Bloomberg Línea — More than 62.5 million Latinos live in the US, representing 19% of the population, but despite owning five million businesses that generate more than $800 billion in annual revenue, according to research sponsored by the Stanford Graduate School of Business (GSB) and the Latino Business Action Network (LBAN), a lack of financing and access to private and government credit continues to be one of their main challenges.
However, Latino-owned companies have the highest growth rate in terms of employability and are recovering the fastest from the Covid-19 health crisis.
As a consequence of this auspicious future in terms of growth possibilities, many artists, NGOs and governmental entities are beginning to support Latino businesses, and among them are Colombian singer J Balvin, who, in collaboration with Miller Lite, has launched the “J Balvin’s Tab” program.
Also helping are Accion Opportunity Fund, an organization that provides financial support for small businesses that promote racial, gender and economic equality, and which designed limited-edition Miller Lite cans, a portion of the proceeds of which - some $150,000 - will fund nearly 50 Latino entrepreneurs across the country.
“We want to help entrepreneurs learn how to elevate their businesses and guide them on to where they should be. And also help them financially so they can make the right investments and grow,” J Balvin told Billboard. “When I was starting my career, I didn’t have anyone to tell me where to go. Since I didn’t have that, I had to learn on my own, and now I want to help others to have an easier path,” the Colombian singer added.
For its part, Latino Business Action Network (LBAN) - a Silicon Valley-based NGO - has been sponsored by JPMorgan Chase (JPM) to support Hispanic and Latino entrepreneurs in the United States, and which will also strengthen its alliance with Stanford University, with which it had already been working.
The sponsorship will focus on three areas: Research to explore challenges and opportunities in the US; the Business Scaling Program at Stanford, to enable Latino business owners to take their businesses to the next level; and ecosystem development, where networks of alumni, mentors, capital providers and partners will be created to improve access to capital and government and corporate contracts.
The Stanford Graduate School of Business notes in its annual State of Latino Entrepreneurship (SOLE) report that Latino-owned companies receive smaller government and corporate contracts, which take longer to obtain compared to white-owned companies.
Latino-owned companies get corporate contracts that are 3.3 times smaller, on average, than their white peers, and the same goes for state and federal government contracts, which tend to be 30 times smaller.
In terms of duration, Latino businesses are awarded contracts that last up to six months on average, while those owned by whites are awarded contracts for more than a year.
Despite the statistics, Prospera, an Orlando-based nonprofit organization, and the US Small Business Administration (SBA) are working together to boost access to resources for Hispanic small businesses.
On February 24, they signed an agreement that will allow Prospera to help provide better access to SBA programs and services, with loans, consultancy and pathways to government contracting opportunities.
“Latino-owned small businesses rely on their own funds or, unfortunately, abusive credit cards or lending tools. So having the ability to work with the SBA is going to allow us to better help our clients and find better financial tools to equip their businesses and hopefully succeed,” Prospera president and CEO Augusto Sanabria told the Orlando Business Journal.
According to SBA, there are more than 855,164 Hispanic-owned businesses in Florida.
The agreement will also help Prospera expand its activities in Georgia and North Carolina, where it has offices in Atlanta and Charlotte, respectively.