Small-business owners and SBDC leaders tell Assembly rising costs and tariffs squeeze margins; call for technical assistance and incentives

Local small-business owners, trade-association experts and workforce-board leaders told the California State Assembly in Paramount that rising rents, tariffs, insurance and supply costs are squeezing margins for microbusinesses and independent retailers, and they urged the state to expand technical assistance, targeted financing and incentives.

Pat Nye, leader of the Los Angeles Regional Small Business Development Center Network, said the region's one million small businesses face "unprecedented challenges" and that technical-assistance programs are a "lifeline" for entrepreneurs seeking capital, leases and business-model changes. Nye asked the Assembly to increase funding for small-business technical assistance—including grants that support the TAP program run by the state's Office of the Small Business Advocate—because demand far exceeds current funds.

Microbusiness owners described specific pressures. Alma Marquez, founder and CEO of El Sol Group, said micro-enterprise approaches and community-based outreach can help families access economic opportunity, and she urged government-funded contractors to include microbusiness participation for large events. Jennifer Cox, owner of Mama Osa, said material and shipping costs had more than doubled in some cases, narrowing margins: "Some of the material costs have doubled... my margins definitely decreased," she said.

Ariel Pei, owner of LabRx, highlighted supply-chain and cash-flow problems faced by small manufacturers and printing shops, and recommended expanded access to low-interest financing, incentives for local-source supply chains and workforce training programs.

Why it matters: Panelists framed small businesses as the engine of local economies—employing residents, supporting community identity and generating tax revenue—arguing that state action to shore up technical assistance, disaster preparedness and access to capital would help stabilize neighborhoods and jobs.

Specific policy suggestions raised during the hearing included increasing state funding for Small Business Development Centers and TAP grants, exploring incentives (for example, lower insurance rates for businesses that adopt disaster-preparedness training), creating or expanding low-interest and emergency lending to bridge cash-flow gaps, and using tax credits or other incentives to encourage local hiring and paid internships aligned with students' career goals. Assemblymembers discussed past proposals to offer tax credits for hiring from local communities and expressed interest in partnering with SBDCs on local outreach and district-level events.

Panelists also emphasized the distinct needs of microbusinesses—many are not part of chambers of commerce and require outreach that meets them where they work. Marquez urged "community-informed outreach" and mobile, neighborhood-level supports rather than relying only on digital newsletters. Pat Nye offered the SBDC network as a direct partner for Assembly members interested in district-level business clinics.

The panel concluded with Assembly members asking staff to consider legislative and budget approaches that could expand technical assistance and disaster response support for small businesses statewide.

Provenance: recorded testimony from the microbusiness panel, including remarks by El Sol Group, LA SBDC and multiple small-business owners.