Abstract

The number of Latin American immigrant small business owners throughout the United States continues to rise each year. Yet this expanding and generally underserved group faces multiple financial, business, and pandemic-related obstacles to its success. Fortunately, there are several sources of support that can help this community surmount such barriers. This research paper has discovered that faith-based, educational coursework, and non-governmental organization resources are among the most effective for this demographic. Moreover, this paper concludes by recommending more funding and staffing for such initiatives that empower Latin American immigrant entrepreneurs to thrive. 

Background Context

For the purposes of this paper, the phrase “Latin-American immigrants” refers to almost “...anyone born in or with ancestors from Latin America and living in the U.S., including Brazilians” (The Editors of Encyclopaedia Britannica). Granted, this phrase may not necessarily capture how some Latin American immigrants choose to describe themselves. This paper therefore uses this term with the utmost level of respect and inclusivity. 

Furthermore, the term “small businesses” is defined for the purposes of this research paper as “businesses with fewer than five employees…” (Theodos et al.). This definition will also apply to any references to entrepreneurship that occur throughout this paper. Opening small businesses helps immigrants support themselves and their families. Entrepreneurship also provides employment for other immigrants and can have a favorable influence on local economic progress. Immigrant-owned small businesses also provide their communities with “...familiar food and clothing, uniting communities and fostering a sense of normality even under difficult conditions” (Nicholson). Perhaps most significantly, small business ownership can enable immigrants to achieve economic self-sufficiency and is a way to improve their socioeconomic mobility. 

Latinos comprise “…18.4 percent of the US population and 17.3 percent of the US labor force, a share forecast to rise more than 30 percent by 2060. Latinos start more businesses and have higher rates of intergenerational mobility, and their share of skilled and higher-paid occupations has increased in the past decade” (Pérez et al.). These percentages further illuminate the plight of this population when translated into actual numbers. “Roughly 1.2 million of the 12.2 million business owners in the United States are immigrant Latinos” (Fairlie). The figures are also impressive when understood with respect to the revenue that they yield and how many people they tend to employ. From this vantage point, there are “…about 400,000 Latino-owned employer businesses in the U.S. Before the pandemic, they generated nearly $500 billion in annual revenue and employed 3.4 million people” (Steen). 

It is also important to appreciate the extent of these figures in the context of entrepreneurs as a whole. “Nearly 1 in 4 new entrepreneurs in 2017 was Latino. Similarly, immigrants accounted for 29 percent of all new entrepreneurs in 2017” (Theodos et al.). To provide additional background context, it can be helpful to understand the different occupational functions of this demographic according to gender trends. “Immigrant Latino male business owners are highly concentrated in construction, and immigrant Latina female business owners are highly concentrated in other services (which includes beauty, laundry and cleaning services)” (Fairlie).

There are numerous reasons why it is critical to protect and cultivate Latin American immigrant small business ownership. On a humanitarian level, doing so may result in enhanced education and healthcare opportunities for this population. Promoting Latin American immigrant entrepreneurship also has many business-related and economic benefits. “Blocked opportunities for minorities to start and grow businesses create losses in economic efficiency, especially through their effects on limiting job creation, wealth accumulation, innovation, and local economic growth” (Fairlie). New industry development, innovation, job creation, increased sector productivity, and economic growth have all been linked to small business formation. “If minority entrepreneurs face liquidity constraints, discrimination or other barriers to creating new business or expanding current businesses, there will be efficiency losses in the economy” (Fairlie). 

In light of these revelations, the obstacles that Latin American immigrant entrepreneurs face with respect to the growth of their businesses can cause problems that extend far beyond the needs of themselves and their families. “In the wake of the Great Recession, immigrants played an important role founding businesses and helping communities recover in states with high shares of immigrant populations such as California, New York, Florida, New Jersey, and Illinois” (Theodos et al.). This suggests that small business growth restrictions among Latin American immigrant entrepreneurs might damage the U.S. economy and productivity. In low-income communities, such barriers may have a particularly negative impact on employment creation as well. “If Latinos’ share of employer business ownership reached parity with their share of the population, some 735,000 new enterprises could be added to the US economy, supporting 6.6 million new jobs” (Pérez et al.).

Obstacles to Latin American Immigrant Entrepreneurship

Overview

Unfortunately, Latin American immigrant entrepreneurs encounter several challenges in the U.S. job market. Recently, multiple business and economics researchers have begun to shed some light on these difficulties. “The two most important factors limiting business ownership among U.S.-born Latinos are their relatively young age and lack of wealth. The most important factor limiting business income among U.S.-born Latinos is the low average level of education” (Fairlie). Furthermore, the comparatively young age of Latinos born in the United States also contributes to lower wages. Due to their general young age and lack of education, Latino immigrants tend to be overrepresented in low-wage jobs, underrepresented in high-wage jobs, and earn less overall than non-Latino workers who hold similar job titles and functions. 

