Latino-owned businesses have grown at double the national rate, even as financing channels remain mired.
Intern Jeffery Urbano and operations fellow Aileen Connelly in the new AL DÍA News Media office, located at 1835 Market Street in Center City Philadelphia.
At a recent online gathering of Latinos in Social Media, the topic was whether, after the elections, Latinos would have the political clout we appear to have now while the candidates are courting what they’ve been told is a crucial voting block. While the consensus of the chat appeared to be a disheartening “no” on the political front, the economic clout of Latinos is an altogether different thing.
The purchasing power of Latinos based on 2010 Census data is $1 trillion. We are the fastest growing consumer market. People want to sell us everything from phone cards to news. Fox is gearing up to launch MundoFox to Spanish-dominant Latinos Aug. 13, while Univision is working with ABC to create a network for the English-dominant Latino which they’re hoping will be up and running by the elections. Fox and ABC already have English-language Latino web sites, and NBC’s just moved out of beta. All of these are focused on drawing Latino readership and selling advertising to Latinos.
Meanwhile, Latino businesses in the United States generate more than $345.2 billion in sales, according to a 2010 Census Bureau report. They employ 1.9 million people. And the growth rate of Hispanic-owned businesses is double the national rate — from 1.6 million businesses in 2002 to 2.3 million in 2007 —a whopping 43.7 percent increase that outpaces our population growth rate for the same period (approximately 36 percent).
We are, it seems, a cash cow.
Too bad that hasn’t translated into capital and investment parity for Latino-owned businesses. “Financing channels to Latino business remain mired within the control of incumbent market players,” according to one West Coast report about closing the financing gap. The Federal Reserve Bank of Minneapolis puts it even more plainly. Latino business owners, they say, have “limited opportunities to network with sources of traditional business financing and providers of business-related technical assistance.”
Moreover, the same Federal Reserve Bank calls for “promoting better working relationships between banks and minority and immigrant groups” and points out that it is in “the self-interest of banks to work with emerging market communities.”
As far back as 2004, the Milken Institute was saying that “Resolving the [Hispanic] business capital gap is critical to national economic health.”
What is remarkable is that Latino entrepeneurship has grown in spite of the economic crisis and recession. And that Latino-owned businesses continue to expand their vision and reach.
For us at Al Día it has meant, most recently, moving to a new space which will accommodate the growth we anticipate and the new endeavors we are poised to embark upon. The 20-year growth of the company — from a home-based newspaper produced in the Olney neighborhood of Philadelphia to the ambitious 2012 version with offices at 1835 Market — points to the strength of entrepreneurial Latinos.
The quality that has driven Al Día and the many Latino-owned businesses that have opened despite a dire economy and limited financing options, is what our office manager and comptroller calls “berraquera” — a Colombian slang expression that can be loosely translated as tenacity and drive.
Don’t get us wrong: it galls us that entrenched thinking limits access to capital, or corporate boardrooms, for Latinos. And equally, that preconceived notions and misconceptions make it necessary for us to work twice as hard and prove our mettle and excellence time and again.
But it doesn’t stop us, and that’s what makes Latinos a good bet. Take a look again at that Hispanic-owned business growth rate. Talk about berraquera.