As the U.S. small businesses continue to recover from the impact of Covid-19, Latino-owned businesses have emerged as a powerful force in the economy. In fact, according to the Latino Business Action Network’s 2021 State of Latino Entrepreneurship Report (SOLE), Latino-owned businesses have started at a much faster rate than other groups in the past decade, with a staggering 44% growth rate compared to only 4% for non-Latino-owned firms. This growth has led to an increase in the number of employees at Latino-owned businesses, which has grown by 55% since 2007, compared to just 8% for white-owned businesses.
The impact of Latino-owned businesses on the economy is undeniable. In 2018, there were approximately 350,000 Latino-owned employer businesses that generated over $460 billion in annual revenue and employed 2.9 million people. And, the 2021 report projects that there are now approximately 400,000-450,000 Latino-owned employer businesses, which shows the continued growth and importance of this segment of the business community.
Latino-owned businesses are distributed across all sectors of the economy, in similar proportion as white-owned businesses, with one notable exception: Latino-owned firms skew higher into food services while there are more white-owned professional services. Additionally, among Latino-owned employer businesses, 19% own tech firms, while among white-owned employer businesses, that number is only 14%.
However, despite the success of Latino-owned businesses, there are still disparities that must be addressed. For example, the report found that financial institutions are more likely to ask Latino-owned businesses for collateral and personal guarantees, making it harder for them to secure funding. And, while adjustments to the Paycheck Protection Program (PPP) did eventually even out the disparity between the loan approval rates of Latino-owned businesses and white-owned businesses, it highlights the challenges that Latino-owned businesses still face when it comes to accessing capital and loans.
At Chingon Digital, we recognize the vital role that Latino-owned businesses play in the U.S. economy, and we are committed to supporting them through our digital marketing and advertising services. We believe that by working together, we can help Latino-owned businesses continue to grow and thrive in the years to come.