Latino Business Boom: SBA Doubles Loans to Small Latino Businesses under Biden Administration

Administrator Isabel Casillas Guzmán, the Latino voice in President Biden’s cabinet for small businesses in the country, assured that the Small Business Administration (SBA) doubled the granting of loans backed to small Latino businesses and that under the Democratic government it has already They gave $3,000 million.

“Our country is experiencing a small business boom fueled significantly by the entrepreneurship, drive and resilience of the Latino community, and the Biden-Harris administration is working to reverse the historic underinvestment in Latinos to unleash their full potential and advance our economy and the global economy. competitiveness,” Guzmán said.

Under President Biden’s Investing in America agenda, the SBA has doubled the amount of loans it supports annually to Latino small businesses and reached a record $3 billion in loans in fiscal year 2023, an 80% increase over 2020. “While there is still work to be done, this data is an encouraging sign of progress that the SBA will continue to build on as we seek to close long-standing gaps in lending to Latino-owned small businesses,” the official said.

The number of Latinas in the workforce will grow 26% and will be the most dynamic group in the economy

In a tight lending environment, SBA loan programs offer small businesses a critical alternative: affordable loans backed by the federal government. The SBA supported more than 7,700 loans to Latino-owned small businesses in fiscal year 2023 through loan programs. The Latino share of the SBA loan portfolio increased from less than 8% to more than 12%.

The United States has been experiencing a historic boom in small business creation led by women and people of color, and the SBA’s FY 2023 loan programs supported that trend: with 11% more loans awarded to small businesses than in the previous fiscal year.

Latino entrepreneurs are at the center of this growth as the rate of Latino small business creation continues to climb at a historic pace—the fastest in a decade. More than 20% faster than pre-pandemic levels.

In fact, according to the annual Stanford Latino Entrepreneurship report, Latino-owned businesses in the United States are more likely than non-Hispanic white businesses to say they have recovered from the pandemic and are performing better than before. Latino-owned businesses are the fastest growing segment of the U.S. business population.

Still, Latino companies still struggle to access financing and face more acute staff shortages than others, according to the Stanford report. They are denied bank loans and when they are granted, they are at higher rates than white companies. Even when they have similar credit scores or higher income rates. That makes Latino businesses twice as likely to use personal or family savings.