Financial-Related Obstacles

Latin American immigrants face a severe shortfall in their annual flow of net wealth partly due to their lack of financial support from their families. “Two-thirds of the gap—some $255 billion—is attributable to intergenerational transfers, such as inheritances” (Pérez et al.). Unfortunately, many Latin American immigrants lack such opportunities due to their circumstances. “[T]heir level of household wealth—which directly affects their ability to accumulate and pass on wealth from generation to generation—is just one-fifth that of [other] Americans” (Pérez et al.). Another challenge that Latin American immigrants face is related to their various purchasing needs for themselves and their families. “At similar income levels, Latino households spend a greater share on essentials compared with White households and are more likely to stick to a budget when shopping. In addition, many Latino communities have lower or inadequate access to key product and service categories, including food, housing, banking, broadband, healthcare, and consumer goods. And there’s unmet demand: Latinos are, on average, more dissatisfied with current product and service offerings…especially in categories where they have limited access” (Pérez et al.).

Business-Related Obstacles

Latin American immigrants also confront unique business-related hurdles. They are more likely to be start-ups with larger credit risks, limiting their capacity to access inexpensive and low-risk loans. “Roughly 90 percent of small businesses in majority-Black or majority-Latino neighborhoods have less than 14 days of cash on hand that they could use to sustain operations if cash inflows were to stop…This not only increases the vulnerability of businesses in these neighborhoods to economic shocks like the one caused by the COVID-19 pandemic, but it prevents them from accessing larger-scale business opportunities” (Theodos et al.). Unfortunately, many Latino immigrants have been found to live in regions throughout the U.S. that are known for difficult barriers to business market entry. As a result, they face very severe competition for business creation opportunities from native U.S. citizens who are generally more familiar with local customs and have strong social networks. “Many also lack formal work authorization, limiting their employment options. Others lack proof of education or training from their homelands, and what formal credentials they possess may not be recognized by host societies” (Nicholson). 

These immigrants are also frequently confronted with significant business-related administrative barriers that may seem insurmountable. “They are frequently unfamiliar with host-country taxation rules as well as labor, social security, and safety regulations. Furthermore, language barriers and limited social networks can make it difficult for migrants to navigate bureaucratic regulations and procedures” (Nicholson). As outsiders, Latino immigrants are therefore more likely to face severe discriminatory practices against them on the basis of their ethnic identity. 

One manifestation of such discrimination and hardship facing Latin American immigrants often occurs when they apply for small business loans. “Funding is an issue for many who want to establish their own businesses. According to a Stanford study, 50.8% of Latinos receive business loans compared to 76.7% of whites” (Latin Business Today Staff). One reason why this trend is disturbing is because both Latino- and non-Latino-owned businesses tend to have strikingly similar credit and liquidity profiles. These are important factors that are considered in the process of loan acquisition. 

Moreover, “about three-quarters of businesses in both groups had broken even or been profitable in the last 12 months, though White-owned businesses were, on average, slightly more profitable than Latino-owned businesses. Latino-owned businesses were younger than White-owned businesses: an average of 10 years old compared with 14 years” (Steen). Indeed, Latino households tend to possess a lower amount of assets than non-Latino families – even though their debt levels might be similar. “The typical Hispanic or Latino family has around $25,000 in net worth, while non-Hispanic households have a little above $100,000” (Latin Business Today Staff). Dozens of research articles therefore report that Latino business owners frequently could not secure the loans that they needed. As a result, in many cases, they were forced to close their doors.

Another business-related obstacle to the success of Latin American immigrant entrepreneurs is a lack of formal legal commercial registration. Many entrepreneurs simply avoid publicly establishing their businesses when the restrictions, expenses, and other barriers to entry are steep and difficult to navigate. This can result in a significant amount of unofficial economic activity on a nationwide scale. “The International Labor Organization has estimated that more than 70% of workers…have jobs outside the formal sector…Economists note that this can create a situation that limits the potential of entrepreneurship as a source of good jobs and social mobility” (Crabtree). Without the legal and governmental protections that formal registration can provide, Latin American businesses are prone to disadvantages. 

For example, one way to gain significant protections and strategic tax advantages is by forming a Limited Liability Company (LLC). “The main advantage to an LLC is in the name: limited liability protection. Owners’ personal assets can be protected from business debts and lawsuits against the business when an owner uses an LLC to do business” (Crail et al.). In addition, ​​LLCs offer greater tax flexibility than other business structures. LLCs are taxed as either a sole proprietorship or a partnership, depending on whether there are one or multiple members. Members declare their respective share of company revenue and costs on their personal tax returns. Furthermore, “Corporate taxation allows LLC owners to be paid as company employees, participate in company benefit programs and potentially save on taxes. A C-corp pays corporate tax and its owners pay tax on distributions they receive. An S corp is a pass-through entity–it doesn’t pay corporate tax but each owner pays personal income tax on their share of the company’s profits” (Crail et al.). 

Another advantage that formal business registration can provide Latin-American entrepreneurs is with respect to their legal name and public credibility. “State law usually doesn’t allow you to form a new business with the same name as an existing one. When you form an LLC, you gain the exclusive right to use your name as a business entity name in your state, and you also create a public record of your use of the name. The LLC moniker at the end of a company’s name can also lend credibility to a small business” (Crail et al.). Without the necessary support structure to formally register their small businesses, Latin American entrepreneurs may not gain all of the aforementioned benefits. In light of all the obstacles described thus far, an unfortunate trend emerges: “Nearly 13 percent of Latino-owned firms close in their first year…” (Pérez et al.).

