Latino small business owners are increasing in number. But the Latino business community still lacks access to that -oh-so-important resource: capital.
Latinos are one of the fastest-growing segments of small business owners in the United States. Estimates suggest by the end of the decade there could be as many as 12 million small businesses owned by Latinos.
A recent report from Biz2Credit, a website connecting small businesses with lenders, suggests assistance is needed to give Latino and other small business owners greater access to the capital they need.
The “Biz2Credit Small Business Lending Index” from March 2013 shows loan approval rates increased for the fourth consecutive month at small banks. Those rates reached an all-time index high of 50.8%. Rohit Arora, co-founder of Biz2Credit.com, says the numbers suggest the recovery is starting to bring relief to some small business owners.
But others continue to struggle. Among those are groups that have traditionally lacked access to capital, including Latino and women business owners.
Hector Barreto recently told Fox Business many factors contribute to this lack of access to small business loan capital among Latinos. Barreto is the former head of the U.S. Small Business Administration. He now leads The Latino Coalition, a national organization that represents Latino interests. The Latino Coalition is engaged in advocacy on behalf of Latinos, including Latino small business owners. The Latino Coalition also provides resources for Latino business owners.
Barreto used the interview to announce a partnership with Biz2Credit to help more Latino businesses obtain the financing and credit they need.
Barreto said recent data shows there are currently 3 million Latino small business owners in the U.S. He says businesses owned by these Latino entrepreneurs generate about $500 billion in sales annually.
Minority- and women-owned business enterprises are underserved by the lending community. Based on my experience as a lender with years experience serving this segment of business owners, the reasons for this are two-fold:
First, many minority- and women-owned business owners are not aware of all the lending products available to them outside of the products offered by their local community bank.
Second, many banks do not understand the unique circumstances of minority- and women-owned businesses. Owners need to be aware that there are commercial finance companies owned by fellow entrepreneurs which offer factoring and asset based lending products and work with business owners across a wide variety of industries. These alternative lenders advance against the assets of a business not its historical financial performance and provide ready working capital to support staffing needs, purchases of inventory or to accommodate growth. My company Coral Capital Solutions is proud to provide purchase order financing, factoring and asset based lending financing solutions to many minority led and owned businesses throughout the United States.
Einat Steklov
The options available to all businesses are equally available to minorities too. The problem as stated by the last commentator is the lack of awareness. It is hurting a lot of business owners. Programs must be introduced to bridge this gap. It’s sad to see that people can’t obtain financing, not because they don’t qualify, but because they don’t know it’s available to them. We offer alternative financing to all business owners, and since traditional bank loans have been harder to qualify for, we’ve been seeing a record number of applications.
We Factor
Yes, I totally agree with what you said. I think that one of the necessity of the business is working capital and there are also a lot of business owners who are facing working capital issues. Luckily, there are now a lot of financing partners like Biz2Credit who can help business owners. Thanks for sharing this article.