What happened to the Latino businesses who applied for a loan in 2020?
Latino businesses in the United States are the fastest-growing demographic segment in the small business community, as reflected by a 34% jump in the number of Latino business owners over the past 10 years compared to a 1% rise in the number of small business owners in America as a whole.
Although the media tends to cover the immigration side of the Latino community as it is a topic that attracts significant interest from viewers and readers, at least 80% of the Latinos residing in the United States have already obtained their citizenship, according to an article posted by USA Today.
That said, Latino businesses face some hurdles when it comes to securing financing for their ventures, with statistics indicating that the Latino-owned small businesses have often been shunned by large banks, while relying on smaller institutions to obtain financing.
Meanwhile, 44% of loan applications made by Latinos were originated in California and Texas, followed by Florida, a state that accounts for 11% of the total applications received in the United States.
This highlights the degree of geographical concentration of the Latino business community, which is why the following article aims to provide more information on how Latino-owned companies can easily obtain small business loans in Florida, Texas, and California by relying on financial technology companies.
How have Latino businesses been performing lately?
One of the most important elements that can help Latino businesses in securing small business loans in Florida, and other states, is showing the financial performance of their companies in a way that conveys strength in their payment capacity to a prospective lender.
According to Biz2Credit, Latino small businesses saw their annual revenue grow by nearly 10% on average – moving from a total of $479,000 to $525,000 during the twelve months ended in September 2020.
Biz2Credit’s survey further highlighted that Latino small business owners saw their credit score rise from 588 to 618 – an interesting improvement as lenders often impose a minimum credit score of 600 to consider a candidate eligible.
The average revenue of Latino-owned businesses fell short by $96,000 compared to the figure made by companies owned by non-Latino individuals in the US.
The good news is that fintech companies like Camino Financial consider this performance as good enough for granting small business loans in Florida, with the firm currently offering as much as $400,000 in financing for eligible candidates.
The interest rates for these small business loans in Florida usually starts at 12% per year with repayment periods going from 24 to 60 months depending on various factors.
The most advantageous aspects of these financing instruments are that Latino owners can apply for them online in a matter of minutes and they will typically receive a response in less than 48 hours while the funding can be deposited in their accounts within ten business days or less.
Which are the main challenges that Latino business face when it comes to credit?
One of the main challenges that Latino-owned businesses face is the “cultural gap” that owners often experience as they are not accustomed to the way the US financial system works. For example, Latino owners often ignore the impact that a high credit score or a clean credit history can have on securing cheap financing.
Furthermore, debt often has a negative connotation in Latino communities, which creates certain reluctance in regards to the benefits of using loans as a way to finance a business’ growth.
How can financial technology companies help in the US?
By eliminating the usual hurdles that traditional financial institutions create, financial technology companies, such as online lenders, can assist Latino-owned businesses in securing the financing they need to keep expanding their operations at an accelerated pace.
Are you a Latino small business owner?
Did you know small business loans in Florida can be obtained in a matter of minutes with an online loan provider?
Visit Camino Financial’s official website for more information on these loans if you are currently seeking financing for your company.
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