As the preeminent resource for small, minority, women, and veteran owned businesses in the Paso del Norte region, we at El Paso Hispanic Chamber of Commerce are encouraged by the elevation of the discussion regarding the successes and challenges faced by Latino and Latina owned businesses to the national stage during this election cycle.
The growth and success of these businesses is critical to the expansion of not only our local economy, but the growth and stability of the Texas economy and national economy as a whole.
Latinos and Latinas start businesses at a higher rate than any other demographic. Latina owned businesses alone accounted for 31% of new women owned business between 2018 and 2019 alone, with existing Latina owned businesses growing at a rate of 10% in the same year.
Through our entrepreneurial technical assistance centers, we have seen a significant increase in not only the number of Latinos starting a business, but also an increase in the number of Hispanic business owners looking to expand by acquiring an existing business, financing a second location, and especially through government contracting.
We are particularly excited to see more and Latina business owners reaching out to us for assistance in expanding their business or even starting a second one in the area. This recent growth in the rate of business ownership among Latinos in the El Paso community will have a significant impact on our economic strength as a region.
Currently, El Paso is ranked 26th in terms of the rate of Hispanic entrepreneurship according to a study by WalletHub published in May of last year.
If Latina owned businesses achieved parity with that of non-minority women owned businesses they would generate additional annual revenues of $393,894,103, representing an increase in their ability to create more jobs within their communities.
If Hispanic owned businesses in general grew at the same rate as non-Hispanic owned businesses, they would generate an additional $1.4 trillion to the US economy, leading the US economy to grow by 8%.
While these businesses are opening their doors at an ever increasing rate, their growth and ability to scale is stunted by a number of factors, the most significant of these being access to credit.
While more and more Latino business owners are applying for traditional forms of credit to finance their business expansion and success, loan application success rates remain stagnant. The average credit score of a Latino business owner is under 600, the standard benchmark for most banks when evaluating a loan package.
This is why nontraditional forms of financing such as Community Development Financial Institutions (CDFI’s) are critical to ensuring
the success and ability of these businesses to scale. We are encouraged by the discussion at the national level regarding the funding for these intuitions that often times make the difference between a minority-owned business being able to grow or not.
It is of critical importance that the conversation surrounding the growth and scalability of Latino and all minority-owned businesses is
elevated on a national stage and policies that will help these businesses scale from small to medium to large sized businesses are enacted.
It is also crucial that the programs that are currently available to assist these businesses, such as the Minority Business Development Agency Business Centers and the Minority Women’s Enterprise Center both funded by grants from the US Department of Commerce, Minority Business Development Agency, continue to be funded and supported by Congress.
We look forward to counting the conversation regarding these issues with all 2020 candidates and welcome them to our vibrant community to continue the discussion as we work to ensure the success and vitality of small, minority, women, and veteran owned businesses in this region and beyond.
Author: Cindy Ramos-Davidson, CEO of the El Paso Hispanic Chamber of Commerce