Expanding Latinx-Owned Businesses in Pittsburgh

By Isabel Morales

In recent years, Pittsburgh has witnessed the rise of vibrant and exciting Latinx-owned businesses that have brought life to certain areas of the city and have become a piece of home for some. The Latinx community in Pittsburgh is a small but growing minority. In 2019, the Latinx population in Pittsburgh was estimated to be about 3.2 percent of Pittsburgh’s total population (302,205), but Allegheny County experienced a 116 percent growth of Latinos from 2000 to 2017 (Grant, 2019). Beechview is considered the heart of the Latinx community in Pittsburgh. However, it is still difficult to truly see the presence of a large Latinx population there (Grant, 2019). Latinos do not only move to Pittsburgh due to its low cost of living, but also due to its low levels of diversity. They see this lack of diversity as a great opportunity to open a restaurant or food truck and contribute to an emergent market of Latinx businesses. Yet, many Latinx entrepreneurs face challenges accessing funds, resources, and language-specific information when starting their businesses. Therefore, strengthening entrepreneurship efforts is key in welcoming the Latinx community to Pittsburgh and supporting their economic empowerment (All for All, 2016).  

Entrepreneurship fosters economic prosperity and broader economic participation in the short and long term by improving productivity, driving innovation, and creating jobs (Center for American Entrepreneurship, 2019). According to a recent study from Stanford University, Latinx small-business owners are the fastest growing group of entrepreneurs in the U.S. (Cimini, 2020). In the past ten years, the number of Latinx businesses owners in the U.S. grew by about 34 percent compared to a one percent growth of all business owners (Cimini, 2020). A New American Economy report in 2012 also found that Latinx-owned businesses located specifically in Pittsburgh employed over 1,200 people—a number that has continued growing and has a positive effect across the local economy (New American Economy, 2016).  

However, the growth of Latinx-owned businesses is typically unrecognized, especially in areas like Pittsburgh where the Latinx community is still small. Jerry Porras, a professor at Stanford University, stated that, if Latino-owned employer firms were given the same chances [as white-owned employer firms], they would generate an additional $4 billion in revenue and 1 million jobs (Cimini, 2020). Therefore, equipping Latinos and other minorities in Pittsburgh with the necessary tools to achieve entrepreneurial success does not only contribute to the well-being of the community itself, but it is crucial for the steady progress and future vitality of the Pittsburgh region. Though there are growing efforts to support the Latinx community and other minority groups in Pittsburgh, Latinx entrepreneurs still face unique challenges when it comes to accessing start-up capital, navigating systems of licenses and permits, attracting and retaining employees, and marketing their businesses (All for All, 2016).  

One of the most common challenges potential Latinx business owners face is a lack of capital. This inhibits them from accessing collateral to cover loans and start their businesses (Grant, 2019). Those within the community that are born outside of the U.S., have even more trouble accessing capital. These groups tend to lack history with entrepreneurship or suitable credit causing their funding applications to be rejected (JP Morgan Chase, n.d.). Without a credit score, Latinx entrepreneurs rely more heavily on personal funds than on business loans, grants, or local resources to start or carry out their business operations (All for All, 2016). These financial complications can have long-term implications. Using personal funds can have a negative impact on the entrepreneur’s existing credit score, impeding their business from growing (Kramer et al., 2018).  

These financial challenges are exacerbated when potential Latinx business owners lack awareness of financial opportunities for entrepreneurs (All for All, 2016). Existing resources are primarily advertised towards native U.S. citizens and there is not enough outreach being done to inform foreign-born residents about financial options and resources. In a study carried out by the organization All for All—an immigrant inclusion initiative for the Pittsburgh region—many immigrants expressed they were not aware of resources such as internet loans like Kiva or government loans through the Urban Redevelopment Authority of Pittsburgh (URA) (All for All, 2016)While the lack of access to business loans is a common barrier among minority and immigrant entrepreneurs, having poor access to fundamental banking and services makes the situation even more challenging (All for All, 2016)Once Latinx entrepreneurs finally access the funds needed to purchase a space by signing a lease or purchasing a food truck, they face another set of regulations and laws before they can open their business. It is challenging to understand these rules while also struggling with language barriers and issues such as discrimination (All for All, 2016) 

Most financial and business information offered to the public is primarily in English, which is extremely limiting for Latinx and other immigrant entrepreneurs. To gain a greater understanding of this issue, I interviewed Brent Rondon, the Senior Management Consultant for the Small Business Development Center at the University of Pittsburgh. He discussed that the city’s approach to offering information about education, financial services, laws, and regulations only in English are no longer effective in supporting the growing Latinx population in Pittsburgh (B. Rondon, personal communication, September 20, 2021). This requires a comprehensive approach to providing information in Spanish and Portuguese to ensure the Latinx community is more aware of the opportunities and resources available to them. Soinstitutions across Pittsburgh such as banksinsurance companies, and private sector providers must view language access as a priority, as community organizations are usually the ones providing most language access resources (B. Rondon, personal communication, September 20, 2021).  