Pandemic-Related Obstacles

The COVID-19 outbreak has caused widespread disruption on an unprecedented scale. In particular, the pandemic's impact on small businesses has not been uniform across demographic groups. Decades of disparities in access to money and other resources have caused Latin American immigrant entrepreneurs to be at a higher risk of failure. “The COVID-19 outbreak and ensuing recession have wreaked havoc on the Latino community in the United States. They have been experiencing shutdowns of their small businesses due to lack of funding and significant job losses, particularly among Latinas in the service industry, as a result of their overrepresentation in industries that have been severely hit by the pandemic” (Latin Business Today Staff). 

The pandemic’s profound impact on Latin American immigrant-owned businesses can be partially attributed to their industries. The small business sector that has had the highest net employment losses—accommodation and food services—is typically more likely to be run by Latin American immigrants. “Accommodation and food service businesses account for 9 percent of all employer firms in the U.S. but 13 percent of employer firms owned by Latinos and 18 percent of employer firms owned by immigrants. Not only is this sector more susceptible to the negative effects of the pandemic’s economic impacts because of its reliance on face-to-face services, but mandatory closures also hit the country during the sector’s busiest seasons” (Theodos et al.). 

The peak seasons for sales revenue among Latin American-owned immigrant businesses in the aforementioned industries are often in the spring and summer. Since many of these companies were just starting to emerge from the winter lull, the pandemic’s timing created a perfect storm of hardship. “‘I’ve had one of my biggest clients not calling me back since February,’” one entrepreneur said. These findings are consistent with quantitative research findings that people with high incomes reduced their spending sharply in mid-March 2020, particularly in areas with high rates of COVID-19 infection and in sectors that require in-person interaction” (Theodos et al.)

Numerous Latino-owned companies have suffered greatly as a result of the pandemic, particularly those run by women. “Thirty percent of Latina-led companies closed during the pandemic, along with 16% of Latino-led businesses. It’s not yet clear how many of those closures will be permanent. Layoffs were also higher among Latina-led companies” (Steen). As a result of this unfortunate turn of events, many Latin American small business owners – especially women – have barely been able to survive. This is particularly true of Latina immigrant small restaurant owners. Dora Herrera, president of Yuca’s Restaurants in Los Angeles and Pasadena, California, faced this obstacle. Herrera initially believed that her quick-service restaurants would fare well throughout the pandemic because they did not rely on in-person dining. “‘We thought, ‘We dodged a bullet,’’” Herrera said. ‘But the customers weren’t coming in, because their businesses had closed and they were at home’” (Steen).

Support Structures for Latin American Immigrant Entrepreneurship

Overview

Although Latin American immigrant small business owners face significant barriers, there are a number of initiatives that can help them succeed. These support structures are not necessarily bound by certain geographic regions throughout the country. In addition, they are not limited to public-sector or government assistance programs. Instead, they encapsulate a wide array of resources that are accessible to this community. These opportunities include, but are not limited to, faith-based, educational coursework, and non-governmental organization support structures with documented histories of success for Latin American immigrant entrepreneurs. 

Faith-Based Support Structures

Faith-based organizations are founded on the principles of religion. “They include religious congregations (e.g., churches, mosques, synagogues, or temples), programs or projects sponsored by a religious congregation, and nonprofit organizations founded by religious congregations or individuals motivated by religion” (Nicholson). These groups have valuable networks and resources that may facilitate immigrants’ access to fulfilling jobs. Many faith-based organizations across creeds and denominations advocate for entrepreneurship among people in dire financial situations – such as Latin American immigrants. “By tapping into volunteer networks, they provide prospective entrepreneurs with business contacts, training, and visa support” (Nicholson). They may also offer small grants and loans for entrepreneurs. To do so, they must sometimes even resort to drawing on governmental subsidies and community donations. 

Since many Latin American immigrants arrive in the United States with resource constraints, they may flock to faith-based institutions for assistance. These institutions “…often hold familiarity and cultural appropriateness…In addition, religious institutions are often among the first organizations that immigrants join upon arrival to a new country…These institutions provide community services, including social services, cultural refuge and a sense of community…while distinguishing themselves from more formal political or government associations” (Sanchez et al.). Overall, it seems that faith-based organizations can help offset some of the marginalization that is frequently felt by this vulnerable community in its attempt to obtain social support.  

The aforementioned findings suggest that faith-based organizations can provide a beneficial source of social capital for Latin American immigrant small business owners. “Social capital, in general, can be defined as resources acquired through social interactions of reciprocity and mutual aid…Religious social capital involved social resources available to individuals and groups through their social connections with a religious community” (Sanchez et al.). Participation in religious organizations may boost religious activity within the Latin American immigrant entrepreneur community. This, in turn, can strengthen both concrete and intangible social ties amongst many of these community members. By encouraging possibilities for engagement and the sharing of experiences, affiliation with religious organizations may improve access to social capital throughout this community. 

