Despite a lot of right wing rhetoric that wants to pin Latinos and immigrants as a burden on the American welfare system, the numbers tell a different story. Right now this is the group that is most likely to start a business in the U.S.
According to the Stanford Latino Entrepreneurship Initiative, the number of Latino businesses grew 34% from 2009-2019 compared to 1% for all business owners in the United States. In 2019 alone, they had an average revenue growth of 14% outpacing the growth of the U.S. economy.
The purchasing power is also increasing at an exponential rate. According to the same study and based on data from 2017, Latinos already account for 60 million inhabitants in the U.S. and $2.3 trillion in economic activity, which on its own would account for the eight largest economy in the world.
But even with that entrepreneurial spirit and enhanced purchasing power, Latinos find themselves with more obstacles and difficulties securing loans from major U.S. banks according to the same data.
Most Latino businesses that generate less than $1 million of yearly revenue get their financing through personal and business credit cards and find it increasingly difficult to get loans above $100,000.
Part of this discrepancy is due to the fact that Latinos tend to have lower credit scores which may be due to the fact that even top-earning Latinos earned only 65% as much as whites in 2016.
The pandemic has also widened the income gap for not just Latino workers but business owners as well which have taken the brunt of business closures across the country.
The new Biden administration has recognized the discrepancies among the Black and Latino communities and has pledged to invest heavily through the Community Development Financial Institutions, the Small Business Administration and other entities as well.
The SBA is currently rolling out several different relief options that will take effect from February 24, 2021 through the end of March 2021. Some of these programs will include the Paycheck Protection Program (PPP), SBA debt relief as well as new grants with an aim to find equality for minorities.
To find our more or apply please visit: www.sba.gov