I Believe That We Will Win is the title of Pitbull's new single about bringing us together in the face of Covid-19. After releasing that song, Pitbull, aka Armando Christian Perez, committed his support to Latino business owners to help them get through the coronavirus. This week he launched the Hispanic Small Business Center and an associated emergency grants program.
Even in the best of times, Latinx business owners do not have an easy go at starting and building businesses in the United States. My co-founder knows better than anyone. "As a Latina entrepreneur who has both failed and succeeded," says Carolyn Rodz, "I know first-hand the obstacles that our community faces when starting a company: less capital, narrow networks, and a lack of knowledge of resources available to us."
To combat these issues, the Center is built in partnership with the Global Entrepreneurship Network, the United States Hispanic Chamber of Commerce, Latino Business Action Network, and my company, Hello Alice, to provide resources data shows are needed immediately. Pitbull says, "This program is directly benefiting Latino entrepreneurs, helping them keep their businesses open and their employees paid."
During tough economic times, as both their access to capital and the financial status of their customers take disproportional hits, Hispanic business owners tend to suffer even more than the average business owner. During the 2008 recession, according to a Pew Research Center study released in 2011, the median wealth of Hispanic households fell by 66 percent from 2005 to 2009. The median wealth of white households fell by 16 percent over the same period, while African Americans saw their wealth drop by 53 percent. In addition, because Latino owners are more reliant on their own capital than most entrepreneurs, they are more susceptible to the credit squeeze that falling real estate prices can create.
Even so, the Hispanic community remains remarkably resilient and entrepreneurial. By 2017, the Aspen Institute was reporting that "Latinos have managed to start new business enterprises at multiple times the rates of the rest of the population. This high business creation rate is unique in the US -- the five-year average growth rate in the number of Latino firms has remained at double or triple that of the national average for the past 15 years, according to The State of Latino Entrepreneurship 2016 by the Stanford Latino Entrepreneurship Initiative."
Our data through the Covid-19 Emergency Grant program shows 30 percent of Hispanic business owners have said that funding is their biggest need. More than 88 percent of the Hispanic owners who applied said they needed government support to survive.
If Latino companies were to generate revenue the way non-Latino companies generate revenue, the report found, they would add $1.38 trillion to the U.S. economy. Unfortunately, after spending most of the last decade digging out from the Great Recession, Hispanic entrepreneurs are once again back in crisis mode. Minority Americans tend to be more exposed to the disease itself, and minority-owned businesses, because they do not have strong banking ties, have struggled to obtain sustaining grants and loans. You can help support them here. Like Pitbull, I, too believe that we will win.