One tangible form of such social capital is advertisement assistance. Some faith-based organizations allow Latin American immigrant business owners to advertise their products and services at their places of worship. This gesture can help small business owners expand their reach among a wider base of consumers. Given that immigrants frequently experience tight job markets and widespread employment discrimination, these gestures are especially crucial. Their efforts can aid immigrants in becoming economically independent and provide financial resources for their families.

Faith-based organizations can also become sources of social capital by serving as workshop hubs for Latin American immigrant entrepreneurs. These hubs can focus on a variety of useful topics for such immigrants. One workshop topic that religious institutions have sponsored for this community involves complying with intricate rules and tax laws. Economic developers and service providers have attended these hubs to assist immigrant entrepreneurs in a variety of ways. These presenters field questions from entrepreneurs and have created numerous helpful resources such as “...a comprehensive information packet that includes market research, local contacts, tax requirements, and building codes. In addition to having information readily available, some communities establish a lead organization to orient Latinx entrepreneurs and refer them to appropriate services…Proactive outreach strategies such as visiting Latinx businesses directly and offering workshops in nontraditional settings like churches are needed to engage nontraditional entrepreneurs” (Constantine 28). 

Successful Latin American immigrant small business owners may act as mentors for budding entrepreneurs by sharing insights about the startup process and other tools. The social capital that is created by faith-based organizations that facilitate these connections can help many entrepreneurs compensate for a lack of formal business knowledge. In addition to the structured business support services that religious organizations provide, Latin American immigrant entrepreneurs may benefit from informal networks with other businesspeople in faith-based contexts. “Social support has been found to be an important mitigating factor in buffering immigration stress among Latino immigrants…Latino immigrants rely on others for tangible and emotional social support during stressful events related to the immigration process…” (Sanchez et al.). 

Aside from the nurturing social and communal environment that faith-based organizations can provide, Latin American entrepreneurs may also benefit from holding religious beliefs through their respective faith-based support structures. “Religion holds a prominent role in Latino culture and could be influential during difficult life transitions (e.g., the course of immigration). Among [many] Latinos, religious traditions and practices are considered social events that strengthen bonds between family members and friends as well as extended support networks. Religious values are prominent within Latino culture – guiding attitudes, behaviors, and social interactions” (Sanchez et al.). In fact, there are values of certain religious traditions that can help in this regard. These values include hope and fortitude, which can boost the morale of such business owners during very difficult times and provide them with the will to persevere. 

An additional important asset that faith-based organizations can provide to Latin American immigrant small business owners consists of powerful socioemotional support services. “Fostering partnerships between mental health professionals and religious leaders could lead to beneficial physical and mental health outcomes among Latino immigrants. This can take the form of interdisciplinary teams working together with religious community leaders in capacity-building efforts within centers of worship in immigrant-receiving communities” (Sanchez et al.). In many religious communities, these strong and strategic collaborations have resulted in the creation of pastoral counseling programs and faith-based outreach teams. These services can be extremely helpful to Latin American entrepreneurs as they struggle with difficulties posed by immigration, business ownership, and cultural barriers.

Educational Coursework Support Structures

Business-related educational coursework resources can help Latin-American immigrant entrepreneurs quickly and efficiently gain critical skills to succeed in their entrepreneurial endeavors. “The education level is an important factor in the survival of the immigrant entrepreneur. It helps the entrepreneur understand the challenges faced in the host country and the best approaches to meet them” (Chrysostome and Arcand). Furthermore, it can take a significant amount of time to thoroughly learn the nuances of a new business environment and effective entrepreneurial strategies. “Insertion into the local economy demands considerable familiarity with the various aspects of the business and relevant experience, which usually comes with time…” (Rahman et al.). 

Yet, business courses can streamline this process and quicken the learning curve for Latin American immigrant entrepreneurs. Interestingly, this population may be less likely to seek out such courses due to cultural norms that focus on their relatives as primary sources of educational insight. Studies indicated that “Latino entrepreneurs are less likely than their White counterparts to seek support and mentoring from professional advisers and colleagues, instead turning to family for support on running the business and making decisions” (Pérez et al.). Unfortunately, these relatives may lack critical business-related knowledge to adequately help in such circumstances. 

To address this oversight, there are a number of educational resources that are available to Latin American immigrant small business owners. One example is created by The Cooperative State Research, Education, and Extension Service. The Cooperative State Research, Education, and Extension Service is a federal initiative that designed and launched an entrepreneurial training program to provide assistance for Latin American immigrant communities along their path to starting their own businesses. The Cooperative State Research, Education, and Extension Service has offices that are located in post office buildings, courthouses, and many other local government facilities. This can offer its constituents easy access to its educational coursework. The mission of the Cooperative State Research, Education, and Extension Service is “...to improve the quality of people’s lives by providing research-based knowledge to strengthen the social, economic and environmental well-being of families, communities and agriculture enterprises” (U.S. Department of Agriculture Staff). 

