    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

                    HARNESSING THE POWER OF IMMIGRANT-OWNED
                        BUSINESSES TO BUILD BACK BETTER

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD
                                 APRIL 28, 2021

                                   __________

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 117-009
                 Available via the GPO Website: www.govinfo.gov

                                    __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    44-562                      WASHINGTON : 2021

    -----------------------------------------------------------------------------------

                       HOUSE COMMITTEE ON SMALL BUSINESS

                     NYDIA VELAZQUEZ, New York, Chairwoman
                              JARED GOLDEN, Maine
                              JASON CROW, Colorado
                             SHARICE DAVIDS, Kansas
                             KWEISI MFUME, Maryland
                            DEAN PHILLIPS, Minnesota
                             MARIE NEWMAN, Illinois
                           CAROLYN BOURDEAUX, Georgia
                              JUDY CHU, California
                           DWIGHT EVANS, Pennsylvania
                           ANTONIO DELGADO, New York
                         CHRISSY HOULAHAN, Pennsylvania
                              ANDY KIM, New Jersey
                             ANGIE CRAIG, Minnesota
                  BLAINE LUETKEMEYER, Missouri, Ranking Member
                             ROGER WILLIAMS, Texas
                            JIM HAGEDORN, Minnesota
                            PETE STAUBER, Minnesota
                            DAN MEUSER, Pennsylvania
                            CLAUDIA TENNEY, New York
                           ANDREW GARBARINO, New York
                             YOUNG KIM, California
                             BETH VAN DUYNE, Texas
                             BYRON DONALDS, Florida
                             MARIA SALAZAR, Florida
                          SCOTT FITZGERALD, Wisconsin

                     Melissa Jung, Majority Staff Director
                Ellen Harrington, Majority Deputy Staff Director
                         David Planning, Staff Director

                                C O N T E N T S

                               OPENING STATEMENTS

                                                                       Page
    Hon. Nydia Velazquez.............................................     1
    Hon. Blaine Luetkemeyer..........................................     3

                                   WITNESSES

    Mr. David Dyssegaard Kallick, Director of Immigration Research
      Initiative, Fiscal Policy Institute, Latham, NY................     5
    Mr. Daniel Fitzgerald, Acting Regional Director, San Diego &
      Imperial Small Business Development Center (SBDC) Network,
      Southwestern Community College, National City, CA..............     7
    Ms. Jaja Chen, Co-Owner & Chief of Strategic Initiatives &
      Business Partnerships, Waco Cha, LLC, Waco, TX.................     9
    Mr. Jose Ponce, President, Re/Max Gold, Fenton, MO...............    11

                                    APPENDIX

    Prepared Statements:
        Mr. David Dyssegaard Kallick, Director of Immigration
          Research Initiative, Fiscal Policy Institute, Latham, NY...    35
        Mr. Daniel Fitzgerald, Acting Regional Director, San Diego &
          Imperial Small Business Development Center (SBDC) Network,
          Southwestern Community College, National City, CA..........    38
        Ms. Jaja Chen, Co-Owner & Chief of Strategic Initiatives &
          Business Partnerships, Waco Cha, LLC, Waco, TX.............    41
        Mr. Jose Ponce, President, Re/Max Gold, Fenton, MO...........    44
    Questions for the Record:
        None.
    Answers for the Record:
        None.
    Additional Material for the Record:
        Boundless Immigration Inc....................................    46
        FWD.US Immigrant Competitive Advantage Report................    48
        Latino Landscape Network (LLN)...............................    61
        National Venture Capital Asociation (NVCA)...................    63
        Sayuri Tsuchitani Statement..................................    71

    HARNESSING THE POWER OF IMMIGRANT-OWNED BUSINESSES TO BUILD BACK BETTER

                                  ----------

                           WEDNESDAY, APRIL 28, 2021

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The committee met, pursuant to call, at 12:15 p.m., via
    teleconference. Hon. Nydia Velazquez [chairwoman of the
    Committee] presiding.
        Present: Representatives Velazquez, Crow, Mfume, Phillips,
    Newman, Bourdeaux, Chu, Evans, Delgado, Houlahan, Mr. Kim of
    New Jersey, Craig, Schneider, Luetkemeyer, Williams, Hagedorn,
    Stauber, Ms. Young Kim of California, Van Duyne, Salazar, and
    Fitzgerald.
        Chairwoman VELAZQUEZ. Good afternoon. I call this hearing
    to order.
        Without objection, the Chair is authorized to declare a
    recess at any time.
        I want to thank everyone, especially our witnesses for
    joining us today for our Committee's remote hearing. I want to
    make sure to note some important requirements.
        Let me begin by saying that standing House and Committee
    rules and practice will continue to apply during remote
    proceedings. All Members are reminded that they are expected to
    adhere to these standing rules including decorum when they are
    participating in any remote event.
        With that said, the technology we are utilizing today
    requires us to make some small modifications to ensure that
    Members can fully participate in these proceedings. House
    regulations require Members to be visible through a video
    connection throughout the proceeding, so please keep your
    cameras on. If you participate in another proceeding, please
    exit and log back in later.
        In the event a Member encounters technical issues that
    prevent them from being recognized for their questioning, I
    will move to the next available Member of the same party and I
    will recognize that Member at the next appropriate time slot
    provided they have returned to the proceeding.
        Should a Member's time be interrupted by technical issues,
    I will recognize that Member at the next appropriate spot for
    the remainder of their time once their issues have been
    resolved. In the event a witness loses connectivity during
    testimony or questioning, I will reserve their time as staff
    address the technical issue. I may need to recess the
    proceedings to provide time for the witness to reconnect.
        Finally, remember to remain muted until you are recognized
    to minimize background noise like right now.
        In accordance with the rules established under H.R. 965,
    staff have been advised to mute participants on the event there
    is inadvertent background noise. Should a Member wish to be
    recognized, they must unmute themselves and seek recognition at
    the appropriate time.
        Today's hearing serves as a reminder that the immigrant
    story is the American story. For centuries, the United States
    has welcomed immigrants from all around the world. These
    migrants often risk their safety and well-being to get here.
    They cross vast deserts, tumultuous oceans, and rough terrain,
    all in the pursuit of a better life and the American dream.
        In turn, these immigrants have made our country better. For
    generations, they have fueled American small businesses and
    embodied the entrepreneurial spirit that helps make our country
    great. Immigrant entrepreneurs are a dynamic group, starting
    businesses at a higher rate than the general population and
    accounting for 28 percent of main street business owners. These
    immigrant business owners run many of the institutions that
    serve as the pillar of local communities. They own over 50
    percent of businesses that supply necessities, like gas
    stations, drycleaners, laundromats, and grocery stores.
        These entrepreneurs are force multipliers in local
    economies. They buy local products, create local jobs, and make
    communities more attractive places to live. Immigrants also
    have an outside impact in the world of big business. Immigrants
    founded 44 percent of 2020 Fortune 500 companies, employing
    more than 13.7 million people worldwide.
        Despite the great success that immigrant entrepreneurs have
    enjoyed, 2020 presented monumental setbacks and obstacles. The
    pandemic closed immigrant-owned businesses at disproportionate
    rates. At its lowest point in April 2020, COVID has lowered the
    number of active immigrant business owners by approximately 36
    percent. In other words, we lost over a million immigrant
    business owners between February and April. The pandemic
    created new challenges for immigrant entrepreneurs, but it also
    exacerbated familiar obstacles that have haunted them for a
    long time.
        When it comes to foundational areas like business
    mentorship and accessing capital, immigrants are at a
    disadvantage. Immigrants often lack the professional networks
    used by many entrepreneurs for guidance and support. They also
    struggle to access the capital needed to start and run a
    business. Whether due to poor credit history, limited financial
    literacy, or a lack of access to mainstream financial services,
    immigrant-owned firms have a harder time obtaining the funding
    needed to be successful.
        The SBA offers resources for immigrant entrepreneurs to
    combat this obstacle. SBA resource partners, like SBDCs, WBCs,
    and SCORE, counsel and advise immigrant businesses so they can
    overcome these barriers. Community development financial
    institutions offer lending and microlending to service low- to
    moderate-income borrowers from diverse backgrounds. These
    organizations do vital work. But the road to recovery is long
    and we must do more to support immigrant businesses. If our
    economy is to recover, we need immigrant businesses operating
    at full strength.
        As was the case in the aftermath of the Great Recession,
    the businesses that suffered the most during COVID will play a
    significant role in our recovery, as inncreased vaccination
    diminished the severity of the public health crisis and aided
    the return to normalcy. New businesses started by immigrants
    will drive local economic growth.
        Our witnesses today are a testament to what is possible
    when immigrant business owners receive adequate support. I look
    forward to hearing your testimony and discussing how we can
    harness the power of immigrant entrepreneurs to help rebuild
    our economy.
        I would now like to yield to the Ranking Member, Mr.
    Luetkemeyer, for his opening statement.
        Mr. LUETKEMEYER. Thank you, Madam Chair, and thank you for
    holding this hearing, especially to discuss the unique issues
    immigrant-owned small businesses face.
        Each of us have immigrant-owned small businesses in our
    districts that are highly integral to our communities. The
    ability to start anew, pull yourself up by your bootstraps, and
    own a small business are all key aspects of the American dream
    that many immigrants are seeking in the United States.
        However, immigrant small businesses face the same difficult
    tasks as all small businesses face--how to survive the pandemic
    and having to deal with the daunting deliverable tax policies
    and over regulatory policies looming over their heads. This is
    not good for any small firm.
        No matter how you slice it, higher taxes are a burden for
    small businesses, both the owners and their employees. A
    mandatory higher minimum wage and excessive, unnecessary
    regulations are a burden for small businesses, small business
    owners, and their customers. The continuance of stringent
    COVID-19 mandates is burdensome to small business owners and
    their employees and their customers. If I sound like a broken
    record, that is intentional. The list of liberal policies that
    this administration and this majority want to enact that will
    have adverse effect on small businesses goes on and on and on.
        While no one can deny that the pandemic's emergency period
    is unparalleled, what we can cling to is the knowledge that
    prior to COVID-19, small businesses were operating at historic
    levels. We know that because of the previous administration's
    policies, and specifically the Tax Cuts and Jobs Act, small
    businesses' optimism reached record heights and the
    unemployment rate to an impressive 3.5 percent. When small
    businesses have this optimism, coupled with lower taxes and
    fewer regulations, they are more comfortable taking risks and
    our communities receive new innovations that make the world a
    better place and a safer place. These are the characteristics
    that drive our economy forward and keep Main Street afloat.
        To get back to our pre-COVID-19 small business environment,
    we must reject these new liberal policies and continue the
    previous administration's pro-growth policies focused on tax
    reform and targeted, smart regulation. These are commonsense
    principles that allow small businesses to invest their hard-
    earned dollars as they see fit. Unfortunately, the Biden
    administration and the left's economic policies, along with the
    COVID-19 protective measures that continue to hold small
    businesses back, cause this group to face unprecedented
    challenges. Once busy Main Streets remain dormant in locations
    that continue these harsh measures instituted by state and
    local governments.
        However, state and local governments that have lifted
    mandates have seen small businesses begin to fight their way
    back to the busy Main Streets of the pre-pandemic days. As the
    initial emergency period wore on, we know Congress worked
    diligently as a bicameral, bipartisan nature to begin the PPP
    and EIDL programs. In addition, Congress extended the Debt
    Relief program for new and existing 7(a), 504, and microloans.
    Bipartisan congressional efforts also created the Shuttered
    Venue Operators Grant Program for venues, theaters, and
    museums. These programs have aided small businesses in every
    congressional district. They have helped all business owners of
    all backgrounds without limiting access to specific groups.
        While these grant and loan opportunities have been vital in
    keeping small businesses afloat during the emergency period,
    these programs do require diligent oversight. The December
    COVID relief bill alone delivered $325 billion to the Nation's
    smallest and hardest-hit businesses and industries. But
    realize, when billions of taxpayer dollars are being used, we
    must insist that they are used prudently. As I have said
    before, this Committee must ensure that American taxpayer
    dollars are safeguarded and protected.
        I look forward to the testimony of our witnesses today and
    thank them for joining us. It is my hope that with your voices,
    we can take the American dream, put it back into play, and
    return to a pro-growth economy, rather than the destructive
    pro-regulation path we are on now. Advancing all small business
    interests must continue to be a priority of this Committee.
        Madam Chair, with that I yield back.
        Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The
    gentleman yields back.
        I would like to take a moment to explain how this hearing
    will proceed. Each witness will have 5 minutes to provide a
    statement, and each Committee Member will have 5 minutes for
    questions. Please ensure that your microphone is on when you
    begin speaking and that you return to mute when finished.
        With that, I would now like to introduce our witnesses.
        Our first witness is Mr. David Kallick, Deputy Director of
    the Fiscal Policy Institute and Director of the institute's
    immigration research. He is the author of numerous studies of
    the economic and fiscal aspect of immigration at the national,
    state, and local level. In addition to his work at the Fiscal
    Policy Institute, he is a Visiting Assistant Professor at the
    Pratt Institute's Graduate School for City and Regional
    Planning.
        Welcome, Mr. Kallick.
        Our second witness is Mr. Daniel Fitzgerald, who works for
    Southwestern Community College as the Acting Regional Director
    for the San Diego Imperial SBDC Regional Network. He also
    oversees the San Diego and Imperial Women's Business Center and
    is the Fiscal Agent for the California Women's Business Center
    Network. For over 20 years, Daniel has been a prominent fixture
    in the small business communities of San Diego County and
    Imperial County. His leadership has made a significant impact
    on thousands of businesses and multiple industries throughout
    the state of California. Welcome.
        Our third witness is Ms. Jaja Chen. Ms. Chen is Co-Owner
    and Chief of Strategic Initiatives and Business Partnerships of
    Waco Cha, LLC, a bubble tea company based in Waco, Texas. She
    is also a licensed clinical social worker supervisor
    specializing in trauma, burnout, and perinatal mental health
    through her private practice. She received both her Bachelor's
    and Master of Social Work through the Diana Garland School of
    Social Work at Baylor University. Welcome.
        Now I would like to yield to our Ranking Member to
    introduce our final witness.
        Mr. LUETKEMEYER. Thank you, Madam Chair.
        It is indeed my pleasure to introduce one of my
    constituents from Fenton, Missouri, Mr. Jose Ponce, a very
    successful real estate agent with Re/Max St. Louis Gold Homes
    for over 19 years. As a successful Hispanic entrepreneur, Jose
    serves as a mentor to young real estate agents and offers his
    assistance to the Hispanic community through his bilingual
    services. He continues to advocate for the St. Louis community
    and business owners everywhere. He has been named a 30 under 30
    recipient from the St. Louis Business Journal and has been
    featured in several St. Louis Business Journals. In December
    2016, he began the new owner of Re/Max Gold and currently has
    five offices, 22 satellite offices, 66 agents, and a referral
    company, Gold Realty, in which he oversees as president.
    Outside of his business, Jose was a professional boxer and
    continues to work with local fighters and co-owns Sweat Gym in
    Clayton, Missouri.
        Mr. Ponce, thank you for being with us today. I look
    forward to your testimony. And I know as a small business owner
    you are taking that same fighting spirit from your younger days
    to your own business and to this Committee today. Thank you
    very much.
        And Madam Chair, I yield back.
        Chairwoman VELAZQUEZ. Thank you.
        Mr. Kallick, you are recognized for 5 minutes.

