The period from September 15th to October 15th marks National Hispanic Month, which celebrates Latino culture and successes in the U.S. The Latino population today is estimated to be 54 million, ranking second among racial or ethnic groups and comprising 17% of the total U.S. population.
Latinos remain the fastest growing ethnic group in the U.S., and they are among the most entrepreneurial. There are more than 3 million Latino-owned companies, and the figure is predicted to double in five years. These businesses range from landscaping and construction companies to nail salons and catering businesses. Overall, Latino companies are now generating an estimated $500 billion in annual sales.
Although the number of successful businesses owned by Latinos is rising, their owners still face challenges in securing the financing needed to make them grow. According to research my company has conducted on Latino-owned companies that register on Biz2Credit.com, the Average Annual Revenue for Latino-owned businesses is about $17,000 less than for other businesses. Meanwhile, the Average Credit Score for a Latino-owned businesses was 611.7, compared to 622.3 for all others.
Former SBA Chief Hector Barreto, now the chairman of The Latino Coalition, believes that many business owners in his community are young and don't have a much experience in the banking system.
"Capital is the oxygen that small businesses need to grow," Barreto says. "It sometimes takes numerous attempts to secure financing, and the process can often be daunting. Accessing capital is important not just to get started, but also to grow in the long-term."
The process of applying for loans can be intimidating, not only for Hispanics, but for other ethnic groups, and everyone else, for that matter. Language and culture barriers can be an issue. Fortunately, help is available.
On its web site, the SBA hosts:
Links to Minority Business Development Centers (MBDCs) that can connect Latinos with training courses and other assistance
Connections to a network of Small Business Development Centers (Centros de Desarrollo Empresarial) that provide networking opportunities and advice
The 8(a) Business Development Program established to help socially and economically disadvantaged individuals through a wide range of assistance programs
The agency provides assistance on its web site in both English and Spanish.
On Tuesday, September 30th from 3:00 to 4:00 p.m. (EDT), Hector Barreto and I will participate in a webinar that will examine access to capital for Latino-owned businesses. Joining us will be Paul Quintero, CEO of Accion East, a non-profit microlender that provides loans of less than $50,000 to entrepreneurs. The panel will be hosted by Anita Campbell, the founder of Small Business Trends, an online resource that hosts a wealth of information for entrepreneurs.
Like other companies, Latino-owned businesses need capital to thrive. As larger portions of their population are native born and grown up speaking English, they are overcoming language and cultural barriers that hindered their parents and grandparents. The rise of small businesses is the best route for members of any ethnic group to increase their economic wellbeing. As their numbers rise, it is in the country's best interest to assist Latino entrepreneurs in pursuing the American Dream of business ownership.