Latinos in America continue to drive unprecedented growth in their own businesses

In the United States, Latino-owned businesses are experiencing rapid growth and making significant contributions to the economy. These entrepreneurs are creating businesses at a rate more than twice that of the general population, with new businesses owned by Latinos accounting for 36% of launches in 2023. Latino-owned businesses are projected to make up 29% of the population by 2050, potentially adding $1.4 trillion to the economy, nearly an 8% boost to the $18 trillion U.S. economy.

As of 2023, Latino entrepreneurs have established five million businesses across the United States, generating over $800 billion in annual revenue. These businesses not only represent nearly one-fifth of the U.S. population but also significantly contribute to the world’s fifth-largest GDP. The number of Latino-owned businesses surged by 34% from 2007 to 2019, in stark contrast to a 7% decline in the number of white-owned businesses during the same period. Latino-owned businesses are responsible for creating almost two-thirds of all new jobs in America and account for nearly half of the private-sector output.

Despite their impressive growth and contributions, Latino-owned businesses face challenges in securing financing. A significant 70% of initial funding for these businesses comes from personal savings, highlighting the commitment and belief Latino entrepreneurs have in their ventures. While one in three Latino-owned businesses sought out financing in 2022, they experienced lower approval rates for loans over $50,000 compared to white-owned businesses. In 2021, less than 1% of all venture capital funding was allocated to Latinos, exacerbating the financial challenges they face.

Organizations like Endeavor and Accion play a crucial role in offering resources, pre-conventional business financing, and guidance to bridge the gap to more substantial funding sources for Latino entrepreneurs. Moving forward, there is a need for collective efforts between venture funding, accelerators, and traditional banks to address the immediate challenges of financing while also providing pathways for sustainable growth and contribution to the U.S. economy. With the right mechanisms in place, the future looks promising for Latino entrepreneurs as they continue to break new ground and make impactful economic contributions.

In conclusion, Latino-owned businesses are a dynamic and influential force in the U.S. economy, contributing significantly to job creation and economic growth. Despite facing challenges in securing financing, these entrepreneurs are resilient and dedicated to their ventures. With the support of organizations and collective efforts to address financial barriers, Latino entrepreneurs are poised to continue their trajectory of growth and make a lasting impact on the U.S. economy.