DPC REPORTS
FACT SHEET | April 22, 2008
Hispanic Small Businesses: Diversity, Economic Growth, and Job Creation in America
America's small businesses are the backbone of our economy, helping to keep the country competitive through innovation and new ideas. Democrats recognize that one of our nation's greatest assets is our diversity. Investing in minority-owned businesses, therefore, helps to increase the value of that asset and to promote economic growth and job creation.
Hispanic small business enterprises are growing. Over the last ten years, minority-owned business enterprises accounted for over 50 percent of the two million new businesses started in the United States, crossing every industrial sector from financial services and health care to construction and transportation. Today there are more than four million minority-owned companies in the country with annual sales totaling $694 billion. Between 1997 and 2002, the number of Hispanic-owned firms increased by 31 percent. (SBA Office of Advocacy, 4/2007)
Hispanics or Latinos constitute the largest minority business community in the United States, owning 6.6 percent of all U.S. firms. There are 1.6 million Hispanic-owned firms in the United States, supporting 1,536,795 employees.
A state-by-state report on the Hispanic small businesses is attached in Appendix A.
Minority-owned firms, however, make significantly less than their non-minority counterparts. The average gross receipts of minority firms were $162,000 - considerably lower than the $448,000 average gross receipts of non-minority firms. On average, for every dollar that a White-owned firm made, Hispanic-, Native American-, and Asian-owned businesses made 56 cents; Black-owned businesses made 43 cents; and Pacific Islander-owned firms made about 59 cents, according the Small Business Administration (SBA) (SBA Office of Advocacy, 4/2007).
Hispanic-owned firms receive a disproportionately low percentage of government-backed business loans. Hispanics represent 14.8 percent of the U.S. population. (Census Bureau, 5/2007) Government-backed small business loans to Hispanics, however, have remained stagnant over the last seven years, despite the fact that they comprise the largest group of minority business owners. Last year, Hispanics received about ten percent of 7(a) loans - the government's largest loan program for working capital - and only seven percent of total dollars lent.(SBA)
The Small Business Administration should be a resource for minority-owned firms. The SBA is supposed to reach out to more minorities, women and other underserved communities to market their financing, contracting, and training programs. For the last seven years, however, the Bush Administration has not made helping underserved communities a priority.
The continuing disparity between the number and earnings of minority firms in the United States and the continuing barriers many minorities face as they seek to start or expand a business demonstrates the need for targeted programs at the federal level for minority entrepreneurs. Despite signs that small businesses are facing increasingly difficult market conditions, President Bush's Fiscal Year 2009 budget proposal for the SBA raises fees on loans, provides no funding for microloans, fails to invest in more contracting oversight, and cuts funding for key business assistance programs like Women's Business Centers and Small Business Development Centers.
Appendix A
Hispanic-Owned Small Businesses
