Latino Small Business Study 2020
October 23, 2020
Earnings of Latino- Owned
Businesses Jumped 10 Percent
During Past 12 Months, According to
Biz2Credit’s Annual Study
Growth Outpaces Non-Latino Owned Businesses
When Economy Was at Full Strength
Average Annual Revenue
Average annual revenue of Latino-owned business increased to $525,415 in 2020, with an improvement of 10% from $479,413 in 2019.
The number of credit applications from Hispanic-owned businesses decreased by 4% over the past 12 months.
Average Credit Score
The average credit scores Latino-owned businesses increased from 588 last year to 618 in 2020. California was the state where the most business loan applications originated (24%), followed by Texas (20%), Florida (11%), New York (7%) and New Jersey (5%).
Average Annual Revenue
Average annual revenue for Hispanic-owned businesses was $96,106 lower than the
average revenue of non-Latino-owned companies ($621,521) in 2019-20.
Average Operating Expense
Average operating expense represents 67% ($349,444.70) of the Average Annual Revenue ($525,414.91) for Latino businesses-owned businesses, which was 45% ($215,846) in 2019. The rise of nearly 23.4 percent is observed in average operating expense of non-Latino businesses which is 64% (2020) from 40.6% in 2019.
Top Industries for
Experts Weigh In
“The spirit of entrepreneurship continues to thrive among the Latino populations and, until the COVID-19 set everyone back, Latino-owned businesses blossomed during the past year. As the economy emerges from the pandemic, we expect to see them in the forefront of the economic rebound.
Latino-owned businesses make enormous contributions to the U.S. to their communities, including job creation, which also benefits our overall economy. Popular Bank is proud to work with them to help solve their financial needs.”
“As a group, Latinos are expected to comprise almost 30% of the population by 2050, compared to 18% today. Our research finds that revenues of Latino-owned companies jumped 61% from 2017 to 2020.
Latino businesses are a growing sector of theeconomy, and they help contribute to its overall strength.”
- Average Annual Revenue of Hispanic-owned business increased to $525,414.91 in 2020, with an improvement of 10% from $479,412.97 in 2019.
- Average annual revenue for Hispanic-owned businesses ($525,415) was $96,106 lower than Non-Latino-owned companies ($621,521) in 2019-20.
- The number of credit applications from Hispanic-owned businesses decreased by 4% over the past 12 months.
- Average operating expenses represents 67% ($349,444.70) of the revenue for Hispanic-owned businesses, while in 2019, the figure was 45% ($215,846).
- The average credit score for Hispanics has increased from 588 of last year to 618.
- California was the state where the most loan applications originated (24%), followed by Texas (20%), Florida (11%), New York (7%), and New Jersey (5%). Arizona, Pennsylvania, Georgia, Illinois, and Virginia round out the top ten states for loan applications by Latino-owned firms.
- Construction remains the largest category of businesses represented nearly 17.18% of the Hispanic-owned companies in the study. Services (except Public Administration) were 15.74%, Accommodation and Food Services was 14.63%, Retail Trade was to 9.4%, Transportation and Warehousing 7.6% were the four next most common industries for Latino entrepreneurs.
About the Biz2Credit Latino Small Business Credit Study Biz2Credit, a leading online marketplace lender, analyzed the financial performance of 2900 Hispanic-owned businesses and 32000 other companies that submitted funding requests through the company’s online marketplace. All companies included in the survey have less than 250 employees and less than $10 million in annual revenues. The report covered small businesses across the country, from start-ups to established companies. Outliers have been removed from the dataset to avoid skewed results.