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Latino-Owned Businesses Across the U.S. Drove Post-pandemic Growth Despite Systemic Barriers

Despite historic disruptions in health, trade, employment, and credit markets, the number of Latino self-employed entrepreneurs rose significantly during the pandemic—from about 533,000 in 2018 to 658,000 in 2022—boosting the Latino share of all self-employed from 16% to 19% over this period. Yet, this growth occurred in the face of sustained earnings decline, greater financial needs, and limited access to capital.

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Contact: lppipress@luskin.ucla.edu

New UCLA Data Brief Finds that Latino-Owned Businesses Across the U.S. Drove Post-pandemic Growth Despite Systemic Barriers

LOS ANGELES (September 11, 2025)—A new UCLA Latino Policy and Politics Institute (LPPI) data brief, produced in partnership with UCLA’s Center for Neighborhood Knowledge (CNK), shows that Latino-owned businesses helped drive the post-COVID-19 recovery, but remain disproportionately at risk to ongoing systemic barriers. 

The report, authored by Silvia R. González, Paul Ong, and Yina Marin, is part of The Economic Recovery and Entrepreneurial Project (TEREP) and uses data from the U.S. Census Bureau’s Small Business Pulse Survey and other federal sources to assess how microbusinesses, particularly those led by Latinos, fared amid the pandemic and recovery after.

Despite historic disruptions in health, trade, employment, and credit markets, the number of Latino self-employed entrepreneurs rose significantly during the pandemic—from about 533,000 in 2018 to 658,000 in 2022—boosting the Latino share of all self-employed from 16% to 19% over this period. Yet, this growth occurred in the face of sustained earnings decline, greater financial needs, and limited access to capital.

“Latino entrepreneurship surged in the wake of the pandemic, but much of that growth occurred out of necessity and declining opportunities in the labor market,” said Professor Paul M. Ong, co-author and director at UCLA CNK. “If we want inclusive economic resilience, we need policies that support small business owners before the next crisis hits.”

The brief finds that structural weaknesses exposed during the pandemic—such as barriers to credit and the fragility of microbusinesses—have been compounded by recent challenges, including inflation, labor shortages, natural disasters, and reduced government support.

  • The 2020 pandemic triggered a 9% drop in GDP in just two quarters, with unemployment soaring from under 4% to over 13%. While the macroeconomy rebounded quickly, many small businesses remained stuck in recovery limbo.
  • From 2018 to 2022, Latino-owned businesses grew from 533,000 to 658,000. This growth prevented total U.S. business counts from declining, despite systemic barriers and the disruptions of the pandemic.
  • In 2020, 51% of small businesses reported “large negative effects”; By 2022, that share had dropped to 22%, but 39% still faced “moderate negative effects” two years after the height of the pandemic.
  • Though many small businesses closed during the pandemic, high rates of new business formation kept the total number of employer establishments nearly flat (7.17 million in 2019 vs. 7.19 million in 2021), signaling the pandemic disrupted the economy in ways that not only shuttered many businesses but simultaneously created incentives for developing new businesses to adapt to changing lifestyles and consumer behavior in the face of economic turbulence.
  • Latino-owned businesses were 1.3 times more likely to report major sales losses and 1.5 times more likely to need additional financing compared to their non-Latino counterparts, yet they consistently reported greater difficulty accessing credit and capital.

“Latino-owned businesses have always been resilient—but resilience is not a substitute for equity,” said Silvia R. González, director of research at UCLA LPPI. “These businesses are engines of local economic growth, but they continue to operate within systems that were never built to support them, even less so in times of crisis. That must change.”

Read the full data brief here.

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About UCLA Latino Policy and Politics Institute

The UCLA Latino Policy and Politics Institute is a non-partisan research institute that seeks to inform, engage, and empower Latinos through innovative research and policy analysis. LPPI aims to promote equitable and inclusive policies that address the needs of the Latino community and advance social justice. latino.ucla.edu.