and when I started bidding on the public projects I found out about the certification as a 

minority, about a bonding program and the loan availability for the 

small companies like myself. 

In 2009, the Surety Bond Guarantee Program was raised from $2 

million to $5 million. I’m talking about a program from the SBA. 

But for some reason, even me that I’m already actively involved in 

the industry, I did not know about this increase in the bonding 

until about maybe just a few months before. For example, if we 

would have heard about this back then in 2009, I’m sure that my 

company would have bid on a lot more projects, and those projects, 

we would have been executing them and building them as of right 

now, and that would have avoided having to lay off between 20 to 

25 people in the last six months. 

So in a certain way, you know, I think there is still this gap 

where information is not coming down to the right people. 

In our current economic situation, timing is the essence. We do 

not have the luxury to sit back and let things move and take their 

time as if we’re in a regular business, because these are not times 

for regular business. The government must act quickly, and by 


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quickly it means to start dropping the bureaucracy, excess paperwork, and streamline the process for our program to actually work 

and to reach its intended population, and not just the few who has 

the time to do the research and find the bits and pieces of information, which most people probably won’t know how to or won’t have 

the time to. 

Companies are registered, so it’s easy for the SBA to actually 

find all these—you know, the emails of these firms, and maybe just 

doing some massive emails from time to time, it would provide a 

lot and help and become a more effective program. 

I know you will say that we can access Internet and find all this 

information, but I think if the SBA, you want to have a real impact, create new jobs quickly, what better way than making sure 

that every dollar allocated for the program is used immediately? I 

do not have the latest records, but I was reading that back in 2009 

the SBA total lending was down by 41 percent, that by July of 2009 

there were only 3,900 loans versus 6,700 loans the year before in 

the same period of time. Now, these statistics are speaking for 

itself. 

The program, which is a life saver for thousands of businesses, 

is failing to successfully reach its intended public, probably due to 

excessive requirements and, again, bureaucracy. 

One of the weak points for any small business, and right now I’m 

sure even the large business, has always been cash flow. In my industry specifically, as a subcontractor, we have always been the 

underdog, the one who forks out the funds immediately but get 

paid at the end. The biggest problem is that the system is flawed 

in the sense that even though we are supposed to get paid by law 

within 10 days of the general contractors getting paid, this seldom 

happens. Especially in hard times like now, general contractors are 

still, they’re using their funds and they will hold it for themselves 

as long as possible. 

So the subcontractors don’t get paid until maybe 60 days to 180 

days, 180 days, and I repeat that, and many of the cases are even 

longer than that. And they will use all kinds of excuses for us not 

to get paid. Among all the institutions, Cal Trans is one of the few 

that has an open website for the public where people like me, subcontractors, can log in and find out what items has been already 

paid to the general. For all the other entities, no information is 

available from the owners to the subcontractors since their contract 

is only with the general contractor. 

The SBA should protect its members, most of all, vulnerable 

members like ourselves, which in many aspects have major problems with the cash flow, by mandating that the companies that do 

business with the SBA firms will allow them full access to vital 

and pertinent information such as payment records from the owners to them, to any company that has delivered material or done 

work for the project. 

The SBA is definitely a powerful engine for opportunities. It has 

already come a long way from the 1980s, when the system was in 

its infancy. The programs offered by the SBA has personally helped 

my company grow, and without these programs I’m sure that Ace 

Fence would still be only doing commercial and residential fencing. 


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The spirit of entrepreneurship is very much alive, and more so 

now when scores of unemployed individuals will be seeking to start 

their own businesses as the only alternative to finding a job again. 

I commend the efforts of this committee for understanding the urgency and the demands of our current predicament, and I’m very 

optimistic that together we will find the solution to keep this beautiful country as the land of opportunities. Thank you. 

[The prepared statement of Ms. Tang follows:] 

Chairman MULVANEY. Thank you, Ms. Tang. 

Mr. Torres. 

STATEMENT OF JESSE TORRES 

Mr. TORRES. Good afternoon, Mr. Chairman and members of the 

Committee. As the President and Chief Executive Officer of Pan 

American Bank in East Los Angeles, I am pleased to be here to testify before the Subcommittee on Contracting and the Workforce. 

Pan American Bank is an example of the American Dream. 

While the fact that Pan American Bank is California’s oldest 

Latino-owned bank and the second oldest Latino-owned bank in the 

United States is an impressive feat, particularly in today’s banking 

environment, it is the story of its founder that is most impressive 

and reflective of the values of our great nation. 

Pan American Bank was founded by and is majority-owned by 

Romana Acosta Banuelos. Mrs. Banuelos, born in the small and 

poor mining town of Miami, Arizona in 1925, is the daughter of 

Mexican immigrants. In 1933, as part of a repatriation initiative, 

Mrs. Banuelos and her family were relocated to Mexico. While Mrs. 

Banuelos did not at the time understand the reasons for her relocation, she knew she would one day return to the United States. Mrs. 

Banuelos returned to the United States as a young woman in the 

early 1940s. 

Mrs. Banuelos was born a United States citizen. However, her 

upbringing was consistent with that of an immigrant. When Mrs. 

Banuelos relocated to Los Angeles, she quickly found employment 

as a dishwasher during the day and as a tortilla maker from midnight to 6:00 a.m. After several years, Mrs. Banuelos saved $500, 

enough seed capital to start her own tortilla company. Mrs. 

Banuelos purchased a tortilla machine, a fan and a corn grinder. 

With the assistance of her aunt, Mrs. Banuelos made $36 on the 

first day of business in 1949. After many long days and many long 

years, Mrs. Banuelos’ immigrant work ethic evolved the two-person 

business into Ramona’s Mexican Food Products, a company that for 

decades has employed hundreds of Angelinos. 

In 1963, with significant business and financial success, Mrs. 

Banuelos joined an effort to establish Pan American Bank in order 

to help struggling Latino consumers and small business owners in 

her neighborhood. Pan American Bank opened its doors in 1964. 

Mrs. Banuelos’ success in the food and banking industries resulted 

in her successful appointment as the first Latina United States 

Treasurer, serving from 1971 to 1974. 

While some in the past have criticized Mrs. Banuelos’ decision to 

locate and headquarter Pan American Bank in economically-challenged East Los Angeles, others call her a true visionary who for 

47 years has provided culturally relevant financial services, supVerDate Mar 15 2010 04:44 Jan 20, 2012 Jkt 071787 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\B787.XXX B787

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ported local ‘‘mom and pop’’ immigrant-owned businesses, provided 

‘‘living wage’’ jobs for East Los Angeles residents, and has provided 

immigrants and their children with an example of what is possible 

in the United States. Today, Mrs. Banuelos is a vibrant 86 years 

old. 

In June 2009, Mrs. Banuelos brought me to Pan American Bank 

to assume her decades-old role as Chief Executive. Upon my arrival 

at Pan American Bank, Mrs. Banuelos stressed the importance of 

staying true to the mission of Pan American Bank, to play a vital 

role in the transformation and empowerment of the underserved 

immigrant communities served by the Bank. Of particular concern 

was the ongoing support of the family-owned businesses that dominate these communities but that have been largely ignored by 

mainstream financial institutions. 

Serving the small businesses that populate immigrant communities such as East Los Angeles is not an easy feat. While every 

small business at some point can benefit from financial, technical, 

or other assistance, significant challenges exist. Such challenges include but are not limited to a distrust of financial institutions, a 

lack of understanding regarding licensing requirements, a lack of 

knowledge regarding the availability of technical and other assistance, and a lack of time needed to obtain the necessary knowledge. 

All of these challenges are further complicated by the language 

barrier that exists within the predominantly Spanish-speaking 

community of East Los Angeles. 

