Entrepreneurship in the New Mainstream
As the US Hispanic population continues to rapidly increase, many Latinos are attempting to carve out their own slice of the American pie by starting their own businesses. In fact, Latinos are starting businesses at higher rates than any other ethnic group with Latinas and Millennials leading the charge. According to the 2017 Hispanic Wealth Project Report, Latina entrepreneurs own 17 percent of all women-owned businesses and represent 50 percent of the growth in Latino small business starts overall.
With that said, many Latino business owners still face many obstacles, particularly when scaling their businesses. The Stanford Latino Entrepreneurship Initiative released findings from their “State of Latino Entrepreneurship 2017” study which analyzed data from over 5,000 Hispanic-owned business to gather insights on the successes, and obstacles this emerging group of entrepreneurs face. Their study found that funding and access to capital remain major barriers for these business owners. According to the report, 12% of Latino-owned businesses received bank loans, compared to 18% of white-owned businesses. And, Hispanic entrepreneurs take advantage of loans provided by the US government’s Small Business Administration at even lower rates. While some Latino entrepreneurs are able to get access to funding by pooling together resources from family, friends and personal credit, scalability is hindered by not accessing more traditional small business loans and lines of credit.
Small businesses fuel our national economy and given that Latinos are increasingly becoming the New Mainstream, the growth and success of Hispanic-owned businesses should be a vital part of that the economic strategy.