    STATEMENTS OF DAVID DYSSEGAARD KALLICK, DIRECTOR OF IMMIGRATION
         RESEARCH INITIATIVE, FISCAL POLICY INSTITUTE; DANIEL
      FITZGERALD, ACTING REGIONAL DIRECTOR, SAN DIEGO & IMPERIAL
    SMALL BUSINESS DEVELOPMENT CENTER (SBDC), NETWORK, SOUTHWESTERN
      COMMUNITY COLLEGE; JAJA CHEN, CO-OWNER & CHIEF OF STRATEGIC
    INITIATIVES & BUSINESS PARTNERSHIPS, WACO CHA, LLC; JOSE PONCE,
                         PRESIDENT, RE/MAX GOLD

                 STATEMENT OF DAVID DYSSEGAARD KALLICK

        Mr. KALLICK. Thank you for the introduction, and thanks for
    inviting me.
        There are plenty of issues that are controversial about
    immigrants, but one thing we can say with a great deal of
    certainty is that immigrants are highly entrepreneurial. I am
    going to talk today about a particular nexus, the immigrant
    entrepreneurship, and the rebuilding of the U.S. economy after
    their COVID pandemic.
        What will America's Main Streets look like as we return to
    living our lives without fear of COVID-19? Hopefully soon.
        It is not hard to imagine two rather different scenarios.
    On the one hand, a Main Street-centered rebuilding could pick
    up on some of the innovations we have seen during the COVID
    period: outdoor restaurants, expanded pedestrian areas, bike
    paths that have transformed many downtowns and urban centers in
    very positive ways. This scenario would entail Main Streets as
    vibrant places where people meet, walk around, and poke into
    locally owned stores and restaurants.
        On the other hand, is I would say an equally likely
    scenario that is much more centered on online and outskirts
    rebuilding and leaves Main Streets relatively empty. That
    scenario is centered around Amazon and other online retailers
    selling us most of what we buy, big box stores drawing
    customers away from Main Streets and towards the outskirts of
    town, and restaurants that are franchised and look much the
    same everywhere. To put it a little differently, once we can go
    to stores and restaurants, what small businesses will be there
    for us to go to?
        Here is where immigrants come in. Immigrants are, in
    general, more likely to be business owners but they are far
    more likely to be owners of independent Main Street businesses,
    the shops and services that are the backbones of neighborhoods
    around the country.
        In a report that the Fiscal Policy Institute published
    together with the American Society/Council of the Americas, we
    found that immigrants make up 16 percent of the labor force, 18
    percent of small business owners, and 28 percent of Main Street
    business owners. So that is a number you also heard from
    Representative Velazquez. Twenty-eight percent of all of the
    Main Street businesses around the country are owned by
    immigrants.
        Immigrants also play a big role in the growth of Main
    Street businesses. There are 31 major metro areas where
    immigrant business owners represent all of the net growth in
    Main Street business ownership between 2000 and 2013. Among
    them are New York, Chicago, Houston, or Washington metro areas.
    Maybe no big surprise there. But there are also areas where
    immigrants make up a smaller share of the overall population,
    yet still make up all of the net gain in the number of Main
    Street business owners. For example, Baltimore, Detroit,
    Milwaukee, Pittsburgh, Birmingham, and Buffalo metro areas.
        So, to some extent, I can make a prediction. I can predict
    that, as in the past, immigrants will play a central role in
    this revitalization of America's Main Streets after COVID.
        But policy will matter. Immigrants faced extraordinary
    challenges over this past year. They were more exposed to COVID
    than the population overall, and immigrants got sick and died
    in disproportionate numbers. The Paycheck Protection Program
    (PPP) was the most important support for small businesses in
    the pandemic recession, but it well known that people of color
    and immigrants were far less likely to benefit from the PPP
    loans. Industries and geographic areas where immigrants are
    prevalent are very often the same as those that were hardest
    hit by the pandemic recession.
        So, as we build back--``build back better'', if you like--
    Congress should be thinking about how to correct that imbalance
    and nurture the growth that immigrant businesses have always
    been a part of.
        To name just one example, will help for a small business
    depend on a relationship to a big bank or will businesses that
    do their banking with a Community Development Finance
    Institution also get aid? Or businesses that may not have a
    banking relationship at all?
        I am not here today to propose a fully fleshed-out view of
    how the rebuilding can happen. But I would like to underline
    what seems to me an important fork in the road ahead. One path
    leads to a rebuilding that is centered around Main Streets.
    Another is dominated by online shopping, big box stores,
    chains, and franchises. All of these kinds of businesses have
    their place, but it would be a pity, to my mind, if the big
    boxes wind up with a bigger share of our economy than they
    would have if it had not been for COVID.
        Thank you for having me.
        Chairwoman VELAZQUEZ. Thank you.
        Now we recognize Mr. Fitzgerald for 5 minutes.

