State of Latino Entrepreneurship: Research Report 2015

Since the early 2000s, the number of Latino-Owned Businesses (LOBs) has increased at substantially higher rates than Non-Latino Owned Businesses (NLOBs).Yet, a multi-trillion dollar “opportunity gap” exists between LOBs and NLOBs. For this reason, the Stanford Latino Entrepreneurship Initiative (a partnership between the Latino Business Action Network and Stanford University) released the first annual report State of Latino Entrepreneurship in an effort to explain why LOBs lag behind NLOBs in yearly sales and to promote the economic potential of Latino businesses. Through surveys of research panels of Latino businesses owners, the report disputes the notion that the opportunity gap exists because LOBs lack a diverse customer base or because they are concentrated in smaller industries. Instead, the authors find that  lower sales are more likely to be caused by difficulties raising capital and the weaker networks of LOBs. LOBs also have greater difficulty getting approval for bank loans and tend to rely on other financing methods such as credit cards or personal savings for business investment. They are also less familiar with government programs such as those run by the Small Business Administration. The report encourages policymakers and business leaders to increase their engagement with Latino entrepreneurs to help LOBs scale to the level of NLOBs and reach their full economic potential. (The Immigrant Learning Center Public Education Institute)

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