Despite COVID-19 challenges, Hispanic and Latino businesses are recovering from the pandemic
The pandemic has brought on many challenges for Latino business owners, but resiliency has helped many maintain and strive.
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The COVID-19 pandemic has impacted businesses and communities left and right, large and small.
As a result, business owners have had no choice but to navigate and find innovative ways to not only survive, but thrive. While some have succeeded, the weight of the pandemic became too overwhelming to bear for others.
This has been especially true for diverse business owners of color, who have been more profoundly impacted by the pandemic.
During the Greater Philadelphia Hispanic Chamber of Commerce’s 2021 State of Hispanic Business virtual event, Rhett Buttle, Founder & Principal at Public Private Strategies, provided a detailed overview of small businesses in the region.
While discussing how specifically Hispanic and Latino businesses have fared during the pandemic, the research showed that the top five business sectors most affected by the pandemic generate almost 50% of the revenues of Hispanic and Latino-owned businesses and 65% of Hispanics and Latinos work in those sectors.
“One of the biggest challenges we saw as we think about recovery and tools to come out of recovery is that Hispanic and Latino businesses just weren’t able to get access to many of the programs,” said Buttle.
According to statistics from the GPHCC, Latino-owned businesses had their Paycheck Protection Program (PPP) loans approved at nearly half the rate of white-owned businesses.
While PPP has been a huge lifeline for many businesses to remain open throughout the worst of the economic downturn resulting from the pandemic, the inequity in access has been problematic.
However, despite that hurdle, Latino-owned businesses have some great resiliency in coming back out of the pandemic, resulting in a significant positive trend.
“This is being fueled not only by existing businesses, but also folks who are starting new businesses,” said Buttle.
“We are seeing some positive momentum in the Latino and Hispanic community,” he added, noting entrepreneurship as one of the main ingredients of that momentum.
Through a survey, it was found that overall, a majority of the Hispanic and Latino business community have great optimism in the future.
To this end, Buttle noted that when thinking about long-term solutions to help those businesses grow, a big part of the equation is in what the government can do.
When it comes to public policy, Buttle highlighted three primary initiatives from the federal government.
One is the American Rescue Plan passed in March 2021, which has helped many businesses obtain funds that have been crucial in helping them survive the economic climate.
During the survey, three main commonalities heard from business owners were a need to access capital to keep employees on payroll, better access to information on vaccines and how it may impact the economy, and information about the digital tools many businesses have had to use during the pandemic.
In addition to PPP, the American Rescue Plan has also produced the Employee Retention Tax credit, helping small- and medium-sized businesses benefit by keeping employees on the books; as well as the Paid Leave Tax Credit, helping businesses that didn’t previously have paid leave take advantage of it and allow businesses the ability to allow employees to get vaccinated against COVID.
The Biden administration’s overarching Build Back Better Initiative has also been critical to helping diverse businesses survive the pandemic.
For example, part of the initiative includes a budget for a $25 billion investment in American small businesses over the next 10 years.
Buttle noted that one proposition currently under consideration is a direct lending program that would give the U.S. Small Business Administration the authority to make loans to businesses under $150,000.
“It's a really interesting proposition, because we often see that one of the biggest gaps is not getting the medium sized loans, but it's really small loans,” he said.
While larger banks and institutions are often unable to make those loans, the FinTech market has been able to step in and make those loans.
“However, there’s still a gap, particularly for Latino and Black businesses,” added Buttle.
Looking forward, there remains optimism towards moving further past the pandemic and seeing growth in Latino-owned businesses.
In addition to those business owners, the government also have a very important role to play in seeing that through.
This article is part of Broke in Philly, a collaborative reporting project among more than 20 news organizations focused on economic mobility in Philadelphia. Read all of our reporting at brokeinphilly.org.