Sean and Kenny Salas with Camino Financial member. Concept: Camino Financial Latinx Small Business Survey.
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Camino Financial US Latinx Small Business Survey

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Camino Financial’s U.S. Latinx Small Business Survey provides insights into macroeconomic trends within the U.S. Latinx small business segment, predominantly those operating in low-to-moderate income areas and/or owned by first and second-generation immigrants.

Camino Financial’s loan application data informs the Survey. It is released quarterly, giving an evolving snapshot of change over time and insight into macroeconomic trends within the larger U.S. economy.

For more information, data, and background, contact [email protected].

 


Q2 2020

Summary: Latinx-Owned Small Businesses (LOSBs) are in a credit crunch caused by a disproportionate lack of access to government relief funds and other lines of credit, which will deepen and prolong the crisis for them. Given the scale of this community, this has implications for the recovery of the U.S. economy as a whole.

 

Credit Crisis: Capital critically needed for survival and recovery

  • 70% had to close at some point during the first half of the year
  • 80% experienced a decline in sales
  • 33% lost critical asset during COVID-19 (including 11% who lost all assets)

Credit Crunch: Capital even more difficult for SMBs to obtain

  • LOSBs experience significant obstacles in applying for government business relief.
  • 29% applied for government business relief
  • Of those that did not apply:
    • 69% did not apply, required technical assistance  or believed they would not qualify
    • 19% required technical or other assistance in completing the application process
  • Smaller businesses much less likely to apply in Q2: revenue up 38% QoQ ($129K Q2 20 vs $96K Q1 20)
  • New businesses less likely to apply:  Applicants with 2+ years in business surged 18% QoQ

This survey encompasses data from Q2 2020. It is derived from 29,164  business loan applications to Camino Financial.


Q1 2020

Summary: Immigrants and undocumented business owners have been disproportionately impacted by the lack of access to credit and access to stimulus programs in the face of the COVID-19 crisis. Given the scale of this community, this has implications for the U.S. economy as a whole. 

The U.S. Latinx Small Business market is large and significant:

  • Approx 11 million undocumented immigrants, mostly Latinx, in the U.S. 
  •  $31.9 billion in U.S. tax receipts without benefits in return
  •  Approx 810,000 businesses owned by undocumented immigrants
  •  Businesses owned by undocumented immigrants contribute $80 to $120 billion in sales per year (est.)

Key Insights

  • Immigrants and undocumented business owners have been disproportionately impacted by the lack of access to credit and access to stimulus programs
  • Q1 2020 annual revenue for undocumented applicants decreased by 11% compared to Q4 2019, and 22% compared to Q1 2019
  • Rise in first-time borrower applicants in Q1 2020, reflecting 40% of all applicants in the quarter compared to 35% in Q4 2019
  •  No Credit applicants surged by 14% to 40% of Latinx applications

This Survey encompasses data from Q1 2020. It is derived from 27,793 business loan applications to Camino Financial. 


Q4 2019

Summary: Latinx entrepreneurs launched new businesses at an increasingly rapid rate in 2019, despite lack of credit history.

Key Insights

  • Average Latinx Small Business revenue remained relatively flat in Q4 2019
  • Latinx businesses have a lower distribution of Credit Scores compared to Non-Latinx applicants
  • The number of Latinx Small Business loan applications with no reported credit score increased dramatically in Q4 
  • Latinx entrepreneurs launch new businesses at an increasingly rapid rate 
  • Most Latinx Small Businesses operate in Low to Moderate Income areas

This initial Survey encompasses data from 2019.


 

Camino Financial uses proprietary A.I. software to aggregate data and build machine learning models to make credit decisions for thin-file, cash-based microenterprises. These unique capabilities give Camino Financial exclusive insights into the understudied Latinx business market.

For more information, data, and background, contact [email protected].

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