Second quarterly Camino Financial U.S. Latinx Small Business Survey offers insight on the structural inequality faced by Latinx-Owned Businesses (LOBs) that received a disproportionately small share of the PPP loan and similar funding relief efforts. Our Q2 2020 survey shows that 29% of Latinx-Owned Businesses applied for government business relief vs. 70% of businesses as a whole. Evidently, there exists a failure to adequately support a critical component of the U.S. economy, holding implications for recovery and future growth.
Camino Financial is sharing its proprietary data on the LOB segment to provide a baseline and track the economic development of this key demographic. As part of the report, Camino Financial surveyed 497 Latinx business owners who reported that 67% are open for business and many of the remaining 33% expect to reopen absent a reclosing of the economy. The findings indicate the resilience of Latinx-Owned Businesses during a time of economic uncertainty amidst a long road of recovery.
Other key insights from the survey include:
- Positive selection bias as LOBs are discouraged from applying – Smaller businesses self-disqualify at higher rates & better-funded businesses are overrepresented in loan applications.
- Capital critically needed for survival – 80% of those surveyed experienced a decline in sales. At some point during the first half of the year, 70% of businesses had to shut their doors.
“We’re seeing the beginning of a credit crunch, especially of micro-businesses in the Latinx market,” said Sean Salas, CEO & Co-Founder of Camino Financial. “However, we see the resilience of our market despite lack of access to capital, as 67% of Latinx-owned businesses reported they’re open and we expect many others to re-open.”
This survey will be followed by quarterly-issued U.S. Latinx Small Business Surveys informed by Camino Financial’s loan application data. The report can be indicative of systemic macroeconomic trends within the larger U.S. Economy.
SOURCE Camino Financial, Inc.