In the future, Latinx communities are going to make up ⅓ of the United States population, and if given the opportunity, Latinx entrepreneurs can grow to add 5.3 million jobs and $1.5 trillion to the economy in 30 years.
This projected growth is just one reason why we should begin and continue to invest in Latinx-owned small businesses, but the barriers that these entrepreneurs face in accessing funding as well as their stature in their communities are all also important reasons.
Once you’ve read about why you should be investing in Latinx-owned businesses, find out how you can do so through small business crowdfunding!
Grow your community with confidence by investing in Latinx-owned small businesses.
There are many reasons to invest in Latinx-owned small businesses, beyond just what we’ve listed here. By investing, you’re giving entrepreneurs a chance to uplift their communities, create jobs, and build wealth where they are.
Learn more about investing with Honeycomb Credit, and start searching for live campaigns to invest in today!
Why Supporting Latinx-Owned Businesses Matters
Latinx-owned businesses are the fastest growing segment of small businesses in the United States
According to the Latino Business Survey run by Stanford University, The number of Latinx-owned business owners has gone up 34% in annual growth, and revenue has grown 14% for these businesses.
Did you know that if you took all the Latinx entrepreneurs in the United States and put their net worth together, it’d consist of a GDP of $2.6 trillion - large enough to be the 8th largest economy in the world!
That being said, there are many barriers that Latinx business owners face in taking advantage of this growth. Only half of Latinx-owned businesses have been able to secure outside funding, which is inhibiting their ability to expand.
Latinx-owned businesses are key to revitalizing our communities
In recent years, there has been a strong trend between Latinx-owned businesses being established in communities and those neighborhoods seeing a period of economic revitalization.
Latinx entrepreneurs come into these communities and are more likely to start their own businesses, creating jobs and slowly generating wealth and growth through the neighborhood.
Also, have we mentioned that Latinx entrepreneurs are an incredibly young demographic? The median age of the Latinx community is 28 years old - arguably a great age to establish a long-lasting community business.
We see this all the time - when small businesses thrive, their neighborhood does as well. Investing in these small businesses is a great way to support them in their work and make your community a more vibrant and financially-empowered place to live.
Latinx-owned businesses face significant challenges in finding funding from traditional financial institutions
Only 51% of Latinx entrepreneurs who apply for funding through bank loans are approved, compared to 77% of white business owners.
This has only been exacerbated by the pandemic. 86% of Latinx business owners report a negative impact on their businesses due to the pandemic, and have had issues seeking out relief from PPP loans.
Because of this funding gap, many Latinx business owners seek out funding through riskier channels, such as taking on credit card debt or seeking out predatory merchant cash advances. Some even forgo pursuing growth opportunities altogether.
This just isn’t fair - no one should be forced to take on APRs of 94% plus just to grow their business. This is why we are committed to making small business loans accessible!
Building brighter communities with small business
Latinx-owned businesses are key to our neighborhoods, and we ought to do what we can to support them, perhaps by investing in them! Learn more about how to invest in small businesses with Honeycomb, and check out the live campaigns available to invest today!