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Panel cites procurement gaps, regulatory and litigation costs as barriers for Latino businesses
Summary
Business leaders and the California Hispanic chamber told a Senate select committee that Latino businesses face barriers including limited access to procurement, federalized technical‑assistance funds that restrict service to undocumented owners, regulatory complexity and rising operating costs.
A second panel before the Senate Select Committee on Minority Economic Development focused on barriers that limit growth of Latino‑owned businesses and on strategies to create more quality jobs.
Julian Canete of the California Hispanic Chamber said Latino businesses contribute nearly $200,000,000,000 in output and support more than 2,000,000 jobs but face systemic obstacles including capital access, complex regulation and limited procurement. “Latino owned businesses just represent 11% of employer businesses of more than 4,000,000 small businesses in the state,” Canete said, and he urged stronger state investment in technical assistance and procurement outreach.
Canete and others asked lawmakers to examine how federal rules affect state technical assistance programs. He said when state dollars are used to supplement federal programs, “we are not dictated by the federal rules,” and raised concerns that federalization can limit service to undocumented business owners.
Canete cited AB 2019, which established a 25% procurement goal for state agencies (he said the goal applies to all small businesses rather than explicitly to diverse firms), and AB 1392, a recent bill on hospital procurement and supplier diversity. He and other panelists also said local governments should be encouraged to set similar goals; progress on utility procurement under a program referred to in testimony as GO 156 was described as a positive example.
Elizabeth Martinez, vice president of government relations for Meruelo Enterprises, and Luis Armona of the Meruelo/Morello Group described operational burdens for growing firms. Armona listed regulatory complexity and frequent litigation as major constraints. “The litigation is just completely out of control in this state,” Armona said, and added that compliance costs, insurance and the rising price of equipment and materials push costs up for small firms.
Panelists highlighted state programs that can help if scaled and targeted: the state technical assistance (TAP) and capital infusion programs, Small Business Development Centers (SBDCs), and a state capital infusion guarantee that makes smaller loans easier to obtain once businesses are capital‑ready. Several panelists urged expanding state funding for TAP and for ensuring outreach into Latino communities to improve program penetration.
Committee members raised workforce pipeline and housing affordability as crosscutting concerns for business growth. Senators and panelists agreed to hold follow‑up hearings: the committee scheduled an August 14 session in the Bay Area focused on access to capital and financial institutions.
No formal votes were taken; the committee asked panelists to submit top policy recommendations and data requested to inform future hearings.
