Latino-Owned Business Study 2015

Biz2Credit Annual Study Gauges Progress on Business Operations and Areas of Growth

Introduction

The most recent Biz2Credit study showed that Latino small business loan applications grew 18 percent, however, Latino business owners lag behind in the necessary factors needed to secure financing such as annual revenue, credit scores, age of business and operating expenses.

"This year's study was interesting because we found that Latino businesses made gains in number of loan applications and certain industries saw higher growth, however, they still need to catch up to non-Latino businesses in many areas," said Rohit Arora, Chief Executive Officer, Biz2Credit. "It's an exciting time because Latinos are one of the fastest growing populations in the U.S. with 43 percent growth since 2007. We believe that this population will soon be on par or surpass non-Latino businesses."

Key Findings

The study uncovered the following key findings about how Latino small businesses compare to non-Latino small businesses:

• The average annual revenue for Latino-owned businesses was $68,540, trailing slightly behind the average annual revenue of $70,641 for non-Latino-owned businesses (though an improvement from the previous year).
• Average operating expenses were also significantly lower at $18,334, contrasted with $24,857 for non-Latino businesses.
• The average age of Latino businesses was younger at 22 months vs. 25 months for non-Latino businesses.
• The average credit score for Latino-owned businesses applying for loans was 603, compared to 614 for all others.

The Top 5 states for Latino-owned small business loan applications were:

• Texas (16.4%)
• California (15.7%)
• Florida (15.7%)
• New York (9.1%)
• Georgia (3.0%)

When sorted by Annual Revenue, Riverside-San Bernardino, CA was the leader. The New York metro area rounded out the bottom of the list in the top 25.