Although the aforementioned educational course was offered to Latin American immigrants in rural western Arkansas, many of its modules are applicable to such immigrants on a nationwide scale. In order to adequately address the needs of this community, bilingual Cooperative State Research, Education, and Extension Service staff members performed an assessment survey for over 150 Latin American immigrant entrepreneurs. This assessment asked for “Specific problems that they had encountered when starting their business…and information or training that would have helped them start their business” (Abreo et al.). As a result of the responses that were received, the Cooperative State Research, Education, and Extension Service created personalized, content-based training materials and sessions. This educational coursework was later designed in ways to directly address the informational gaps that were revealed from the survey’s results. 

The Cooperative State Research, Education, and Extension Service’s survey demonstrated that there were two important obstacles to small business ownership among the Latin American immigrants who responded to it. The results, with the corresponding percentages of respondents who voiced their concerns are, as follows: “Having enough start-up capital (37%)[;] Understanding regulations and taxes (17%)” and “The top two informational needs are: Understanding business license regulations (18%)[;] Developing a business plan (17%)” (Abreo et al.). The course creators then proceeded to develop an outline that helped students devise their own unique business plans. This is a crucial first step of the course because  business plans are typically required to secure loans. In addition, business plans can help Latin American immigrant entrepreneurs refine their ideas and keep track of their progress. “Writing a business plan can be daunting for anyone, much less someone with limited English proficiency (LEP); these resources are designed to make that process easier and less intimidating for people who are starting or expanding their business…They guide the entrepreneur through the fact-finding and personal exploratory processes to write a business plan that reflects their skills, abilities and resources” (Abreo et al.). 

In the process of creating this educational content, it was important for The Cooperative State Research, Education, and Extension Service to ensure that the course could also be used in a self-guided and self-paced format. This allowed participants to have the flexibility of learning these modules around their own schedules and increased the chances that they would complete the entire curriculum. Moreover, the course was created in both English and Spanish to help increase retention among participants with different language abilities. In addition, the content areas that are covered by this course are vast and informative. These areas include “Defining a business idea, choosing a business legal structure, selecting a business location, developing a financial system, writing a business plan, understanding regulatory requirements, [and] obtaining financial assistance” (Abreo et al.). 

There are three key pillars around which The Cooperative State Research, Education, and Extension Service designed this course. These pillars include the “Latino Immigrant’s Guide to Starting a Business…A Handbook for Entrepreneurs,” the “Business Owner’s Records Portfolio: A Handbook for Entrepreneurs,” and a comprehensive “Checklist for Licensing a New Business.” The “Latino Immigrant’s Guide to Starting a Business…A Handbook for Entrepreneurs” is both a text and workbook that can be used in classroom settings or individually. This attribute allows for both group study and self-guided education. “Each section of the guide covers a topic that study participants identified as a barrier or informational need. Several sections include worksheets that can be compiled to form part of a business plan. The guide also contains contact information for…government licensing offices and business resource agencies” (Abreo et al.). 

An additional pillar around which The Cooperative State Research, Education, and Extension Service created this course entails the “Business Owner’s Records Portfolio: A Handbook for Entrepreneurs.” A 3-ring binder called a “portfolio” is the main aspect of this pillar. This portfolio contains tabbed sheet protectors that are labeled to indicate the specific contents that are within each pocket. “It is a portable records’ keeping system that can be used to store receipts, applications, etc. in the sheet protectors and write the contents on the label outside. The binder also contains a yearly calendar and business card protector pages to assist in organizing business schedules and contacts” (Abreo et al.). This practical and hands-on component of the course has been used by participants in a variety of ways to build organizational skills and bring some of the ideas to which they are exposed throughout the course to life.

The third and final pillar of the Cooperative State Research, Education, and Extension Service’s course is a “Checklist for Licensing a New Business.”  “The checklist is a quad-fold brochure on legal-size paper that contains contact information for local, county, and state agencies that issue business-related licenses, permits, or information” (Abreo et al.). The brochure provides a list of the necessary permits that entrepreneurs need based on the type of their particular business. It also equips participants with agency contact details that can help entrepreneurs obtain and complete such permits. Overall, this checklist provides these entrepreneurs with a solid and straightforward foundation from which to build their businesses.   

In light of the sheer thoroughness and thoughtfulness of this Cooperative State Research, Education, and Extension Service course, it has received overwhelmingly positive feedback. “Participants evaluated the usefulness of the resource materials and the three workshops upon completion of training. In addition, the participants were interviewed between 4 and 9 months after the workshop to determine if they were using the information learned to start a business or implement changes in their business practices. The materials and workshops received overall high ratings at both sites…” (Abreo et al.). In fact, students found the course so helpful that they even requested more time to continue learning about the topics that were covered. In addition, they indicated that extra training on different areas that were not part of the course’s original curriculum could be beneficial for them. These new modules that they requested included basic educational content that demonstrated accounting principles for small businesses. Due to the course’s effectiveness, “...several participants had made or were planning to make changes in their business as a result of participating in the workshops” (Abreo et al.). 

