In this research brief, Stanford Latino Entrepreneurship Initiative’s research highlights the ongoing impact of COVID-19 on Latino-owned businesses. We followed up with the same group of Latino-owned businesses that took our survey in March and also surveyed a larger sample of 7,000 Latino and white business owners. In our first pulse survey, we highlighted that the effects of the pandemic were both immediate and largely negative for Latinos. For the same group of businesses, between March and June, the overall impacts remain negative. However, the negative impact on business operations seems to be growing.
We also find that employer businesses as a whole are experiencing universal, negative impacts from the pandemic. In our national sample of Latino-owned employer businesses, we find that Latinos have fewer resources to weather the ongoing storm. Latino-owned businesses have less cash on hand and when requesting funding from the Payroll Protection Program, Latinos have their PPP loans approved at half the rate of white-owned businesses. An even smaller proportion of Latino-owned businesses gets their full funding relative to white owned-businesses, 3% compared to 7%. We found one surprising exception: 82% of SLEI Education Scaling Program alumni received PPP funding compared to 18% of scaled Latino-owned businesses and 28% among scaled white-owned businesses.
On the whole, despite not being able to access PPP funding at a similar rate to their white counterparts, Latino business owners remain equally optimistic about being able to recover from the negative effects of the pandemic. While the future for many remains uncertain, SLEI research will continue to gather data on the ongoing and long-term impacts of the pandemic for the Latino business community, an essential and rapidly growing part of the U.S. economy.