About the Biz2Credit Latino-Owned Business Study
Biz2Credit, a leading online funding provider to small businesses, analyzed the financial performance of over 121,000 companies, including more than 18,000 Latino-owned firms, that submitted funding requests through the company's online funding platform. The report covered small businesses across the country, from start-ups to established companies, from July 1, 2023 to June 30, 2024.
Inflationary pressures significantly hurt the earnings of businesses, and Latino-owned firms are not immune. While their revenues rose in 2023-24, their expenses increased almost twice as much.
Profits were down 36%, on average, for companies that applied for funding on our platform. 
INSIGHT FROM BIZ2CREDIT CEO, ROHIT ARORA
Latino-Owned Businesses Versus Non-Latino Counterparts In Key Business Performance Categories During 2023-24
Data from financing applications over the past year revealed the following key facts:
- Average annual revenue for Latino-owned businesses was $671,360, compared to $744,027 for non-Latino-owned businesses.
- Average Operating expenses for Latino-owned businesses was $599,192, compared to $649,790 for non-Latino-owned businesses.
- Average earnings (Annual Revenue - Operating Expenses) across all businesses decline. Latino-owned businesses ($72,168) had lower profit than non-Latino-owned businesses ($94,237) in 2023-24.
Latino-Owned Businesses Versus Non-Latino Counterparts In Key Business Performance Categories During 2023-24
- Based on submitted applications, the average credit score* for Latino business owners jumped from 641 last year to 647 in 2023-24, while credit score for non-Latino business owners increased from 648 to 659.
- The average age of business (in months) for Latino-owned businesses is lower (63.5) than for non-Latino businesses (78.9) in 2023-24.
CREDIT SCORES
AGE OF BUSINESS
Average Approved Funding Amount for Latino-Owned Businesses was Lower than for Non-Latino Businesses
- The average approved funding amount for Latino-owned businesses was $16,662 less than non-Latino-owned businesses in 2023-24.
- The average funding size for Latino-owned businesses was lower than for non-Latino-owned businesses in 2023-24.
Funding Applications by State
For the third consecutive year, Florida has ranked first, followed by California in second, and Texas in third for the highest concentration of funding applications from Latino-owned businesses.
The state where the largest number of financing applications from Latino-owned businesses was Florida (24.00%), followed by California (19.4%), Texas (15.2%), New York (5.8%), New Jersey (4.4%), Arizona (3.2%), Georgia (2.4%), Illinois (2.1%), and Colorado (1.9%) in 2023-24, according to submitted applications.
Funding Applications by Industries
Construction, the largest category of businesses represented 19.10% of the Latino-owned companies in 2023-24, followed by Other Services (except Public Administration) and Accommodation and Food Services.
Latino-Owned vs. Non-Latino-Owned Businesses (YEAR-OVER-YEAR COMPARISONS)
Over the past year, businesses have experienced mixed performance across key metrics. While both Latino-owned and Non-Latino-owned businesses have seen revenue growth, their earnings have notably declined.
2023-24 vs. 2022-23 Percent Change
| Key Categories | Latino YoY % Change | Non-Latino YoY % Change |
|---|---|---|
| Avg Annual Revenue | 11.6% | 11.5% |
| Avg Earnings | -36.3% | -40.9% |
| Avg Operating Expenses | 22.7% | 28.0% |
| Avg Credit Score* | 0.9% | 1.7% |
| Avg Age of Business (in Months) | 17.6% | 25.2% |
Latino-Owned vs. Non-Latino-Owned Businesses (YEAR-OVER-YEAR COMPARISONS)
Detailed breakdowns of the changes in key metrics of Latino-owned businesses and Non-Latino year-over-year (YoY).
| Latino | 2023-24 | 2022-23 | % Change | Difference |
|---|---|---|---|---|
| Avg Annual Revenue | $671,360 | $601,636 | 11.6% | $69,724 |
| Avg Earning | $72,168 | $113,268 | -36.3% | ($41,100) |
| Avg Operating Expenses | $599,192 | $488,368 | 22.7% | $110,824 |
| Avg Credit Score* | 647 | 641 | 0.9% | 6 |
| Avg Age of Business | 63.5 | 54 | 17.6% | 9.5 |
| Non-Latino | 2023-24 | 2022-23 | % Change | Difference |
|---|---|---|---|---|
| Avg Annual Revenue | $744,027 | $667,204 | 11.5% | $76,823 |
| Avg Earning | $94,237 | $159,365 | -40.9% | ($65,128) |
| Avg Operating Expenses | $649,790 | $507,840 | 28.0% | $141,950 |
| Avg Credit Score* | 659 | 648 | 1.7% | 11 |
| Avg Age of Business | 78.9 | 63 | 25.2% | 15.9 |
Methodology
Industry Sector Definition : For the analysis, Biz2Credit examined the financials of companies that applied in the 2024 study in the following sectors:
- Accommodation and Food Services—Activities of this sector are providing customers with lodging and/or preparing meals, snacks, and beverages for immediate consumption.
- Administrative and Support and Waste Management and Remediation Services—Activities of this sector are performing routine support activities for the day-to-day operations of other organizations.
- Construction—Activities of this sector are erecting buildings and other structures (including additions); heavy construction other than buildings; and alterations, reconstruction, installation, and maintenance and repairs.
- Health Care and Social Assistance—Activities of this sector are providing health care and social assistance for individuals.
- Other Services (except Public Administration)—Activities of this sector are providing services not elsewhere specified, including repairs, religious activities, grantmaking, advocacy, laundry, personal care, death care, and other personal services.
- Professional, Scientific, and Technical Services—Activities of this sector are performing professional, scientific, and technical services for the operations of other organizations.
- Real Estate and Rental and Leasing—Activities of this sector are renting, leasing, or otherwise allowing the use of tangible or intangible assets (except copyrighted works) and providing related services.
- Retail Trade—Activities of this sector are retailing merchandise generally in small quantities to the general public and providing services incidental to the sale of the merchandise.
- Transportation and Warehousing—Activities of this sector are providing transportation of passengers and cargo, warehousing and storing goods, scenic and sightseeing transportation, and supporting these activities.
- Wholesale Trade—Activities of this sector are selling or arranging for the purchase or sale of goods for resale; capital or durable non consumer goods; and raw and intermediate materials and supplies used in production and providing services incidental to the sale of the merchandise.
Data Collection
- The data included in this study was collected from the submitted cases between July 1st, 2023, and June 30th, 2024. The study encompassed over 121,000 applications.
- Based on verified cash flows of merchants on the Biz2Credit marketplace (using Submitted Annual Revenue and Submitted Operating Expense), we excluded cases where the 'annual revenue' or 'operating expense' exceeded $5 million from the analysis of revenue and expenses.
- Biz2Credit used 2023-24 submitted applications to conduct a year-over-year comparison for 2022-23 data, showing average revenue, average operating expenses, and average earnings.
Data Preprocessing Methodology
The four most important variables considered in pre-processing were:
- Annual Revenue
- Operating Expenses
- Age of Business
- Personal Credit Score
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $8 billion in small business financing. Through its state of the art online platform, Biz2Credit directly offers business funding products. Biz2Credit believes small business funding should be easy to understand, easy to access, easy to use and always available when needed most. That is why Biz2Credit's goal has always been to create the best and fastest small business funding platform.
To learn more and apply for business financing, visit www.biz2credit.com or Twitter @Biz2Credit, Facebook and LinkedIn.
Term Loans are made by Itria Ventures LLC or Cross River Bank, Member FDIC.