SBA-backed loans to Latino-owned small businesses hit $3B
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The number of federally-backed loans to Latino-owned small businesses has nearly doubled in two years, hitting a record $3 billion, according to the U.S. Small Business Administration.
Why it matters: Latino-owned firms are among the nation's fastest-growing small businesses, but a lack of access to capital, credit and loans has prevented some of these businesses from scaling and growing.
Details: SBA Administrator Isabel Guzman said last week the agency's latest data shows it has given out 7,746 loans to Latino-owned businesses in the last fiscal year.
- That's almost double the number of loans given to Latino-owned businesses in 2020, when 3,877 were issued.
- Total loan dollars ($3 billion) are up nearly $1.4 billion since President Biden took office, while the Latino share of the SBA's lending portfolio rose from under 8% to more than 12%.
What they're saying: "Our country is experiencing a small business boom driven significantly by the entrepreneurial spirit, drive, and resilience of the Latino community," Guzman said in a statement.
- She said the Biden administration is working to reverse historic underinvestment in Latinos and the latest data shows the SBA is making progress.
- U.S. Rep. Nanette Barragán (D-Calif.), chair of the Congressional Hispanic Caucus, said in a statement the caucus "applauds this promising trend" but much more needed to be done for Latino-owned businesses to get capital.
Zoom out: In 2006, the Obama administration SBA backed a record 9,951 loans for Latino businesses, although the amounts were smaller, totaling about $1.3 billion that year.
Background: SBA's lending programs offer small businesses affordable loans backed by the federal government at a time when interest rates are rising.
- The agency's 7(a) and 504 loan programs are the two most popular.
Between the lines: Latino-owned businesses in the U.S. are more likely than white non-Hispanic ones to say they've recovered from the pandemic and are performing better than before, according to a report out earlier this year.
- According to the report, 23% of Latino-owned businesses said they've recovered and are doing better than before, compared to 18% of white non-Hispanic-owned businesses.
- The median growth rate for Latino businesses was 25% from 2019 to 2022. It was 9% for white non-Hispanic owned businesses.
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