At Stanford, Latino Entrepreneurs Forecast Rapid Growth Amid Systemic Challenges

 

FINANCING FOR LATINO BUSINESSES CONTINUES TO LAG

Last year, SLEI reported that Latino companies were 60% less likely to have financing approved than white companies with similar business performance. This year’s report expanded on that finding showing that Latino businesses were asked to provide more collateral than comparable white counterparts. While one fourth of white business owners did not need to put up collateral – including a car, home, or business equipment – to secure needed financing while, one fifth of Latino businesses were not asked for collateral. (See chart at top of this page.)

Meanwhile, despite the fact that COVID-19 increased the need for both business groups to seek financing to meet operating expenses, Latino-owned businesses were more likely to seek capital to expand their business or pursue a new opportunity – 30% of Latino businesses compared to 21% of white businesses.

While all companies reported lower average revenue growth this year compared to last, presumably because of the ongoing effects of the pandemic, Latino-owned businesses continued to report lower revenues than their white counterparts, the report found. Latino businesses reported average revenue per company of $1.3 million compared to $2.5 million for white businesses.

LATINO GROWTH OCCURRING IN ‘PRACTICALLY EVERY STATE’

Toward the end of the presentation, Levin hosted a fireside chat with Isabella Casillas Guzman, administrator of the Biden administration’s Small Business Administration. She is a child of Latino entrepreneurs herself.

Isabella Casillas Guzman

Isabella Casillas Guzman, SBA administrator

Guzman summed up the importance of the Latino sector this way: “President Biden really has committed to building a more productive economy with the greater capacity to deliver goods and services to the American people. And that is what small businesses do,” she said.

“When you think of Latino entrepreneurship, it’s quite exciting because it is one of the fastest growing segments of the economy … That growth is happening everywhere across the U.S., in practically every state.

“I have an ingrained belief in entrepreneurship as a pathway to a better future, the American dream, and wealth building for families and communities. I’ve experienced it myself, of course, growing up in a small business family,” she said.

You can watch their full conversation here, starting at about 1 hour and 18 minutes, or tune in to the full SLEI presentation. You can download the 2021 report here.

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