An additional barrier from a banker’s point of view is the regulatory challenges. As many of these small businesses possess nontraditional credit profiles, regulators at the field office level struggle many times to understand these businesses, which results in 

regulatory challenges for the financial institutions. 

In an effort to serve the needs of Pan American Bank’s small 

business community, the Bank has recently implemented several 

programs apart from its traditional products and services. First, in 

2010, Pan American Bank partnered with non-profit EastLA 

Works. Under the partnership, the Bank provides free office space 

to EastLA Works. EastLA Works visits with family-owned businesses in East Los Angeles for the purpose of providing free Business Improvement Plans. The Business Improvement Plans are 

roadmaps to improved operations and profitability. 

The key to EastLA Works’ program is its focus on visiting the 

small business owners at their place of business rather than requiring them to make office visits. This is a crucial element as 

most of these family-owned business owners cannot leave their 

place of business without having to temporarily close the business. 

In addition to the Business Improvement Plans, EastLA Works 

also provides on-site training related to Quick Books and other 

small business applications, as well as training related to social 

network marketing, direct mail marketing, and licensing requirements. 

Due to the socioeconomic challenges of Pan American Bank’s 

service area, the Bank also employs graduate students from the 

Community Organization Planning and Administration Program at 

the USC Graduate School of Social Work. These individuals include 

among their responsibilities the performance of surveys and needs 


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assessments with consumers, small businesses and other community stakeholders. Among other things, the social workers assist 

the Bank in bridging the divide that stands between the Bank and 

the small business community. 

In October 2011, Pan American Bank entered into a Memorandum of Understanding with the Small Business Development 

Center. The Small Business Development Center will maintain a 

presence at Pan American Bank. Similar to the Bank’s arrangement with EastLA Works, the Small Business Development Center 

will receive free office space in order to permit the Small Business 

Development Center to establish a presence in East Los Angeles 

and surrounding communities. The Small Business Development 

Center will develop and deliver culturally relevant technical and 

other assistance to East Los Angeles small business owners. 

Mr. Chairman, Pan American Bank is very proud of its history 

in serving the largely immigrant small business community of East 

Los Angeles. Our work over the years has enabled immigrant entrepreneurs to experience firsthand the same American Dream experienced by Mrs. Banuelos. Apart from supporting their immediate families, immigrant entrepreneurs also provide living wage 

jobs for other members of the community. In Mrs. Banuelos’ case 

and other similarly situated small businesses, the businesses provide financial support for hundreds of families. 

Just as Pan American Bank has sought creative and innovative 

solutions to meeting the needs of its local small business community, so too must this Committee continue to support traditional 

and non-traditional efforts that encourage the work of organizations such as EastLA Works and the Small Business Development 

Center. In communities such as East Los Angeles, it is the small 

businesses that are owned and operated by immigrants that will 

act as the engine that keeps America working. Pan American Bank 

will continue to do its part to serve the largely immigrant small 

business community of East Los Angeles. However, as one of Los 

Angeles County’s smallest banks, our efforts reflect a drop in a 

large bucket that must be filled through continued Committee support and outreach. 

Mr. Chairman, this concludes my remarks. I would be happy to 

answer any questions at this time. 

[The prepared statement of Mr. Torres follows:] 

Chairman MULVANEY. Thank you, Mr. Torres. We will hold the 

questions until the very end. 

Ms. Chang. Would you please make sure the microphone is on. 

STATEMENT OF YUSA CHANG 

Ms. CHANG. Yes. Hello? Okay, thanks. 

Chairman Mulvaney and Ranking Member Chu, thank you so 

much for this opportunity to testify. My name is Yusa Chang. I 

represent a non-profit community development corporation called 

PACE, an acronym for Pacific Asian Consortium in Employment. 

PACE was established 35 years ago to improve the economic conditions of the emerging Asian and other immigrant communities. 

PACE receives both Federal and private grants and operates six 

major lines of services. But today I would like to talk PACE’s Business Development Center. This center was established 18 years 


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ago, right after the 1992 Los Angeles riots, with the goal of assisting small businesses with recovering. We have since then assisted 

close to 24,000 entrepreneurs and small businesses. We receive 

public and private financial support, including the Small Business 

Administration. Our current SBA grants support the operation of 

a Women’s Business Center and a PRIME-funded project in the 

San Gabriel Valley. Last year, we became an SBA microlender. We 

are also in the process of being certified as a CDFI entity so that 

we can bring even more capital to our community. 

In the Center’s 18-year history, we helped to create and sustain 

over 10,000 businesses and 14,000 jobs. We have also helped these 

businesses in accessing $43 million in capital. I can tell you from 

experience that these programs are a very good investment for our 

community. 

I just want to share with you a few success stories of entrepreneurs that we assisted. One, a political asylee from China operating a Dollar Store created several jobs after receiving a $10,000 

loan from PACE. Two, the daughter of a Vietnamese refugee started a food truck business selling Vietnamese eggrolls and noodles. 

Three, a son of an immigrant from China created his own line of 

high fashion for men. And four, an immigrant from Mexico opened 

her second hair salon after borrowing $5,000 from PACE and put 

a few of her family members to work. Similar stories of these can 

be repeated hundreds of times. 

But with every success story, there are many others that are still 

struggling. I will just tell you one story in the interest of time. Mr. 

Chung, we call him a ‘‘mad scientist.’’ He is an inventor in the 

clean energy field. He has many patents under his belt. He recently 

developed a prototype machine that can convert solid waste into 

fertilizer in one hour instead of over several months. This small 

prototype can reduce eight tons of solid waste a day. He has received a tremendous amount of interest from companies across the 

nation, as well as overseas. But he lost the equity of his home and 

faced bad credit. He was in no position to finance the production 

of this machine. He can potentially create jobs, but he needs help. 

There are thousands of people like Mr. Chung out there in the 

same predicament. So here are my two recommendations. 

Number one, not only to keep the current SBA programs alive 

but further invest in them. Small business start-ups and small 

business expansion is the job creation engine, particularly in this 

economic climate where millions of Americans are out of work. Our 

government and large corporations cannot create enough jobs at 

the rate that we need them. But there are thousands of aspiring 

entrepreneurs who have the will and can create jobs, so let’s help 

them. 

We ask that you strongly support and augment these following 

SBA programs: SBA Women’s Business Center, SBA Microloan 

Program, and make permanent the Community Advantage initiative, and initiate a credit building/credit counseling program for 

small businesses. We also strongly support the expansion of the 

Small Business Investment companies, or SBIC program, that 

makes financial assistance available to the ethnic minority communities. 


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And number two, we need to be flexible in collateral requirement 

in small business lending for those business owners who lost their 

home equity but are still reliable and still have very good business 

models. So I recommend that we expand SBA loan guarantee programs to keep the credit flowing. 

We are in an unusual time. We need a game changer. We need 

our elected officials to stand up for small businesses. We need you 

to increase the size and flexibility of these programs in order to ensure that all Americans with the hardworking entrepreneurial spirit have access to the American Dream. Thank you very much. 

[The prepared statement of Ms. Chang follows:] 

Chairman MULVANEY. Thank you, Ms. Chang. 

As is my practice, I will yield to my Ranking Member for her 

questions first. 

Ms. CHU. Well, let’s start with Ms. Chang. As a business development and technical assistance provider for businesses in the L.A. 

area, can you tell me more about the businesses that come to 

PACE for assistance and the barriers that they face? 

Ms. CHANG. Most of the businesses that we work with are startups or what we call micro enterprises, and they are usually about 

1 to 5 employees, with annual sales of under half-a-million dollars. 

