PALO ALTO, CA, March 27, 2025 (GLOBE NEWSWIRE) -- Today, the Latino Business Action Network (LBAN), in collaboration with the Stanford Graduate School of Business (GSB), released the 10th annual State of Latino Entrepreneurship (SOLE) research report unveiling groundbreaking data on the latest trends in Latino entrepreneurship across the U.S. The findings will be presented at the 2025 State of Latino Entrepreneurship (SOLE) Summit, a free event that brings together over 1,200 attendees at Stanford, including business owners, investors, corporations, government officials, and academics, among others, creating opportunities for professional networking and collaboration.
The report highlights the challenges Latino-owned businesses face and the significant growth and contribution they bring to the U.S. economy. This year’s report aims to better understand the challenges and opportunities facing Latino-owned firms in the United States, access to capital and government and corporate contracts, adoption of artificial intelligence (AI), sustainability, and much more.
KEY TAKEAWAYS
Latino-owned businesses are a dynamic and growing portion of the U.S.; with more than 5 million firms driving $800 billion in revenue, they represent a massive opportunity for the U.S. The research reveals that Latinos are driving entrepreneurship in the U.S., starting businesses faster, increasing revenues faster, and providing more jobs with better benefits across the board. In addition, the research highlights that without the rapid creation of new businesses in the last 5 years by Latinos, the total number of businesses in the country would have suffered a decline, further emphasizing their essential role in the growth of the U.S. economy.
LATINO-OWNED BUSINESSES CONTINUE TO SHOW STRONG GROWTH AND CONTRIBUTION TO THE U.S. ECONOMY
In the last 5 years, the number of Latino-owned businesses grew by 44%, in that same period, the number of white-owned businesses decreased by 3%, without this growth the total number of businesses in the U.S. would have declined in the last 5 years. In other words, Latinos are now driving the country’s business growth.
Despite a challenging economic climate, Latino-owned businesses have consistently expanded the number of companies, revenue, and workforce. Without Latinos, there would have been no net growth in new business during the pandemic (2020-2021).
LATINO-OWNED BUSINESSES HAVE REBOUNDED IN PROFITABILITY FASTER POST-PANDEMIC
Latino-owned businesses have outpaced White-owned businesses recovering from the pandemic's economic impact. The latest research shows that 84% of Latino-owned businesses operate profitably, compared to 80% of white-owned companies. This marks a significant shift, highlighting Latino entrepreneurs' resilience and capacity to navigate economic challenges effectively.
SYSTEMIC BARRIERS IN ACCESS TO CAPITAL PERSIST
Despite their contributions to the economy, for the last ten years, we have consistently observed that Latino-owned businesses face systemic challenges in accessing capital. According to the research, Latino entrepreneurs today are half as likely to receive full funding compared to White-owned companies (21% vs. 40%).
Additionally, only 51% of Latino business owners receive an explanation for funding denial, compared to 86% of their White counterparts. This lack of transparency perpetuates long-standing inequities in financial systems and makes it difficult for Latino business owners to close the loop and effectively address gaps in their applications. Over the years, many have navigated these systemic disparities by tapping into personal savings or relying on high-interest funding sources like credit cards, underscoring the urgent need for equitable access to capital in the financial ecosystem.
CERTIFICATIONS HELP, BUT STRUCTURAL BARRIERS REMAIN IN CONTRACTING
Approximately 1 in 5 Latino and White-owned businesses reported securing at least one government contract in 2024. Latino-owned companies with at least one certification were 40% more likely to secure local government contracts than their non-certified counterparts. The impact of certifications was even more pronounced for White-owned firms, although they were less likely to report having them.
However, structural challenges—such as limited access to decision-makers and complex procurement processes hinder their full potential. Addressing these systemic barriers could significantly enhance the impact of certifications, allowing Latino-owned businesses and other underrepresented groups to scale and thrive in the contracting space.
LATINO-OWNED BUSINESSES CONTINUE TO PROVIDE STRONGER EMPLOYEE GROWTH & BENEFITS
Latino business owners more likely to offer their employees pathways for growth and advancement compared to their White counterparts. The report reveals that 89% of Latino-owned businesses provide employer-paid benefits, compared to 75% of White-owned companies, and 90% of Latino-owned businesses offer development opportunities, surpassing 77% among White-owned businesses. These trends align with historical findings and underscore Latino entrepreneurs’ commitment to job quality and shaping equitable employment opportunities for all.
LATINO ENTREPRENEURS ARE LEADING IN SUSTAINABILITY
Latino-owned businesses are more likely to implement green practices, such as water conservation (35% vs 26%) and renewable energy use (15% vs 11%), compared to White-owned businesses. This trend is driven by opportunities to reduce costs, enhance brand reputation, and meet regulatory requirements.
LATINO-OWNED BUSINESSES ARE ADOPTING AI WITH A HIGHER PEOPLE-CENTRIC APPROACH
Latino and White-owned businesses implement AI at similar rates (20%), with both groups focusing on improving the quality of products and services, upgrading or replacing operations, automating tasks, and expanding goods/services offered.
However, Latino entrepreneurs are more likely to see workforce expansion and skill growth as a result of AI adoption. Among businesses implementing AI, 59% of Latino-owned businesses reported increases in worker skill levels compared to 55% of white-owned businesses.
Latino entrepreneurs are also more cautious about AI’s future, citing data privacy and security concerns. Addressing these challenges through ethical AI frameworks that do not reinforce societal biases will be key to unlocking AI's full potential.
KEY STRATEGIES TO UNLOCK GROWTH FROM LBAN
Latino entrepreneurs are fueling the U.S. economy yet continue to face structural barriers that limit their full potential. Addressing these challenges is not just about equity — it is essential for sustaining economic growth and job creation.
Closing these gaps demands a strategic and coordinated approach. To unlock the full potential of Latino entrepreneurship and drive an additional $1.1 trillion into the U.S. economy, benefiting everyone, stakeholders — including policymakers, business leaders, entrepreneur support organizations (ESOs), and LOBs themselves — should act intentionally and collaboratively.
READ THE FULL ROADMAP FROM LBAN HERE
Marian Garcia Latino Business Action Network (LBAN) (408) 384-9389 marian@lban.us