Some community institutions in Pittsburgh offer a variety of resources that focus on helping Latinx entrepreneurs tackle existing obstacles. For instance, the Pittsburgh Hispanic Development Corporation (PHDC) seeks to support new and existing Hispanic businesses and increasing Hispanic investment in the Pittsburgh region. Their business incubator program offers services to help Hispanic entrepreneurs through cubicle rentals, business assessments, access to resources and connections, language access, setting up meetings with vendors, and more (PHDC, n.d.). PHDC incorporated 15 new companies in 2020, and the business incubator has assisted around 124 entrepreneurs to plan and accelerate their businesses in different industries since its inception (PHDC, 2020). The Small Business Development Center (SBDC) at the University of Pittsburgh is another example of an institution in Pittsburgh that has a Hispanic outreach program. The program offers quarterly webinars called “Abre Tu Negocio En Pittsburgh” (Open Your Business in Pittsburgh) and provides consulting and workshops in Spanish (B. Rondon, personal communication, September 20, 2021) 

Pittsburgh’s prosperity heavily relies on the diversity of ideas and cultures which comes from working towards inclusive development. Therefore, it is necessary to continue informing the Pittsburgh community about the challenges that Latinx and other minority entrepreneurs face, along with the strengths that they bring to the table. Organizations that are specifically focused on helping the Latinx community and other minorities are crucial for Pittsburgh’s welfare, but they are not the only ones responsible for making Pittsburgh a more welcoming and vibrant region. All of Pittsburgh’s institutions must incorporate the goal of welcoming these groups into their core values and devise strategies focused on helping them overcome the obstacles impeding them from success. It is a joint effort to build a community in Pittsburgh where Latinos and other minorities are given the tools to create a future for themselves and where they feel a sense of belonging that motivates them to help create a promising future for Pittsburgh as well. 

 

 

Isabel Morales (she/her/hers) is a third-year international student from Pereira, Colombia. She is currently pursuing a B.A. in Economics with a minor in French, along with a certificate in Latin American Studies. Due to her background and opportunities offered at Pitt, Isabel has become greatly interested in development economics, politics, and human rights, which are topics of focus in her writing. As a Panoramas intern, she hopes to promote the LAC region and its people, while also using CLAS as a space to continue learning and having conversations about key issues and matters not commonly within her scope of research. in addition, Isabel will be the Public & Professional Relations chair for the Women in Economics club at Pitt. She is grateful and excited to be a part of a group of motivated and supportive people at the Center this year!


References

All for All. (2016). Immigrant-Owned Small Businesses & Local Food Economy Reporthttps://www.immigrationresearch.org/system/files/Low-Res_Immigrant-Owned%2BSmall%2BBusinesses%2B%26%2BLocal%2BFood%2BEconomy%2BReport.pdf 

Center for American Entrepreneurship. (2019, October 28). Why is Entrepreneurship Important? https://startupsusa.org/why-is-entrepreneurship-important/ 

Cimini, K. (2020, May 24). ‘Puro cash’: Latinos are opening more small businesses than anyone else in the USUSA Todayhttps://eu.usatoday.com/in-depth/news/nation/2020/02/24/latino-small-business-owners-becoming-economic-force-us/4748786002/ 

Grant, T. (2019, October 16). Latino entrepreneurs gaining traction in Pittsburgh. Pittsburgh Post-Gazette. https://www.post-gazette.com/business/bop/2019/11/04/Latino-businesses-gaining-traction-Pittsburgh-Rojas-Duquesne-Hernandez/stories/201910160157 

JP Morgan Chase. (n.d.). Latino-Owned Businesses May Be the U.S. Economy’s Best Bet. JP Morgan Chase & Co. Retrieved September 23, 2021, from https://www.jpmorganchase.com/news-stories/latino-owned-businesses 

Kramer, C., Battisto, J., Lieberman, S., Orozco, M., Perez, I., & Lee, N. (2018, November). Latino-Owned Businesses: Shining a Light on National Trends. Stanford University. https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/slei-report-2018-latino-owned-businesses-shinging-light-national-trends.pdf 

Lyons, K. (2015, December 1). Pittsburgh’s Latino community showing signs of growth. NEXT Pittsburgh. https://nextpittsburgh.com/features/business-latinoburgh-picks-top-latino-places-pittsburgh/ 

New American Economy. (2016, July 12). Advancing the Pittsburgh Region. New American Economy Research Fund. https://research.newamericaneconomy.org/report/advancing-the-pittsburgh-region/ 

PHDC. (n.d.). Hispanic Corporation - About Us. Pittsburgh Hispanic Development Corporation. Retrieved July 18, 2021, from https://sites.google.com/phdcincubator.org/phdc/about-us 

PHDC. (2020). Hispanic Corporation - Annual Reports. Pittsburgh Hispanic Development Corporation. https://www.phdcincubator.org/about-us/annual-reports  

 

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