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On today’s Business Beat, Jeff Sloan talks about how Hispanic-owned businesses are the fastest-growing segment in the U.S., but there is an obstacle holding Latino entrepreneurs back from being even more impactful.
Tune in to the Business Beat, below, to learn more about the study results:
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Good morning, Paul! As we know, businesses are being started at a record pace here in the U.S. in this post-pandemic period and we’ve got news. Insight into the data shows that Hispanic-owned businesses are the fastest-growing segment in the U.S. over the last 10 years with their numbers increasing by 34% since 2010.
That’s according to the State of Latino Entrepreneurship 2020 study from the Stanford Latino Entrepreneurship Initiative. Now Marlene Orozco, lead research analyst for the study, indicates that not only are we seeing this torrid pace of growth in Latino startups, it’s broad based across industry sectors in geography.
As she puts it, “We are seeing multifaceted growth across states and industries, including construction, finance, and insurance transportation and real estate. And beyond industry expansion, the report showed that over the past two years, Latino-owned firms grew revenue at an average of 25% per year, while white-owned businesses grew at a rate of 19%.
Yet, in spite of all this positive news, the study reveals that there’s still opportunity for this population segment to do even better and contribute more significantly to the startup ecosystem and to our national economy through new business formation if they had better access to funds. Orozco says despite being the fastest-growing segment in the U.S. small business ecosystem, Latinos continue to struggle because they have trouble securing capital from the national banks. In fact, only 20% of Latino-owned businesses that applied for national bank loans over $100,000 obtained such funding compared to 50% of white-owned business.
Now, Paul, this is really an area that deserves focus, given that Hispanics overall account for over $2 trillion in economic development and employee over 3 million Americans. Just imagine what the impact could be if we level the playing field to ensure that funding is readily available to all entrepreneurs seeking to secure it.
I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat brought to you by Dell Technologies on the Great Voice of the Great Lakes, WJR.