They are usually sole proprietors and owner operators, and most of 

our clients are from the immigrant communities. 

The barriers with them we see is mostly, of course, language and 

culture barriers. For simple things like how to get a permit, the 

zoning process, or even where to file a business license, and a lot 

of times because they are limited in their language proficiency, 

they tend to stay within their own or the ethnic enclave. 

So let’s say for a restaurant, they just tend to market to only 

their own ethnic communities, but potentially they could market to 

other communities. They could expand their business a lot more. 

So those are the barriers that we see for the clients that we work 

with. 

Ms. CHU. And your staff speak many languages, right? And they 

are able to help them through these kinds of issues? 

Ms. CHANG. Yes. Every one of our business counselors are multilingual in English and another language, English to Mandarin, 

Cantonese, Vietnamese, Cambodian, even French. 

Ms. CHU. And you provide a microloan program. 

Ms. CHANG. Yes. 

Ms. CHU. In the past SBA said that their standard 7A loan programs are cheaper and more effective than the microloan program 

in helping low-income and small-dollar borrowers. Ms. Chang, do 

you agree with that assessment, or does this program, the 

microloan program, continue to fill an important void in the credit 

markets? 

Ms. CHANG. 7A or other larger loan programs are probably 

cheaper to operate, but there is huge segment of market that those 

programs are not touching, particularly the kind of clients that we 

work with. The way I understand those loans, they are really larger than over half-a-million or three-quarters of a million dollars, or 

even multi-million dollars. But the kind of loan programs that we 

work with are the microloans, and those are the huge gap and void 

that these loans are not meeting the demands. 


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So we see a great need for microloans. There is definitely a huge 

market for it, and we definitely need a continuation of that. 

Ms. CHU. Can you give an example of a microloan that helped, 

and how small are the loans that you provide? 

Ms. CHANG. Our microloans are typically from $5,000 up to about $40,000, so it is relatively small. Of course, it is very labor intensive. We spend the same amount of time packaging these loans 

compared to a multi-million-dollar loan, and then we have to provide a lot of technical assistance. So it is definitely a lot more labor 

intensive, but that is the hole or that is the only avenues for a lot 

of clients that we work with. 

Ms. CHU. And are there other SBA loan programs that meet the 

needs of San Gabriel entrepreneurs? 

Ms. CHANG. There’s another program the SBA I think just unveiled in the last year or so. It’s called Community Advantage. 

That’s kind of replacing the formal Community Express programs, 

and these programs are made to be available to non-profit community corporations like ours, and that’s for loans up to $250,000, 

with a guarantee I think—don’t quote me exactly—up to about 75 

percent. Again, we see—so this is different products. Our current 

products is microloans, about $5,000 to $40,000. We see another 

level of loans that is not quite available in the market. It is up to 

$250,000. So that is the product that will develop the capacity to 

address. 

Ms. CHU. Excellent. 

Mr. Torres, let me ask, I understand that your bank does not 

offer SBA-guaranteed loans, but does operate a small business 

lending program. What are the differences between your small 

business loan program and SBA’s? 

Mr. TORRES. Yes, that is accurate. The main difference is just the 

flexibility in the process. Many of our clients in East Los Angeles 

lack a certain amount of sophistication relative to the application 

for a small business loan. Items such as cash flow projections and 

other similar documentation is something that escapes many of 

them. And as a result, in order for us to adequately meet the needs 

of that community, we need to be able to work within the scope of 

where they are. 

What this means is we get to know these clients in different 

ways. In our community, we have served customers for more than 

40 years, and so we know their businesses pretty well. If they are 

restaurants, we have eaten there for decades. If they are retailers, 

we have purchased there for decades and we know their business 

cycle. We know their strengths. We know their weaknesses. We 

break bread with them on a very regular basis. 

And so we rely on the more traditional metrics for credit than 

the SBA process requires, and that flexibility, quite honestly, is 

what ensures that a lot of these folks do get funded. In an ideal 

world, having an SBA product in every business would be great. 

But these folks, because they are largely immigrant, at least in the 

first generation here, lack a lot of the expertise that is needed to 

get them past the process. 

So we do originate, as a result, loans. We will go as high as 

$150,000, $200,000. The nice thing about our community is that 

they don’t need a lot of funding. Their needs are fairly modest. 


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Anywhere from $50,000 to $100,000 is more than sufficient working capital for the majority of these small businesses. 

Ms. CHU. Have you thought about being an SBA lender, or is 

the—— 

Mr. TORRES. We have, we have. You know, we are a very small 

organization, and the problem in a sense with SBA is that it has 

become sort of a micro-industry. There is a certain amount of expertise that is required to make these loans, and what you see 

around town is you see banks buying teams of SBA underwriters 

and funders, and as a result these teams are paid a premium. 

For a bank of our size, it really makes it difficult for us to make 

up those costs that are associated with these premiums. We would 

really have to make a whole lot of loans, many more loans than our 

capital would permit us to do. So it really becomes a difficult situation for us. As a result, we go the non-traditional route of a nonSBA portfolio. 

Ms. CHU. Well, I was interested in hearing that you are sharing 

space with a local SBDC, and I am really interested in this because 

the San Gabriel Valley lost its SBD center and now we have to 

send people to Long Beach, and there is a huge void there in my 

opinion. 

Did you have an SBDC center that was nearby, or what brought 

you to this generous offer to share space? 

Mr. TORRES. Right. No. Well, in fact, you are absolutely right 

that the nearest was Long Beach, and as I said in my remarks, it 

is very difficult for these small business owners to get out of their 

shop and come and seek the technical assistance. It is tough 

enough for them to go to the next town over, much less 10 miles 

up the road. So we are—our mission—we live our mission, and our 

mission is to empower and transform this community. So we are 

constantly looking for new approaches to serve these customers. 

So we reached out to the SBDC, asking them if they would consider something similar to what we had with EastLA Works, and 

I think we caught them at exactly the right time, and they came 

on-site. They took a look around and they said we would love to 

partner with you. This will open up a tremendous opportunity for 

our local small business, not only those in East L.A. but those in 

the San Gabriel Valley in general by way of their technical assistance. We have space that they will be able to use for classes for 

a number of services. 

So I am extremely excited about the opportunity that this is 

going to bring. They have committed to providing these services in 

a culturally relevant meeting in Spanish, coming from the immigrant point of view. So this is something that we currently don’t 

have that can really be a game changer for the small business community in East L.A. It will, in a sense, give them the tools to enable them to compete for the same bank loans on the same terms 

as what I would consider the more sophisticated small business 

owners. 

Ms. CHU. How long did it take to get this process going? Because 

some are saying that it could take as long as three years to get an 

SBDC running. 

Mr. TORRES. You know, we are very entrepreneurial as a bank, 

and as most entrepreneurs know, time is money. And so basically 


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what we said is if we are going to make this happen, this needs 

to happen tomorrow. So the process took probably three months 

from the point we originated conversations to the point we signed 

an MOU. So like I said, I think we hit them at exactly the right 

time, and we brought them—we forced them to show up. We 

showed them the space, and within two weeks of them visiting our 

location we had a draft MOU in hand, and it probably took another 

three or four weeks to get them to sign off on it. So we were able 

to move rather quickly. 

But again, we are East L.A., and despite what others may believe, in my opinion East L.A. is the center of the universe. And 

so we have a tremendous amount of opportunity. We have a tremendous buying and purchasing power. We have tremendous opportunity for investment. And so I wasn’t surprised that they 

snapped up the opportunity to come into East L.A. 

Ms. CHU. And they usually require a match. Was your office 

space the match, or are there funds from elsewhere? 

