Latino-owned businesses in the United States are growing at a rapid pace, with new businesses owned by Latinos accounting for 36% of launches in 2023. These entrepreneurs are creating businesses at over twice the rate of the general U.S. population, showcasing a high level of innovation and ingenuity within the Latino community. As of 2023, Latino entrepreneurs have established five million businesses across the country, collectively generating over $800 billion in annual revenue.
The impact of Latino-owned businesses on the U.S. economy is profound, with these businesses responsible for creating almost two-thirds of all new jobs in America. They also contribute significantly to the world’s fifth-largest GDP. Despite facing challenges in securing financing, with 70% of initial funding coming from personal savings, Latino-owned businesses are making a significant economic impact. However, they encountered lower approval rates for loans over $50,000 compared to white-owned businesses, and less than 1% of all venture capital funding in 2021 was allocated to Latinos.
The future looks promising for Latino entrepreneurs, as projections show that they are set to make up 29% of the population by 2050. If these businesses continue to grow at the same pace as the U.S. average, they could contribute a staggering $1.4 trillion to the economy, nearly an 8% boost to the $18 trillion U.S. economy. Organizations like Endeavor and Accion play a crucial role in offering resources and guidance to Latino entrepreneurs, bridging the gap to more substantial funding sources.
The growth of Latino-owned businesses is highlighted by the fact that the number of Latino/a-owned businesses surged by 34% from 2007 to 2019, while white-owned businesses saw a 7% decline over the same period. Hispanic employer businesses employ about one million workers and contribute more than $100 billion in annual payroll, further showcasing their impact on job creation and economic growth. With collective efforts between venture funding, accelerators, and traditional banks, Latino entrepreneurs can address immediate challenges in financing and continue their trajectory of impactful economic contribution.
Latino-owned businesses are not just a burgeoning force within the community; they are a powerhouse propelling the U.S. economy forward. As these businesses continue to grow and diversify, they not only bolster the U.S. economy but also highlight the vital role of Latino entrepreneurs in shaping a more inclusive and dynamic American business landscape. With mechanisms in place to address financing challenges and lay down pathways for sustainable growth, the future looks promising for Latino entrepreneurs as they break new ground and make a lasting impact on the U.S. economy.