                     STATEMENT OF DANIEL FITZGERALD

        Mr. FITZGERALD. Thank you. It is an honor to speak today on
    a topic that is so very important to me.
        Living and working along the US-Mexican border and in a
    city of immigrants in San Diego, I have seen many times over
    the entrepreneurial energy in recent migrants to the U.S. The
    passion, creativity, and work ethic needed for successful
    entrepreneurs is so very common in people who have fought to
    come to the U.S. My name is Daniel Fitzgerald and I serve as
    the acting regional director for the San Diego and Imperial
    Small Business Development Center (SBDC) Network, hosted by
    Southwestern Community College District. As one of the 62 SBDC
    networks funded by the U.S. Small Business Administration, our
    work in the southernmost part of California is to assist small
    business owners to grow and to help entrepreneurs to start
    their business. Of course over the past 13 plus months our work
    has been primarily focused on helping small business owners
    retain their business by accessing Federal, state, and local
    disaster assistance. Beyond the capital assistance, a lot of
    work has been to help small business owners navigate the
    changing public health rules and still be able to reach their
    customers.
        The variety of COVID capital assistance programs has been
    critical to the survivability of small business. However,
    access to the programs was varied. In our region, two of the
    largest barriers faced were confusion over the different
    programs and access to information in their own language. Our
    SBDC Network has the capacity to serve in over 15 different
    languages. A significant portion of our team is fluent in
    Spanish, but the other common languages include Arabic,
    Vietnamese, Swahili, Korean, Farsi, Tagalog, Mandarin, and
    Somali. Since the onset of the pandemic, our network has
    provided over 2,000 hours of one-on-one counseling in a
    language other than English. We have also provided many
    webinars for PPP, EIDL, and state and local capital programs in
    Spanish, Arabic, and other languages. This has been critical to
    help businessowners access capital.
        When the first PPP deadline was approaching last June, an
    owner of a nail salon was put in contact with us. She primarily
    speaks Vietnamese. One of our advisors went to her business,
    discovered her email inbox was full and she had not been
    receiving emails for 2 months. He worked with her to put
    together her financial records, worked with a local lender, and
    she was able to get her PPP loan. This is one of many examples
    of the hands-on, in-language assistance we at the SBDC provide
    to recent migrants during the pandemic.
        Beyond the response and relief efforts the COVID-19
    pandemic has necessitated, the San Diego and Imperial SBDC
    Network has an ongoing commitment to supporting small
    businessowners and entrepreneurs who are immigrants. For many
    years, our programming has provided support, in particular for
    small business owners from Latin America who primarily speak
    Spanish.
        Fernando Miramontes came to our SBDC in Imperial County, a
    farming area that borders with Mexico. As a migrant from Mexico
    and having been in trucking for many years, he wanted to start
    his own transportation company. Working with our SBDC advisor
    and Accion (now Accessity), a local non-profit lender, he was
    able to complete his business plan, do the required legal
    steps, and obtain capital to purchase a truck to start his
    business. In 2018, thanks to additional funding from the State
    of California and increased funding from the SBA, we were able
    to expand our network of sub-awarded service centers from four
    to eight. Two partners in particular were added to increase our
    SBDC Network's reach into immigrant communities by awarding
    service center contracts to both the Asian Business Association
    of San Diego and the International Rescue Committee.
        At the SBDC, we strive to provide both linguistically and
    culturally correct training and counseling. Besides providing
    assistance in the preferred language of the client, our SBDC
    advisors also base assistance in knowledge and understanding of
    the business environment and regulations in the country of
    origin. For example, an SBDC advisor helping an entrepreneur
    start, helps them understand and navigate the roles of
    different governmental entities in the U.S., such as how the
    county governs health codes, the state governs sales tax, and
    the city will provide a business license.
        Business owner Naw Say Phaw came to San Diego in 2014 as a
    refugee from Malaysia. Upon resettling in San Diego, Naw Say
    wanted to start her own business but had no previous experience
    and was also unsure of the various licenses, permits and
    regulations required on the local and state levels. IRC came to
    the international rescue community SBDC for help, and after
    receiving assistance, including a small loan, AYA Mini Market
    was launched.
        A major program at the San Diego and Imperial SBDC Network
    is assisting entrepreneurs to start in-home childcare centers
    and also to support childcare businesses to expand. The SBDC
    provides extensive childcare startup training, helping
    primarily women to navigate the state rules to open a childcare
    center, then to work with local organizations who provide
    vouchers for childcare for working people in obtaining clients.
    These childcare providers support the community not just by
    having a business but providing critical childcare for working
    parents by someone who is from their own community, speaks
    their native language, and follows their cultural norms.
        Today, the SBDC programs also work to help the childcare
    businesses expand, including a program with the San Diego and
    Imperial Women's Business Center and Southwestern College's
    Family Studies department. And the SBDC works to help the
    businesses develop into larger childcare centers, including
    Sarah and Rafat Illaian who worked with our North San Diego
    SBDC to obtain a $250,000 SBA-backed loan.
        From childcare, to restaurants, to the Internet of things,
    the immigrant entrepreneur and small business owner is critical
    to current and future of our small business ecosystem. As our
    economy comes back from the COVID-19 pandemic, the passion,
    hard work, and creativity of our immigrant communities can and
    will play a critical part to helping our recovery to be
    inclusive and even better. Thank you.
        Chairwoman VELAZQUEZ. Thank you, Mr. Daniel Fitzgerald.
        Now we recognize Ms. Chen for 5 minutes.

                         STATEMENT OF JAJA CHEN

        Ms. CHEN. Good afternoon, Chairwoman Representative
    Velazquez, Ranking Member Luetkemeyer, and distinguished
    members of the Committee on Small Business. Thank you for the
    honor providing testimony before the House Committee on Small
    Business today.
        My name is Jaja Chen and I am here today on behalf of my
    small business, Waco Cha, representing the over 3.4 million
    immigrant-owned businesses in the U.S., approximately 2 million
    of which are owned by an Asian American Pacific Islander
    (AAPI). I am a daughter of Taiwanese immigrants. My parents are
    from a small farm town on the East Coast of Hualian. My parents
    and ancestors are Hakka Chinese, HakkaYin, in which the literal
    translation means guest families. I come from a line of Hakka
    farmers, educators, and business owners that worked hard and
    moved across lands as guest people to pave the pathway for what
    we do today.
        As a child, I remember going to Asian supermarkets in
    Oklahoma City with my mom to help her find ingredients to
    prepare Taiwanese dishes. I observed how to make boba tea,
    dumplings, and other delicious food at home. At the age of 13,
    I moved to China with my parents as they returned overseas to
    work and I completed high school in Taiwan and eventually moved
    to Waco, Texas for college. My husband Devin Li, an immigrant
    first-generation from Guangzhou, China, and I met at Baylor
    University. After I completed school, we got married and
    settled in Waco due to job opportunities, I as a social worker
    and Devin as an engineering high school teacher. Throughout our
    time in Waco post-graduation, we enjoyed getting involved in
    the downtown community by supporting local small businesses.
    Devin's students at a local Waco ISD high school, the majority
    of whom identify as Hispanic or Black, often voiced feelings of
    not belonging and thoughts of not being able to see
    representation of their cultures within downtown development.
        As immigrants and children of Chinese and Taiwanese
    immigrants, Devin and I both resonate with this experience. In
    fact, we would often drive on weekends to Dallas or Austin to
    stop by an Asian grocery store, similar to what I did as a
    child with my mom, and we hoped for Waco to one day have an
    authentic boba tea cafe. Well, rather than hoping for this to
    one day happen, we were inspired to start a business that
    celebrates diversity and cultures. We opened our Saturday
    morning Waco Cha popup tent in summer of 2018. That first year
    was filled with time spent educating our community about boba
    and Taiwanese and Chinese culture. We even had one individual
    come up to us yelling that we are not truly Texan and spit out
    the samples that we offered them.
        After 1 year of popups, we upgraded from the tent to our
    mobile tea truck, and then we grew our first storefront this
    past year in downtown Waco alongside an additional launch of
    our Chinese dumpling food concept in the midst of the COVID-19
    pandemic. In fact, the week that our boba tea shop was cleared
    by the Health Department to open, was the week that Waco's
    shelter-in-place order was enacted. During the early months of
    the pandemic, we had to quickly pivot our business. We delayed
    our new storefront opening for about 3 months and took
    precautionary steps by shutting down our operations when some
    team members had potential COVID-19 exposures.
        We also had many challenges navigating the SBA PPP process,
    but despite this, our community and guests showed up to support
    us by pre-purchasing gift cards to help us stay afloat, and
    many also came regularly to show support as we used our mobile
    tea truck to offer drinks.
        Our values are lived out both within our team through the
    ways we strive to represent our culture through our shop and
    products and the ways we seek to hire diverse team members. Our
    culture values hospitality and that really leads us to find
    deep joy in developing business partnerships. In fact, one of
    my greatest joys this past year in our community work was
    partnering with the NAACP to host nonpartisan voter
    registration booths on-site at our boba tea shop.
        As we continue growing in profit, we are also seeking to
    give back to local nonprofits around us, and this has included
    contributing portions of our profits recently to support
    nonprofit funds that benefit the AAPI community, particularly
    with the rise of anti-Asian hate crimes within our nation. We
    now have 19 team members on staff and look forward to
    continuing to grow our team as we open our second boba tea shop
    in downtown Temple, Texas this upcoming year.
        I am thankful to the House of Representatives and Committee
    members as you continue to highlight the gift of immigration,
    particularly as we recover from the COVID-19. Our lives in
    America are enriched and our economy is stronger when we
    celebrate the diverse and rich perspectives, stories, and
    experiences of immigrants. Thank you.
        Chairwoman VELAZQUEZ. Thank you, Ms. Chen.
        Now we recognize Mr. Ponce for 5 minutes.
        Mr. Ponce, you may need to unmute.

