NEW YORK, Sept. 20, 2023 (GLOBE NEWSWIRE) -- The annual Biz2Credit Latino-Owned Business Study found that average annual revenue for Latino businesses increased by 23.1% in 2022-23 over the previous 12-month period, based on a study of 57,000 submitted applications on Biz2Credit’s online platform. Meanwhile, average operating expenses increased 23.6%, while earnings rose 21.1% for Latino-owned firms.
While these results are encouraging, Non-Latino firms saw revenues soar 54.4% and earnings skyrocket by 75.2%.
The Biz2Credit Latino-Owned Business Study examines financial indicators including annual revenue, operating expenses, age of business, and credit scores of both Latino-owned and Non-Latino-owned companies.
Key findings about Latino-owned businesses:
- Average annual revenue increased from $488,827 in 2021-22 to $601,636 in 2022-23, an increase of 23.1%.
- Average Operating expenses jumped from $395,265 in 2021-22 to $488,368 in 2022-23, an increase of 23.6%.
- Average earnings (Annual Revenue - Operating Expenses) rose from $93,562 in 2021-22 to $113,268 in 2022-23, a 21.1% increase.
- The average credit score for Latino-owned businesses increased from 632 in 2021-22 to 641 in 2022-23.
- The average age of business for Latino-owned business increased from 52 months in 2021-22 to 54 months in 2022-23.
- Industry ranking: Construction accounted for the largest percentage of Latino-owned companies in this study (18.3%), followed by Services (except public administration) (16%), Transportation and Warehousing (12.8%), and Retail Trade (10.5%).
- Florida was the state from which the greatest number of small business loan applications originated, followed by California, Texas, New York, and New Jersey.
- The overwhelming percentage of Latino-owned businesses (57%) were Limited Liability Companies (LLCs), while Corporations accounted for 25%, and Sole Proprietorships comprised 15%.
“Overall, it was a solid year for Latino-owned businesses, but they trained in comparison to the success of Non-Latino firms in the past 12 months,” said Rohit Arora, CEO of Biz2Credit, one of the country’s leading experts in small business finance. “Average revenues were up, but so were expenses, a reflection of inflation during the past year.”
An example of growth
Gainesville, Georgia-based Vital Foods has been processing and portioning poultry products since it was established in 2015. Starting with just three employees, the company has now grown to over 1,200 employees and was recently able to expand after receiving an infusion of working capital.
“Five days after submitting my working capital application, I received the money,” said Juan Carlos Lomas, CEO and founder of Vital Foods. “The funding enables us to begin operations in our new plant in South Carolina, and to process enough meat up to our standards to meet the two million pounds per week goal.”
Comparing Latino and Non-Latino Companies
- Average annual revenue for Latino-owned businesses increased from $488,827 in 2021-22 to $601,636 in 2022-23. However, Non-Latino firm revenues soared to $667,204 in 2022-23, up from $432,260 during the previous 12 months -- an increase of whopping 54.4%.
- Average Operating expenses for Latino-owned businesses jumped from $395,265 in 2021-22 to $488,368 in 2022-23. Meanwhile, the expenses of Non-Latino firms leapt from $341,316 in 2021-22 to $507,840 in 2022-23, an increase of 48.8%.
- Average earnings (Annual Revenue - Operating Expenses) for Latino-owned businesses rose from $93,562 in 2021-22 to $113,268 in 2022-23. Meanwhile, earnings of Non-Latino firms rose during the past 12 months from $ $90,944 in 2021-22 to $159,365 in 2022-23, an increase of 75.2%.
- The average credit score for Latino-owned businesses was 641 in 2022-23, while the average credit score for Non-Latino businesses in 2022-2023 was six points higher at 648.
- The average age of business for Latino-owned business was 54 months in 2022-23, while the average age of business for Non-Latino firms in 2022-2023 was 63 months.
- Other Services (except Public Administration) accounted for the largest percentage of Non-Latino firms (15.2%), followed by Retail Trade (13.5%), Construction (11.7%), Transportation and Warehousing (11%), and Accommodation and Food Services (9%).
- California was the state from which the most applications were submitted by Non-Latino firms, followed by Florida, Texas, Georgia, and New York.
- The largest percentage of Non-Latino firms (63%) were Limited Liability Companies (LLCs), while Corporations accounted for 22%, and Sole Proprietorships comprised 13%.
“While Latino-owned businesses did very well during the past 12 months, their success still lags behind the fortunes of Non-Latino firms,” said Rohit Arora, CEO of Biz2Credit, one of the country’s leading experts in small business finance. “The good news is that small businesses of all types fared better overall than anyone could have anticipated last year.”
“South Texas is home to many Latino-owned small businesses. They are crucial drivers of our local, state, and national economies. I am eager to discuss how federal legislative action can enable Latino-owned small businesses to continue to thrive in our country,” said U.S. Congressman Henry Cuellar, Ph.D. (D, TX-28).
Methodology
Biz2Credit’s 2023 Latino-Owned Business Study is an annual review of the financial performance of Latino-owned small to midsized companies in the United States. The study reviews tens of thousands of credit inquiries and applications from small and midsized businesses across the country from July 2022 to June 2023. Results from the study are a trusted source of insight on the performance of Latino-owned private companies over the past 12 months. Biz2Credit reported average revenue and average expenses using 2021-2022 numbers to conduct year-over-year comparison for 2022-2023.
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $7 billion in small business financing. The company is expanding its industry-leading Biz2X technology in custom digital platform solutions for banks and other financial institutions, investors, and service providers. Visit www.biz2credit.com or Twitter @Biz2Credit, Facebook, and LinkedIn.
Media Contact: John Mooney, (908) 720-6057, john@overthemoonpr.com
