Hispanic-owned businesses surging on U.S. mainland
Hispanic business owners accounted for nearly 5.2 million companies with $766.8 billion in annual sales.
The number of Hispanic-owned businesses on the U.S. mainland is on the rise.
Hispanic business owners represented 14.5% of stateside business in 2022, up 13% from the prior year, the U.S. Small Business Administration’s Office of Advocacy reported.
Hispanic business owners accounted for nearly 5.2 million companies with $766.8 billion in annual sales, 3 million employees, and $124.4 billion in annual payroll.
Mexican business owners represented almost half, or 49.2%, of all Hispanic business owners in the U.S., followed by Cubans with 8.3%, Puerto Ricans with 7.7%, and Dominicans with 4.2%. A mix of six other Hispanic nationalities, as well as an “other” category, accounted for 30.8% of the businesses.
The highest share of Hispanic ownership was in administrative support and waste management (26.2%), transportation and warehousing (24.8%), and construction (24.2%). The lowest share was in real estate (7.7%), mining, quarrying and gas/oil extraction (5.7%), “other” (5.8%), and management of enterprises (2.6%), according to SBA’s report.
For employer firms, or businesses with at least one paid employee, the U.S. Census Bureau reported that about 7.1% of the 5.7 million employer firms in the U.S. were Hispanic-owned in 2021.
Construction was the top industry sector (70,571 firms) for Hispanic-owned businesses, the U.S. Census reported based on two-digit codes under the North American Industry Classification System. Next were accommodation and food services (46,795); and professional, scientific and technical services (44,684).
Hispanic-owned firms generated $572.9 billion in revenue in 2021, about 3.3% of the $17.4 trillion total revenue from all U.S. employer businesses, the Census reported.
The Census considers a business Hispanic-owned when 51% or more of the stock or equity is held by Hispanic owner(s) of any race. When 50% of the stock or equity is held by Hispanic owners and the other 50% by non-Hispanic owners, businesses are considered equally Hispanic/non-Hispanic-owned.
In the equally Hispanic/non-Hispanic-owned category, the highest number of firms were in the accommodation and food services (8,238); professional, scientific and technical services (7,525); and construction (7,363) sectors.
Pandemic recovery efforts
The U.S. Treasury Department recently reported that Hispanic-owned business ownership is up thanks to pandemic recovery efforts, noting that the COVID-19 pandemic caused disproportionate harm to Hispanic businesses and communities.
“At the height of the pandemic, Latinos were more likely to lose their jobs, more likely to work in front-line positions that increased their risk of exposure, and had among the highest mortality rates. Latino unemployment peaked at nearly 19% in 2020,” Treasury stated in a press release.
By 2021, Hispanic-owned businesses were generating greater revenue than before the pandemic, and Latino unemployment was dropping.
“Over the pandemic and recovery, the median growth rate in revenues was 25% for Latino employers. From 2019 to 2022, median weekly earnings increased 2.4% for Latino workers after accounting for inflation. At the same time, Latino unemployment hit a record low last September,” Treasury said in October.
In 2022, Hispanic-owned businesses were 50% more likely to request funding and financing than white-owned businesses, with plans to use the funds to expand their businesses, acquire additional capital assets, and meet operating expenses, the agency reported.
The Treasury Department said that federal programs under the President Biden administration’s American Rescue Plan helped spur and sustain the Latino small business boom. These programs included the State Small Business Credit Initiative (SSBCI) and the Emergency Capital Investment Program (ECIP), through which the Treasury Department invested $1.6 billion in Latino-designated minority depository institutions.
In Puerto Rico, the American Rescue Plan expanded the island’s version of the Earned Income Tax Credit (EITC), quadrupling benefits for workers through the first federal enhancement to Puerto Rico’s EITC since the credit was established nearly 50 years ago, Treasury said.
The agency also pointed out that there has been a 23% increase in the dollar amount of prime contracts awarded to Latino-owned businesses since fiscal year 2020 and noted that two minority-owned financial institutions have been designated as financial agents of the government.
There are some 5 million Hispanic-owned businesses in the U.S., and these generate an economic output of $2.8 trillion, including more than $800 billion in annual revenue, Treasury reported, citing data from the Stanford Latino Entrepreneurship Initiative (SLEI).