                        STATEMENT OF JOSE PONCE

        Mr. PONCE. Thank you, Madam Chair.
        My name is Jose Ponce, an entrepreneur from the St. Louis
    region. I am honored to be before you and this Committee today
    to speak about the challenges and opportunities in the Hispanic
    entrepreneur community.
        I have invested and owned various businesses in the last 20
    years. I am proud to be an Hispanic entrepreneur. Hispanic
    entrepreneurs business ownership has surged in the past decade,
    outpacing any other ethnic group. According to the new study
    from the Stanford Latino Entrepreneur Initiative in 2020, this
    study shows that in the pat 10 years, Latino business owners
    have grown 34 percent compared to 1 percent for all other
    owners in the United States.
        This is good news and bad news in these numbers. As a
    culture, Hispanics gravitate toward starting businesses and
    being their own boss, creating a legacy for their families. But
    there are strong barriers for growth. One extreme barrier is
    discrimination when it comes to banks and lending. The recent
    study in 2020 that found that 20 percent of Latino-owned
    businesses that applied to national banks for loans over
    $100,000 received funding, compared with 50 percent of White-
    owned businesses. The discrepancy was even larger when looking
    at firms with annual revenues over $1 million who were
    requesting similar-size loans. Twenty-nine percent of Latino-
    owned businesses go the loans versus 76 percent of White-owned
    businesses. Even after controlling for business performance
    measures, the odds of loan approval from national banks were 60
    percent lower for Latino-owned businesses.
        I have personally experienced this when I sought funding
    from banks. For example, when I was purchasing my real estate
    company, I had to personally fund $350,000 of the $500,000
    purchase price. Even with my 20 years of experience, there has
    been times that I was not able to acquire bigger opportunities
    because of the barriers of bank funding.
        I believe one problem may be the continued decline of
    independent banks who many feel better understand the needs of
    the local communities. The independent banks simply have a
    better pulse on what is happening in their local community.
        Loans from the bigger banks tend to be more concentrated on
    high technology rather than traditional business. (That is on
    Bates and Bradford, 2007.)
        The Stanford study makes an especially important point. The
    study states, ``Latinos are going to be one-third of the
    population in the future and their success will have an
    enormous impact on the future economic success of the United
    States. If the Latino portion of the economy is not more
    developed economically, the whole economy will suffer.''
        So how do we harness the power of the immigrant? Maybe it
    is a better awareness of how the government can assist this
    community, such as the Small Business Administration as stated
    earlier. Possibly, the Hispanic community could be educated on
    how to leverage the existing Federal opportunity zones.
    Additionally, I believe the large banks need to be better
    educated on the benefits of investing with Hispanic
    entrepreneurs and their busineses. Relationships between my
    fellow Hispanic entrepreneurs and traditional banks need to be
    strengthened. The old saying goes, ``People do business with
    people they know and like.''
        We have proven we are a community of hardworking
    entrepreneurs. There are about 400,000 Latino-owned employer
    businesses in the United States before the panic. They
    generated nearly $500 billion in annual revenue and employed
    3.4 million people. We want the same equal opportunity to grow
    our businesses and have access to capital when we have shown we
    have experience to take on bigger opportunities that will fuel
    the U.S. economic engine. We have the ``can do'' American
    spirit that historically built this country.
        Madam Chair, it has been an honor to speak to this
    Committee today. Thank you.
        Chairwoman VELAZQUEZ. Thank you, Mr. Ponce.
        Now I will begin by recognizing myself for 5 minutes. Thank
    you so much to all the witnesses for your compelling stories
    and sharing the important role that immigrants play in our
    economy.
        Mr. Kallick, I would like to address my first question to
    you.
        Immigrant-owned businesses were particularly important in
    the recovery from the Great Recession, adding more than 200,000
    jobs, thousands of small businesses between the period of 2007
    to 2014, a period when the economy was shedding jobs. They may
    not have fared as well given the nature of the COVID-19
    pandemic. How do we ensure these businesses are fully utilized
    for this recovery as well?
        Mr. KALLICK. Thank you for the question.
        Yeah, I mean, I think it is instructive to think about the
    comparison to what happened after the Great Recession where I
    would say I think it is right that the immigrant small
    businesses played a big role in the revitalization after the
    Great Recession. I think immigrants and people of color were
    also devastated during that recession by home laws. And so I
    think there is a real danger to my mind that the destruction of
    capital gains and of people's wealth, people of color,
    immigrants during the Great Recession, they lost their homes.
    And during this recession they could be losing their
    businesses. So I think we really need to pay a lot of attention
    to I think, you know, not the question of whether there is some
    special program but how do we make sure that people are not
    excluded from the rebuilding process as they have been already
    in various ways.
        I think we heard a little bit of a thread going through
    everything is the question of access to capital. And how do you
    make sure that it is not just immigrants relying on big banks
    where they may not have very good relationships to be able to
    get business loans.
        Chairwoman VELAZQUEZ. Thank you, Mr. Kallick.
        Ms. Chen, I see you and I hear you. I have the honor of
    representing two Chinatowns in my district out of three here in
    New York City. It is no secret that the public rhetoric around
    the COVID-19 pandemic and China have fueled anti-Asian American
    hate incidents. Have you or anyone you know experienced this
    firsthand? Has it made you fear for the safety of your business
    or your customers?
        Ms. CHEN. Thank you, Chairwoman Velazquez, for that
    question. In fact, last night I was at a protest on campus at
    Baylor University because just recently a student near campus
    was physically assaulted and attacked and had racial slurs
    spoken against them near campus. And so I was standing with the
    AAPI community last night at this protest. I, myself,
    personally have not experienced the physical attacks against me
    but I do have fears or concerns regarding attacks potentially
    impacting my team members or even my own business, especially
    as we are more outspoken and continue to speak up and stand
    against this issue.
        Chairwoman VELAZQUEZ. Any suggestions from your end that we
    need to do in order to tone down this hateful rhetoric and
    build better relationships with the AAPI community?
        Ms. CHEN. Well, you know, outside of my work as a boba tea
    entrepreneur, I am a trauma therapist and social worker. And so
    with the rise of all the hate crimes, I personally have even
    seen a rise of communities within the AAPI community seeking
    therapy. And so I know that there is such a mass need for
    mental health support and accessible support. And so I urge
    Congress to continue funding advocacy centers or even local
    community mental health centers that provide multilingual,
    multicultural services. And that is particularly the case in
    places like Waco where it is a bit more rural and so there is
    less funding opportunities, you know, in our community for
    accessible mental health.
        And in addition, I think it just starts with the
    leadership. Right? It is important as leaders for us to stand
    and to speak against anti-Asian hate crimes. And it really
    starts at the leadership setting that tone with not just
    speaking about the importance of being against these hate
    crimes but also having tangible policies or even tangible
    evidence of, okay, this is what we are going to do beyond----
        Chairwoman VELAZQUEZ. Thank you. I have seen the economic
    impact that this has had in our communities. I toured Chinatown
    communities in Manhattan, lower Manhattan and in Brooklyn, and
    saw how in the beginning they were closing their doors after
    5:00 because they were really afraid of their lives and the
    safety of their customers. We need to do better.
        Mr. Fitzgerald, have you come into any interactions with
    community navigators that we included as part of the PPP and
    EIDL and if so, has that played any role in providing
    information to the businesses?
        Mr. FITZGERALD. Absolutely. That was why a number of years
    ago we expanded our network of service centers to include the
    International Rescue Committee, which is a refugee resettlement
    agency, which is very heavily embedded in communities in San
    Diego, the Asian Business Association of San Diego, and of
    course at Southwestern College, we are an Hispanic-serving
    institution and worked heavily in those communities. That is
    why language services and being very intentional with who is
    our staff and working that really they are able to be able to
    work within the community, be part of the community, and to be
    able to provide those services.
        Chairwoman VELAZQUEZ. Thank you. My time has now expired.
        The Ranking Member, Mr. Luetkemeyer, is recognized for 5
    minutes.
        Mr. LUETKEMEYER. Thank you, Madam Chair.
        I would like to start with Mr. Ponce. You know, Mr. Kallick
    made the comment a minute ago that policy will matter as we
    rebuild the economy here. And I think along that line,
    President Biden has pledged to repeal the Trump
    administration's pro-business Tax Cuts and Jobs Act. The
    administration lowered taxes and reduced regulatory environment
    I believe generated a small business economy that was filled
    with optimism and confidence. Small business owners were
    investing in their employees, their companies, and their
    communities. As a result, the Nation saw historic levels of
    unemployment and job creation.
        As a small business owner, can you give me your thoughts on
    the Biden tax plan?
        Mr. PONCE. Yes, thank you, Representative Luetkemeyer.
        You know, it is my understanding that there is going to be
    substantial cuts coming down the line and the increase in
    taxes. You know, I can speak freely of my current economic view
    here locally in our local market. The reality is what we had
    before within the Trump administration, it allowed us to really
    excel and grow in our diverse market being that we are in the
    Midwest. But right now as we stand I feel that we need to
    really reimplement or rethink through that process of allowing
    small business owners the opportunities and the capabilities to
    grow and succeed with the financial opportunities that are out
    there that everyone else is able to obtain. Thank you.
        Mr. LUETKEMEYER. To allow you to keep your own dollars with
    tax cuts and be able to invest those as you saw fit, either in,
    you know, buying another business or expanding your business,
    more inventory, hiring more people, that allowed you to grow
    your business as you saw fit and improve the entire community
    with you investing in and growing your business I would say. Is
    that a fair statement?
        Mr. PONCE. That is a very fair statement. It gives me the
    flexibility and it would give us really the flexibility to grow
    and continue to grow to the market share that we want to
    tackle.
        Mr. LUETKEMEYER. So if those taxes are raised and you wind
    up with increased regulation, it is going to suck money out of
    your operating capital, out of your operating money to be able
    to do those things and it is going to restrict your ability to
    grow I would assume. Is that correct?
        Mr. PONCE. It would definitely limit our growth. That is
    correct, Representative Luetkemeyer.
        Mr. LUETKEMEYER. Something else that sort of really piqued
    my interest here is I serve on the Financial Services Committee
    as well. I am the Ranking Member on Financial Institutions,
    which oversees the banks and credit unions and those folks. And
    so when you talked about the inability of big banks to really
    address the immigrants' basic needs for capital, that really
    struck a chord with me because I am concerned the numbers will
    bear out, you made the point about community banks. You know,
    your local bank that is independently owned and run and
    basically they invest in the community. And as a community
    grows, they grow, versus the big bank which has a completely
    different business model. The numbers bear out that the smaller
    banks actually make more, significantly more business models
    out of their deposit base than big banks do. So it did not
    surprise me when you made that comment, especially when it
    comes to beginning, you know, startup businesses, the capital.
    The big banks will be glad to take the business once it is off
    and running but it is a little difficult to get that startup
    capital.
        So I guess my question to you is, we have got some concerns
    with the small business program because of some reports that we
    are getting from the IG and the Government Accountability
    Office of some problems there with regards to our ability to
    provide oversight. And I am considering looking at having the
    banks do more of that.
        So in your experience with the banks with regard, even to
    SBA programs, were the small community banks able to deliver on
    those dollars, on those programs in a way that it was giving
    you the information you needed and be able to give you the
    dollars that you needed to be able to get through your startup
    and getting going through the PPP program, things like that?
        Mr. PONCE. Yes, Representative Luetkemeyer. The
    opportunities were given to me by the smaller, local banking
    institution that actually understood and really read through my
    experience and my vision of what I wanted to do with our
    company. They were not 100 percent onboard completely with
    funding. I had to, again, for example, in the acquisition of
    this firm in 2016, you know, they gave me some but not all.
    They wanted me to step up to the plate and put my own skin in
    the game and it just turned out that I had to put a substantial
    amount more skin in the game than the bank was willing to savor
    on my end. But they were definitely much more receptive versus
    the bigger branch banking institutions out there. They really
    looked at me as an individual, who I am and what I envisioned