A more specialized educational course for Latin American immigrant small business owners is offered by La Cocina. La Cocina is a non-for-profit organization that empowers low-income food entrepreneurs as they take measures to grow and sustain their businesses. “There are three- to nine-week programs that cover topics such as product development, business planning, licensing, insurance, accounting and taxes, marketing, and sales channels” (Theodos et al.). Like the aforementioned course offered by the Cooperative State Research, Education, and Extension Service, La Cocina provides its educational coursework in both English and Spanish for wider accessibility. Unlike the Cooperative State Research, Education, and Extension Service’s course, “La Cocina offers most of this training to entrepreneurs participating in its incubation program after an application and interview process” (Theodos et al.).

Many Latin American immigrant food entrepreneurs do not have significant experiences or background in business ownership before starting their first venture. As such, La Cocina’s courses often serve as crucial platforms for prospective entrepreneurs to turn their dreams into actual successful businesses. “One entrepreneur said: ‘I had many ideas, but something was missing…Their program helped me organize my ideas, define a business name, and profile and target clientele’” (Theodos et al.). Yet La Cocina’s coursework is just the beginning. Support and technical guidance is also offered to entrepreneurs who finish its courses to pursue their entrepreneurial endeavors. 

Aside from providing guidance on how to develop and run small businesses, other La Cocina courses teach concepts such as financial literacy. “While many Latinos are responsible for their money, many lack financial mentors in their communities. And when each of these factors compound, many find themselves in a situation where they are unable to get reasonable loans from outside sources in order to create generational wealth” (Latin Business Today Staff). Many Latin American immigrants may be unaware of the numerous financial sources that they can access. 

In light of the aforementioned issues, many members of this community may require professional instruction on how to borrow money from lenders. “Although the Small Business Administration provides loans, statistics reveal that Latino entrepreneurs apply for them at a lesser rate than national bank loans. There are still other small business funding options available, including equity financing” (Latin Business Today Staff). Overall, La Cocina’s courses can help Latin American immigrant entrepreneurs demonstrate to potential lenders that they are able to effectively handle their finances. In turn, this shows such lenders that these immigrants are strong candidates for loans that can help them start and grow their businesses.

Non-Governmental Organization Support Structures

Non-Governmental Organizations (NGOs) can serve as beneficial sources of support for Latin American immigrant entrepreneurs. “The landscape of public and nonprofit support organizations includes business (or entrepreneur) service organizations, small business development centers, chambers of commerce, community development corporations, and community development financial institutions, but the specific constellation of support institutions varies across localities…” (Theodos et al.). One such NGO with a proven track record of success on behalf of this community is The National Association for Latino Community Asset Builders (NALCAB). NALCAB collaborates with hundreds of other NGOs to offer many support programs and services for this demographic. NALCAB supports its member organizations “...to better serve their communities through training, public policy work, peer-to-peer collaboration, and access to funding, nonprofit resources and professional development. With that support, our members build thriving communities through affordable housing, investment in Latino-owned small businesses and neighborhoods, financial coaching, and policy advocacy to advance racial and economic justice” (National Association for Latino Community Asset Builders Staff). 

A prominent NGO with which NALCAB partners in this regard is the Hacienda Community Development Corporation. The Hacienda Community Development Corporation was established in Portland, Oregon. It supplies housing and assistance to low-income, Latino populations. Immigrants from Latin America who are small business owners are its primary clients. “Hacienda provides stable homes for more than 1,500 people each year by managing nine low-income properties around the Portland area…For more than a decade, Hacienda’s programs have included entrepreneurship support” (Hacienda Community Development Corporation Staff). 

Aspiring business owners, particularly women and people of color, may learn the fundamentals of fulfilling their entrepreneurial goals by enrolling in the Hacienda Community Development Corporation’s three-week Bilingual Business Boot Camp. Through individualized technical support, this program assists entrepreneurs in starting and expanding their microenterprises. Perhaps one of the most well-known and effective dimensions of the Hacienda Community Development Corporation is its Portland Mercado Empresarios program. “Owned and operated by Hacienda, the Portland Mercado is a small-business incubator and sliding-scale commercial kitchen and has become a hub for Latino food, culture, and entrepreneurship. Established in 2015, it offers an incubation space for Hacienda’s Empresarios. The Mercado Empresarios community is designed to be more than its physical space” (Hacienda Community Development Corporation Staff). In fact, it is a community of more than 120 small companies. It includes Mercado entrepreneurs with physical business locations, virtual businesses, a variety of independent food vendors, and even various types of consulting clients. “In 2019, 60 entrepreneurs received one-on-one advising through Empresarios, 50 entrepreneurs graduated from the Bilingual Business Boot Camp, and 92 entrepreneurs used Portland Mercado’s commissary kitchen. Overall, Hacienda estimates that it had a $4.5 million economic impact in 2019 through sales, kitchen use, and local events” (Hacienda Community Development Corporation Staff). 

