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Latino Businesses Experienced Disproportionate Hardship as a Result of COVID-19, and Benefitted Less from Pandemic Assistance

A new study identifies challenges faced by Latino-owned enterprises in the DC Metro Area when seeking aid during the crisis, but also local innovations for the future.

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Business closed due to covid

Researchers and faculty in American University’s Center for Latin American and Latino Studies (CLALS), conducted a comprehensive study documenting COVID-19 relief programs and challenges for businesses in the Washington, DC Metro Area in response to the pandemic crisis. The study details steps taken by local jurisdictions to provide often hard-to-reach Latino small business owners with crucial financial and technical assistance.

The study, Pandemic Relief for Latino-Owned Businesses: Lessons from the Washington DC Metropolitan Area, is authored by Robert Albro, faculty in CLALS and Eric Hershberg, Director of CLALS and faculty in AU’s School of Public Affairs, is the most recent outcome of an ongoing center research program examining Latino entrepreneurship.

Home to Latino enterprises across a range of industries affected by the pandemic, the DC Metro Area includes multiple jurisdictions with distinct approaches to supporting businesses. As co-author Albro notes, this makes our region a “valuable laboratory for evaluating the relative success of policies and programs designed to help Latino businesses overcome the challenges of the pandemic.”

Nationwide, Latinos are the most likely to start a business among any group and the fastest growing group in the DC Metro Area. Our region’s economic health is increasingly tied to the success of its Latino entrepreneurs. But Latino businesses were hit extremely hard by the pandemic and accompanying public health guidelines, experiencing closures, catastrophic losses of customers and profits and challenges pivoting to new business realties.

“The pandemic had an insurmountably negative impact on the Latino community in ways that will be felt for years,” said Nicole Quiroga, President and CEO of the Greater Washington Hispanic Chamber of Commerce (GWHCC). She adds, “We were able to take a deep dive into our local communities and learn more about the needs of our small businesses in order to maximize our ability to assist them.”

The GWHCC co-sponsored this study along with AU’s Kogod School of Business.

The study highlights two key features of the area’s relief efforts:

  1. The relative effectiveness of strategies of promoting relief assistance in different jurisdictions, and specific modes of outreach to Latino business owners;
  2. The pivotal role of non-governmental and community-based institutions other than banks in channeling informational resources, financial, and technical assistance to Latino and minority enterprises.

The research also points to notable gaps and barriers to access, examples of effective targeting of aid, promising structures of inter-jurisdictional collaboration as a result of the pandemic and the need for trusted community ambassadors with strong local knowledge.

Finally, it emphasizes the importance of understanding how and where to best engage Latino business owners. As Albro stresses, “Our hope is that the findings of this study will help to inform approaches taken in subsequent crises and by other cities and counties striving to improve support for businesses in historically underserved communities.”