    of our operation but the bigger banks did not give me the time
    nor the availability to sit down and understand exactly what I
    wanted to do with our organization.
        Mr. LUETKEMEYER. Thank you for that. My time is about up.
        Mr. Fitzgerald, in a world where you saw SBA as a guarantor
    of loans and grants versus the direct lending or direct
    grantee, how would you see the SBDC's role in that? Is that
    something you could see expand and be an initiator of those
    loans, for instance, or those grants, for instance?
        Mr. FITZGERALD. What we do is mainly help people navigate
    the lending process, complete their applications, complete
    their business plans so that way it is a much easier process
    for the lender to be able to underwrite and help them
    understand what that particular process is.
        Mr. LUETKEMEYER. Could you see it expand a role for you
    though in that regard?
        Mr. FITZGERALD. Always, because that is really what we
    focus on is access to capital in a lot of ways.
        Chairwoman VELAZQUEZ. The gentleman's time has expired.
        Mr. LUETKEMEYER. Thank you, Madam Chair.
        Chairwoman VELAZQUEZ. Now we recognize the gentleman from
    Colorado, Mr. Crow, for 5 minutes.
        Mr. CROW. Thank you, Madam Chair. And thank you to all the
    witnesses. This is an extremely important hearing for me in
    particular. I represent the most diverse district in the state
    of Colorado, one of the most divers in the Nation where we are
    home to many immigrants and refugees. I have over 160 languages
    spoken in my district and about 20 percent of my constituents
    were actually born outside of the United States. And the
    comment earlier by several of you that are immigrants and
    refugees, entrepreneurs, resonates very strongly with me
    because I see so many of those folks come here and they start
    businesses--restaurants, bakeries. You know, the mom and pop
    shops on the corner are oftentimes run by immigrants and
    refuges and it really is kind of like the lifeblood of our
    economy but actually makes our community a lot more stronger
    and vibrant and a great place to live. So it is an extremely
    important topic for me.
        One issue that I would love you all to touch on, and this
    goes back to the access to capital which, of course, is a
    common thread throughout much of this. But, you know, I have
    folks who had been business owners for decades back where they
    lived before they came to the United States, and then when they
    immigrated here or sought refugee status here, they are
    starting from scratch because their credit histories, their
    credit ratings do not translate back from where they ran
    businesses to where they are now. So they are starting from
    scratch and it is really a tough thing for them to grow that.
        Can you touch on, you know, how can we address that issue?
    How can we be creative and innovative and give some folks some
    credit for sometimes decades of business ownership so they are
    not starting from ground zero again?
        Maybe start with Mr. Kallick and then go to Mr. Daniel
    Fitzgerald.
        Mr. KALLICK. Sure. Thanks for raising that.
        So the report that I was referring to before is the report
    we did about immigrant Main Street businesses. And one of the
    questions we looked at was exactly that issue of what makes for
    better lending practices.
        One of the things that I thought was striking and surprised
    me in some ways as we did the research was the issue seemed to
    me not so much about widening the doors, sort of letting the
    people qualify more, but it was more about, so in other words,
    like not providing different terms but it was more about how do
    you make sure that the lenders can have the time to really
    evaluate the potential business, you know, borrowers? And so I
    think, you know, the more that you can do to support community
    developing finance institutions, community development
    corporations, sort of people who can have individual
    relationships with business owners and, you know, figure out
    who is a good credit risk. It is not doing anybody a favor if
    you lend people money and they cannot pay it back. Right? That
    gets them in trouble but it also gets the bank or the lender in
    trouble. So you really do want to say how do you evaluate
    somebody's credit worthiness? But I think what you are pointing
    out is that immigrants and refugees in particular, you know,
    the usual ways that we do that may not fit very well. So just
    being able to look at somebody's credit history is not a very
    good indicator of that. So I would say invest the time really
    of the loan officers. And, I mean, I guess if I could say one
    more thing about that I would say how do you make sure that you
    are really connecting people with the kinds of business
    services that help them to grow as they are doing the
    borrowing?
        Mr. CROW. Thank you.
        Mr. Fitzgerald, a short answer, because I would like to get
    Ms. Chen's view on that as well.
        Mr. FITZGERALD. Absolutely. I just want to echo what Mr.
    Kallick was speaking about and the need for microlenders and
    very small business lenders. The continuation of the SBA
    Microlending program is critical. But also looking at early
    loans that are based on social credit which are kind of credit-
    building loans which are very, very small are critical as well.
        Mr. CROW. Thank you.
        Ms. Chen, any thoughts on this?
        Ms. CHEN. Yes. Because we were underfunded from the PPP, we
    actually relied heavily on community support and had
    opportunities to apply through a local nonprofit for a KIVA
    Microfinance Loan, actually. That was pretty recently. And so I
    think utilizing microfinancing can actually be very critical
    for small businesses like ourselves, especially programs like
    KIVA where there is 0 percent interest and it does not rely on
    your credit to be able to access. Instead, it is focusing more
    on social credit trustworthiness.
        Mr. CROW. Thank you. I appreciate very much that view and
    for everyone's hard work.
        I yield back, Madam Chair.
        Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
        Now we recognize the Vice Ranking Member Mr. Williams from
    Texas for 5 minutes.
        Mr. WILLIAMS. Thank you, Madam Chair. And thank you to the
    witnesses. And thank you to our ranking Chairman for this.
        As the owner of auto dealerships in Texas and a small
    business owner, I know firsthand how devastating President
    Biden's corporate tax increase would be on Main Street America.
    You know, raising taxes will only cause businesses to invest
    less in operations, to hire few employees. They will cut
    employees so they can save money to pay the increase in taxes.
    And I know when we cut taxes under the Trump administration it
    caused the labor market to tighten which was a good thing. We
    had to compete to attract workers which led to higher wages for
    all employees.
        So I know this story is not unique to just the car
    business. The bottom line is all small businesses, regardless
    of ethnicity, will be affected with any increase in the
    corporate tax rate. It is a disaster when you raise taxes.
        So Mr. Ponce, as someone in the real estate market, can you
    explain--you have done a good job so far--of how President
    Biden's tax increase would affect your business and doing away
    with things like the like-kind exchange, treating capital gains
    as ordinary income, inflation, all that is going to be affected
    with you. How is it going to affect your business?
        Mr. PONCE. Thank you, Representative Williams.
        I believe as stated earlier with Representative
    Luetkemeyer, if the tax increase does assess itself, I feel
    that it will make it very difficult for us to sustain our
    business due to the fact that we would have to use literally
    our own financial resources and not have the opportunity to
    really bridge the assistance of bigger banks or anything of
    that nature to assist us and continue to grow. But here in our
    local market there are too may weighing factors in my honest
    opinion of how it is going to affect us. And the major one is
    the growth. It is allowing us to continue to grow as a company.
    And not only just in the real estate market but I would assert
    to say, an strongly assert to say that in any type of business
    entity, if they increase taxes it will definitely hinder our
    potential for growth and our opportunity to really generate
    potential future revenue for our industry.
        Mr. WILLIAMS. Thank you.
        So what is good for small business is good for America. I
    believe that. Most of us do.
        We need to stop focusing on what increased government
    spending can do for Main Street America and shift our efforts
    to building an economy that incentivizes entrepreneurship and
    grows what I call the real economy, small business owners and
    not the government's economy.
        So Mr. Fitzgerald, you mentioned the Small Business
    Development Centers offer assistance to people who are looking
    to start or expand their business. With COVID-19 bringing many
    unique challenges for businesses to confront moving forward, I
    want to ensure that we are using these resources as effectively
    as possible. So can you briefly talk about some of the ways the
    SBDCs should be changing the way they assist small businesses
    as we are regaining normalcy back in Texas. We are back to
    normal in Texas and we should get America that way.
        Mr. FITZGERALD. So right now we are still, of course,
    continuing to focus on the relief programs. The last month of
    PPP is coming up but we are already beginning to see a strong
    increase in entrepreneurship and business starts. So we are
    ramping up again our programs on how to start a business, how
    we can go to those programs, including newly expanding a lot on
    childcare businesses, as well as foodservice businesses. In
    addition, we have really continued to grow our services around
    the innovation economy here in San Diego. We have a very strong
    life science sector and that has continued to expand at which a
    number of immigrants certainly work in that sector as well. And
    so basically getting back to the core services that we were
    providing pre-pandemic is what we need to do very, very soon as
    the relief programs begin to expire.
        Mr. WILLIAMS. Okay. So when the pandemic began, large
    stores were able to remain open while mom and pop shops were
    forced to shut their doors. I was very opposed to these orders
    since the government should never pick winners and losers and
    be deciding what businesses are essential and ones that are not
    and the ones that can operate. Small franchise businesses of
    which I am that and the mom and pop stores are the strength of
    this country and of Main Street.
        So Mr. Kallick, in your testimony you talked about some of
    the long-term effects of the COVID lockdowns if we do not
    revitalize Main Street America.
        Can you go into a little more detail for the people
    listening today on the long-term effects of COVID-19, how it
    could shift the competitive landscape of the economy?
        Mr. KALLICK. Sure. Thanks for the question. I think my
    concern is that big businesses and some of the online
    businesses may squeeze out the more locally oriented business.
    I would say that it strikes me as unlikely. We do not know what
    the tax proposals are in any detail but it is unlikely that the
    small businesses we are talking about here are going to see
    really significant impacts from those. They are aimed largely
    at wealthy people and corporations that are making big profits.
    And I think what is really important is creating a climate of
    confidence in downtown growth. I think people need to be able
    to feel like they are, first of all, safe. They can trust the
    government to tell them when it is okay and when they can
    really go safely without feeling that there is a health risk.
    And I think they have to feel like there is money in the
    economy to be able to support the reopening and risking of
    small businesses.
        Chairwoman VELAZQUEZ. The gentleman's time has expired.
        Now we recognize the gentleman from Minnesota, Mr. Phillips
    for 5 minutes.
        Mr. PHILLIPS. Thank you, Madam Chair. And thank you to
    today's witnesses. I am quite encouraged that our Committee is
    having this conversation today because most of us have
    foremothers and forefathers who came to America, bringing the
    very same ambitions and seeking the very same opportunities and
    possibilities that today's immigrants seek for themselves and
    their families. And I am one of those people. My great, great
    grandparents came to the United States in the late 19th
    century, built successful businesses, and perhaps most
    importantly, shared that success, and we continue to share that
    success with the very communities that made it possible.
        As you all know, some of America's most innovative and
    impactful enterprises were founded by immigrants. Even today,
    Moderna, one of the companies leading the way in the COVID-19
    vaccine was founded by an immigrant. eBay introduced the entire
    world to ecommerce founded by immigrants. Tesla and SpaceX,
    writing history in the energy and automobile and space sectors,
    founded by an immigrant. The story of how these companies rose
    to their position is really a uniquely American story and there
    are stories of the United States welcoming talent. I stress
    welcoming talent from all over the world. And that is why I am
    a significant advocate and supporter of proposals throughout
    Congress to afford more visas to foreign-born entrepreneurs who
    wish to develop their companies in the U.S., provide jobs to
    Americans, and improve communities.
        To my colleagues who are arguing for lower taxes, we all
    want lower taxes. We also need better roads and bridges and
    airports and electrical grid. We need a trained workforce. We
    need healthcare for human beings so they can be productive
    employees. And I ask all of us to unify behind the investments
    we need to make and ways to pay for them.
        Mr. Kallick, I will start with you. In your research
    relative to immigration, what impact have you found that
    immigrant entrepreneurs have had on job growth and creation in
    the United States?
        Mr. KALLICK. Well, so certainly as you point out, I mean,
    very significant in the overall economy. I think one
    particularly interesting thing from our research was the sort
    of bread and butter of economic growth which is that Main
    Street small business growth and the way in which immigrants
    have often found kind of niches that are unexplored or
    undeveloped within the economy.
        I think something that was particularly surprising in our
    research was how important that was in some cities that had
    seen overall economic decline--Detroit, Pittsburgh, Baltimore,
