Latino entrepreneurs in the U.S.: key economic asset with surmountable obstacles

Small and medium-sized enterprises (SMEs) led by Latinos in the United States are proving to be a fundamental pillar in the country's economy. Despite representing only 6.9% of businesses, these Latino-owned companies contribute $800 billion annually to the economy and provide employment to 3.5 million people, according to the Latino Entrepreneurship Initiative (LEI) at Stanford University. However, persistent inequality in access to financing and opportunities remains a barrier to the full development of this entrepreneurial sector. Mari Borrero, founder of American Abatement & Demo (AAD), is an example of the challenges faced by many Latino entrepreneurs. Despite running a successful company that employs 14 people and generates three million dollars in sales, Borrero has faced constant rejections from financial institutions when seeking financing for her business. The lack of access to credit and barriers to obtaining liquidity limit the growth and capacity of these companies to seize expansion opportunities. Barbara Gómez Aguinaga, associate director of LEI, highlights that Latinos play a crucial role in job creation in the United States, with 52% of job creators within the Latino entrepreneurship sector being immigrants. This positive contribution of immigration to the economy has been supported by various studies, including one from the Congressional Budget Office (CBO), emphasizing the importance of supporting and empowering Latino entrepreneurs. Despite the challenges, Latino businesses represent a significant opportunity for economic growth, according to Elián Savodivker, director of Engagement for the Latino Business Action Network (LBAN). Savodivker points out that, if current difficulties were overcome, these companies could reach a potential of three trillion dollars, generating more employment and making an even more prominent contribution to the American economy. One of the main barriers to the development of these companies is limited access to financing, especially in cases like AAD's, which require liquidity to seize business opportunities such as those offered by the National Park Service. The lack of financial support forced Borrero to turn to her parents in order to fulfill an urgent demolition contract, highlighting the need for solutions that facilitate access to capital for Latino entrepreneurs. While there are positive trends, such as an increased presence of Latinos in financial institutions that understand the challenges facing this community, there is still a long way to go to achieve a more equitable and favorable system for Latino entrepreneurs. Savodivker emphasizes the need to change the existing bias in financial institutions and provide appropriate solutions to support the growth and success of Latino businesses in the United States. Ultimately, overcoming the barriers faced by Latino entrepreneurs would not only benefit these companies but also strengthen the economy as a whole and expand employment opportunities in the country. It is necessary to recognize and support the growth potential of this business sector to build a more inclusive and equitable business landscape in the United States.