Every year, National Hispanic Heritage Month (HHM) is observed by Americans across the United States. The designation began in 1968 as Hispanic Heritage Week, under President Lyndon B. Johnson, and was made a month-long celebration in 1988 by Congress.
National Hispanic Heritage Month, held annually between September 15 and October 15, celebrates the histories, cultures, and contributions of American citizens whose ancestors came from Spain, Mexico, the Caribbean, and Central and South America.
America has the fourth largest Spanish-speaking population of any country in the world, following Mexico, Columbia, and Argentina. Although it is not an official language in the U.S,. Spanish is spoken at home by 42 million people and is the most common second language learned.
Generations of Hispanic Americans have enriched our nation by making contributions in science, education, the arts, and politics. Famous Hispanic Americans, including Cesar Chavez, Roberto Clemente, Jennifer Lopez, Marco Rubio, Sonia Sotomayor and Lin-Manuel Miranda have had major influence on history and culture in the U.S.
Economic impact of Hispanic-owned businesses
In addition to these cultural and historical impacts, Hispanic-owned businesses have a huge effect on the U.S. economy. Hispanic business owners enhance and improve the overall U.S. economy by:
- Contributing to local economies by bringing growth to the community where the business was established.
- Innovating with new products, services, and delivery channels.
- Driving economic growth and job creation.
According to the Joint Economic Committee Hispanic Entrepreneurship and Business Brief, there are nearly five million Hispanic-owned businesses located across all 50 states and the District of Columbia. These businesses contribute over $800 billion to the American economy annually.
Hispanic Americans are also starting employer businesses, which employ at least one person other than the owner, at a faster rate than the national average. Nearly one in four new employer businesses are formed by Hispanic Americans, driving job creation and growth. More than 300,000 Hispanic-owned employer businesses employ about three million workers, with more than $100 billion in annual payroll.
Funding for Hispanic-owned businesses
However, despite these remarkable contributions from Hispanic businesses, it is still more difficult for Hispanic entrepreneurs and small business owners to access the capital they need. Hispanic-owned businesses are less likely than white-owned businesses to be approved for large loans by national banks. These constraints may leave Hispanic-owned businesses more vulnerable to economic volatility.
For example, during the pandemic and subsequent recession, Hispanic businesses and workers were disproportionately harmed by the COVID-19 pandemic. More than four out of five Hispanic-owned businesses reported a large negative impact, and many were unable to access emergency relief measures.
SBA and federal contracting programs
The Small Business Administration (SBA) recognizes the importance of Hispanic Heritage Month and celebrates the impact of Hispanic entrepreneurship on the U.S. economy. The SBA and its partners, including SmartBiz, help entrepreneurs with access to capital, mentorship, and business development.
Federal contracting programs also exist. The federal government uses special programs to help small businesses win at least 23% of federal contracting dollars each year. Programs include:
- 8(a) Business Development program for businesses owned and operated at least 51% by socially and economically disadvantaged individuals.
- HUBZone Program for small business growth in historically underutilized business zones.
- Women-owned Small Business (WOSB) Federal Contracting program to provide greater access to federal contracting opportunities for WOSBs and economically disadvantaged women-owned small businesses (EDWOSBs).
SmartBiz supports Hispanic-owned businesses
SmartBiz® is committed to helping Hispanic entrepreneurs get the capital they need to grow their businesses and continue to positively impact the U.S. economy. We are proud of the fact that over 60% of the loans funded by banks in the SmartBiz® network are to support women-owned, minority, or veteran businesses.
One of these businesses is Vargas Imports Bikes® in Laredo, Texas. The family business is owned by Maria and Victor Vargas and specializes in bikes for all ages, selling both on the wholesale and retail market in the United States and Mexico. Maria and her husband work long hours to give the best service and products to customers on both sides of the border. Maria said, “My husband and I are hard working people. I’m tired when I get home, but I love the business.”
Vargas Imports Bikes is a repeat SmartBiz customer. The couple first came to SmartBiz in 2020 and received two SBA loans. In 2022, they returned and received an $88,000 SBA loan to bolster inventory ahead of the busy holiday season, hire an employee, and for additional working capital. Read more of their story.
Final thoughts
Hispanic entrepreneurs and small businesses are a vibrant and vital component of the U.S. economy. Supporting Hispanic-owned businesses is important and will result in continued small business growth, job creation and community development.
Visit the SmartBiz website to learn more about how we work with all small businesses. Fill out our simple application to find out what loan options are available and how to get started.
