02/23/18

Latino-Owned Small Businesses Struggle to Find Capital

Latino entrepreneurs are starting up businesses left and right. In fact, a recent Stanford study found that Latino businesses increased by a whopping 47% between 2007 and 2012. And female Latino-owned businesses showed even more impressive numbers, increasing 87% during that same time. 

But Where’s the Funding?

Despite starting businesses in record numbers, only 6% of Latino-owned businesses have used commercial loans. And less than 1% have received venture capital funding. 

Another California-based study noted that more than 40% of the nearly 400,000 Latino-owned small businesses in the greater Los Angeles area were denied capital due to low credit scores and other perceived risks. The study also showed that Latino small business owners are often denied credit, charged higher interest rates, and discouraged from applying for loans.

Latino-Owned Businesses Continue to Grow

Latino-owned businesses may not be finding capital, but they show no signs of slowing down.

One recent study discovered that between 2007 and 2012, 86% of the growth in all small businesses was due to Latino-owned businesses. That’s definitely something to write home about. It’s also kind of a big deal: Latino-owned businesses are a cornerstone of  job creation and economic development in America.

What’s the next step? For lenders to recognize the value of Latino-owned businesses, and become more willing to take risks and fund Latino small business owners. Only time will tell…

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About the author

Andrew Mosteller
Andrew Mosteller
Andrew Mosteller is a freelance writer and regular contributor to Lendio News. His upbringing in an entrepreneurial family nurtured a passion for small business at a young age. Andrew's father, an equity fund manager, taught him the ins and outs of investment financing. Now, Andrew spends his time writing copy for business owners, helping them expand and advertise their unique brands. He's also studying Strategic Communications at the University of Utah. When Andrew's fingers aren't glued to the keyboard, he spends his time reading, podcasting, composing music, and bombing down the ski slopes.

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