|
State |
# Small Businesses |
Jobs |
Income |
Hispanic-Owned |
|---|---|---|---|---|
|
UNITED STATES |
26,800,000 |
58.6 million |
$992.5 billion |
1,600,000 |
|
Alabama |
368,500 |
826,200 |
$10.6 billion |
2,500 |
|
Alaska |
67,300 |
132,700 |
$2.4 billion |
1,200 |
|
Arizona |
473,000 |
1,000,000 |
$15.1 billion |
35,100 |
|
Arkansas |
247,700 |
499,800 |
$6.0 billion |
2,100 |
|
California |
3,675,700 |
6,900,000 |
$151 billion |
427,700 |
|
Colorado |
550,100 |
991,900 |
25.4 billion |
24,100 |
|
Connecticut |
347,600 |
774,800 |
$18.8 billion |
9,400 |
|
Delaware |
76,300 |
180,000 |
$2.5 billion |
900 |
|
District of Columbia |
65,200 |
207,200 |
$4.2 billion |
2,200 |
|
Florida |
1,942,200 |
3,100,000 |
$39.2 billion |
266,700 |
|
Georgia |
859,500 |
1,600,000 |
$25.6 billion |
18,300 |
|
Hawaii |
117,200 |
268,900 |
$3.1 billion |
3,100 |
|
Idaho |
151,300 |
284,700 |
$4.5 billion |
2,800 |
|
Illinois |
1,121,300 |
2,600,000 |
$42.5 billion |
39,500 |
|
Indiana |
486,400 |
1,300,000 |
$14.7 billion |
5,500 |
|
Iowa |
261,800 |
660,400 |
$6.4 billion |
1,500 |
|
Kansas |
246,900 |
609,800 |
$8.8 billion |
4,200 |
|
Kentucky |
346,200 |
759,200 |
$8.5 billion |
2,100 |
|
Louisiana |
364,900 |
895,600 |
$10.6 billion |
7,600 |
|
Maine |
154,000 |
302,700 |
$3.4 billion |
700 |
|
Maryland |
536,200 |
1,100,000 |
$16.8 billion |
15,400 |
|
Massachusetts |
651,100 |
1,500,000 |
$24.8 billion |
15,900 |
|
Michigan |
849,500 |
2,000,000 |
$28.4 billion |
9,800 |
|
Minnesota |
504,000 |
1,200,000 |
$13.1 billion |
4,000 |
|
Mississippi |
216,700 |
473,000 |
$5.8 billion |
1,300 |
|
Missouri |
508,900 |
1,200,000 |
$14.5 billion |
3,700 |
|
Montana |
115,700 |
224,700 |
$3.1 billion |
1,000 |
|
Nebraska |
161,800 |
400,700 |
$5.0 billion |
2,000 |
|
Nevada |
215,800 |
453,100 |
$6.7 billion |
9,700 |
|
New Hampshire |
145,900 |
311,500 |
$4.7 billion |
900 |
|
New Jersey |
828,400 |
1,800,000 |
$34.9 billion |
49,800 |
|
New Mexico |
158,200 |
338,700 |
$4.6 billion |
29,700 |
|
New York |
1,925,100 |
3,900,000 |
$85.4 billion |
163,600 |
|
North Carolina |
766,500 |
1,600,000 |
$19.1 billion |
9,000 |
|
North Dakota |
63,100 |
167,700 |
$1.7 billion |
200 |
|
Ohio |
920,500 |
2,400,000 |
$26.9 billion |
7,100 |
|
Oklahoma |
332,000 |
656,000 |
$16.4 billion |
5,400 |
|
Oregon |
350,500 |
771,400 |
$10.3 billion |
6,400 |
|
Pennsylvania |
1,006,900 |
77,800 |
$39.9 billion |
11,000 |
|
Rhode Island |
101,800 |
252,900 |
$2.8 billion |
3,400 |
|
South Carolina |
352,900 |
780,800 |
$8.1 billion |
3,000 |
|
South Dakota |
79,100 |
195,700 |
$2.3 billion |
400 |
|
Tennessee |
531,200 |
1,100,000 |
$23.3 billion |
4,300 |
|
Texas |
2,093,400 |
3,900,000 |
$122.6 billion |
319,300 |
|
Utah |
236,000 |
467,200 |
$7.0 billion |
5,200 |
|
Vermont |
80,300 |
162,800 |
$1.7 billion |
500 |
|
Virginia |
643,600 |
1,500,000 |
$20.7 billion |
19,000 |
|
Washington |
578,300 |
1,300,000 |
$19.4 billion |
10,300 |
|
West Virginia |
125,300 |
313,600 |
$3.6 billion |
600 |
|
Wisconsin |
447,200 |
1,300,000 |
$12.1 billion |
3,800 |
|
Wyoming |
61,900 |
129,000 |
$2.4 billion |
1,300 |
Source:SBA Office of Advocacy, 2007. Minority-owned business data are from 2002, the most recent data available from SBA and the Department of Commerce. Statewide figures are from 2006, the most recent data available from SBA and the Department of Labor.
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- Erika Moritsugu (224-3232)