Mr. TORRES. For the space? So they—that detail is being worked 

out specifically. We have the MOU in hand, and it is signed. So I 

believe that they are figuring out—they are finalizing their matching piece. But they wanted to get their fee, their boots on the 

ground as quickly as possible to start working this. 

I have to give credit to the local director, a fellow by the name 

of—in Spanish we call him a toquio—Jesse Torres, who is a regional, the local executive director of the SBDC in Long Beach. His 

name is also Jesse Torres. So my toquio there, he really wanted to 

get something moving, and he has been with the agency for maybe 

two months. And so he has been very aggressive in making sure 

that we put something in place because he wants to make sure 

that we start putting the SBDC resources to bear in the eastern 

part of the county as soon as possible. So it is very, very exciting 

for us. 

Ms. CHU. Very, very wonderful that you have been able to do 

this. 

Chairman MULVANEY. We have a special guest here is what we 

are talking about. I am sorry to interrupt the questions, but Ms. 

Chu would like to introduce her colleague and good friend, also 

here from the San Gabriel Valley. 

Ms. CHU. Yes. We are joined by Congress member Grace Napolitano. I am so happy to see that she is here. I know that she has 

had a lot of interest in small business and that she will add a great 

deal to this very important conversation. So welcome, Congress 

member Napolitano. 

Ms. NAPOLITANO. Thank you so very much. I am sorry I am late. 

I was on the phone with Lieutenant Governor Gavin Newsom on 

international trade. So this is right down the alley of being able to 

expand the manufacturing export, not necessarily import, export. 

And unfortunately, state, county, cities and state don’t talk to each 

other, and that is what he is attempting to do. So later on if you 

want to, I took some notes. 

But thank you very much for allowing me to be here. This is of 

great interest. We need to find markets. We don’t need to import 

any more. We need to find markets so that we can expand our 


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manufacturing base. With that, I look forward to the witnesses’ testimony. Thank you. 

Ms. CHU. Well, they did testify. Now I am in the middle of asking questions, and then feel free to make comments and ask questions. 

But I would like to turn to Ms. America Tang now. Let me ask 

this. You have had quite a success story. Do you think businesses 

in the San Gabriel Valley know about the resources SBA has to 

offer, and why or why not? 

Ms. TANG. In my experience, I haven’t heard too much about 

these SBA programs, so I really believe that there is not enough 

information passed on—I don’t know why—in the form of maybe 

pamphlets or—I know that we got representatives, they are at both 

sides of me right now who are actually doing that, and it is their 

job for the past many years. But for some reason, you know, I come 

from a family of business people. It is not only I, but my brother 

is the owner of Hanfore Realty. My sister and her husband owns 

Battery Technology, which is another $30 million company, which 

is fairly large. We would have taken advantage of programs like 

this, but we didn’t because we really didn’t know about them. 

So for some reason or the other, our businesses were started just 

like Mr. Jobs in the garage of our houses and using our own resources, using credit cards, and that is how we started our business 

20 to 30 years ago. 

You know, I know that maybe precisely that is the reason we are 

having this subcommittee, to try to see the ways that we can get 

this information, which is really great programs that should be 

more available to the majority of the public that needs it. But for 

some reason it is not getting down to where it is really needed. 

Maybe the resources are limited. That is very possible. But to me, 

we have the email right now. I think it would be such a powerful 

thing to just compile the information of all of these companies like 

myself who have already been in business and just keep us informed of new projects or new programs that are coming from the 

SBA. 

Ace Fence, despite the fact that we have been in the industry, 

23 years, I am still an SBA company. We haven’t been able to grow 

beyond it. We still are very limited in many of the resources, if we 

are going to compare them with the large firms. So there are 

things that programs like SCORE I’m sure we could take advantage of, and programs from Mrs. Chang where it is set to help the 

Pacific community. I will acknowledge that there are many areas 

that I would be very happy to participate in. I am already receiving, of course, the benefits of the SBA. But what I am saying is 

that when I started a business, I really didn’t know about them 

and I started just finding out about the SBA as I grew my business. 

And it is thanks to programs like the SBA that I am where I am, 

because I took advantage of these loans, the loan that helped me 

build the fence at the Century Freeway, and right now the certification of being a woman-owned company, a minority-owned company, a SBE company, and a small business; all those certifications 

are definitely a plus to help me continue getting the jobs, because 

our businesses do nothing but public works mostly. They are based 


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on bidding, and the invitations to bid have continually come to our 

office thanks to the fact that we are certified as a minority. 

So definitely this is a program that more people should be aware 

of and more participant on. But yet, in actuality, being in the industry already all these years, I haven’t seen that many other 

Asian firms, a few of them maybe, but not too many that are in 

the public works. And for them to participate, they need to know 

about the availability of all these resources, know that they are 

there. But somehow, I don’t know why they are not being used, 

possibly because of cultural issues like you have mentioned before, 

that they are not used to going to the government for help because 

the Asian communities I think were more self-sufficient individuals, and in China I don’t think they have that many business 

loans for small businesses. So maybe out of tradition, out of cultural habits, they have not really resorted to using programs like 

the SBA. 

But yet they are there, and I do believe that a lot has to do with 

having the chance to reach out and tell the whole public; to say 

‘‘Here we are, how can we help?’’ 

Ms. CHU. And how could the SBA improve its outreach to businesses like yours? 

Ms. TANG. In the way to help directly to me, I was thinking just 

the fact that I am already in the industry for so long, you know, 

you should still maintain a forum of these programs. A good example that I talked about earlier is that the bonding program issue. 

The bonding capacity by the SBA increased the back-up from $2 

million all the way to $5 million. But I did not know about this increase for some reason, even though I am in the industry. If I 

would have known about this back in 2009 when the change happened, I would be the first to jump in and start bidding on larger 

projects and participate on them in such a way that today, in 2011, 

I would already maybe have enough jobs to maintain my regular 

crew. 

So instead I went from 85 employees down to 60 maybe because 

of miscommunication and the fact that I did not get that information passed down to me. 

You know, and the funny thing is I even asked my insurance 

agents, the ones that sell me the bonds, and they work with thousands of contractors, so they are specialized in construction, and 

somehow they also didn’t know about this until I told them. I said 

could you look into this for me? I heard that the bonding capacity 

has gone from $2 to $5 million, but we didn’t know about this. That 

is when he started reading on it and started telling me, oh, you are 

absolutely right, we can put you in that program. I should have 

been in that program two years ago and avoid having to let go 25 

employees of mine that I have had for 20 years, and now they are 

unemployed because I don’t have enough jobs to support them. 

So I definitely want to stress the point for the SBA to compile 

a big information database of emails, and hire a couple of students, 

interns, and put them to send emails out, massive emails. It 

doesn’t have to be sent only once. Send them two, three times, 

whatever it takes for the general public to get to know about your 

programs. 

Ms. CHU. Okay. Well, thank you. 


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21 

Mr. Martinez, SCORE is dedicated to educating entrepreneurs, 

and you have counseling and then train small business owners. So 

you must know from personal experience, since you are president 

of SCORE, and I guess you do SCORE counseling yourself? 

Mr. MARTINEZ. Correct. 

Ms. CHU. Could you tell us from your experience with these business owners, what are the typical challenges they face, and how do 

you help them? 

Mr. MARTINEZ. Well, the typical challenge that our clients face 

is basically just how to get started. A large percentage of the kinds 

that we get in our office is people who have an idea to open a business, and where do they go from there. I think the best way I can 

kind of summarize it to you is with a quick story. 