    Cincinnati--where immigrants were filling in those niches and
    helping the local neighborhoods to grow. And I think that is in
    some ways the story of some of the bigger metro areas as well
    but I would say it is more striking in some ways and maybe more
    surprising in some of those smaller metro areas.
        Mr. PHILLIPS. I should ask if there are risks to the U.S.
    economy that we should be concerned about if Congress and the
    White House do not take steps to increase the number of legal
    immigrants in the United States.
        Mr. Kallick or any of our other witnesses, I would welcome
    your perspective on that question. Anybody? All right.
        Mr. KALLICK. I am happy to say something. I am happy to say
    something on it. I do not want to be the only one talking but I
    mean, I think, sure. I mean, look, I do not think that endless
    population growth is necessarily always and in every case a
    good thing. But I think having population decline is a real
    danger to the economy where we have in lots of cities, and we
    have seen this. We have got a substantial amount of built
    infrastructure that is going underutilized and if we do not
    have people who can revitalize that and bring that back into
    productive use I think you see a real loss to the overall
    economy. And a number of the metro areas, a number of the
    cities are just at that tipping point.
        Within New York State--Buffalo, Syracuse, Rochester,
    Albany--every time the census comes out people are looking to
    see, you know, is there a population decline or a little bit of
    finally population increase. And without immigration I think we
    are not going to see that population increase. And similarly,
    not the revitalization of these cities.
        Mr. PHILLIPS. I can tell you in my business career there
    are two ways to grow enteprises--either find new consumers at
    home and/or new opportunities to market products abroad. Many
    of you are familiar with forward.us@wd.us. They published a
    report recently in collaboration with George Mason University,
    that found that the U.S. risks losing its status as the world's
    largest economy by 2030 if policymakers do not take steps to
    expand legal immigration. That report, which I would like to
    enter into the record, Madam Chair, found that current
    population trends and immigration levels will lead to the U.S.
    economy being only three-quarters of the size of China by 2050.
        Chairwoman VELAZQUEZ. Without objection.
        Mr. PHILLIPS. I am sorry?
        Chairwoman VELAZQUEZ. Without objection.
        Mr. PHILLIPS. Thank you.
        And that influx of legal immigrants would help keep
    entitlement programs, like Social Security and Medicare from
    going insolvent, something that we surely could all agree on.
        I do see my time is expiring, Madam Chair. I yield back and
    thank you again to our witnesses for being with us today.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentleman from Minnesota, Mr.
    Hagedorn.
        Mr. HAGEDORN. Thank you, Madam Chair. I appreciate the
    opportunity, and thanks for holding this hearing.
        I guess at the start I would say we have to always remember
    the United States is the most generous country in the world
    when it comes to legal immigration. We bring in over a million
    people a year and I think many of us would like to see that
    including merit-based immigration so we can have more people
    that want to come here and fulfill the American dream and
    continue this entrepreneurial spirit which flourishes in our
    system of free enterprise. And I think at any point in our
    history we look back and whether it is the Germans or the
    Italians immigrating or people fleeing Communism in Cuba or
    folks coming here for economic opportunity, whatever, folks
    have been able to flourish in this system and we have to
    maintain our system, rather than go towards socialism.
        I see some of this up front. My wife, Jennifer, was born in
    Korea. She was adopted by two great people in Minnesota at a
    very young age and brought to our country. Now one of the ways
    that she has fulfilled the American dream is she is a retail
    small business owner. Her business is up in Congressman
    Stauber's district. Congressman Stauber, of course, a member of
    our Committee. And I think whether you are somebody that came
    to America and started a business or you are somebody who has
    been here many, many generations, we are all in the same boat.
    And what we need to do is to make sure that we have a system
    with good government that is going to allow people to have the
    best opportunity possible in order to take their dreams and
    ideas and turn them into something and keep growing. And that
    means, you know, if you look back the last 4 years, we had that
    in our economy and it was a good economy for small businesses
    of any sort. We had tax reform, which was very successful. Less
    regulations, and a lot of business owners will tell you that is
    very important, particularly in the banking industry where you
    are talking about where community bankers were wiped out
    because of bad regulations coming out of Dodd-Frank.
        And then you look at things like low-cost energy. Many
    businesses thrive because they can keep their costs downward
    and then trade deals like USMCA and others.
        But then you kind of look at the other side of the coin,
    bad government policies and how tough it can be on business. In
    the state of Minnesota, I would like to associate myself with
    Congressman Williams's statements about the lockdowns. In
    Minnesota, we had lockdowns here where our governor used
    emergency powers to basically pick winners and losers and
    decide that the retail small business owners had to shut down
    and the restaurants and everybody else but the big box stores
    and the online only stores, they were wide open. And they were
    getting all that business. On top of that in Minnesota, we had
    businesses across the border at places like South Dakota, Iowa,
    and Wisconsin, they were open. Our businesses were shut down.
    Our people were hurt. They are still struggling with that to
    this day and probably will into the years to come. That was not
    good.
        Another bad government policy, and this one comes from
    Congress, this one comes from the national group. What is going
    on with unemployment compensation and the way we were throwing
    out benefits and money to people during this COVID has made it
    so people literally do better staying at home. They make more
    money than if they go to work. And if you talk to any business
    owner across this country for the most part, big, small, or
    otherwise, they are having a really tough time finding people
    to work. And a lot of that is because of bad policies put
    together by the Congress, by the president, and we have got to
    stop that. We have to get back to where we have people getting
    incentives to go back to work, get into the private sector, do
    their jobs. Because we are going to have business literally
    losing market share or going out of business because they just
    cannot find a workforce, skilled or otherwise. So I am part of
    those solutions in Congress. I hope we can all join together
    and move that forward.
        So Mr. Ponce, you are a small business owner. You have seen
    some of this. I will just let you kind of respond to what I
    have been saying.
        Mr. PONCE. Thank you, Representative Hagedorn. You are 100
    percent correct. As stated earlier by Representative
    Luetkemeyer, in my bio, I also own a fitness facility in the
    Clayton area here in the St. Louis market. And government, that
    may be that it is currently seen in our area, did just that.
    They unfortunately put us in a position where small businesses
    were almost put out of extinction because of the way they
    decided on who stays open and who does not. But the reality is
    there has got to be some equal share or responsibility on all
    sides, you know, from local government to national government.
    And in my opinion, here on a local level there are many
    obstacles that we still have to overcome.
        To your point, Representative Hagedorn, in regards to the
    unemployment and the people that are currently rather wanting
    to stay home versus going back to their normal jobs, that now
    that the opportunity is there they decide to stay home because
    they make more money doing that instead of having to go to
    work, there has got to be some clarification and there has got
    to be some type of balance. You know, this government was built
    on immigrants as everyone here on this panel and this Committee
    is well aware of. And I am very thankful to say that I am one
    of those that is trying to build my American dream here, but we
    definitely need the support of local government to allow us to
    continue to grow and not put us in positions where we have to
    be challenged day to day on how to grow. Thank you.
        Mr. HAGEDORN. Thank you. I appreciate your time.
        Chairwoman VELAZQUEZ. The gentleman's time has expired.
        Now we recognize the gentlelady from Illinois, Ms. Newman,
    for 5 minutes.
        Ms. NEWMAN. Well, thank you very much. Good afternoon,
    everybody. So pleased to be here. Thank you, Chairwoman, and
    thank you, Ranking Member Luetkemeyer.
        So a couple of things for the record, and I think it is
    important to say that I think we all have had Econ 101 and many
    other econ classes so that we know that our economy only grows
    when we have more people being productive. So limiting the
    number of people in this country is really a bad idea because
    we will not be as productive. Our GDP will never grow. So that
    is one.
        Two is that I just want to be clear for the record in
    writing that we did not pick losers and winners. What we did do
    was provide science and we provided great outline as to how
    people can stay safe as they keep their businesses open. And so
    they can make choices for themselves, their staff, and their
    customers. So pleased that our government did that and
    continues to do that. And I am so pleased small business is
    coming back.
        As a former small business owner and someone that has a
    strong advisory council in my district that I meet with once a
    month, I hear about their challenges. And I am incredibly
    concerned.
        So a few things. I do understand that President Biden's
    plan does not include small businesses all the way down with
    the 21 to 28 percent or whatever it might be. That most of the
    businesses that we are talking about here would not be affected
    by the tax increase. So let's get that out there. We will learn
    more as the weeks go on.
        I also want to ask Mr. Ponce and Ms. Chen a couple of
    direct questions about their businesses because I have asked
    this of hundreds of small businesses in my district and I keep
    on getting two answers. So I will tell you what the answers are
    but tell me if you are hearing something differently.
        So the first question for both of you is, are you both
    having trouble with hiring folks? Meaning finding folks to work
    in your businesses.
        And I will go to Ms. Chen first.
        Ms. CHEN. So thank you for that question. Specifically for
    us, we are not having trouble hiring. In fact, we have had a
    lot of individuals eager to work and even get off of
    unemployment, desiring to go back into the workforce and are
    eager to serve. And I specifically am in the food and beverage
    industry in particular. And I think part of why a lot of folks
    have wanted to work for us is because we have ensured that our
    company is going to be transparent about safety and even
    continued requiring our customers, along with our staff to wear
    masks despite the state of Texas mandates that have lifted
    those.
        Ms. NEWMAN. Right. Good. Well, I am so pleased to hear
    that. And it is funny. When I do hear that there are workforce
    problems, it is usually attached to childcare. So I think we
    are hearing consistent things, is that people are dying to come
    back if they do not have childcare concerns, but when they have
    childcare concerns they are having trouble getting back to work
    because there is no where to put their children right now so
    that they can work. So thank you for your answer.
        And then Mr. Ponce, I will ask you the same thing. Are you
    having labor workforce recruitment issues or are you not?
        Mr. PONCE. Thank you for that question, Representative
    Newman.
        As stated earlier, within my industry, we are a little bit
    of a unique industry. We are, obviously, in the real estate
    industry, so we are not having that issue at the very moment,
    but I am involved in other businesses that my fellow colleague
    and entrepreneurs are having issues finding and hiring people
    due to the fact of the local government's issuance on how they
    are wanting to return back to work but do not choose to because
    of the unemployment benefits that they are receiving.
        Ms. NEWMAN. Okay. So you have not heard from any of them
    that potentially it was childcare related.
        And then I have one more question for you.
        Mr. PONCE. Yes. This is mainly related to the restaurant
    industry and the fitness industry that I am also well aware of
    in our local market.
        Ms. NEWMAN. Okay, I am sorry. So are you saying that the
    employees that are not coming back, it is not due to the fact
    that they do not have the ability to have their children cared
    for while they are at work?
        Mr. PONCE. No, ma' am. That is correct.
        Ms. NEWMAN. Okay. Thank you for that answer.
        And then my last question has to do with livable wage. Do
    you think that it is interesting that you have just identified
    that, in fact, people are not coming back because they are
    getting paid more potentially by their current subsidies. Do
    you think that is interesting in light of the fact that they
    are looking at going back to a low wage that they cannot live
    on or they are temporarily getting a lift and taking advantage
    of that until they can go back?
        Mr. PONCE. I can confidently say, Representative Newman,
    that within our local market, our local district, there is a
    lot of individuals that are taking advantage of the benefits
    right now, the subsidies that are given to them that gives them
    the option to decide not to want to be gainfully employed but
    much rather want to be under the unemployment benefits plan
    because the minimum wage probably does not fare out to equate
    to what they are getting now. There are plenty of businesses
    here, local businesses that have signs on their windows looking
    for, in desperateness looking for individuals, even calling
    back previous employee that unfortunately were had to let go
    due to the fact that when the quarantine and the city getting
    involved in closing small businesses, it made a huge impact to
    these individuals that decided to take it. So.
        Chairwoman VELAZQUEZ. Time has expired.