Another leading NGO that partners with NALCAB to serve Latin American immigrant small business owners is La Cocina. As mentioned in the preceding section, La Cocina is a leading charity dedicated to the development of new businesses among this community. The goal of La Cocina is to provide financial stability to such underserved entrepreneurs – especially since they tend to have severely limited access to capital and other indispensable resources. “To accomplish its mission, La Cocina cultivates talented food entrepreneurs with low incomes as they formalize and expand their businesses by providing them with affordable commercial kitchen space, industry-specific technical assistance, and access to market opportunities” (La Cocina Staff). Immigrant Latina women with modest incomes compose the majority of La Cocina’s clientele. Many of them are talented cooks who unfortunately face steep barriers in education and are unable to join the professional food service industry. 

At its Mission District shared commercial kitchen, La Cocina conducts an incubator program for these people. “In 2019, it provided support to more than 40 businesses through that program and to 33 restaurants owned by La Cocina graduates. These graduates have created more than 250 jobs and generated more than $16 million in annual revenue. In 2019, La Cocina also launched three women chefs into new brick and-mortar locations” (La Cocina Staff). In particular, La Cocina recently opened The Tenderloin neighborhood’s Municipal Marketplace in San Francisco, California. This marketplace is notable because it is one of the foremost Latin American immigrant entrepreneur women-led food halls in the nation. 

To date, seven company owners have been chosen to inhabit the Municipal Marketplace and have been given support from La Cocina for business incubation. Amidst a very expensive real estate market in San Francisco, this marketplace offers a more affordable physical location for such struggling entrepreneurs to refine their entrepreneurial pursuits. “La Cocina hopes the marketplace will help increase equity in business ownership by distributing the cost of maintenance across tenants and therefore reducing the burden of rent and utilities. La Cocina also envisions the marketplace as a public space that brings the Tenderloin community together and offers healthy, culturally diverse, and affordable meals to its residents” (La Cocina Staff). 

The Latino Community Foundation is an additional NGO that assists Latin American immigrant entrepreneurs. Specializing in California-based Latin American communities, this organization combines corporate, political, and grassroots advocacy to enhance lives and small businesses. One of the Latino Community Foundation’s successful initiatives in this area is its Latino Entrepreneurship Fund. 

“Since 2020, our Latino Entrepreneurship Fund has invested more than $1.6 million in Latino nonprofits working to create an inclusive economy for Latino Entrepreneurs and the Latino small business ecosystem” (Latino Community Foundation Staff). 

To achieve these milestones, the Latino Community Foundation works in collaboration with related charities to increase funding for Latin American immigrant entrepreneurs. The Latino Community Foundation also provides a significant amount of financial assistance to community-driven organizations such as non-for-profit organizations, Latino philanthropic social ventures, and community development financial institutions that offer this demographic easily accessible capital. In addition, The Latino Community Foundation is in the process of “...leveraging the largest Latino donor network in the nation through LCF’s Latino Giving Circle Network by launching the Latino Entrepreneurship Giving Circle which mobilizes resources to Latinapreneurs” (Latino Community Foundation Staff).

Recently, The Latino Community Foundation provided a one million dollar grant to 17 Latino-led organizations across California’s Bay Area and the rest of the state. This grant offers financial resources to Latin American immigrant entrepreneurs to jumpstart their pursuits. “‘Resources are not created equally. Talent and drive … a lot of us have that,’ said Veronica Vences, the [Latino Community Foundation’s] entrepreneurship director. ‘But if we don’t have the resources, if we don’t have the systems that support our dreams, then they’re left to the sidelines’” (NBC Bay Area Staff). Fortunately, the Latino Community Foundation has demonstrated its dedication to addressing this issue.

Concluding Thoughts

As shown throughout this paper, Latin American immigrant small business owners encounter many impediments to their entrepreneurial pursuits. These barriers consist of financial, business, and pandemic-related obstacles. Among all of the possible sources of assistance for this community, this paper has found that the faith-based, educational coursework, and NGO support structures described above are among the most effective. These initiatives are essential to improving economic opportunities for this underserved population. Yet it is also important to note that these resources require a great deal of support to maintain their momentum. When working with entrepreneurs, they frequently handle a wide range of challenges and often must address them within a short time frame. This process is compounded by the fact that such support services often have limited staff. Moreover, these groups may have limited funds and rely significantly on the generosity of donors to carry out their missions. 

In light of these circumstances, this research paper recommends that more resources and talented staff are provided to faith-based, educational coursework, and NGO initiatives that assist Latin American immigrant entrepreneurs. That way, these support structures can continue their transformative work more effectively. Addressing the barriers that hinder Latin American immigrant entrepreneurs from fulfilling their business goals is not only a beneficial course of action for this single demographic. It can also strengthen the economy at large. In addition, these structural supports may help build thriving families and communities for future generations. 

 
Works Cited

Abreo, Christina, et al. “Training Materials Developed for Latino Entrepreneurs.” The Journal of Extension (JOE), archives.joe.org/joe/2014august/iw8.php.

Bernstein, Hamutal, et al. “Immigrant-Serving Organizations’ Perspectives on the COVID-19 Crisis.” Urban Institute, 27 Aug. 2020, www.urban.org/research/publication/immigrant-serving-organizations-perspectives-covid-19-crisis.