I had a gentleman come in about three weeks ago who wanted 

to open a restaurant, and my first question that I asked him was 

have you been in the restaurant business before, and he said yeah, 

and I say what capacity, and he said, well, I have been a waiter 

and kind of in the kitchen. So I said, well, you know, what you 

need to do is what I do when I want to open a business, is you need 

to go back to the restaurant and get to a management level, or become the best employee that the restaurant has, because when you 

do that, the owner of that restaurant will give you all the information that you need. And therefore, you need to spend enough time 

doing that so when you do open a business, guess what, you are 

100 percent ready, you know exactly what to do. 

So the challenges that I see, a lot of people when they come into 

our office, is just the challenge of how to get started, not much of 

where do I get the money. Yes, a lot of them do come with that, 

but a lot of them come with the need for marketing and experience, 

sales experience. We get a lot of practitioners who come into our 

office wanting to open a business, but they have never been business owners in the past. So therefore, they have a hard time understanding what it takes to open a business. 

Like, for example, we do a financial literacy class or how to audit 

your financials, and we go from—we create a fictitious business 

from beginning to end, and we let the attendees know that at the 

end, when we complete the financial plan, they are $250,000 in the 

hole just to open the business itself. So the challenges that we see, 

that I see personally, it is a lot of folks that want to start their own 

business or they already started, they just need the marketing 

sales experience, or they need that information to get going. 

Ms. CHU. And how long do you work with them? 

Mr. MARTINEZ. We work for as long as they want. We don’t have 

a time limit. We have had individuals who we have taken from beginning to end. We have individuals who come just for a one-time 

session, and I think that is what our expertise is. We have experts 

not just here in L.A. but throughout the country where somebody 

comes to us and they have a specific issue, like I was talking to 

Mrs. Rays before, and she says she might have an issue, just a 

small one that she needs help with, and I mentioned to her we 

don’t have someone in our office that can help you, just give you 

the wisdom, the knowledge, information that you need. We have 

somebody across the nation because we have 13,000 volunteers 

that can answer that question for you. 


pwalker on DSK7TPTVN1PROD with REPORTS
22 

We have been in the hole. We know how to get out of it. So we 

can definitely give you a hand up, help get you out of it. 

Ms. CHU. Well, that sounds really great. I understand that 

SCORE has mentored 6,220 small business owners and held 187 

workshops, but that it is still 1 percent of all businesses that are 

small businesses operating in the greater Los Angeles area. 

Mr. MARTINEZ. That is right. 

Ms. CHU. What do you need to be able to have an even greater 

reach? 

Mr. MARTINEZ. Honestly, we need to get more people in our community involved, especially in the minority communities. One of 

the biggest challenges that I have had, and I have only been a 

president for the last two weeks or so, but one of the biggest challenges that I have is finding individuals that want to give back. 

And I was having a conversation with another gentleman at one 

of our lunches that we had, and I basically told him the reality is 

that within the minority communities, we are probably 15 or 20 

years away still from seeing actually individuals that have been 

successful in business raise their hands and say, yes, I want to 

help. 

So my recommendation to him was let’s just go out there and see 

what we can find and get the one or two that want to give their 

time and efforts and experience and knowledge and wisdom, and 

let’s team up with them, let’s see what we can do. 

Ms. CHU. Okay, thank you. 

Chairman MULVANEY. Thank you, Ms. Chu. 

Ms. Napolitano, it is our custom on this subcommittee, since I 

am a tried and true southerner, to let the ladies go first. So if you 

have some questions or some comments, you are welcome to go. 

Ms. NAPOLITANO. How sweet of you. 

I don’t know if I am on. Can everybody hear me? 

Chairman MULVANEY. Yes. 

Ms. NAPOLITANO. I am not sure what—well, you can hear me. 

Okay. Logistics. 

Lots of questions, and I just barely have started going through 

some of the testimony, and I already have about 10 questions, but 

I will limit myself to Mr. Martinez because I sat on a subcommittee 

now for six years on small business, so I went through a lot of this 

with them. And then at the state level I also did a lot on international trade and small business. In fact, I am still a micro-business owner. 

But I did go to SBA, and they assigned a SCORE person to me 

before we had a restaurant, and let me tell you, I am glad that you 

are talking the way you are talking, because at that time they said 

what is your business plan? I don’t know. So you have got to understand from people that have no experience and, like you say, coming in brand new, off the street with the ideas and the passion that 

will make things work, but how do we get them from point A to 

B? 

Have you considered going to the community colleges and asking 

them to set up classes to help entrepreneurs that you are dealing 

with go in and begin to talk to actual businesses that can give firsthand information and begin to make sense of what they are going 

to need? Because one person tells you, but you are missing out on 


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some of the things that somebody else can tell you. That is one 

thing. 

And then you must be dealing a lot with individual companies 

that might have product for export, and have you been able to communicate those to, say, Commerce or State Department, the State 

of California, to be able to find assistance for them to be able to 

get certified? Let me tell you, when I did small business, certification was a process that took many people 15 years, and even 

then they could not get the 8A certification. I mean, they got it 

maybe, but they weren’t getting any ability to get projects like you 

have. You have been lucky. But at the Federal level, it is a whole 

different ballgame. 

So how do we bring all those resources? And sure, while you are 

at it, and to any of you, how do you get the cities to do the permitting at a one-stop shop, the state to work with the cities to be able 

to allow waivers or not exemptions necessarily to bring more business to California instead of having the states come into California 

and taking our businesses because they are either right-to-work 

states or they have incentives that they provide for the businesses? 

Have you maybe gone to the county to find out how everybody can 

sit at the table and be able to format what are the regs that are 

out there that are prohibiting—that are not prohibiting—that are, 

unfortunately, roadblocks for business? Because it takes the same 

amount of time to go after one permit if you had a one-stop shop 

and you would be able to have the city, the county, the state at one 

point, be able then to facilitate the ones that are duplicative, not 

only in money but in time, and time is money for business. 

Mr. MARTINEZ. That is correct. And to try to answer all those 

questions—— 

Ms. NAPOLITANO. Like I said, I have a million of them. 

Mr. MARTINEZ. There are about 10 of them there, but I will try 

to do my best that I can. First of all, with the communities, as a 

matter of fact, one of the directives this year with our original director which is here, Blake Welch, one of his directives for this year 

is to actually go out there and get involved with the community colleges, and also the universities to see how we can spur that entrepreneurship spirit. And if the communities or the community colleges don’t have that program, to get involved with them and actually create an entrepreneurship program. 

One of my goals in life which I think is a lifetime goal that I 

really have talked about over the last few years, it is about a program that I started about a year-and-a-half ago. It is called the 

Academy of Entrepreneurship Leadership, and I was talking to 

Jesse about it before we got started. But basically what I am doing 

with that, I am taking high school students like myself, because I 

saw myself in that, and that is where I came from, I am taking 

high school students that otherwise have graduated from college or 

really not college but high school, are now going to graduate, but 

they really have that entrepreneurship spirit, they want to do 

something with their lives. 

So basically what I have done is I have brought them on board 

to my academy and asked them to give me a three-year commitment, and what I do with them is that I find out where they are 

at as far as personality and what would be best for them—— 


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Ms. NAPOLITANO. Can I stop you? Because I don’t want to run 

into a lot of time. 

Mr. MARTINEZ. Yes, sure. 

Ms. NAPOLITANO. One of the community colleges is Reondo, and 

in conjunction with the COGs, the Councils of Government, they 

identified what the business community needed in terms of training of personnel, and then they set up a class. So then they had 

a market of people to go and do it. That is something that we have 

not really looked at. 

Mr. MARTINEZ. No. 

Ms. NAPOLITANO. And that is something that needs to happen because the community can tell you what they need, versus us going 

out there and setting classes up and saying, okay, come and get it, 

and then where are they going to be employed? 