        Mr. PONCE. Thank you.
        Chairwoman VELAZQUEZ. The gentlelady from California, Ms.
    Kim, is recognized for 5 minutes.
        You need to unmute, Ms. Kim. We cannot hear you.
        We will go to Mr. Stauber and then go back to Ms. Kim.
        The gentleman.
        Mr. STAUBER. One second, Madam Chair. I am trying to get my
    speaker up here.
        Thank you, Madam Chair.
        You know, first off, thanks for the witnesses being here.
    And my questions are for Mr. Ponce. First, I want to
    acknowledge that in your testimony you highlighted that lending
    was a huge barrier to entry. Are there other hurdles such as
    minimum wage increase or new taxes that worry entrepreneurs, as
    they try to overcome the effects of this pandemic?
        Mr. PONCE. Thank you, Representative Stauber.
        I feel strongly that the challenges are banking and lending
    for us. And also in the imminent future, the tax increase will
    definitely be a major catastrophe on our end to continue to
    succeed in our growth and our industry. Yes.
        Mr. STAUBER. And then also in your testimony you highlight
    the importance of educating our communities of the assistance
    the government provides for entrepreneurs through the SBA. And
    can you speak more specifically about your experience starting
    your business, and did you know of SBA assistance or work with
    the SBA resource partners such as the SBDCs?
        Mr. PONCE. Thank you for that question, Representative
    Stauber. It was in my past experience and I was unaware of
    these opportunities that the local governments and national
    governments were offering. I was aware of the SBA initiatives
    and the programs that they had to offer but I did not have the
    direction nor the know how to be able to get pointed in that
    direction. And I speak highly within our local market and that
    is where I can really specialize my questions, or my answers,
    rather. But in essence, to be very direct here, we lack
    education within our community and the involvement of these
    organizations for our communities. And that is where I feel
    strongly that once we are aware of what opportunities are out
    there for our businesses and our fellow entrepreneurs in the
    Latino community, I can feel certain, being that I sit on the
    board of the Hispanic Chamber of Commerce here locally in St.
    Louis, I see this each and every day. And we try to guide now
    more so now because of our past experience and our past
    leadership that had to deal with the most difficult route
    possible to gain a business of their own, now as we keep moving
    forward there is obviously more opportunities out there that
    the government allows us to research and know and advise to.
    Now it is just bringing those people from our community to
    those organizations. That is our challenge. Thank you.
        Mr. STAUBER. So, Mr. Ponce, give us some advice on how we
    might better educate our communities on the opportunities
    available to them from your experience.
        Mr. PONCE. Thank you. That is a very good question. I would
    say please look at us as individuals and not as a number. And
    that is truly factual even in our industry, if we can just
    please be looked at as individuals and our credibility and our
    experience and that endeavored business that will go a long
    way. And not look at us as an actual number as such as these
    big bank branches do and instead of putting in check marks they
    are just crossing the lines and making sure they hit all
    avenues.
        It has been my experience that a lot of banking
    institutions here on a local level look at a deal as how can we
    not get it approved versus how can we get you to the approval,
    you know, stamp. You know, maybe we cannot get approved at this
    very moment but let's show you what you need to do to get
    approved and that is the educational component that we lack.
    And that is the educational component that we push within the
    local organizations that I am involved in such as the Hispanic
    Chamber of Commerce of St. Louis. Thank you.
        Mr. STAUBER. Mr. Ponce, what I heard you say is personalize
    the assistance and get to a yes because it is easy to say no in
    government. Would that be correct?
        Mr. PONCE. That is 100 percent correct, Representative
    Stauber.
        Mr. STAUBER. Thank you, Mr. Ponce, for your testimony.
        And Madam Chair, I yield back. Thank you.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentlelady from Georgia, Ms.
    Bourdeaux.
        Ms. BOURDEAUX. Thank you, Madam Chairwoman. And thanks to
    all the witnesses here today. Hopefully, you can hear me okay.
    I see my Internet connection may not be great.
        I represent one of the most diverse districts in the
    country with immigrants from all over the world that help drive
    our economy in Gwinnett and Forsyth counties. About a quarter
    of my constituents were born outside of the United States. Many
    of these, of course, as you all have noted, are entrepreneurs
    and operate lots of wonderful mom and pop shops all over this
    district. And so our challenge is to figure out how to, of
    course, get them through the COVID crisis and then get them off
    to a strong start on the other side of this.
        So just starting at the top with a question for Mr.
    Kallick. You mentioned in your testimony concerns about the
    disproportionate impact of COVID-19 on immigrant communities,
    the importance of correcting that imbalance using small
    business relationships with big banks versus CDFIs as an
    example.
        In your view, how can Congress ensure that our immigrant-
    owned businesses, which are these really wonderful but often
    small and do not have those regular banking relationships, how
    do we help them recover and build back better after the
    pandemic?
        Mr. KALLICK. You know, I wish I had a more fully blown
    answer for you. I think there are 1,000 steps along the way and
    as you consider each one I would say it would be really
    important to think about how is that going to affect the
    immigrant businesses, the businesses owned by people of color
    who have been so sometimes deliberately I think, sometimes not
    deliberately but so excluded from other forms of aid. So I am
    not sure how to, you know, I would be glad to come back another
    day and come with a series of proposals. I do not really have
    one ready but I think it can be part of the thinking every step
    of the way.
        Ms. BOURDEAUX. I have heard about the microlending
    programs, things like that, and we are working with our Small
    Business Development Center also to try to really improve and
    build on the outreach to our immigrant businesses. Recently, I
    had an event with over 60 restaurants from Georgia 7 who we saw
    last week with Isabel Guzman, the Small Business Administrator.
    And many of those who showed up to this event were immigrant-
    owned restaurants and they were beginning to apply for and
    receive assistance through the Restaurant Revitalization Fund.
    However, we know that there are many other businesses that have
    not been able to access any assistance over the past year. And
    so we are now looking forward to the launch of the Community
    Navigator pilot program on April 30. And it is my hope that
    this program will enable more immigrant-owned businesses to get
    the information and resources that they need to help them
    recover and prosper in the years to come.
        That being said, you know, we are trying to figure out, you
    know, what does this Community Navigator need to do? How are we
    going to target that towards our small businesses in order to
    help them be successful? And one of my colleagues at George
    State University did a study and talked about how a lot of
    resources were really just oriented towards providing in-
    language services to folks.
        And I was wondering, this is a question for Ms. Jaja Chen,
    what would be some of the things that would really help people
    in the Taiwanese or Chinese business community? You know, what
    could the Small Business Administration do to help them get to
    the other side of this crisis? We want them to provide services
    in language. You know, have some of that kind of research. But
    are there other things they could be doing that would help a
    business like yours or your colleagues and peers in the
    community?
        Ms. CHEN. Well, I think it is huge to really focus in on
    building relationships with the grassroots organizations and
    community organizations like mutual aid groups that are already
    serving immigrant-owned populations. And so rather than
    revamping, creating brand new programs, really starting to
    recognize, like there are so many nonprofits and organizations
    already serving the immigrant-owned population or immigrant-
    owned business population. So it is important to really have
    the linkages. Right? The collaboration between the
    organizations and part of that is having the time, having
    people to be able to build those linkages, build those
    relationships, and to be able to ensure that there is that
    cultural competency that has held out throughout that time in
    the relationship because it comes down to someone having the
    relationship with someone to know, oh, I can actually qualify
    for programs within the SBA. I think many Chinese and Taiwanese
    business owners might not even realize that they have the
    ability to apply for programs like the PPP or Restaurant
    Revitalization Fund.
        Ms. BOURDEAUX. I will just state we have this challenge,
    and I will have to wrap up, between we have people with the
    cultural knowledge and people with the small business
    knowledge. We have got to find a way to bring those two groups
    together.
        But thank you very much, Madam Chairwoman. I yield back the
    balance of my time.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now we recognize the gentlelady from California, Ms. Kim.
        You need to unmute. We cannot hear you.
        Ms. YOUNG KIM. I am joining by audio.
        Chairwoman VELAZQUEZ. We can hear you now.
        Ms. YOUNG KIM. Sorry about the technical difficulty here.
        So I wanted to thank the witnesses that are joining us
    today and thank the Chair and the Ranking Member for holding
    this hearing.
        You know, I am an immigrant myself and also a former small
    business owner so the witnesses' testimonies really resonate
    with me. And as my family and I also strive to live the
    American dream, I fully understand the importance of immigrant-
    owned businesses in our community and the contributions they
    make.
        According to a study from 2019, about 3.2 million
    immigrants run their own small businesses making it one in
    every five entrepreneurs in this country. And immigrant-owned
    businesses, they employed almost 8 million across America. And
    I have the honor of representing California's 39th District,
    which is one of the most diverse districts in California and
    also home to many small businesses owned by immigrants.
    Overall, here in California over 40 percent of businesses are
    started by immigrant entrepreneurs.
        But unfortunately, many entrepreneurs in my district have
    been negatively impacted due to one of the most onerous stay-
    at-home restrictions in the country imposed by Sacramento.
        You know, Mr. Ponce and Mr. Chen, just like as you, you are
    policymakers and legislators, I, too, have taken the time to
    speak to many small businesses in my district. And one common
    theme I hear is that they are unable to hire qualified workers.
    And I am sure based on your experience investing and owning
    businesses, you also see the same problem in your business and
    with your communities.
        So I want to ask you, Mr. Ponce, do you have any
    recommendations that could make it easier for businesses to
    find and hire workers?
        Mr. PONCE. Representative Young Kim, thank you so much for
    your question.
        Yes. You know, we have, I would say within the Latino
    community, we do have a luxury where we are really utilizing
    our chamber, our business chamber here locally to vet out and
    find and market to potential future business entrepreneurs to
    even help gain employment to start and understanding perhaps
    the business that an individual would like to be involved in.
    Here my advice to be more direct to your question is continue
    to help these organizations and these foundations that allow
    and assist in gaining knowledge and education to and getting it
    out there I should say to the future employers and future
    business owners in our minority communities. I hope I did it
    justice to answer your question. I apologize. Thank you.
        Ms. YOUNG KIM. Well, thank you, Mr. Ponce.
        In response to Mr. Williams's question earlier, you already
    stated that it would not be prudent for our government to
    increase taxes as it will quell business confidence in the
    American economy at this point. So as a follow up to that and
    as our economy looks to recover from the pandemic, what type of
    policies would instill business confidence and incentivize new
    businesses to open?
        Mr. PONCE. Yes, thank you. To be more direct to your
    question I completely 100 percent stand behind the fact that we
    cannot increase access. That is a major component to our issue.
    It will not allow us to grow in the manner that we need to
    grow.
        Furthermore, we need local government authorities and local
    legislature to really back the business and the local economy
    of business to allow us to continue to grow. But adding more,
    you know, more detriment to increase of taxes or limiting an
    opportunity to open our doors during the reopening of the
    pandemic, that all has to be looked at and really sought out
    with a fine-tooth comb. Thank you.
        Ms. YOUNG KIM. Sure.
        In the interest of time, let me ask a quick question to Mr.
    Kallick and hope you have time to respond.
        In several of the relief packages Congress passed over the
    last year, the Committee ensured that the smallest of the small
    business and those that rely on lending institutions like
    community development financial institutions or CDFIs and small
    and independent lenders have access to PPP and EIDL programs.
    So to what do you attribute those businesses not being able to
    access the programs given the specific carveouts that were
    already provided?
        Mr. KALLICK. I think they were starting so far behind in
    doing that that there was a real problem in catching up. I
    think that is the extent of my understanding of it.
        Chairwoman VELAZQUEZ. The gentlelady's time has expired.
        Now we recognize the gentlelady from California, Ms. Chu,
    for 5 minutes.
        Ms. CHU. Ms. Chen, I appreciate you sharing your experience
    of discrimination and talking about the fears prevalent in the
    Asian American community during this year of rising anti-Asian
    hate crimes across our country. I have been active in leading