Chrysostome, Elie, and Sebastien Arcand. “Survival of Necessity Immigrant Entrepreneurs: An Exploratory Study.” Érudit, 2009, www.erudit.org/en/journals/jcim/2009-v12-n2-jcim12_2/jcim12_2art01.

Constantine, Lucia. “Por Gusto Y Por Necesidad: Understanding the Barriers and Opportunities to Latinx Entrepreneurship in Rural Communities.” Carolina Digital Repository, 1 Apr. 2019, cdr.lib.unc.edu/concern/masters_papers/8s45qf35c.

Crabtree, Steve. “Latin Americans See Barriers to Entrepreneurship.” Gallup.com, 7 May 2021, news.gallup.com/poll/143966/latin-americans-barriers-entrepreneurship.aspx.

Fairlie, Robert. “Latino Business Ownership: Contributions and Barriers for U.S.-Born and Immigrant Latino Entrepreneurs.” Minority Business Development Agency, 2018, www.mbda.gov/sites/default/files/media/files/2018/latino-business-ownership-research-paper_.pdf.

Hacienda Community Development Corporation Staff. “Hacienda CDC.” Hacienda Community Development Corporation, 22 June 2023, haciendacdc.org.

La Cocina Staff. “La Cocina.” La Cocina, lacocinasf.org.

Latin Business Today Staff. “Why Latino Business Owners Face Greater Financial Challenges.” Latin Business Today, Jan. 2022, www.latinbusinesstoday.com/why-latino-business-owners-face-greater-financial-challenges.

Latino Community Foundation Staff. “Latino Entrepreneurship Fund - Latino Community Foundation.” Latino Community Foundation, 19 Oct. 2022, latinocf.org/latino-entrepreneurship-fund.

Liu, Sifan, and Joseph Parilla. “Businesses Owned by Women and Minorities Have Grown. Will COVID-19 Undo That?” Brookings, 9 Mar. 2022, www.brookings.edu/research/businesses-owned-by-women-and-minorities-have-grown-will-covid-19-undo-that.

National Association for Latino Community Asset Builders Staff. “About NALCAB - NALCAB.” NALCAB, 17 Mar. 2023, nalcab.org/about-nalcab.

NBC Bay Area Staff. “SF Nonprofit Announces $1M Grant for Latino-Led Small Businesses.” NBC Bay Area, 27 Sept. 2022, www.nbcbayarea.com/celebrating-hispanic-heritage/sf-nonprofit-announces-1m-grant-for-latino-led-small-businesses/3014210.

Nicholson, Mike. “The Role of Faith-Based Organizations in Immigrants’ Health and Entrepreneurship - the Center for Migration Studies of New York (CMS).” The Center for Migration Studies of New York (CMS), 6 Feb. 2019, cmsny.org/publications/2018smsc-nicholson.

Pérez, Lucy, et al. “The Economic State of Latinos in America: The American Dream Deferred.” McKinsey & Company, 9 Dec. 2021, www.mckinsey.com/featured-insights/sustainable-inclusive-growth/the-economic-state-of-latinos-in-america-the-american-dream-deferred.

Rahman, Mizanur, et al. “Entrepreneurship in Ethnic Enterprises: The Making of New Immigrant Businesses in New York.” Sustainability, vol. 13, no. 20, MDPI, Oct. 2021, p. 11183. doi.org/10.3390/su132011183.

Sanchez, Mariana, et al. “Immigration Stress Among Recent Latino Immigrants: The Protective Role of Social Support and Religious Social Capital.” Social Work in Public Health, vol. 34, no. 4, Haworth Press, Apr. 2019, pp. 279–92. doi.org/10.1080/19371918.2019.1606749.

Steen, Margaret. “Latino Entrepreneurs Face — and Can Overcome — Funding Obstacles.” Stanford Graduate School of Business, 25 Apr. 2023, www.gsb.stanford.edu/insights/latino-entrepreneurs-face-can-overcome-funding-obstacles.

The Editors of Encyclopaedia Britannica. “What’s the Difference Between Hispanic and Latino?” Encyclopedia Britannica, www.britannica.com/story/whats-the-difference-between-hispanic-and-latino.

Theodos, Brett, et al. “Supporting Latino and Immigrant Entrepreneurs in a Time of Crisis.” Urban Institute, 2021, www.urban.org/sites/default/files/publication/103714/supporting-latino-and-immigrant-entrepreneurs-in-a-time-of-crisis.pdf.

U.S. Department of Agriculture Staff. “Co-op Research and Extension Services.” USDA, www.usda.gov/topics/rural/cooperative-research-and-extension-services.

Vilain, Melia M. “Beyond the Economic: The Freedoms, Capabilities, and Social Capital of Latin American Women Entrepreneurs in San Francisco.” USF Scholarship: A Digital Repository @ Gleeson Library | Geschke Center, repository.usfca.edu/thes/115/?utm_source=repository.usfca.edu%2Fthes%2F115&utm_medium=PDF&utm_campaign=PDFCoverPages.