Mr. MARTINEZ. Right. No, my program runs a little bit different 

where I see what the need of the individual is, and then I go and 

I team them up with that industry. We find them a job in that industry for three years, working in that industry, find out exactly 

what it is to be successful in industry, and during those three years 

we take them through a whole mentoring program where we teach 

them management skills, sell skills, marketing skills, everything. 

Ms. NAPOLITANO. That’s very laudable, but we need this for business. And while those youngsters may be coming up in the business world, right now California and the rest of the nation is suffering from budget woes. 

Mr. MARTINEZ. That is correct, and I agree fully with you, Ms. 

Napolitano. Like I said, we have a directive this year to get involved with the community colleges, get involved with the universities and see how we can spur that entrepreneurial spirit and help 

any ways we can. 

As far as exports, when we have individuals who come to our office to get help for import/exports, we have actually experts on our 

staff here in California, here in L.A., that as soon as somebody 

comes in and they talk about import/export, we direct them to 

them, and that individual walks them through the whole process 

of what they need to do. And we also have a workshop that teaches 

import/export to individuals that want to get involved with that. 

So the resources are there, definitely, yes. 

Ms. NAPOLITANO. Again, to the point of Ms. Tang is we cannot, 

do not, and have not been able to get the information to the people 

that need the information. We don’t use everything that is available to us to communicate, whether it is the new technology, 

whether it is the Net, or whether it is videoconference, or whether 

it is the cable, which you have the free access cable in every city. 

Mr. MARTINEZ. Right. 

Ms. NAPOLITANO. All those things, we have not put them together. 

Mr. MARTINEZ. You know, one of the things, Ms. Napolitano, that 

I learned when I was in business is that I needed to go and do it 

myself. If I didn’t have the resources, I would get in my car and 

go find the resources. If I need to find out about bonding or whatever the issue might be, I would go out and find it myself. It is 

true, yeah, we need to communicate better, and to be honest with 

you and completely frank with you, the only thing that can improve 


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that is the resources that we have available. And unfortunately, 

the resources that we have available will only get us to that 1.09 

percent of being able to reach the small business community. 

Ms. NAPOLITANO. As you understand, I’m sure, Chairman 

Mulvaney and my colleague understand that when Washington resources are being cut more and more. 

Mr. MARTINEZ. That is correct. 

Ms. NAPOLITANO. And the state, of course, is in financial woe, so 

no help. So what do we do to be able to get out of the box and be 

able to get these things done? Now, if I may, if you will indulge 

me for just a second, I was in a conversation with Lieutenant Governor Gavin Newsom a little while ago in regard to trade, as I mentioned, and he is looking at the permitting process. How do we cut 

down the red tape? 

Second, streamlining with the counties and the cities. In other 

words, have the counties, cities and county government also involved in this. They are doing six pilots, one of them starting in 

Riverside, international trade. They are going to open a new office 

in China, the first state office since the Davis Administration, and 

they are looking at the manufacturing component. Those are just 

a few of the highlights that I garnered from the conversation. 

So there is great need, and I think hopefully we will be able to 

partner with the state, Madam Chair, to be able to get a lot of 

these things passed on to not just the new entrepreneurs but also 

the ones that have business and who want to expand and go into 

other countries with a product that they make. 

And thank you so very much for being so indulgent. 

Chairman MULVANEY. Happy to do it. Thank you, Ms. Napolitano, for joining us. It is a pleasure to meet you. There are 435 of 

us in Congress, so it takes a while to meet everybody. 

Let me go about it a little bit differently. Instead of going one 

by one, I want to deal with topics and have each of you check in 

on just a couple of global topics I have heard discussed here today. 

One of them, the first one is access. Ms. Napolitano was mentioning it. Ms. Tang, you talked about it a couple of times, access 

to the information. 

Does anybody here use the SBA website? Mr. Martinez, good. 

You have to. Ms. Chang, you have. But Mr. Torres, Ms. Tang, you 

have not had a chance to use it? It is a tremendous, a tremendous 

asset that we have available to us. But again, everywhere I go and 

I have these meetings, I ask that question and half is above average for folks who have actually been aware of it. 

Ms. Tang, I did a series of small business workshops in my district, put together a tremendous body of information. The SBA 

came up from the state capitol. We had four or five people on this 

panel. I had 40 people at most at a meeting where I thought I 

would have 500. It is just very difficult to get that word out there 

that this particular service is available. 

So often it seems with the Federal Government, the difficulty we 

have is this overlap of services. We have all of these entities doing 

the same thing. I think we are up to 47 different job training programs now. But in this particular circumstance with small business, there is this giant gap that nobody even knows that we do 

this. So it is up to us, I think, to do a little bit about that. 


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Sharing something else with you folks, I didn’t hear the 8A program mentioned at all. I don’t know if you are familiar with it. Mr. 

Martinez is. But I know, Ms. Tang, your business would qualify for 

it. Ms. Chang, yours may well. There is a series of programs available to especially women-owned businesses where you can compete 

on a non-competitive bid basis. There are certain restrictions on 

that, but you don’t have to bid. You have to have a track record. 

You have to be established as a certified 8A provider, but there is 

a wealth of programs out there that folks are simply not taking advantage of. The last one would be the mentorship program that I 

think one of you—I read the testimony before, and one of you has 

participated in that before. Was it you, Mr. Martinez? 

Mr. MARTINEZ. Which mentorship program? 

Chairman MULVANEY. The SBA mentorship program. 

Mr. MARTINEZ. Oh, no. 

Chairman MULVANEY. So you have done your own. The SBA has 

its own mentorship prote ́ge ́ program where large businesses will 

come down and teach small businesses how to do government contracting. In fact, there are incentives in place for large businesses 

to do exactly that. So I encourage you to put that in front of your 

customers, your clients, your colleagues, your neighbors as well. 

But we are learning firsthand in South Carolina. Boeing has already signed up a tremendous number of very, very small businesses doing very small levels of work that they are ready to do, 

subassembly a lot of time, but it is a great way not only to expand 

that small business but also to train those small businesses in the 

intricacies of complex contracting. Contracting with Boeing is probably more complex than contracting with the Federal Government, 

believe it or not. 

Let me ask this, then, and move on to the questions I have on 

a different topic, which is micro-credit. Mr. Torres, you said that 

you don’t do SBA loans but you said you do your own. You effectively are doing what we try to get folks to do. Why don’t you do 

SBA loans, and what would it take in your experience, what could 

we change—and really, at the end of the day, that is why we are 

here. What could we change to make it better so that you could 

provide it? 

Mr. TORRES. Sure, and as I had said earlier, the biggest issue for 

us is just our size. So for us to bring on a capable SBA team, the 

expense related to, in a sense, buying that team, and banks compete for teams of individuals to—— 

Chairman MULVANEY. Why does it take a team to do it? 

Mr. TORRES. Because it is a highly technical area of lending. I 

mean, there are a lot of specific rules and regulations that if you 

do not dot the proper I or cross the proper T, the guarantee is not 

there. And so it takes a very specific expertise and someone that 

is very experienced, and this knowledge base is not very widespread in our community. And where it is widespread, it lies resident within a larger organization. So it becomes very expensive for 

banks of our size to obtain that expertise. 

Now, we can develop it. We can home-grow it. We can take existing resources or bring in new resources and educate them in that 

process, and that is something that we have talked about for in the 

coming years, taking our existing credit folks and putting them 


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through a rigorous training program, but that is a process that also 

takes a significant amount of time because they need to go through 

the entire program. 

So getting to your question, what can the SBA do, I would say 

if the SBA can develop a program where they can take either junior credit administrators or some folks that have been in the credit 

industry for a while and put them through a comprehensive certification program where they can become competent, that would probably go a long way in doing this. 

