If you are Latino, you should be proud. The Latino community and its culture have an increasingly strong presence in the U.S., and Latino small businesses play a crucial role in the American economy.
Currently, about 18% of the country’s population is Hispanic American, but this proportion is expected to grow significantly. It’s estimated that by 2020, 19% of U.S. residents will be Latinos. By 2060, this will increase to 28%.
Hispanic Population to Reach 111 Million by 2060 – Projected Hispanic Population 2020 to 2060
However, the growth in the number of Latinos in the U.S. doesn’t tell the whole story about the economic importance of this community. Consider these facts:
- Although Latinos account for only 18% of the population, they are behind a disproportionately large number of new businesses. According to a report titled The Latino Contribution to U.S. Economic Dynamism, Latinos accounted for almost 25% of new entrepreneurs in 2016.
- The U.S. Hispanic Chamber of Commerce says that the 4.37 million Hispanic-owned businesses in the country contribute more than $700 billion annually to the American economy.
- A report prepared by New York City Democratic Representative Carolyn Maloney and Texas Representative Joaquin Castro points out that businesses with majority Hispanic ownership provide 2.7 million jobs to workers across the United States.
In view of these staggering numbers, what can we expect for 2020? In 2020, Latino businesses will likely continue to grow both in number as well as in their share of the American economy. Here’s our forecast of what you can expect to see next year.
What Trends and Tendencies Will We see on Latino Small Businesses in 2020?
These are some of the changes that you can expect in 2020:
1. A greater focus on technology
The internet can be a game-changer for Latino small businesses. It allows you to reach out to new customers and stay in touch with existing clients at a fraction of the cost of traditional methods. Online marketing and e-commerce can help to grow your business exponentially.
What if you think that your business is too small to use technology? Or that it’s working well enough and that changing things could complicate matters for your customers?
The truth is that practically any enterprise, even a one-person business, can use technology to its advantage. Here are some of the ways in which Latino small businesses can increase their level of efficiency and save on costs by using technology:
- There are several business apps for internal communication that you can use. Switching over from the app that you currently use could make keeping in touch with your employees easier and help to boost productivity.
- Do you find it difficult to keep track of your work? Are there days when you find that it’s time to go home for the day, and you realize that you haven’t completed the essential tasks that you had planned to? A good business app to manage your agenda could help.
- Do you want an alternative to your landline or cell phone plan? A virtual phone system could be just what you are looking for.
- Many small businesses can also benefit from signing up with an email provider. If you do this, you could get your own custom domain. Your email address would be [email protected] instead of an unprofessional and generic Gmail or Yahoo account.
In 2020, we’re likely to see a far greater number of Latino small businesses focusing on digital marketing and increasing their social media presence. If these initiatives are handled well, the rewards can be disproportionately higher than the expenses and effort involved.
2. There will be many more Latino businesses
There are already over 4 million Latino small businesses in the country. In 2020 we’ll probably see a significant increase in this number.
Why do we think that there will be a surge in Latino entrepreneurship in 2020? A research report titled State of Latino Entrepreneurship published last year points out that growth rates for Latino small businesses outpace that of all other ethnic groups.
The 2018 report, which was released by the Latino Entrepreneurship Initiative of the Stanford Graduate School of Business, states that Latinos, as a group, are more entrepreneurial than whites, Asians, or blacks. In fact, the number of white-owned businesses has been falling. The Latino Entrepreneurship Initiative found that white-owned firms declined by one million between 2007 and 2012.
Where will the new Latino small businesses be established? They will be set up wherever there is a large Latino population.
Latino Population by State (%)
3. Future expectations are high
This is the third change that Latino small businesses can expect in 2020. Despite the headwinds created by the U.S.-China trade war, small business owners remain optimistic about the future.
The quarterly Wells Fargo/Gallup Small Business Index survey indicates that small business owners are positive about their financial outlook.
Wells Fargo/Gallup Small Business Index: Online Survey Trend
Future Expectations Index
Why are small business owners optimistic about the future? Low-interest rates have helped to reduce borrowing costs and boost profits. This has led to a stronger financial position. About 81% of the survey’s respondents said that their finances are either “very good” or “somewhat good.”
4. More access to capital
This is a fourth change that Latino small businesses can expect to see in 2020.
Currently, many Latino small businesses don’t have access to reliable sources of external finance. They often can’t get loans from traditional lenders like banks.
The Latino Entrepreneurship Initiative’s Shining a Light on National Trends report says that when Latino small businesses require funds, they invest their own money or rely on informal sources of finance. That’s a disadvantage because a lack of funds can hold back their growth. Additionally, costly funding can eat into their profits.
However, there’s a solution to this problem. Camino Financial offers loans that are specifically designed for Latino entrepreneurs. We are Latinos helping Latinos.
Camino Financial: Latinos supporting Latinos
At Camino Financial, our motto is “No business left behind.” Our loans can provide Latino small businesses with the funds they need to buy new equipment or enhance their working capital. The money can also be used for any other business-related expenses.
What makes our loans different from those offered by traditional lenders? How do we ensure that we don’t reject loan applications made by deserving Latino small businesses?
Here’s how we are different.
- You don’t need a Social Security Number to borrow from Camino Financial: We know how difficult it can be to get a social security number if you are an undocumented immigrant. That’s why we don’t need you to provide your SSN. If you have an Individual Taxpayer Identification Number (ITIN), you’re eligible to apply for a Camino Financial loan.
- You don’t need to provide collateral: Camino Financial loans are collateral-free. We want to make our loans accessible to borrowers who can’t provide security in the form of a house or a car. Our goal is to help Latino small businesses like yours acquire the funds you need to grow your business.
- You don’t need a minimum FICO score: In fact, you don’t even need a credit history to get a loan from Camino Financial. We know how long it takes to build a credit record and a high FICO score, and, as a Latino immigrant, chances are you haven’t remained long enough in the country to do so. Therefore, we have done away with this requirement.
The Bottom Line
The year 2020 holds great promise for Latino small businesses. In fact, all seem to indicate that 2020 can be the perfect time to apply for a business loan. If a lack of funds is holding you back, we’ll be glad to help. Contact us and get a quote today. Our flexible credit standards will ensure that you have an excellent chance of getting your loan application approved.