Small Businesses: A Path to Prosperity for All

The Current Landscape

If you wish to gauge America’s health, look no further than the state of small businesses in your own community. As the son of Korean immigrants in Los Angeles, mom-and-pop stores in K-town were my introduction to the American dream. But just as my neighbors enjoyed the opportunities of this country, they also felt the pain of every faulty policy, predatory corporate action, or market crash. Small businesses are an extension of the working class, and like American workers, our representatives have failed them. It is time to recenter their needs, over the interests of corporations that lobby and control our government. 

As the lifeblood of our economy, small businesses represent 99.9% of all U.S. firms. As of 2024, there are 33.2 million small businesses in the United States, which employ 46% of the private-sector workforce and create over 1.5 million jobs annually, accounting for 64% of new jobs. These businesses are critical for economic growth and community development, especially in districts like California’s 34th Congressional District.

Small businesses provide a crucial pathway to economic mobility for immigrants and people of color, helping them achieve the American Dream. As someone who has experienced the challenges of both being employed by and owning a small business, I understand the obstacles these enterprises face. Despite the availability of various funding and advisory programs from the U.S. Small Business Administration (SBA), these resources are often difficult to access due to bureaucratic complexities. Furthermore, federal policies have historically favored tax cuts for the wealthy and bailouts for large corporations over meaningful support for small businesses. The COVID-19 pandemic has demonstrated Congress’s capacity to deliver direct assistance, as evidenced by the Paycheck Protection Program (PPP). It is imperative that such support mechanisms are made permanent to ensure the continuous prosperity of small businesses.

Policy Recommendations

Enhancing SBA Funding and Expanding Programs

1. Establish a National Helpline: Create a free, multilingual helpline staffed with professional business and tax advisors. This service would provide direct assistance to small business owners, connecting them with relevant SBA grants and programs tailored to their specific needs.
   
2. Support for Struggling Businesses: Develop a federal program dedicated to advising and supporting small businesses facing closure or bankruptcy. This program would offer strategic guidance and financial assistance to help them navigate challenging periods.
   
3. Strengthen Antitrust and Intellectual Property Laws: Reform antitrust laws and patent/trademark regulations to protect small businesses from the predatory practices of large corporations. This includes measures to prevent monopolistic behaviors that stifle competition and innovation.
   
4. Streamline SBA Assistance Processes: Simplify the application procedures for SBA programs to eliminate unnecessary bureaucratic hurdles. This would make it easier for small businesses to access much-needed support.
   
5. Improve HUBZone Program: Streamline the application and approval process for the Historically Underutilized Business Zones (HUBZone) program to promote small business growth in underserved areas.
   
6. Expand the “Community Navigator” Program: Make the Community Navigator program, initiated under the American Rescue Plan, a permanent fixture to provide ongoing support to small businesses.
   
7. Utilize Federal Agencies: Leverage the capabilities of all federal agencies to strengthen supply chains, particularly during times of crisis, ensuring that small businesses have access to necessary resources.
   

Creating Small Business Financing and Loan Programs Under a Public Bank

1. Establish a Public Banking System: Develop a public banking system to provide SBA loans with more favorable terms, bypassing private Wall Street lenders who often impose onerous conditions and require duplicative approvals.
   
2. Enhance Accountability Measures: Implement stricter accountability and fraud detection measures to ensure that federal funds are allocated to genuine small businesses, preventing misuse by large corporations.
   
3. Provide Start-Up Grants: In addition to loans, offer start-up grants for community-based, green, or veteran-owned businesses to foster innovation and support sustainable practices.
   

Encouraging Investment in Local Communities

1. Support Worker Cooperatives: Promote the development of worker cooperatives to encourage collaborative business models and shared prosperity.
   
2. Affordable Commercial Real Estate: Create a federal program similar to HUD’s “Good Neighbor Next Door” initiative, offering commercial real estate to small business owners at below-market rates.
   
3. Reform Economic Opportunity Zones: Ensure that tax credits and incentives for Economic Opportunity Zones benefit a broader spectrum of entrepreneurs, not just wealthy developers and investors.
   
4. Redefine Small Business Standards: Adjust the size and revenue criteria defining small businesses to make more enterprises eligible for federal assistance.
   
5. Engage Local Partnerships: Encourage large local businesses to reinvest in their communities through partnerships and collaborative initiatives.
   

Protecting Small Businesses from Litigation

1. Federal Small Business Litigation Support Program: Establish a program providing legal resources and financial assistance to small businesses facing lawsuits. Key components include:
   1. Access to Pro Bono Legal Services: Connect small business owners with pro bono attorneys specializing in defending against employee claims and slap suits.
   2. Legal Defense Fund: Create a fund to help small businesses cover legal costs associated with defending against baseless claims.
   3. Mediation and Arbitration Services: Offer mediation and arbitration services to resolve disputes outside of court, reducing legal expenses and time spent on litigation.
2. Federal Safeguards Against Frivolous Lawsuits: Introduce legislation to:
   1. Strengthen Penalties for Frivolous Suits: Increase penalties for individuals and attorneys who file lawsuits against small businesses that are deemed to have no merit.
   2. Expedite Dismissal Procedures: Streamline court procedures to quickly identify and dismiss baseless claims.
   3. Encourage Pre-Litigation Dispute Resolution: Mandate pre-litigation mediation for employment disputes, providing a more cost-effective and faster resolution method.
      
3. Promote Legal Education for Small Business Owners: Develop educational programs to inform small business owners about their legal rights and how to protect themselves from potential litigation risks.
   

Conclusion

Supporting small businesses is not just about economic growth; it’s about fostering community resilience and ensuring equitable opportunities for all. By implementing these comprehensive policies, we can create an environment where small businesses thrive, driving innovation, job creation, and community development. It’s time to prioritize the needs of small business owners and workers, ensuring they receive the support and protection they deserve. Join us in this movement to build a better, more inclusive economy.