Our biggest fear as an industry relative to, let’s say, SBA, is the 

loss of that guarantee, obviously. If we do something along the way 

and there’s a default and someone says, ah, I see in the file when 

we do a post-mortem review, you did not dot this I, cross that T, 

sorry, and we have pulled it from you, now we are stuck with a 

much bigger loss than anticipated. 

So as a small bank, that tends to be the hurdle for us. Certainly 

I think the education piece, the outreach piece, putting the money 

out there to take these smaller banks that can afford to buy these 

teams and just getting their folks and educating them, and perhaps 

even—and this is a perfect tie-in to the community college piece— 

why not take these kids that are in community college that normally get these AA degrees or certificate programs, and make them 

SBA qualified or SBA credentialed so that they can go straight into 

those same communities that they are living in and start working 

in that business? That is a lifetime opportunity for them, it is not 

overly expensive for the institution, and it takes the resources of 

the SBA and puts them to good use. 

Chairman MULVANEY. Ms. Chang’s testimony rung particularly 

true with me. I had a Small Business loan one time. I was a young 

lawyer, I had just started practicing, and I had a flood in my office, 

and I ended up with a small business disaster loan. It was outrageously easy. Your point is an excellent one, which is that it is 

almost as difficult to make a microloan as it is to make a massive 

loan, and maybe that is one of the places we can look at as well, 

not only figuring out a way to do a training program to certify your 

bankers and so forth and train them so that you don’t have to go 

off and add this team just to do it, but also to change the process 

so that micro-lending is easier, or at least it is proportional to the 

value. There is no reason to spend 100 pages of documents on a 

$100,000 loan when you can spend 100 pages of documents and do 

a $100 million loan. So that is something that I will take away 

from here. 

Mr. Martinez, give me a feel, of these folks that you have talked 

to, if we want to go back, if micro-lending is one of the things we 

take back to Washington, is that the kind of thing that you see on 

a day-to-day basis that really would have an impact? Do you get 

a feel for the percentage, the volume of traffic that you see that 

could benefit from those loans, say, under $100,000 or under 

$50,000? 

Mr. MARTINEZ. I would say yes, definitely. We do get a large percentage of clients that come in and are business ready, ready to receive that microloan. Because they don’t have the experience, 

maybe they don’t have the business plan put together or something 

is missing where they are not able to apply for that loan. I know 


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there are many organizations here in the L.A. County, San 

Bernardino County, and the Empire County, there is a tremendous 

amount of resources. Again, they are out there. The only problem 

that we have is that for some reason they haven’t heard about it 

yet. But, yes, there is a large percentage that would benefit tremendously from that, micro-lending. 

Chairman MULVANEY. I get that impression as well, because most small businesses are not looking for a million or $2 million. 

They are looking for $50,000—— 

Mr. MARTINEZ. No. I mean, the individuals that come in, they are asking for $20,000, $25,000. And by asking questions, looking at 

their background, see where they are with their business plan, I 

usually refer—I say to them do what I did, which is what? Use my 

credit cards, use my savings, ask friends, ask family, and get the 

business going. Get it going for two years. Once it is running, we 

will help you throughout the whole two years. Once you have been 

in business for two years, you will be ready for an SBA loan. 

And the only reason why you need an SBA loan, not to survive, 

but you need an SBA loan to expand, which a lot of people look at 

it differently. 

Chairman MULVANEY. That’s an excellent point. That’s an excellent point. That is a message that needs to get out there to the 

small business communities, and that is that this is maybe not designed to help you start from scratch. In fact, maybe it makes it 

too easy for you to try and start from scratch. 

Mr. MARTINEZ. That is right. 

Chairman MULVANEY. You don’t learn the value of the money 

unless it is your money and your mother’s money and your neighbor’s money, but it can help you to expand. 

Mr. MARTINEZ. Most definitely, most definitely. 

Chairman MULVANEY. So maybe we will take a look at, then, 

possibly changing some of the qualifiers, some of the categories in 

terms of treating loans to existing companies differently than treating loans to brand new start-up companies. 

Mr. MARTINEZ. That would help, yes. 

Chairman MULVANEY. That might be something worth it to look 

at. 

Exports is something else that everybody here has mentioned off 

and on. Ms. Napolitano I think specifically mentioned it. I will tell 

you, I will tell my colleagues, the Small Business Administration 

is available to you to help promote this specifically. There are specific areas within the SBA that are set up to help small businesses 

export. Mrs. Chu and I have been heavily involved in the committee in Washington on trying to drive small businesses to export. 

Less than 1 percent of the small businesses nationwide export at 

all, and 95 percent of the ones that do export to only one country. 

There is a tremendous untapped market for us in small business, 

but it is so often the case, as with other things we have heard here 

today, that it just doesn’t occur to people to seek those markets. 

They are looking here in East Los Angeles, they are looking in 

South Carolina, they are looking where they live, as opposed to 

thinking globally in terms of where their markets are. 

By the way, and I share this with my colleagues as well, there 

are a couple of different organizations that will come to your disVerDate Mar 15 2010 04:44 Jan 20, 2012 Jkt 071787 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 E:\HR\OC\B787.XXX B787

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trict and put on symposia on how to export into specific regions. 

We just had a series of meetings in my district led by the U.S. 

Chamber specifically encouraging people to export into the Middle 

East, tremendous growth opportunities there as well. So those 

things do exist, and again, targeted specifically at small businesses. 

Mrs. Tang, you mentioned something that is near and dear to my 

heart. I have had many careers. I get bored very, very easily, and 

in addition to running a law firm and running a restaurant, I also 

ran a construction and a real estate business. And you mentioned 

the criticalness of getting paid quicker. 

Ms. TANG. Yes. 

Chairman MULVANEY. We are looking at that. One of the 

things—and you don’t often hear this from conservative right-wing 

extremists from South Carolina like myself, but I give the President tremendous credit for specifically mentioning those things in 

his jobs bill, the idea of paying small business, paying contractors 

in 15 days instead of 30 days. This makes a big difference where 

we come from. 

Ms. TANG. Oh, yes. 

Chairman MULVANEY. What we need to make sure of, however, 

and you sort of hit on it, is we need to make sure that while that 

changes at the owner-contractor level, it also needs to change at 

the contractor to subcontractor and second-tier subcontractor level. 

Ms. TANG. Exactly. 

Chairman MULVANEY. Otherwise all it does is we are providing 

the float to the big business but not the small business that come 

down. 

Ms. TANG. Exactly. 

Chairman MULVANEY. So you were spot-on on that. And I know 

that I haven’t raised a lot of questions here because really, for me, 

and I will say this by way of closing today, the value here, we love 

the opportunity to sit and ask you questions. It is extraordinarily 

helpful. But what we are trying to get, and the reason that we are 

here, and the reason this is important, is we need those stories. We 

need the story of the Chinese asylum seeker who took $10,000, now 

hires a bunch of people. We need the stories about the food truck 

with the immigrant who grew it into a business. 

We have to go back and raise the level of dialogue on this particular issue, and having the stories from you and from your colleagues and from your neighbors are what allow us to do it. I can 

go back now, Mr. Torres, and tell these folks, look, I was talking 

to a banker in California, and he said if you can make it easier to 

do microloans and we can get this down to three or four pages, he 

could open the floodgates on this thing and it could really, really 

help. 

So often we get stuck in the policy and we don’t have those firsthand stories to tell. Ms. Tang, I will always tell the story from now 

on about driving in. It is my first experience in driving in Southern 

California. I came when I was 9, thankfully, and someone else 

drove, and then I came a couple of months ago and they provided 

a driver for me. But I did it by myself today, which is a real interesting experience. But it is nice to know that it is your fences on 

105. [Laughter.] 


