Hispanic Entrepreneurs Significantly More
Optimistic About Growth Prospects, Lean on Strong Support Systems
of Family, Friends and Community
Owners of Hispanic small businesses are incredibly optimistic
about the year to come – much more so than their non-Hispanic
counterparts. According to the inaugural Bank of America Hispanic
Small Business Owner Spotlight, they are significantly more hopeful
about revenue and hiring plans in 2017 – which, as the
fastest-growing segment of the small business sector, further
cements their role as a critical driver of local economies and
growth.
The study, which focuses on the aspirations and pain points of
Hispanic small business owners across the country, found that 71
percent of Hispanic entrepreneurs expect their revenue to increase
in 2017 – 20 percentage points higher than that of non-Hispanic
respondents (51 percent). In addition, more than half of Hispanic
entrepreneurs plan to hire more employees over the next 12 months,
compared to one-quarter of non-Hispanic small business owners. The
long-term view also looks promising, with 76 percent predicting
business growth over the next five years, compared with 55 percent
of non-Hispanic small business owners.
“For our community of Hispanic small business owners, the
American dream of prosperity through hard work is alive, real and
inspiring,” said Elizabeth Romero, Small Business Central Division
executive, Bank of America. “They see opportunity for themselves,
as well as their families, and are leveraging personal networks and
communities to help them realize their dreams. Even in the face of
the same challenges and economic concerns that affect all small
business owners, they are proving to be not only resilient, but
incredibly bullish about their future plans and prospects for
success.”
“Hispanic-owned small businesses are a vital driver of economic
growth and American jobs. The Bank of America findings show that
trend is on track to continue in 2017. Research such as this is
important in highlighting the critical contributions that
Hispanic-owned businesses are making to build and sustain
prosperity for families and communities across the country,” said
Javier Palomarez, president and CEO, United States Hispanic Chamber
of Commerce.
Hispanic small business owners aggressively planning for
growth, split on lending gap
Sixty-eight percent of Hispanic small business owners have
applied for a loan at some point during the lifetime of their
business, compared with 48 percent of their non-Hispanic
counterparts. Of those who have applied for a loan, 86 percent of
Hispanic entrepreneurs were approved, similar to the approval rate
reported by non-Hispanic small business owners (85 percent).
Looking ahead, Hispanic small business owners are nearly four
times as likely as their non-Hispanic counterparts to have plans to
apply for a loan in 2017 (35 percent vs. 9 percent). Despite this,
51 percent believe there is a lending gap for Hispanic versus
non-Hispanic small business owners, with slightly fewer (49
percent) saying the disparity doesn’t exist.
Hispanic businesses have stronger ties to family, friends and
community
Hispanic entrepreneurs are more likely to look to family and
friends not only for financial investments, but also for help with
running their business. Sixty-six percent of Hispanic entrepreneurs
have received financial gifts or loans from family and/or friends
at some point to help fund their business — 29 percentage points
higher than their non-Hispanic counterparts (37 percent). When it
comes to additional forms of family support, Hispanic small
business owners scored higher across the board than non-Hispanic
entrepreneurs on:
- The influential role that family plays:
55 percent say their family plays an influential role in their
business decisions, versus 39 percent of non-Hispanic
entrepreneurs.
- Help with running the business: 63
percent say their family helps to run their small business, versus
54 percent of non-Hispanic small business owners.
- Financial, emotional or operational
assistance: 93 percent say they receive financial, operational
and/or emotional assistance from their family, versus 83 percent of
non-Hispanic small business owners.
In addition, Hispanic small business owners are more than twice
as likely to say they will pass their business on to a family
member (42 percent vs. 18 percent of non-Hispanic small business
owners).
Community also plays a key role for Hispanic entrepreneurs, as
69 percent say community is important to their individual business’
success (vs. 47 percent of non-Hispanic small business owners), and
77 percent support local nonprofits or charities (vs. 67 percent of
their non-Hispanic counterparts).
Hispanic entrepreneurs still concerned about a number of
economic issues despite overarching optimism
When asked about the single biggest business challenge they
face, Hispanic small business owners are split. Twenty-three
percent cite maintaining a work-life balance as their top concern,
followed by finding qualified candidates (19 percent), access to
loan funding (17 percent), understanding regulations and policies
(17 percent) and managing the day-to-day of their business (11
percent). Only 3 percent cite a language barrier as a
challenge.
Although Hispanic small business owners are optimistic about
2017 revenue, hiring, and long-term growth, they are also highly
concerned about a number of economic issues. Health care costs are
the top concern for 71 percent of respondents – the same top
concern for non-Hispanic entrepreneurs (75 percent). However,
Hispanic entrepreneurs are significantly more concerned about:
- The strength of the U.S. dollar (62
percent of Hispanic vs. 51 percent of non-Hispanic small business
owners).
- Corporate tax rates (61 percent vs. 49
percent).
- Interest rates (61 percent vs. 45
percent).
- Commodities prices (59 percent vs. 47
percent).
- Credit availability (55 percent vs. 34
percent).
For a complete, in-depth look at the insights of the nation’s
Hispanic small business owners, read the 2017 Bank of America
Hispanic Small Business Owner Spotlight, and for additional
insights, download the Hispanic Small Business Owner Spotlight
infographic here.
Bank of America Hispanic Business Owner SpotlightGfK Public
Affairs and Corporate Communications conducted the Bank of America
Hispanic Business Owner Spotlight survey between August 7 and
October 4, 2016 using a pre-recruited online sample of Hispanic and
non-Hispanic small business owners. GfK contacted a national sample
of 1,000 small business owners in the United States with annual
revenue between $100,000 and $4,999,999 and employing between 2 and
99 employees, as well as 348 interviews among Hispanic small
business owners, 100 of whom were primary Spanish speakers. The
final results were weighted to national benchmark standards for
size, revenue, and region, and, for the Hispanic augment, whether
the respondents were primarily English-speaking or
Spanish-speaking. Previous waves of the Small Business Owner Report
survey were conducted by telephone. Best efforts were made to
replicate processes in sample, weighting, and method.
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