Juan Carlos Hernandez emphasizes need for affordable capital for California small businesses

In a recent meeting of the California Assembly Committee on Economic Development, Growth, and Household Impact, the spotlight turned to the pressing issue of access to affordable capital for small businesses. The atmosphere was charged with anticipation as panelists prepared to hear from the public, a crucial part of the legislative process.

As the meeting transitioned to public comments, one voice rose above the rest—Juan Carlos Hernandez, the president and CEO of the California Southern Small Business Development Corporation. With over three decades of experience in financial development, Hernandez passionately addressed the committee, highlighting the significant challenges small business owners face in securing funding.

“Access to affordable capital is one of the biggest challenges for small business owners,” Hernandez stated, emphasizing the critical role these businesses play in California's economy. He shared that last fiscal year, the state received approximately $366 million in loan guarantee requests, with a notable portion coming from his office in San Diego. This figure underscores the demand for financial support among small enterprises, particularly those seeking loans of $100,000 or less, which are often the hardest to obtain.

Hernandez pointed out the alarming interest rates that many small businesses encounter, with some lenders charging rates as high as 60% or more. He described a new cash advance program that, when calculated, could lead to an astonishing 110% annual percentage rate. This stark reality paints a troubling picture for entrepreneurs striving to keep their businesses afloat.

The collaboration between Hernandez's organization and various community lenders is a beacon of hope, providing essential access to capital for small businesses. He expressed gratitude to Assembly members for their ongoing efforts to champion services that support these vital economic contributors.

As the meeting concluded, the importance of addressing the financial hurdles faced by small businesses resonated strongly. Hernandez's insights serve as a reminder of the ongoing need for legislative support and innovative solutions to ensure that California's small businesses can thrive in an increasingly challenging economic landscape.