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Chairman MULVANEY. And Mr. Martinez, I will tell you that the 

story that you tell makes me pause because my father and I went 

through the exact same situation in 1975 when he lost his job and 

decided that that was the last time that anybody was going to lay 

him off, that if he was going to lose his job, he was going to lose 

it because he wasn’t any good at it, not because somebody else 

made that decision for him, and he has been a small business person ever since. 

You talk a lot about high school dropouts and trying to teach 

them, and I wonder if we had, how many of those folks who 

dropped out of high school had fathers and mothers telling them 

the same stories. My fear is it is probably not enough, and if they 

had their parents telling them that story, they would stay in school 

a lot longer. I know that I did. 

We try and raise the level of dialogue. This is a very small group. 

You may be sitting in the back of this room, you may be sitting up 

front going was this worthwhile or was this a complete waste of 

time? Let me tell you how it works. This is a tremendously valuable tool. 

What will happen inevitably from here today is that the media 

is here. There are folks taking pictures. There are folks who write 

articles in journals that you have never heard of before. I don’t 

know if PACE has a magazine or not, but my guess is there may 

be a Hispanic Banker Magazine that only you truly appreciate the 

value of, Mr. Torres. This story will be written in those magazines, 

and they will be talked about on blogs, and someone at some conference someplace in Nebraska will say, you know, I read about 

this hearing in California about what we can do to help micro-credit, or what we can do to help pay people faster, and it will become 

a dialogue, and then people will start talking to their Congressman, and then we will have another hearing on it, and then finally 

we will have a chance to actually do something about it. 

I can say this with experience because I have only been here nine 

months, but we have already started to see it with the 3 percent 

withholding rule, something that I knew nothing about eight 

months ago, and at the risk of being presumptuous, my guess is 

you knew nothing about it eight months ago, but maybe you did. 

It is something that is arcane and it means something only to 

small business owners who do large government contracts. But because of the hearings that Mrs. Chu and I have been able to have 

this year, because of that process of percolating up information, a 

bill is getting ready to be passed by the U.S. House of Representatives—in fact, I think it passed out of Ways and Means the day before we left—to change the way that the government pays small 

business people on their government contracts. This is a dramatic 

change for the better. It would not have happened in a top-down 

type of process. It happened because people took the time to do 

what you folks are doing today. 

And hopefully, if you start to see progress in the next couple of 

months on things like micro-credit, exports, paying small business 

faster, reaching out to specialized programs perhaps for folks who 

haven’t graduated high school who have a whole other level of 

issues, not only do they not understand business, they don’t understand the basics that go into business. You have to teach them 


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math first before you can teach them how to do accounting for their 

products. But I can assure you this, and I will say this to wrap 

things up—— 

Ms. CHU. Will the gentleman yield before—— 

Chairman MULVANEY. Yes, ma’am. Absolutely. Always to my senior. 

Ms. NAPOLITANO. Just as you are talking, it brings back my six 

years that I sat on Small Business when I first got to Congress. 

And at that time, SBA brought in the banks who purportedly were 

helping small business, and let me tell you, the story was dismal 

about the amount of small business loans they were giving out. 

Now, I am talking about six years ago. 

Now, whether this changed or not, that is something that we 

need to ensure will happen because we were told that a business 

bank would rather do a large loan than a small one because it 

takes the same amount of time, the same amount of money to do 

it, and of course you have the team of experts that need to be able 

to push it through. 

Well, years ago the Arrowhead Credit Union was able to begin 

putting such a team together and be able to get permission from 

SBA to do small business loans at the local level because they 

know their businesses, and that was very, very successful. Maybe 

we need to look at helping SBA be more in contact with the credit 

unions because they can do the microloans that the banks cannot 

take the time, nor do they have the ability to do all of the things 

that they need to do. But they had an expert team developed where 

the credit unions sent in their customers to the Arrowhead Credit 

Union. 

The other issue, Mr. Chairman, immigration, because as you can 

see, you have minorities from other countries that run into issues 

with immigration being able to get—whether it is the owners being 

able to get legalized—now, these are people who are bringing businesses in. And you talk about a story, I have had in my district 

some people who own used car lots netting—grossing, I am sorry, 

$400,000 a month, netting. And because their attorney who was incorporating didn’t do the work with immigration, they became undocumented. Do you think we were able to help them for years? 

So we need to be able to find a way to be able to help the businesses who are bringing, and not the ones who are going through 

the paper mill, to be able to come here to the United States and 

try to become businesses supposedly, but are not necessarily the 

true type of business we would like to have. 

There are pitfalls, and we need to be sure that the businesses 

that come in understand what the letters of credit—if you send 

merchandise abroad, how are you going to collect your money if 

that country does not recognize our justice system or rule of law? 

In other words, you owe us, you pay us. 

So those are all things that I am certain people want to learn 

about, new entrepreneurships. These ladies and gentlemen already 

know because they had the businesses. But if you are talking entrepreneurship, these are pitfalls that we need to ensure that come 

to the front, that they acknowledge and get information so they 

avoid them, or at least know what they are getting into. I am glad 


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to learn about the U.S. Chamber doing an export seminar next 

month, so look forward to talking to you. 

And thank you again for allowing me. Thank you for the invitation. 

Chairman MULVANEY. You are welcome, Ms. Napolitano. 

Ms. Chu, would you like to say anything before we close? 

Ms. CHU. Well, I want to thank you for having this hearing here. 

This hearing meant a lot to me. You know, I have been an elected 

official here in the San Gabriel Valley for 26 years, and I know 

that small business is the engine of the San Gabriel Valley. And 

if we can make it successful, the San Gabriel Valley will be successful. 

So I was really anxious to have a hearing here that reflected the 

issues that we are dealing with in Washington, D.C., but it was 

even more valuable to hear from your very own words what you are 

facing and how the programs of Washington, D.C. are or are not 

helping you. So I appreciate it. We will take these suggestions, 

these experiences that you have had back to Washington, D.C., and 

we will try to make things better. 

I want to thank Congress member Grace Napolitano for being 

here. She has been such an advocate here in the San Gabriel Valley and in Los Angeles County. 

And I especially want to thank our chairman, Congress member 

Mulvaney, for making this monumental effort. He has been so gracious in having this SBA hearing, but then to overcome these incredible obstacles he had just in getting here, I thank you so much. 

Chairman MULVANEY. I will see how I feel tomorrow, that’s for 

sure. 

Listen, thank you, ladies, for doing this. Thank you for participating. Thank you folks especially for doing this. I can assure you 

one thing, that this was worthwhile for me. I have three 11-yearold children that I haven’t seen in the last couple of days, but this 

is what we do, and this was worth coming across the country to get 

this information and to get these stories because it is what we need 

to try and change things. 

Ms. Chu and I have one of the luxuries in Congress. We actually 

function when we participate in a committee that gets along. This 

is a bipartisan effort. We are not here with Republican and Democrat. We are here as the protectors and the voice of small business. 

I think we have sent out more bipartisan bills out of our committee 

this year than perhaps all the rest of them put together. We are 

making strides for small business, and I appreciate you all participating in that process. 

With that, I will ask that there be five days for members to revise and extend their remarks. There are no objections to that, so 

we will do that. And with that—yes, ma’am? 

Ms. CHU. Just to invite everybody to a little reception of cookies 

and coffee afterwards. 

Chairman MULVANEY. Cookies and coffee it is. Coffee would be 

really good right now. [Laughter.] 

We stand adjourned. Thank you, folks. 

[Whereupon, at 4:23 p.m., the Subcommittee was adjourned.] 


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