Latino entrepreneurs submitted 18% more applications for small business loans in 2015. Latino business owners find it challenging to secure financing and are still behind in such factors as credit scores, operating expenses, annual revenue and age of business.
The Financial Performance of Latino-owned Businesses
Biz2Credit has recently analyzed the financial performance of over 1.000 Latino-owned businesses that have less than 250 employees and less than $10 million in annual revenues. According to this study:
- Average annual revenue for Latino-owned businesses was $68.540. For non-Latino-owned businesses, the amount was $70.641.
- Average operating expenses were accounted for $18.334. For non-Latino businesses, the amount was $24.857.
- Average age of Latino businesses was younger at 22 months in contrast to 25 months for non-Latino businesses.
- Average credit score for Latino-owned businesses applying for loans was 603. It was 614 for all others.
- Top 5 states for Latino-owned small business loan applications were as follows – Texas (16.4%), California and Florida (15.7%), New York (9.1%), and Georgia (3.0%).
Modern Latino-owned Businesses
Latino-owned businesses are increasingly seeking for business funding. However, they still need to forge ahead in many areas. Latino-owned businesses are often younger and smaller in size. Also, they need to focus on their cash flow and build a solid credit profile. What is more, they are mainly concentrated in industries that are considered risky– construction and landscaping.
If you are a business owner in Puerto Rico interested in small business loans, consider turning to firstamericanmerchant.com (FAM), a reputable high risk payment processor.
The discussions concerning Mexican immigrants have their negative impact on business owners. Lenders have not got that much experience in lending to Latinos, and Latino borrowers are not too experienced in working within the banking system. Often, language and cultural differences create obstacles for them. However, they are getting into such growing sectors as healthcare and technology.
Latinos are among the fastest-growing populations in the US, so their success in business plays an important role in the economic growth. They have counted for 43% growth since 2007, and may soon surpass non-Latino businesses.