Getting Money on the Ground in our Hispanic Communities

As of February 2013, Biz2Credit formed a partnership with the Latino Coalition to offer more lending opportunities to Hispanic-owned businesses. Working in community and economic development, my ears immediately perked up. After watching this video, I found some of the information needed more research to be clarified. So let's start at the top, shall we?

The Latino population has more effect on the U.S. economy than ever. Hispanics are the fastest growing population in the country, numbering over 50 million. As such, they are also the fastest growing entrepreneurial demographic creating businesses at nearly double the normal rate. As of 2010, they comprised 2.3 million of the 27.1 million U.S. businesses. Over the last five years or so, Latino business' revenue jumped by an astonishing 55% to nearly $350 billion, though some believe even that number could be understated.

More than 20 % of all businesses in New Mexico, Florida and Texas are owned by Latinos, and even in the state with the largest economy, California, the figure is fast approaching 20%. Source

"Of course, the economic benefits from the dynamic growth of Latino businesses are not limited to the Latino community: one study in Los Angeles showed that growth of Latino owned businesses is a major factor in helping the city to recover from the devastating effects of the recession on its economy. The positive trends caused by Latino entrepreneurship can benefit the entire national economy and help the country to start growing again," says Forbes. So it would make sense that getting capital to worthy Latino businesses would be a good thing for everyone.

Lending to the "right" businesses is much more complicated than it sounds. Though banks are loosening their grips on purse strings for capital, large banks are still not equipped to handle the micro-loans that many of these small businesses require. That's where this Biz2Credit Initiative comes in to play. Originally, I thought the partnership was between the SBA (Small Business Administration) and the Latino Chamber. However, this Biz2Credit is not directly through the SBA, nor is it new.

Biz2Credit is an online application system that streamlines the process of applying for a loan. Working with a network of banks and economic developers, standardized loan applications are graded and matched up to potential lenders. This allows potential borrowers easier access to a variety of institutions while also allowing lenders to review applications quickly. The site also allows certified SBA lenders to weed out qualified projects. SBA loans are notorious for having many requirements and paperwork needed to apply. By narrowing down to only eligible projects, it saves business owners and lenders time and frustration.

The new initiative with the Latino Coalition has created an additional Biz2Credit website in Spanish. Since many Hispanic business owners are not comfortably fluent with English for business, this opens up more opportunities for the Latino market to gain access to capital. This has the possibility to increase prosperity and jobs into communities that might lag behind in the recovery otherwise. It also add a more dynamic element into our small business landscape by increasing diversity. If the research is true, we can all look forward to benefiting from stronger communities everywhere.