    the effort to fight anti-Asian hate crimes which increased with
    Trump's usage of the terms China virus, Wuhan virus, and Kung
    flu.
        Last month, I led a delegation to Georgia to visit the
    three Asian-owned small businesses where eight people were
    murdered, six of them Asian women. Two weeks ago I met with
    President Biden to discuss how the administration can work with
    the AAPI community to put a stop to this hatred, and then last
    week the Senate took a big step toward by passing the COVID-19
    Hate Crimes Act which will come to the House in May and
    contains the text of my bill, the No Hate Act.
        I am so impressed that you have managed to grow your small
    business so successfully when you faced not just the pandemic
    but also anti-Asian discrimination. So can you talk about what
    you have done to overcome these hurdles and run your business
    so successfully? And what advice would you give to other AAPI
    small businesses that have some fears and trepidation right
    now?
        Ms. CHEN. Thank you, Representative Chu, for your work in
    this AAPI community.
        So specifically for us, we have an extensive community
    support. I think Waco is a phenomenal community that really is
    seeking to uplift diverse communities. And so as business
    owners, we have been able to take part of organizations like
    the Hispanic Chamber, African American Chamber, and they have
    provided such support and even standing against the anti-Asian
    racism and hate crimes throughout the country. And we have a
    lot of relationships that we have been able to build with other
    community leaders and other partnerships. And I think that is
    what has helped us to continue doing what we do. To recognize
    that we are not alone in this work that we do even as a
    minority within our own community has been huge to have that
    community care support.
        In addition, I do want to put a plug that I, myself, and my
    husband, have gotten therapy through this time. And so as a
    business owner, being able to have access to therapy services
    was huge to be able to continue working through our own trauma
    responses in the midst of all that is going on nationally.
        And so advice to business owners, I would say recognizing
    that there are a lot of leaders and individuals who want to
    support your work and so it is more of trying to find those
    allies and to be able to find the business partnerships and the
    collaborations that are going to continue pushing you forward
    in your work.
        Ms. CHU. Thank you so much.
        Mr. Kallick, we know that family ties strengthen immigrant
    communities which in turn help us bolster the economy.
    Recently-arrived immigrants represent 30 percent of new
    entrepreneurs, despite the fact that they make up only 13
    percent of the population. So immigrants are building the small
    businesses here in the U.S. which helps us all. And family-
    based immigrants make such huge contributions to the U.S.
    economy. In fact, immigrant families help businesses survive
    sometimes by pooling money or by providing childcare. They are
    essential to it.
        And that is why family-based immigrants have added $2
    trillion to the U.S. GDP in 2016. And that is why I introduced
    the Reuniting Families Act, which addresses the family
    immigration visa backlog and unifies immigrant families. And I
    am proud that this is part of the proposed U.S. Citizenship Act
    which will reform our immigration system in such a
    comprehensive way but also allow more immigrants and families
    to build their businesses in our communities.
        So what does your research show about the impact of family-
    based immigration in communities and small businesses? Do you
    think a policy like the Reuniting Families Act, which is in the
    U.S. Citizenship Act, could that help bolster economic
    development in immigrant communities?
        Mr. KALLICK. I do. I think we do very well in the United
    States with the immigration that we get. And as you know, the
    primary source of immigration is through family unification. So
    I think it is quite striking how you can think about ways of
    shifting what immigrants might be coming here, but the reality
    is that immigrants who have been coming to the United States
    make up for all of the statistics you have been hearing so far
    and that is primarily family-based immigration. Many of the
    entrepreneurs that you hear about, you know, the sort of
    superstar entrepreneurs who start the unicorn, the companies
    that become gigantic companies, they did not come here as
    special immigrant visas in order to be entrepreneurs. They came
    here as immigrants and then became entrepreneurs.
        Ms. CHU. Thank you. And I yield back.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now we recognize the gentlelady, Ms. Van Duyne from Texas
    for 5 minutes.
        Ms. VAN DUYNE. Thank you. Thank you very much, Chairman
    Velazquez and Ranking Member Luetkemeyer. I appreciate the
    hearings today.
        Immigrants are some of America's most entrepreneurial
    citizens, and everyone benefits from the jobs their businesses
    create and the services that they provide. While the Biden
    administration may speak positively about small business owners
    and American entrepreneurship, their actions continue to
    inflict unnecessary pain on small business owners around the
    country. Continued encouragement for COVID restrictions, tax
    increases, and luxurious unemployment benefits all hamper small
    businesses' ability to be able to do even the most essential
    things.
        I have heard from so many small businesses that have
    reached out to me and my office to tell me that they are having
    trouble hiring staff because they have to compete with the U.S.
    Government's seemly never-ending unemployment benefits. And as
    Young Kim had mentioned earlier----
        Ms. CHU. Well, Jaja Chen seemed to----
        Ms. VAN DUYNE. We are hearing this over and over again. You
    know, when I am back in the district I have gone out to
    restaurants, and these are either high-end, these are small
    immigrant-owned diners, and they are all telling me the same
    thing. They cannot hire people because they are competing with
    the U.S. Government handing out more money than these people
    are getting paid on the job.
        By the way, these are not only folks who are getting paid
    more than a minimum wage but people who are getting $20, more
    than that per hour, but they are having a hard time hiring
    people.
        I talked to one business owner just last week who said he
    has got 300 openings and cannot get people to apply. This is
    not really helping our economy to open up at all, and I am sure
    that small business owners, including those here with us today,
    do not want government handouts. They want the government to
    get out of their way so they can provide consumers with their
    products, their services, and expertise.
        The reason our immigrant small businesses have such great
    success is not because of the government but rather because
    they have that can-do mentality that this country was built on.
    The Federal Government's role is not to pick winners or losers
    but to allow the greatest opportunity for our citizens to
    flourish no matter how many generations a family has been here.
        I appreciate all the stories that we have heard today but I
    am also concerned about the small businesses not just in my
    district but across the country and what they are seeing.
        And Mr. Ponce--am I saying that? Is it Mr. Ponce or Mr.
    Ponce? I would love to get your----
        Mr. PONCE. Ponce.
        Ms. VAN DUYNE. I would love to get your feedback on have
    you seen any kind of negative or positive experience from the
    extending of these luxurious unemployment benefits?
        Mr. PONCE. Representative Van Duyne, thank you so much for
    your question. And to better answer it, yes. Here in our local
    community and our local market you do find yourself noticing,
    as I notice as a business owner, that the government is way too
    much involved in our small business practices and they do not
    allow us to, you know, really, really grasp and grow as an
    entrepreneur. When it comes to the unemployment versus the
    minimum wage, the unemployment right now and the subsidies that
    people are I would say quite frankly taking advantage of
    because the government allows it, you know, yes, there is a big
    issue. We have local restaurants and colleagues that own them
    that are good friends of mine that are having issues trying to
    reinstate employment with the current people that were employed
    before but unfortunately, because of the fact that unemployment
    is paying better if you will, it makes it difficult for them to
    reattract the previous employee to come back to work. It really
    does bring a challenge here I would say here in our market to
    really help really get back and restabilize as a business owner
    and as a company when you are actually having to battle the
    government and their subsidies and their opportunities to
    basically make it easier for them not to gain gainful
    employment. Thank you.
        Ms. VAN DUYNE. I appreciate that.
        You know, you have owned a small business now for the last
    20 years having navigated the lending process. What do you wish
    you knew then that you know now?
        Mr. PONCE. Well, that is a very good question. I think
    honestly if I had to start this all over again the only change
    that I would make is I would definitely really educate myself
    on the whole banking policies and how banking works because I
    probably would have took a step back and limit my pace of how I
    wanted to grow. I would slow everything back down because I
    took a lot of risk growing and building my business,
    Representative Van Duyne. And if I would have known what I know
    now I probably would not have taken as much of the risk because
    I really thought that by building this on my own and growing
    this business on my own and using my own financial means it was
    going to give me the credibility to really go to these big
    banks and these big institutions and begin to raise capital to
    continue to grow our business. But unfortunately, that was not
    the case.
        Chairwoman VELAZQUEZ. The gentleman----
        Mr. PONCE. Thank you.
        Ms. VAN DUYNE. Thank you very much. I yield back.
        Chairwoman VELAZQUEZ. The gentlelady's time has expired.
        Now we recognize the gentleman, Mr. Evans from
    Pennsylvania, for 5 minutes.
        Mr. EVANS. Thank you, Madam Chair and Ranking Member. Thank
    you for your leadership, Madam Chair, on this very important
    subject. If anything is going to build back it is what we are
    talking about today.
        I would like to start with Mr. Daniel Fitzgerald. What can
    Congress do more to make sure that our Small Business
    Development Centers are fully prepared to help immigrants from
    all backgrounds?
        Mr. FITZGERALD. I think it is, continue to support the
    programs. What our experience was when were able to receive
    some increased funding from the state of California was we were
    able to expand more into the communities. That is when we were
    able to add in International Rescue Committee and the Asian
    Business Association. That coincided with the increase in
    funding that we received at the same time from Congress as it
    has increased for small business development centers. The
    reality is that the demand continues to outstrip the resource,
    but as we are able to get more resources, we are able to hire
    more advisors that are part of the community that are
    linguistically and culturally correct. And that is really what
    supports our efforts to be able to do it. We invest back into
    the community, providing that type of individual work that has
    been talked about with the business owner.
        Mr. EVANS. What would you say are the most in-demand
    services by immigrants that seek help at your business center?
        Mr. FITZGERALD. Really what it is navigating the U.S.
    system. That is either the lending and banking system, credit
    system, but also the layers of government, understanding what
    is a county, what is a city, and what are some of those
    differences. Or really how the credit market works and how
    credit scoring works. And so a lot of that is around how those
    particular systems work because it literally is not something
    they are used to. And so we work with them and that is why we
    also have what we call the culturally correct approach to it
    where if someone is from Mexico, if someone is from Iraq, have
    advisors that are familiar or even are from those countries to
    be able to create some information and be able to help them
    understand how the U.S. systems works similarly to how it
    worked from their country of origin and really be able to
    support them. Really help them understand what they need to do.
    For example, I need to go to the county to get a health permit.
    Or what it is I need to do to make sure that, yes, I have a
    business banking account. How is that different from my
    personal banking account? And understanding that even small
    credit loans are able to help build credit and establish credit
    which can then help them in the future to be able to grow their
    business with even larger loans.
        Mr. EVANS. I yield back my balance, Madam Chair. And thank
    you for the opportunity. Thank you, sir.
        Mr. FITZGERALD. Thank you.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentleman from Wisconsin, Mr.
    Fitzgerald.
        Mr. FITZGERALD of Wisconsin. I am going to yield back,
    Madam Chair. I do not have anything very specific right now.
    Thank you very much.
        Chairwoman VELAZQUEZ. That concludes our hearing today.
        I want to take this opportunity to thank all of our
    witnesses for their testimony. Today you showcased the
    incredible power of immigrant-owned businesses and how vital
    they are to our recovery. When it comes to entrepreneurship,
    immigrants are leading the way. As business startup rates have
    dropped overall, immigrants have filled the gap creating jobs
    and helping our economy keep pace. COVID has devastated these
    same businesses. If we genuinely want to build back better, we
    must ensure they have the support need to recover. I hope that
    today's hearing drove home the importance of these businesses
    to our economy and will yield actions to help build them up. I
    look forward to collaborating with my colleagues on both sides
    of the aisle as we work to harness the power of these
    businesses and drive an equitable recovery.
        I would ask unanimous consent that Members have 5
    legislative days to submit statements and supporting materials
    for the record.
        Without objection, so ordered.
        If there is no further business to come before the
    Committee, we are adjourned. Thank you.
        [Whereupon, at 2:04 p.m., the Committee was adjourned.]

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