The Growth Of Hispanic-owned Business In The United States

By Author: Grover Orr
Total Articles: 1
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Hispanic-owned businesses are a large share of the business sector landscape in the United States, and they are in a state of exponential growth. Research by Geoscape reveals that the number of Hispanic-owned businesses are projected to reach 3.22 million in 2015. Moreover, the rate at which Hispanic-owned businesses are increasing is 44%, which is more than twice the average American business growth rate, which is currently at 17.8%.

This Hispanic-owned business growth mirrors the increasing number of Hispanic entrepreneurs. Currently, 20.4% of new entrepreneurs are Hispanic. These individuals not only provide a strong numerical presence in the business sector, but also bring with it unique personal characteristics. One of these characteristics is the distribution of Hispanic entrepreneurship across the United States. Geoscape reveals that most Hispanic business ownership is concentrated in the southern regions, and this is due to higher Hispanic immigration rates in the south, especially in the Carolinas, Alabama, Mississippi, Tennessee and Kentucky.

Another unique characteristic of Hispanic business owners ...
... is their widespread embrace of bilingual and cross-cultural identities. More than half of Hispanic business owners are bilingual and bi-cultural; they are individuals who speak both English and Spanish and who identify with both American and Hispanic cultural attributes. An additional one-fourth of Hispanic business owners identify themselves as predominantly Hispanic; these individuals originally immigrated to the United States at a young age, prefer to speak Spanish, and claim a dominance of the Latin culture within their identity. These figures clearly demonstrate a Hispanic-individual propensity for establishing their own business.

So what accounts for the Hispanic preference for business ownership? A primary motivation for Hispanic entrepreneurs is financial reward since business ownership provides much greater income potential. In fact, Hispanic business owner households are 82% more likely to earn between $100,000 and $149,999 than Hispanic households in general. This income potential is particularly accessible to the children of Hispanic immigrants. In many of these scenarios, children born to immigrants of the mid-1960s benefit economically from their parents’ business endeavors and are able to obtain the academic and financial resources favorable to business ownership. (Fox News Latino)

However, these opportunity structures are not available to all Hispanics. Many Hispanics face a number of obstacles for business establishment and growth. The greatest of these obstacles is access to capital. A recent report by Rutgers, Brigham Young and Utah State reveals discrimination against Hispanic and African American entrepreneurs seeking to secure small business loans from banks. Alternatively, the report highlights that recent Hispanic immigrants have no credit, which also limits them from securing financing.

In order to address the obstacles that Hispanics encounter on the path towards business ownership, various institutions within and beyond the Hispanic community have developed. For example, the Small Business Administration, headed by Maria Contreras Sweet, a Latina originally from Mexico, aids Hispanic business owners seeking loans and helped to provide over $1.3 billion in loans to Hispanic entrepreneurs in 2015. Similarly, the Labor Council for Latin American Advancement (LCLAA) is a national-level organization that advocates for the labor and family interests of Hispanic trade union members.

With the help of institutions such as the Small Business Administration and LCLAA, the economic future of Hispanic business owners looks promising. The present context of the recession rebound affords business owners the opportunity to re-invest in their firms. Hispanic entrepreneurs will follow this trend and continue to expand their share of the ownership sphere. As they grow, Hispanic firms will contribute to the financial market as consumers of products and services from financial sector institutions. This will promote the continued impact, and significance, of Hispanic business ownership to the American economy.

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