In addition to the growth both in total number of companies and in average annual revenue, the report notes that Latino-owned businesses are no more likely to have high credit risk than white business owners and three quarters of Latino owned businesses either recorded a profit or broke even over the past year. Despite these similarities, Latino business owners continue to face significant challenges in securing funding from major banks. The authors found that the odds of receiving loan approvals from national banks are 60 percent lower for Latino business owners when compared to white business owners who have recorded similar business performance.
Because of the lack of support from the large banks, Latino business owners are taking on more personal financial risk; the report found that scaled Latino owned businesses sourced funding of over $100,000 through personal or business lines of credit (51 percent of businesses), family savings (43 percent), business credit cards (40 percent), and personal home equity loans (37 percent).
The full 2020 State of Latino Entrepreneurship Research report may be accessed here.