The rise in importance of Latina-owned businesses in California is countered on a regular basis with significant barriers to growth here. That was a recurring theme at the recent Los Angeles Latina Roundtable, co-hosted by CA Fwd, which explored the successes and challenges of the community.
“When you take a deep look, you understand that Latinas have always been there and have always been a part of what’s driving the economy,” Salinas Consulting founder Maria Salinas said. “We have real desire to implement growth and we know that with growth there’s more jobs and a stimulated economy.”
Salinas’ words certainly ring true in the statistics.
To date, Hispanic-owned businesses contribute 650,000 jobs to the California economy, bringing in $100 billion annually. According to the latest Kauffman Firm Survey, Latina-owned businesses are the fastest-growing sector of the female-owned business market. Between 2002 and 2007, their businesses increased by 172 percent.
The percentage is a sizable portion of the larger number of statewide women-owned businesses, which have seen their highest numbers ever. According to the 2014 State of Women-Owned Businesses Report, California firms represent about 12 percent of the nine million national total, with 1.1 million small businesses.
However, these numbers are less surprising when you consider the steadily changing demographics of California.
For years, the state has been transitioning into a melting pot prided on its rapidly increasing multi-ethnic population. The largest segment of growth has been the Latino community with 14 million residents statewide in 2010. Just under half were women, coming in at 6.95 million, meaning that one in every three females is Latina.
Despite their successes, however, access to information and financial support continue to be the biggest hurdles for the Latina small business owners.
“I think access to capital perspective is a big issue and it’s very tough to break those [financial] barriers,” Salinas said. “If you can’t find the finances you need, that’s a deterrent for a lot of potential business owners.”
In addition to actual access to finances for Latina business owners, roundtable attendees emphasized that the mindset around corporate banking needs to evolve in order to grow businesses to the next level.
“I’m an immigrant and one of the things that I was taught as a child was that you didn’t necessarily have a banking relationship,” ARAS President and CEO Gabi Barbarena said. “Banks were not the place to go. You always kept your savings and everything home. And growing up in that type of environment, I think one of the things that’s a cultural piece that needs to be broken to grow and prosper.”
Financial literacy and understanding were also consistently highlighted at the roundtable as priorities for continued expansion of this community of entrepreneurs.
“Many businesses don’t even know what opportunities exists,” Los Angeles Latino Chamber of Commerce Representative Theresa Martinez said. “They’re so busy in their day-to-day operations that they don’t know about programs that could help their overall organization.”
The key to spreading information about accessing capital has been exclusively through organizations like Hispanas Organized for Political Equality (HOPE), the National Latina Business Women Association and Spanish media outlets. However, in order to keep the growth going, there’s an inevitable need for more groups that make resources reachable for potential business owners.
“I think creating more programs where individuals who are interested in opening businesses are able to attend is vital to our livelihood as minority business owners,” ACS Group president Anna Sauceda said. “I didn’t have that information available to me and I had to go out and look. It’s not just a matter of going on the Internet, but it’s about getting the right information.”
Barbarena agrees and adds that not only is starting a business about gaining the financial resources to do so, but cultivating relationships that will make that business profitable and successful.
“You have to do more than just have money to make a business work,” she said. “You must create relationships both legally and financially. The attorney is going to help you from the law perspective and the banker’s going to give you an assessment of what you can and can’t do from a financial piece. Those things have to work together.”
President Obama appointed Latina banking founder Maria Contreras-Sweet to lead the Small Business Administration in January and swore in Contreras-Sweet on Monday. The federal agency is responsible for providing loans to small businesses and helping them gain government contracts.
In 2006, Conteras-Sweet founded ProAmerica Bank in Los Angeles. Since its opening it has served as a community-based financial resource that focuses on lending to small- and medium-sized Latino businesses.
Her appointment makes it clear that Latinas presence as leaders in the economy is apparent on a national level and recognized as invaluable to economic growth.
In California, the sentiment is the same, as Latina business owners continue to be a force of power in the corporate industry as well as in the community.
“Latinas are extremely important to the economy,” Salinas said. “We know what we need to do is take care of family and how to hone our various talents and skills to create a niche for ourselves. We have all of the tools that we need to make the California economy as a whole successful and the next step is capitalizing on that. What we need to do is really invest in education so that we can continue to progress and take our families with us.”