Legal Needs for Hispanic Owned Small Businesses

As Hispanic Heritage Month comes into focus, we at OnwardJustice wanted to highlight a foundational problem that keeps many Hispanic entrepreneurs from reaching their potential: lack of reliable legal support.

The Stanford Latino Entrepreneurship Initiative (SLEI) found that Hispanic business owners are 60% less likely to get loans from national banks compared to non-Hispanic business owners, even when their credit profiles are similar. This leaves them with fewer resources to safeguard their businesses from legal pitfalls.

Trademark and intellectual property (IP) concerns are common stumbling blocks. Data from the Latino Business Action Network (LBAN) shows that only 8% of Hispanic entrepreneurs have taken steps to protect their brand through trademarks or copyrights. Without formal protections, they risk seeing their business ideas copied by competitors without any legal recourse.

In comparison, 20% of non-Hispanic business owners have filed for IP protection, allowing them to maintain exclusive rights to their names, logos, and even their unique product lines.

During the COVID-19 pandemic, Hispanic business owners struggled significantly to access federal aid.

According to a report by MPR News, only 45% of Latino firms benefited from the Paycheck Protection Program (PPP), compared to higher rates among other business owners. Many Hispanic entrepreneurs either didn’t apply or were turned down due to a lack of guidance and understanding of the application process.

Karla Castro, a business owner in Oakdale, Minnesota, had to scramble to find help after initially missing out on these programs due to misinformation and a lack of support. It wasn’t until a friend told her about the Latino Economic Development Center that she could access the resources she needed​.

Check out this youtube video spotlighting Karla’s story.

Employment contracts are another minefield. More than 40% of Hispanic-owned businesses in industries like construction and hospitality struggle to comply with regulations governing wages, overtime, and worker safety. That’s almost double the rate for non-Hispanic businesses. These oversights don’t happen because businesses are trying to “take the easy way out” and cut corners, but because a lot of Hispanic or minority owned small businesses don’t have access to an in-house attorney or affordable legal resources to guide them through complex state and federal employment regulations​ (Latin Business Today)

Resources like pro bono legal clinics, affordable legal consultations, and access to community support can go a long way. Organizations such as the Hispanic National Bar Association, Latino Business Action Network and the Statewide Hispanic Chamber of Commerce offer targeted services to help these business owners understand and address their legal needs early on.

More Hispanic business owners need affordable access to legal services or legal help. At OnwardJustice, we’re trying our best to bridge the cultural, linguistic and logistical gaps to bring more affordable legal services to immigrant communities.