Latino Business Owners Optimistic As Pandemic Subsides
In the midst of the pandemic, many Latino-owned businesses struggled to keep their doors open, especially if they were left out of the Paycheck Protection Program (PPP). But now, they’re starting to get their hopes up as the pandemic subsides.
Himar Hernandez works with many Latino business owners in his role as community development specialist with Iowa State University Extension and Outreach. He said he's seen multiple new businesses open including two restaurants, a grocery store and a bakery.
“They're just excited, they see opportunity. They see their space to grow. It's like no pandemic happened. I mean, they're just remodeling buildings, and they're just all over. And I think it has to maybe go with the theme that we're all just ready to get out," Hernandez said.
One of the main concerns now, he said, is finding enough staff for these new businesses.
Last month, Gov. Kim Reynolds announced Iowa will no longer participate in federal unemployment benefits related to COVID-19, citing a workforce shortage.
And that's not the only concern of many Latino business owners. Hernandez said there are also price increases to consider. Even though more people may have extra cash on hand thanks to government stimulus checks, that doesn't mean they're more inclined to spend it, he said.
"That's creating a lot of pressure. Because even though [reports] say customers have more purchasing power, the customers are still very careful with their money, and they want to pay the same prices. And so they don't see that business struggling with their prices," Hernandez explained.
And those Latino-owned businesses, even though they may feel more optimistic about their economic recovery, still have a lot of work to do. Many were left out of the first round of PPP and those that opened near the end of 2019 have not yet reopened, according to Hernandez. And many of them won't, since they didn't qualify for PPP.
The following rounds of PPP and stimulus did reach businesses who were underrepresented in the first round, which allowed extra flexibility for recovery.
When compared to the 2008 recession, Hernandez said it looks like the businesses he works with are headed toward a speedier recovery than 13 years ago.
According to a survey by Camino Financial, an online finance company that focuses on Latinx businesses, "80% of Latino business owners say that their business will be the same or better than before the pandemic," but "the bar is low."
Hernandez said that may be partially attributed to a cultural difference.
"They're just so happy in doing business, because they have the ownership and they don't have to work somewhere else. It's a family pride," Hernandez said. "So there's a lot of faith that it's not necessarily about making a lot of money sometimes, but just having your own business and not having to have a boss above you."
The other factor is that many Latino-owned businesses have low expenses. They tend to refrain from expanding business for fear of amassing too much debt. Which, Hernandez admitted, would have put them in a better position to recover from pandemic conditions.