The Latino Small Business Boom
According to the U.S. Hispanic Chamber of Commerce, there are 4.4 million Latino-owned businesses in this country that are responsible for the injection of over $700 billion into the U.S. economy. In the past year alone, the average annual revenue of those businesses spiked by 26.5%, while the number of credit applications jumped 22%. The U.S. Hispanic Chamber of Commerce has also reported that Latino-owned companies have more than doubled the growth rate of all businesses across America. It is a fact that Latinos are leading all other demographic groups in small-business growth.
A quick glance at the population ought to provide insight into the growing influence of Latinos. According the U.S. Census Bureau, there are an estimated 55 million Latinos living in the United States. That is 17 percent of the country’s population. This makes them the largest ethnic or racial minority. By 2060, the Census Bureau projects that the number will rise to 120 million Latinos, which will comprise 28.6 percent of the population.
Both credit scores and applications have been steadily increasing, according to an analysis conducted by the online credit marketplace, Biz2Credit. Meanwhile, Popular Bank has been fostering this growth by providing comprehensive product offerings, tools, education and services. With better and faster financing options, Latino-owned businesses will not lose their momentum.
The billions of dollars in income represented by the Latino business community has the rest of the market taking the community far more seriously. It is becoming a source of pride and confidence for Latino entrepreneurs. However, there are still political, financial and cultural restraints holding Latino entrepreneurs back. Where can Latino small businesses grow?
According to Biz2Credit, most of the business loan applications submitted by Latinos came from California, Texas, New Jersey, Florida and New York. California and Texas alone provided for more than 40 percent of the Latino small business loan requests. Altogether, 60 percent of the applications for loans for Latinos in the past year came from those five states. There is still plenty of room for expansion.
The most common industries attracting Latino entrepreneurs are accommodation and food services, construction, retail trade, transportation and warehousing. These small businesses have been performing just fine. The gap between non-Latino and Latino business is shrinking.
Financing is the greatest restraint. National banks tend to shy away from businesses with less than 10 employees, or start-ups with less than two years of tax filings. The alternative is treating the first few years of business as an investment, with higher interest rates. Once revenues are up, business owners must monitor their expenses, pay their debts on a timely basis, and lower their credit utilization in order to improve their credit scores and secure lower cost capital.
If you have questions regarding your small business or its operations, contact this office for an initial consultation – se habla español!
The Law Office of H. Benjamin Sharlin LLC
is owned and operated by H. Benjamin Sharlin and serves all of Mercer County, New Jersey and the surrounding areas. Mr. Sharlin is a bilingual Spanish-speaking attorney who vigorously represents the interests of all his clients.
Call (609) 585-0606 or click the button below to schedule an appointment