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…